Global Rivals Narendra Modi (India) and Xi Jinping (China); photo: Global Times
As BRICS-aligned nations gather in Johannesburg, South Africa to form a counterweight to the US-led West, India has poured cold water on Russian-Chinese hopes for an alternate world reserve currency to replace the US dollar. The inventor of the term called the idea of BRICS currency “ridiculous.”
As China’s real estate sector teeters on the verge of disaster and South Africa’s corrupt ANC government can barely keep the lights on, Brazil and India are slamming the brakes on a more powerful BRICs, Op India reports.
The acronym BRIC was invented by Goldman Sachs economist Lord Jim O’Neill 2001 to describe the major emerging economies of the global south, Brazil, Russia, India, and China, predicting these nations may drive the world economy in the 21st century. South Africa joined the group in 2010, but has since forfeited its role as the biggest economy in Africa to Nigeria thanks to rampant ANC corruption, a disastrous energy sector and horrendous crime and violence.
Lord Jim O’Neill called the idea of a BRICS currency “ridiculous,” the Financial Times reports. “They’re going to create a BRICS central bank? How would you do that? It’s embarrassing almost.” O’Neill told FT BRICS had “never achieved anything since they first started meeting”, eight years after he created the phrase 2001.
The BRICS nations account for 42% of global population, over 3 billion people, over 26% of the global economy and a combined GDP of over 23 trillion USD. BRICS nations control over 30% of the world’s territory and 18% of global trade.
Last year, convicted criminal Communist Inacio Lula da Silva of Brazil floated the idea of a combined BRICS currency. Since then, many observers have worried about a “de-dollarization of the world,” especially after the disastrous Nuland-Blinken-Sullivan war in Ukraine inflated the dollar, bankrupted the West and drove China and Russia into closer partnership.
Russia has been pushing the idea of BRICS reserve currency before the BRICS summit in crime-torn Johannesburg, with Russian media insinuating the BRICS nations are already in agreement on launching a new currency backed by gold.
“However, Indian Minister of External Affairs Dr. S Jaishankar clarified in July that there is no plan as such for a combined BRICS currency, and currencies are expected to remain a national issue for participating nations”, OP India writes.
While India has continued to trade with Russia and refused to join the US-NATO bloc in the Ukraine war, it remains in geopolitical conflict with China, with which it exchanged gunfire May 2020 when clashes between troops in Galwan “resulted in the deaths of 20 soldiers from India and dozens of PLA troops”, OP India recalls.
Host South Africa has also clarified that the idea of a combined BRICS currency is off the table, according to OP India: The new BRICS Development Bank “has disbursed only $33 billion worth of loans so far in its existence, roughly one-third of what the IMF has disbursed in a year.”
“India’s reluctance to support a BRICS currency holds much significance, because with a rapidly growing GDP, the sheer scale of its market, and its current stand as one of the world’s top 5 economies, India is hoping to increase the influence of its own currency. It does not need the financial support of BRICS to fuel its economy and has been on excellent trade terms with the USA and Europe”, the Modi-allied outet writes.
Over 40 nations have applied to join BRICS, including major powers like the UAE, Indonesia, Egypt, Argentina, and Saudi Arabia. India, however, has been “reluctant to let other countries in, primarily because it is wary of China”, OP India writes. “India is wary that a stronger China with stronger ties with major powers in an expanded BRICS will reduce the group to a Chinese tool of global dominance, at the cost of Indian interests. Brazil has similar concerns too. Brazil has been against expansion in the BRICS, fearing a dilution of its own interests and voice.”
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