BRICS calls SWIFT out for being biased towards US dollar

In this post:

  • BRICS criticizes the SWIFT system for favoring the US dollar, calling it unfair and expensive.
  • The system’s fees and exchange rate markups, ranging from 3-5%, disproportionately benefit the US.
  • South Africa’s Foreign Minister highlighted the system’s bias against BRICS and developing countries.

BRICS has thrown down the gauntlet, calling out the SWIFT system for its blatant favoritism towards the US dollar, tagging it as not just unfair but a financial black hole for countries forced to dance to its tune. Basically, every time a country tries to make a move in the global marketplace, it has to pay a premium, not to some universal fund that benefits all, but straight into Uncle Sam’s wallet. The SWIFT system, with its hidden fees and exchange rate markups ranging between a hefty 3-5%, is like that friend who always ‘forgets’ their wallet when it’s time to split the bill, leaving others to cover the cost. And guess what? BRICS has had enough of SWIFT.

A Quest for Financial Equity

When South Africa’s Foreign Minister, Naledi Pandor, stepped up to the mic, she talked about a rigged game where the house always wins, and in this case, the house is the US dollar. The BRICS nations, not content to be spectators of their own economic destiny, are drafting plans to flip the script. They’re walking the walk towards a system where local currencies get a fighting chance, and the US dollar doesn’t automatically get to cut in line.

When BRICS countries engage in international trade under the SWIFT system, they’re essentially funding the US’s economic dominance. Every transaction that passes through this system reinforces the dollar’s supremacy, making it harder for emerging economies to stand on their own feet financially. This is why BRICS is working so hard to create its own alternative payment system. By advocating for trade in local currencies, the bloc wants to dismantle the existing financial hierarchy, which disproportionately benefits the US, and create a more equitable global economy where all nations have the opportunity to thrive on their own merits.

Expanding the Playground

On the first day of 2024, the BRICS gang got bigger, adding five more countries to its roster. This was a power move that significantly upped the bloc’s game in the world economy and demographics. But let’s be for real, the mix of different vibes and low trade mix-tape among the crew limits how much noise they can make in the world trade and international money scene. To me, the expansion looks more like BRICS showing it’s a hotspot for countries on the rise and developing nations looking for a squad that gets the Global South, if you know what I mean.

From its early days as a catchy acronym, BRICS has morphed into a more formal clique of countries shaking up the economic and political scene. By the time they hit their 15th Summit in Johannesburg in August 2023, they were ready to welcome new members into the fold—Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates were all set to join from January 2024. Although Argentina decided to sit this one out after a change in leadership and Saudi Arabia has decided to keep us in suspense by playing a mildly-infuriating game of peekaboo that neither says they’ve accepted or rejected BRICS invitation.

Now, holding nearly half the world’s population (a jump from 41% to 46%) and outdoing the G7 with a larger share of the world GDP (35.6% in 2022, and we’re not stopping there), BRICS+ is showing off, with China leading the pack. But as much as BRICS+ is bulking up, it’s also becoming a bit of a mixed bag geopolitically. Adding new members like Iran has made the bloc more of a geopolitical patchwork quilt, with each country bringing its own unique pattern of relations with the West. This diversity could make family dinners a bit awkward, especially when certain members might not see eye to eye due to regional beefs.

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