Contributed by Jim Hayes
Reacting to increasingly uncertain economic times and political pressure from Washington to maintain American dominance over the global economy is causing a growing list of nations to adopt new strategies.
One of these is the revival of the BRICS nations. This is the coalition of Brazil, Russia. India, China, and South Africa, all of them major economies. These member nations are due to meet in south Africa during August. A major issue is moving further on discarding the use of United Sates dollar to pay for transactions between them. This is serious, because the make up the single biggest economic block, representing about two thirds of the world’s population.
Last year the greenback’s share of international reserves had slipped down from 55 percent in the previous year to 47 percent. In 2003, it was 66 percent. This marks a long-term decline, and it prompted U.S. Secretary of State Janet Yellen to admit, there is a risk that the U.S. currency’s dominance as the medium of international trade could end.
The re-emergence of BRICS adds to this uncertainty.
Last week, during China’s President Xi Jinping was in Brazil meeting with President Inácio Lula da Silva, and they talked about greater cooperation and a series of agreements to boost climate sustainable development.
A new tranche of agreements has recently been signed by Russia and China. India is talking with both of them to get in on some of the action. So is South Africa. These are growing economies that are attracting a lot of global attention.
Reports suggest that there are about 20 other nations seeking to join BRICS. If they do, it will encompass most of humanity, and this means that all those out of the block could be locked out of the global economy.
To put this into its full perspective, the new alignment will involve not only the fastest growing economies and most of manufacturing. It will involve most of the Middle East and Persian Gulf area, which supplies much of the world’s oil, and it is also likely to involve Mexico and Venezuela, which are also major oil producers.
The Biggest impact will be on the United States, which particularly dependent on investing in the global economy. Without this, the domestic economy is in real trouble.
Washington’s aggressive foreign policy is bringing this about. One of its main tools is the imposition of economic sanctions. This forces nations to look for other ways to continue international trade. The other tool is gunboat diplomacy and military intervention. This causes nations on the receiving end to look for friends.
There is also the way in which the International Monetary Fund and World Bank have been operating, including demanding austerity measures to pay for expensive loans taken out by governments.
For now, there is an emerging trend for these nations to trade in each other’s currencies. There is also a strengthening of the Russian Rubble, and especially the Chinese Yuan.
The world might be seeing the final stage of world dominance by a single power and the emergence of a global order of diversified and shared authority. The advantages of this are that the global order is much more likely to be shaped around shared interests, in an atmosphere of greater equality. This will generate a more peaceful environment and create far better conditions for agreements on the key issues of the day, such as, greater equality and progress towards ending poverty, and far greater capacity for joint action on the elimination of climate change emission. Both are conditions of lessening tension and elimination of the threat of war.