BRICS Storm
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BRICS storm brewing as 34 nations plan to attend bloc summit where the new multipolar order will be shaped with creation of a common currency
South African International Relations Minister Naledi Pandor told the media on Monday that 34 countries have confirmed their participation in the the 15th BRICS summit, which will take place in Johannesburg from August 22 to 24.
The host’s agenda will focus on expanding the bloc’s membership and developing a BRICS currency to challenge the dominance of the US dollar, the minister added.
The BRICS nations announced in April that they plan to introduce a new currency with an objective of boosting intra-BRICS trade and also eliminating higher dollar conversion costs of international transactions.
South Africa’s international affairs Minister Naledi Pandor © RODGER BOSCH / AFP
Such a BRICS common currency could be a shock to the global fiat money system, said economist Thorsten Polleit in a series of tweets.
“A new international transaction unit, backed by gold, sounds like good money – and it could be, first and foremost, a major challenge to the US dollar’s hegemony,” he said.
The economist said for making the new currency as good as gold and a truly sound currency, it must be convertible into gold on demand. But whether this is what the BRICS Countries have in a mind is a question, he said.
Using gold as the unit of account would be a gamechanger and lead to a sharp devaluation of many fiat currencies including the BRICS fiat currencies, vis-à-vis gold, the economist said. It could make goods prices priced in fiat currencies explode and cause a shock to the global fiat money system, he said.
Another option before the BRICS could be to set up a new bank for foreign trade, which acquires capital in the form of gold, provided by the BRICS, Polleit said. “Against this gold stock, the new bank could, say, grant financing loans to exporters, and issue the ‘new currency;’ or BRICS exports will be sold against the ‘new currency’ and/or gold.”
The widespread recognition of BRICS as a champion of the interests of the global south has drawn more nations to apply for membership, Pandor noted, emphasizing that the bloc’s collective economic power should be a “catalyst for sustainable global economic recovery,” .
The minister confirmed that the bloc has received membership applications from more than 20 nations, including Algeria, Argentina, Bangladesh, Cuba, Egypt, Ethiopia, Indonesia, Morocco, Nigeria, Palestine, Saudi Arabia, Senegal, and the United Arab Emirates.
Iran, which has long been sanctioned by the US, has also formally applied to join the five-nation economic group. To that end Iranian President Ebrahim Raisi has been invited by President Cyril Ramaphosa, with “consensus support” from other BRICS leaders, to the August summit.
“This is not by any means an intention to build some form of bloc that is anti-Western,” she said, insisting that “South Africa’s trading partners in the West are very important” to the country’s “economic progress.”
Source Benzinga/X/RT/SABC
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