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<h1 class="gmail-reader-title">The Rise of the Global South: Can BRICS Triumph Over the IMF and World Bank?</h1>
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<div class="gmail-reader-estimated-time" dir="ltr">April 17, 2023 - <a href="https://www.mintpressnews.com/author/ramzy-baroud/">Ramzy Baroud </a>
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<div class="gmail-moz-reader-content gmail-reader-show-element"><div id="gmail-readability-page-1" class="gmail-page"><div><p>Who would have expected that the BRICS nations could <a href="https://thefinancialexpress.com.bd/views/g7-and-brics-in-the-emerging-world-order-1657983387" target="_blank">rise</a>
as the potential rival of the G7 countries, the World Bank and the IMF
combined? But that once seemingly distant possibility now has real
prospects which could change the political equilibrium of world
politics.</p>
<p>BRICS is an acronym for Brazil, Russia, India, China and South Africa. It was supposedly<a href="https://www.goldmansachs.com/our-firm/history/moments/2001-brics.html" target="_blank"> coined</a>
by the Chief Economist of Goldman Sachs in 2001 as a reference to the
world’s emerging economies. It was then known as BRIC, with the ‘S’
added later when South Africa formally joined the group in 2010.</p>
<p>BRIC’s first official summit <a href="http://www.brics.utoronto.ca/docs/090616-leaders.html" target="_blank">took</a>
place in 2009. Then, the discussion seemed largely abstract. However,
not until 2014 did BRICS begin taking serious steps towards greater
integration, when the nascent alliance, now including South Africa, <a href="https://www.ndb.int/about-ndb/history/" target="_blank">launched</a>
the New Development Bank with seed money of $50 billion. This decision
meant that the group was now ready to take its first practical steps in
challenging the dominance of the West over international monetary
institutions, namely the World Bank and the IMF.</p>
<p>The geopolitical global conflict, thus shifts, resulting from the
Russia-Ukraine war, however, proved to be the driving force behind the
massive expansion underway at BRICS, especially as financially powerful
countries began showing interest in the initiative. They include
Argentina, UAE, Mexico, Algeria and, particularly, Saudi Arabia.</p>
<p>Recent <a href="https://news.bitcoin.com/asean-countries-take-steps-to-reduce-reliance-on-us-dollar-for-trade-settlements/" target="_blank">financial reports</a>
suggest that BRICS is already the world’s largest gross domestic
product (GDP) bloc in the world, as it currently contributes 31.5% to
the global GDP, ahead of the G7, which contributes 30.7%.</p>
<p>One of the greatest opportunities and challenges facing BRICS now is
its ability to expand its membership base while maintaining its current
growth. The issue of helping new members maintain economic and political
independence is particularly vital.</p>
<p>The IMF and World Bank are <a href="https://www.leftvoice.org/in-ghana-an-important-movement-is-forming-against-the-imf/" target="_blank">notorious</a>
for stipulating their monetary support of countries, especially in the
Global South, on political conditions. This position is often justified
under the guise of human rights and democracy, though is entirely
related to privatization and opening markets for foreign investors –
read Western corporations.</p>
<p>As BRICS strengthens, it will have the potential to help poorer
countries without pushing a self-serving political agenda or indirectly
manipulating and controlling local economies.</p>
<p>As inflation is hitting many Western countries, resulting in slower
economic growth and causing social unrest, nations in the Global South
are using this as an opportunity to develop their own economic
alternative. This means that groups like BRICS will cease being
exclusively economic institutions. The struggle is now very political.</p>
<p>For decades, the US’s greatest weapon has been its dollar which, with
time, ceased being a normal currency per se to become an actual
commodity. Wars have been fought to ensure countries like<a href="https://www.rferl.org/a/1095057.html" target="_blank"> Iraq</a>
and Libya remain committed to the dollar. Following the US invasion of
Iraq in March 2003, Baghdad returned to selling its oil in US dollars.
This struggle over the dominance of the dollar was also<a href="https://www.ibanet.org/article/5584F623-6456-4287-8C34-1907B97F3C23" target="_blank"> painfully felt</a> in Venezuela, which has the world’s<a href="https://www.worldometers.info/oil/venezuela-oil/" target="_blank"> largest</a> oil reserve, yet was reduced to abject poverty for attempting to challenge the supremacy of Washington its currency.</p>
<p>Though it will take time, the process of lessening the reliance on US dollars is now in full swing.</p>
<p>On March 30, Brazil and China <a href="https://www.foxbusiness.com/markets/brazil-china-strike-trade-deal-agreement-ditch-us-dollar" target="_blank">announced</a>
a trade agreement that would allow them to use the two countries’
national currencies, the yuan and the reais, respectively. This step
shall prove consequential, for it will encourage other South American
countries to follow suit. But that move was neither the first nor will
it be the last of its kind.</p>
<p>One of the <a href="https://news.bitcoin.com/asean-countries-take-steps-to-reduce-reliance-on-us-dollar-for-trade-settlements/" target="_blank">main decisions</a>
by finance ministers and central bank governors of the Association of
Southeast Asian Nations (ASEAN) following their March 30-31 meeting in
Indonesia is to reduce their reliance on the US dollar. They agree to
“reinforce financial resilience … through the use of local currency to
support cross-border trade and investment in the ASEAN region.” This,
too, is a game-changer.</p>
<p>The BRICS countries, in particular, are <a href="https://www.news.com.au/finance/markets/world-markets/brazil-china-ditch-us-dollar-for-trade-payments-favour-yuan/news-story/682a517c37ba14f306e65ad0e83f6307" target="_blank">leading the charge</a> and are set to serve as the facilitator of rearranging the world’s economic and financial map.</p>
<p>While the West is busy trying to keep its own economies afloat, it
remains wary of the changes underway in the Global South. Washington and
other Western capitals are worried. They ought to be.</p>
<p>Following a <a href="https://www.washingtonpost.com/politics/2022/12/12/biden-africa-ukraine-coalition/" target="_blank">meeting</a>
between US President Joe Biden and 40 African leaders at the White
House last December, it was clear that African countries were not
interested in taking sides in the ongoing war in Ukraine. Consequently,
US Vice President Kamala Harris <a href="https://www.brookings.edu/blog/africa-in-focus/2023/03/30/vp-kamala-harris-visit-to-africa-delivering-on-us-commitments-or-countering-china-and-russia/" target="_blank">flew</a>
to Africa on March 26 to meet African leaders with the sole purpose of
pushing them away from China and Russia. That effort is likely to fail.</p>
<p>A perfect illustration of Africa’s refusal to abandon its neutrality
is the press conference between Harris and the President of Ghana, Nana
Akufo-Addo, on March 28. “There may be an obsession in America about
Chinese activity on the continent, but there is no such obsession here,”
Akufo-Addo <a href="https://www.washingtonpost.com/politics/2023/03/27/harris-ghana-africa/" target="_blank">told</a> reporters.</p>
<p>To argue that BRICS is a purely economic group is to ignore a large
part of the story. The timing of BRICS’ expansion, the stern political
discourse of its members, potential members and allies, the repeated
visits by top Russian and Chinese diplomats to Africa and other regions
in the Global South, etc., indicate that BRICS has become the South’s
new platform for geopolitics, economy and diplomacy.</p>
<p>The more successful BRICS becomes the weaker Western hegemony over
the South will grow. Though some Western politicians and media insist on
downplaying BRICS’ role in shaping the new world order, the change
seems to be real and irreversible.</p>
<p><i><strong>Dr. Ramzy Baroud</strong> is a journalist, author and the
Editor of The Palestine Chronicle. He is the author of six books. His
latest book, co-edited with Ilan Pappé, is ‘</i><a href="https://www.amazon.com/Our-Vision-Liberation-Palestinian-Intellectuals/dp/1949762440" target="_blank"><i>Our Vision for Liberation</i></a><i>:
Engaged Palestinian Leaders and Intellectuals Speak Out’. His other
books include ‘My Father was a Freedom Fighter’ and ‘The Last Earth’.
Baroud is a Non-resident Senior Research Fellow at the Center for Islam
and Global Affairs (CIGA). His website is</i><a href="http://www.ramzybaroud.net/" target="_blank"><i> www.ramzybaroud.net</i></a></p>
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