The BRICS 2024 summit set for this October in Russia’s Kazan region is all about growing the group and shaking up global finance. New members like the United Arab Emirates, Egypt, Iran, and Ethiopia are joining, aiming to make BRICS bigger and financially tougher. This summit is about plotting a future where the U.S. dollar doesn’t dominate global transactions.
De-Dollarization in Full Swing
Currently, over 40 developing countries want in on BRICS, signaling a shift towards a more unified stance against the dollar-centric payment system. The group will make some big decisions at the summit, choosing who gets to join and who doesn’t, all by consensus.
As the bloc expands, the dollar’s reign as the king of cross-border payments could be ending. This shift could split global economic relations into two camps, making it tricky for some nations, especially those tied closely to Western interests, to navigate these new waters.
Thailand’s political scientist Jiraporn Ruampongpattana points out that the BRICS expansion isn’t just a power play—it’s going to reshape geopolitical dynamics and economies, further dividing the world. According to her, “The influence of this group could make it problematic for some countries, closely aligned with the West, to build further relations with it,” which spells trouble for the U.S. and its allies.
Global Economic Changes and Challenges
While BRICS plots its next moves, the global economy has its own drama. Despite a mess of problems like supply chain snarls, food and energy crises, and inflation spikes, the global economy is hanging tough. The International Monetary Fund (IMF) sees things steadying, with growth expected to stabilize around 3.2% this year and next, while inflation cools off a bit.
“Medium-term growth prospects are also harmed by rising geoeconomic fragmentation and the surge in trade restrictive and industrial policy measures. Trade linkages are already changing as a result, with potential losses in efficiency. The net effect could well be to make the global economy less, not more, resilient. But the broader damage is to global cooperation. It is still time to reverse course.”
Pierre-Olivier Gourinchas, Chief Economist of the International Monetary Fund
The U.S. is bouncing back stronger than expected post-pandemic, but not every country is so lucky. Many low-income nations are still reeling, trying to recover from multiple crises. The IMF warns that while things look up, the path to stable inflation is not clear yet, with new risks on the horizon like rising oil prices and persistent inflation in services.
Countries are diverging in how they’re handling these challenges. The U.S. is pushing forward, but with a cautious eye on inflation and fiscal stability. Europe, on the other hand, faces its own set of troubles with slow growth and high inflation that just won’t quit. China’s dealing with a slump in its property sector, dragging down domestic demand and stirring up trade tensions.
Meanwhile, other emerging markets are finding opportunities amid these global shifts. Some are cashing in on changing global supply chains and the ongoing U.S.-China trade tensions. Venezuela, hit hard by U.S. sanctions and looking for new ways to trade its oil, is turning to digital currencies instead of the U.S. dollar, aligning itself more with BRICS ideals.
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