Navigating the Path to Global Influence and De-Dollarization

Research Gate, 2023

The simmering economic crisis that had swept the globe by the corona virus pan-demic and the Russia-Ukraine war supply chain disruption has had a universal im-pact. It has shown that the Western ‘rules-based order’ that heralded ‘the end of histo-ry’ is not immune of crises, undergoing from post-Cold War conquest, to lethargy and struggle to stay afloat. The imprints of greed and flippancy is now part of that order at a planetary scale, necessary input to the ‘rules-based order’. On the global south side, while decolonisation has been achieved with great stride, neocolonialism has hindered former colonies to develop their vast natural wealth because of exploitation and debt vassalage. Coming amid the emergence of a new Cold War, the Brics Summit in South Afri-ca is making not only headlines but also history in signalling new multipolar geopolitics and geoeconomics by expanding its remit to Africa and the Gulf monarchies. Standing tall for buttressing global cooperation under the rubrics of political, security, economic, and people-to-people arenas, it is destined to fortifying multilateralism and interna-tional law, including those enshrined in the consecrated articles of the UN Charter. Blessed with copious natural and human resources, and a shared vision for multi-lateral cooperation, Brics could play a pivotal role in international geopolitical and geoeconomic dynamics, epitomising how cultural and historical diversities can fuse into a shared global goal, evidenced by the creation of the New Development Bank to fi-nance development in poor countries. While the financial evolution of the powerhouse Brics nations signal a new era in global economics, a common currency is one of the key themes that was expected to be discussed at the Brics 2023 summit, but the issue of the feasibility of this R5 project is frail. While de-dollarisation is not an explicit objective, Brics nations find themselves at a strategic crossroads: should they introduce a joint central banks digital currency or devise a cross-national payment system harnessing blockchain and crypto technology? Key words: Brics expansion, multilateralism, de-dollarisation, 5R currency .

The global financial system is the economic bedrock of the contemporary liberal economic order. Contrary to other global-economy areas, finance is rarely analyzed in discussions on contestations of economic liberalism. However, a quite comprehensive process of external contestation of the global financial order (GFO) is underway. This contestation occurs through the rising share of emerging market economies within global finance in recent years, especially the rise of the BRICS economies. This Element investigates whether and how the BRICS contest the contemporary GFO by conducting a systematic empirical analysis across seven countries, eleven issue areas and three dimensions. This contestation occurs across issue areas but is mostly concentrated on the domestic and transnational dimension, not the international level on which much research focuses. Rather than the entire BRICS, it is especially China, Russia and India that contest liberal finance. This title is also available as Open Access on Cambridge Core.

2022

Existing scholarship has not systematically examined BRICS (Brazil-Russia-India-China-South Africa) as a rising power de-dollarization coalition, despite the group developing multiple de-dollarization initiatives to reduce currency risk and bypass US sanctions. To fill this gap, this study develops a 'Pathways to De-dollarization' framework and applies it to analyze the institutional and market mechanisms that BRICS countries have created at the BRICS, sub-BRICS, and BRICS Plus levels. This framework identifies the leaders and followers of the BRICS de-dollarization coalition, assesses its robustness, and discerns how BRICS mobilizes other stakeholders. The authors employ process tracing, content analysis, semi-structured interviews, archival research, and statistical analysis of quantitative market data to analyze BRICS activities during 2009-2021. They find that BRICS' coalitional de-dollarization initiatives have established critical infrastructure for a prospective a...

Luiza Peruffo, 2020

This article analyses the ongoing transformations in the international monetary and financial system (IMFS) since the outbreak of the 2008 Global Financial Crisis and the role played by the BRICS countries. It argues that while changes the BRICS countries have been marginal, because there was not a substantial shift in the underlying power relations, these changes still matter because they are power as an end in itself. The article looks into three areas where the group was relatively successful in challenging the system: (i) increasing their voice in major global economic forums (focusing on the IMF and the G20), (ii) creating new international financial institutions and (iii) influencing the IMF’s new institutional view of capital flows. It then discusses the limits of the BRICS’ monetary and financial power given their subordinated position in the IMFS, China being the exception. Understanding the rise and limitations of the BRICS’ monetary and financial power is important because they encourage the existing theoretical framework to advance if it wants to understand how subordinated players in the IMFS – such as emerging economies and the groupings formed by them (like the BRICS) – can have their way in a system which is rigid, hierarchical and still dominated by advanced economies.

Global Governance

The rise of the BRIC grouping (Brazil, Russia, India, China) is one of the most commented on phenomena in international politics of the past years. Yet little is known about how and why institutionalized cooperation between the BRIC countries began. This article makes two arguments. First, an unprecedented combination in 2008—a profound financial crisis among developed countries, paired with relative economic stability among emerging powers—caused a legitimacy crisis of the international financial order, which led to equally unprecedented cooperation between emerging powers in the context of the BRIC grouping. The BRIC countries were able to use their temporarily increased bargaining power to become agenda setters at the time—culminating in the International Monetary Fund quota reforms agreed on in 2010. This shows that even short periods of reduced legitimacy in global governance can quickly lead to the rise of alternative institutions—such as, in the case of the crisis that began in 2008, the BRIC platform—which now forms part of the landscape of global governance. Second, intra-BRIC cooperation in the area of international finance enhanced trust among the BRIC countries and led to a broader type of cooperation in many other areas, suggesting the occurrence of spillover effects. Intra-BRICS cooperation (Brazil, Russia, India, China, South Africa) is therefore likely to continue, even after the conditions that facilitated its genesis—the crisis in the West—have disappeared. KEYWORDS: BRIC, BRICS, G-20, global governance, legitimacy.

This working paper surveys various debate around the emergence of the BRICS as economic and political players on the global stage in the last 15 years. In economic terms the paper traverses accounts of the future dominance of the BRICS of the global economy in GDP and growth terms; including the question whether there is more to the BRICS than the rise of China; whether other conceptions of emerging markets might be more useful; and what kind of shifts in the spatial patterns of extraction, production and consumption of global capitalism are signalled by the rise of the BRICS. In political terms the BRICS have breathed life into their conception by Goldman Sachs as an investment meme, meeting regularly since 2009 to construct an alternative form of global economic governance to the traditional centres of the west. Most profoundly manifest in new economic institutions that rival the IMF and World Bank, the BRICS also share a conception of development that is more partnership-orientated than donor-recipient focused in process, and more infrastructure and energy orientated than the social and governance focused in substance. Lastly, the rise of the BRICS as economic and political players on the global stage raises questions about the extent to which they advance neo-liberal capitalism by serving as sub-imperialists in the regions, or offer more state-centric models of capitalist growth that open up the possibility of more inclusive development paths. A related debate is whether the rise of the BRICS is good for their regions or just the leading states of those regions. Lastly, the emerging shifts in global capitalism and economic governance signalled by the rise of the BRICS suggests we are the beginning of the end of the utility of the North-South distinction as differences with countries come to be as important as differences across countries.

Otoritas: Jurnal Ilmu Pemerintahan, 2019

For the first time in the history of mankind several powers emerge simultaneously in different latitudes and can interact intensively. The Contemporary Global Order has presented significant changes among which highlight the absolute and relative decline of American power, and the emergence of new actors who have greater agency power in their international relations. One of these actors is the so-called BRICS that brings together Brazil, Russia, India, China and South Africa. For this reason the aim of this investigation is to analyzing the effective and potential power of the BRICS in the Contemporary Global Order. The methodology is it is situated inside the analytical eclecticism which is characterized by explaining a certain phenomenon without using a block of explanations sustained in a single tradition, but it takes and re-means the elements that it considers most pertinent for the case study. The article states that the BRICS do not claim or have the capacity to become hegemons. The objectives and capabilities of the BRICS have been especially notable in terms of international political economy, especially in the financial architecture, where China has its greatest power. The BRICS can promote an alternative to the existing game rules in the international system and promote a more plural world. They have the capacity to reform and build international economic institutions that allow a fairer distribution of material resources. They can curb unilateral global power interventions in regional affairs, framing interventions for humanitarian causes within multilateralism and the Responsibility to Protect. In terms of democracy and human rights, they will not make any contribution since their main actors, such as China and Russia, are examples of disrespect for these values.

The BRICS nations viz Brazil, Russia, India, China, and South Africa have sought to establish not one but two financial institutions- the New Development Bank and the Contingent Reserve Arrangement. Observing the apparent transition into a multipolar world, this paper seeks to discover the driving force behind the need of having parallel establishments to the Bretton Woods institutions and whether it will be able to measure up to the institutions or whether it will supersede them completely. An inference was reached by understanding the dissatisfaction faced by the BRICS nations with regards to their position in the global economic and political order. The paper draws up possible explanations for the need of having alternative financial options and the extent to which it could effect the current order.

2012

The Fourth BRICS Summit in Delhi this week will focus on deepening financial cooperation and developing common positions on the current crises in the Middle East. However the rising non-Western powers are not out to form an anti-West bloc. Commentary AS THE leaders of China, India, Russia, Brazil and South Africa meet in Delhi this week (28-29 March), one cannot but wonder how an improbable concept from Wall Street-the heart of Western capitalism-could have such a remarkable influence in the international system. Coined a decade ago by Goldman Sachs to promote an investment fund in emerging markets, BRICS is now either lionised or denounced as a countervailing bloc against the West.

The genesis of BRIC (Brazil-Russia-India-China, predecessor of present-day BRICS) as a multilateral grouping of the four developing or emerging economies can be traced back to September 2006, with the 61st Session of the United Nations General Assembly in New York, in a bid to explore measures of economic and political cooperation among the member-States. Officially, the organization came into existence in 2009, and with the inclusion of South Africa as the fifth member in April 2011, BRIC was rechristened BRICS. Till date, the BRICS member-states have held seven Summits and the latest in Ufa, Russia (July 2015) has been a watershed with the entry into force of the New Development Bank/BRICS Bank and the Contingent Reserves Arrangement. The BRICS Bank is heralded as an alternative to the World Bank-International Monetary Fund-led international economic architecture. However, it remains to be testified whether the BRICS Bank can evolve as a pulsating alternative to the WB-IMF-led financial system, though there is no way denying its establishment as a stepping stone for providing a predominantly South-South economic cooperative mechanism.