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IOL News
5 days ago
- Business
- IOL News
BRICS+ in Rio: A Bold Voice for the Global South
General view during a plenary session of the BRICS summit in Rio de Janeiro, Brazil, on July 7, 2025. BRICS leaders at a summit on Sunday took aim at US President Donald Trump's "indiscriminate" import tariffs and recent Israeli-US strikes on Iran. This week, the world watched as Rio de Janeiro became the epicenter of multipolar ambition. The XVII BRICS Summit, the first held in Brazil since the bloc's historic expansion – closed with the Rio Declaration, a sweeping 90+ point manifesto aimed at reshaping the world's economic and political architecture. Aspirational and unapologetically assertive, the declaration stands as a powerful counterpoint to the outdated neoliberal script that has dominated global governance since Bretton Woods. From the outset, BRICS+ made its intentions clear. This is no longer a loose coalition of 'emerging markets.' It is a political project rooted in sovereignty, fairness, and systemic reform, united by a shared determination to build a world that works for the majority, not just the privileged few. The summit's theme, Strengthening Global South Cooperation for a More Inclusive and Sustainable Governance, echoed loudly throughout Rio that this summit was not about following rules made in Washington or Brussels, but about rewriting them. With over half the world's population now represented across 11 full BRICS+ members and 11 additional partner countries, the group embodies the Global Majority. This summit reaffirmed the bloc's core message, that developing nations are not passive players in global affairs – they are protagonists. The Rio Declaration called for a 'reformed and reinvigorated multilateral system,' challenging the deep structural imbalances of institutions like the UN Security Council, International Monetary Fund (IMF), and World Bank (WB). These bodies, relics of the post-WWII order, no longer reflect global realities. Brazil and India were explicitly endorsed for expanded roles at the UN. African nations were rightly upheld as essential actors in shaping the future, a gesture that was both symbolic and strategic, recognising the continent's rising economic, cultural, and political influence. The Declaration was firm in its stance on sovereignty. BRICS+ leaders rejected the use of unilateral coercive measures, particularly economic sanctions not authorised by the UN Security Council. This wasn't just rhetorical, it was a statement of principle, aimed at ending the era of financial bullying disguised as diplomacy. Iran's presence in BRICS+ and the group's support for its sovereignty is significant. For decades, Iran has been subject to punishing sanctions regimes that cripple civilian infrastructure and stifle development. BRICS+ is emerging as a safe haven for nations resisting economic domination and choosing development on their own terms. This insistence on sovereignty extended to conflicts across the globe. The bloc denounced Israeli military strikes on Iran and voiced deep concern over the humanitarian catastrophe in Gaza, calling for an immediate ceasefire and reiterating support for a two-state solution, grounded in international law and UN resolutions. These are not fringe opinions. These are globally resonant positions finally given the weight they deserve. In response to U.S. President Donald Trump's latest tariff threats, including a proposed 10% levy on BRICS-aligned countries, the bloc took aim at 'indiscriminate tariff measures' that threaten global trade and economic stability. This was not merely a rebuke of U.S. policy but a rejection of a global economic model built on domination, conditionality, and coercion. In its place, BRICS+ is proposing a new framework. Discussions on a BRICS Cross-Border Payment System, a BRICS Multilateral Guarantee Agency, and a common digital currency framework show the group's commitment to building the financial infrastructure of the future. This is economic sovereignty in action, reducing dependency on the dollar and expanding the tools available to the Global South to finance its own development. The New Development Bank (NDB) continues to scale up its operations, providing an alternative to the austerity-driven lending models of the Bretton Woods institutions. With green finance, sustainable infrastructure, and digital transformation at the heart of its portfolio, the NDB is quietly becoming the financial backbone of the Global South's development agenda. The Rio Declaration also took aim at the politics of technology. With artificial intelligence poised to define global power in the decades ahead, BRICS+ made a clear stand. AI governance must be inclusive, equitable, and open to the Global South. The idea that transformative technologies should only serve a handful of elite economies is being firmly rejected. Instead, the bloc is pushing for shared knowledge, ethical frameworks, and collaboration. This extends to climate change, energy cooperation, digital infrastructure, and health sovereignty – areas where BRICS+ members are already exchanging knowledge, funding joint projects, and leading by example. Whether through the rollout of 5G to remote Brazilian schools, green hydrogen investments in South Africa, or AI partnerships between China and the UAE, BRICS+ is acting decisively in spaces where others have offered only platitudes. The geographic and political diversity of the expanded BRICS+, now including Indonesia, Ethiopia, Egypt, Saudi Arabia, the UAE, and Iran, proves that the vision of a multipolar world is already in motion. The addition of 11 new partner countries, including Nigeria, Thailand, Kazakhstan, and Cuba, only deepens the reach and legitimacy of this global project. This is not a bloc defined by ideology. It is defined by common purpose, to rebalance the global order, to restore dignity to international cooperation, and to place development, not dominance, at the center of diplomacy. In Rio de Janeiro, BRICS+ didn't just hold a summit, it laid the foundation for a new era of global leadership. President Luiz Inácio Lula da Silva rightly emphasised that 'it is up to emerging countries to defend the multilateral trade regime and reform the international financial architecture.' With its growing influence, coherent vision, and deepening partnerships, BRICS+ is proving that it is not a reactive force but a constructive one. One that speaks for the silenced, acts for the excluded, and plans for the generations to come. In the past, the Global South was told to wait its turn. In Rio, it stood up, took the pen, and began writing the rules. By Chloe Maluleke Associate at the BRICS+ Consulting Group Russian & Middle Eastern Specialist ** MORE ARTICLES ON OUR WEBSITE ** Follow @brics_daily on X/Twitter & @brics_daily on Instagram for daily BRICS+ updates
Yomiuri Shimbun
6 days ago
- Business
- Yomiuri Shimbun
How Can the Free Trade System Be Saved From Crisis?
U.S. President Donald Trump's tariff strategy has thrown the world trade system into significant disarray. As a result, the free trade system is said to be facing a serious crisis. What exactly is a free trade system in the first place, and what specifically does it mean when people say there is a crisis? The world trade system was first supported by the General Agreement on Tariffs and Trade (GATT), which came into being under the post-World War II Bretton Woods system. Since 1995, it has been backed by the World Trade Organization, which replaced GATT. The GATT regime was led by Western countries, but emerging economies and developing countries joined the WTO as active members, enabling the organization's influence to spread across many countries and regions. A particularly important turning point for the WTO was China's accession in 2001. In the context of this article, the free trade system refers to the trading system that has developed since China joined the WTO. To be specific, it is a trading system that not only facilitates traditional trade between major countries — the selling and buying of final products and resources — it also drives global economic growth through the cross-border division of labor thanks to the supply chains stretching across the world. This environment features a complex global division of labor, as well as cross-border trade within enterprises and diverse networks of direct investment. U.S. journalist Thomas Friedman focused on this environment in his 2005 book 'The World is Flat.' Since China's accession to the WTO, the global economy has undergone a significant transformation, continuing to grow at an unprecedented speed. Based on the anticipation that emerging economies were likely to underpin global economic growth, the term 'BRICs' was coined to denote the economies of Brazil, Russia, India and China. The world economy's fast growth stumbled temporarily in 2008 due to the Lehman shock, but the 'flattening' of the world continued thereafter. In that time, the United States' view of China has changed. A senior U.S. government official told an international conference that American officials expected China to come closer to their way of doing things by joining the WTO, but it seems that China has made a U-turn midway. Protectionist policies have become evident in the United States after the inauguration of the Trump administration. But tensions between the United States and China — the world's No. 1 and No. 2 trading powers — had been apparent before that. In other words, the process of reviewing the flattening of the world economy had already begun. Increased trade liberalization seems to be a good thing for every economy in the world. However, nearly 30 years of dynamic growth in the global economy — the brisk rise of China in particular — has fostered an entirely different view within the United States. Over that period, the U.S. manufacturing industry was hit hard by the sharp increase in imports from China. This situation was analyzed by David Autor, a professor at the Massachusetts Institute of Technology, and others in their 'China shock' theory. Their analysis sent out shock waves among scholars who had advocated free trade. Areas exposed to fierce competition from inexpensive imports from China witnessed a significant increase in unemployment and a notable decrease in wages. Moreover, labor-force participation rates — the number of people employed and actively seeking employment as a percentage of the working-age population — fell conspicuously, with low-education, low-skilled workers hit particularly hard. Of course, advocates of the China shock theory do not dismiss the benefits of trade. But while the gains from trade tend to be thinly spread throughout society, the pain of trade is concentrated in certain areas and industries. Many people live their daily lives without feeling the gains from trade, but those who are compelled to feel the pain of trade strongly resent imports. This is why protectionism, which advocates trade restrictions from the perspective of political economy, tends to come to the fore even though free trade is desirable in economic theory. Post-Trump U.S. policy Many people may think that U.S. protectionism results from Trump's unique way of thinking. However, as pointed out by the China shock theory, the global trade system, which has developed over the past 30 years or so, has brought a greater shock to the U.S. economy than previously thought. There are concerns that the trend of protectionism will remain strong even in a post-Trump U.S. trade policy. Trump's tariff measures violate the WTO regime's two important principles — one that prohibits countries from raising tariffs and the other, known as the most-favored-nation (MFN) treatment principle, that bans countries from imposing discriminatory tariffs on certain trading partners. It is no exaggeration to say that these two principles have fundamentally supported the free trade regime. The United States has now broken these principles, which it should have supported. Indeed, the United States is endangering the free trade system. Proactive corporate activity is vital for a flattening global economy. How much should a company produce in which country? Which overseas companies should it collaborate with? In which market should it expand sales? Each company makes investments based on outlooks regarding these factors. Such decision-making inevitably requires an environment devoid of uncertainty. After a tariff has been decided, it should not be raised arbitrarily. Compliance with the WTO principles, in other words no increase in tariffs and upholding the MFN treatment, is a prerequisite for global corporate activity. The increase in import duties resulting from the Trump administration's tariff measures is having a major impact on immediate trade. This itself is a major issue, but aside from this temporary impact, there is one more concern that should be addressed. The concern is: to what extent will trade be affected in the medium to long term once we have an environment in which tariffs change frequently, embedding uncertainty into the trade system? As mentioned earlier, the flattening of the world has continued over the past 30 years or so, during which time the global economy has registered high growth. If the rise of protectionism sets back the process of such flattening, there will be a significantly negative impact on economic growth. The question then is how protectionist movements will spread in the post-Trump United States and other major countries. As explained earlier in connection with the China shock theory, the political and economic factors driving protectionism are deep-rooted. So, now that the United States has begun moving toward protectionism, it is not easy to stop it. Also, it is unlikely that we can expect any other country to replace the United States in leading the free trade system. That is all the more reason for major countries to first of all deepen their understanding about how enormous the economic costs of protectionism are. The debate over the China shock theory has shown that naive theories advocating free trade are not persuasive enough. So, what is required now is to make it clear how dangerous naive protectionism is. Motoshige Itoh Itoh is a professor emeritus at the University of Tokyo. He also served as a professor with the Faculty of International Social Sciences at Gakushuin University until March original article in Japanese appeared in the July 6 issue of The Yomiuri Shimbun.
Yahoo
6 days ago
- Business
- Yahoo
Why 24/7 Digital Markets Will Power Development in Frontier Economies
Goodbye to vague notions of 'soft power' and 'impact investing.' Hello to benchmarking, concrete KPIs, and sovereign capital deployed with precision. In the 20th century, Bretton Woods and the Marshall Plan set the financial blueprint for postwar recovery. While the stakes today are just as high, the tools are different. From Ukraine to sub-Saharan Africa, frontier markets are fighting for financial credibility in a trust-scarce world. Traditional aid models, plagued by opacity and inefficiency, have been further dismantled by the Trump Administration's DOGE initiative, which is moving to replace aid with measurable, tech-enabled delivery systems. Tokenization is the inevitable endgame. BlackRock's iShares Bitcoin Trust (IBIT), with over $14 billion in inflows and nearly $200 million in annual fee revenue, has become not only a standout among new ETFs but a symbol of shifting institutional risk tolerance. Its meteoric rise demonstrates growing acceptance of digital assets as a standalone investment class, particularly among institutional investors once wary of volatility. As mainstream allocators embrace digital assets through regulated vehicles like IBIT, capital markets are beginning to reflect a broader appetite for asymmetric upside—an investment profile long associated with frontier economies. Frontier markets, characterized by political uncertainty, thin liquidity, and underdeveloped financial infrastructure, have historically struggled to attract stable foreign direct investment. But the institutional normalization of bitcoin and other decentralized assets is paving new pathways for capital to reach these regions. Just as ETFs like IBIT have created a regulated bridge into crypto, new financial structures—tokenized infrastructure, auditable capital flows, and blockchain-based land registries—are likely to do the same for frontier development. The same investors pouring billions into Bitcoin ETFs may soon view frontier economies not as exotic risk, but as parallel vehicles for exponential returns, particularly when paired with digital rails designed with transparency and scalability in mind. At the root of every successful logistics or capital deployment strategy lies a surprisingly mundane concept: data entry. Every bottle of clean water, every corrugated roof panel, every bolt of fabric destined for refugee housing must be recorded, reconciled, and reported. Today, this is done manually across dozens of silos: UN spreadsheets, NGO CRMs, local government PDFs. But tokenizing these entries—embedding them in smart contracts, linking them to geolocation, timestamp, and vendor profiles—creates a live ledger of aid in motion. This new approach towards accountability will enable not just transparent procurement but tokenized local liquidity: local entrepreneurs paid in stablecoin, verified vendors rewarded with smart grants, or veteran-owned Ukrainian firms given tradable carbon or aid credits. Tokenization allows physical goods, services, and contractual obligations to be represented as digital assets on immutable ledgers. In practice, this means a water pump in Sumy or a shipment of medical supplies in Sudan can be tracked, verified, and paid for in real time without bureaucratic drag or trust deficits. A properly structured token ecosystem creates global, auditable, and real-time liquidity for critical development resources: a 24/7 commodity market for gravel, steel, solar panels, or cement in post-conflict zones. Global commodity markets are not built for the rhythms of frontier states. Most development needs—timber, power tools, clean water filtration—are transacted through arcane, manually priced channels. This invites corruption, delays, and cost overruns. Tokenized markets enable round-the-clock pricing, liquidity, and settlement. A contractor rebuilding schools in South Sudan can lock in tomorrow's price for sheet metal with a click. A regional bank in Tbilisi can see in real-time whether a food distribution contract has been fulfilled. Governments can collateralize transparent delivery records instead of hoping donors believe their paperwork. As China floods the Global South with opaque lending and Russia bankrolls destabilization, the U.S. needs a private-sector-led, transparency-first development model. Tokenized systems provide built-in auditability, modular integration, and sovereign-aligned incentives. And they align with the State Department's mandate toward outcomes-based aid, rather than a carte blanche check which too long defined U.S. foreign policy. Through our work at AUSP, we've seen firsthand that frontier markets are starving for trust, coordination, and clarity. Tokenization is not the starting point in these spaces, nor should it be, but it will be the final endpoint. In the interim, best practices for data entry to ensure that life-saving resources go towards their intended use is the priority; these logs will contain valuable data sets for reconstruction while laying the foundation for 24/7 frontier markets. What Bretton Woods did with pen and paper, tokenization will do with code: create a new financial order for U.S.-led reconstruction.
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First Post
09-07-2025
- Business
- First Post
Trump's trade wars expose chink in global economic order
The United Nations and the Bretton Woods institutions, established in 1945 in a different era, have failed to accommodate the changes in the balance of power since then read more At the end of last week, US President Donald Trump shook the global economic firmament with yet another aftershock, this time claiming that he would be sending 'letters' to about a dozen countries intimating the imposition of tariffs between 10 to 70 per cent. The announcement came days before the 90-day moratorium set in April was to end on 9 July. Meanwhile, negotiations have resulted only in two deals, with the UK and Vietnam respectively, and an interim agreement with China. The UK deal resulted in lower tariff rates on British automobiles and eliminated tariffs on the UK aerospace industry but the steel and aluminum exports remain outstanding. With Vietnam, the agreement resulted in reduction of tariffs from 46 per cent to 20 per cent, with duty-free access for US goods in return! STORY CONTINUES BELOW THIS AD Recent negotiations between the US and China have led to both sides lowering tariffs as an interim measure from an all-time high of 145 per cent by the US and 125 per cent by China, with some easing of the chokehold by China on exports of rare earth magnets. So far, no deals have been reached with the EU, Japan or India. Meanwhile, Trump has threatened 10 per cent tariffs on BRICS member states, including India, for the grouping's 'anti-American policies'. The US-China trade war is at the heart of the tariff war. The US has long chafed at the bit with regard to its trade deficit of nearly $300 billion. China also holds about $1 trillion in US treasury bonds, accounting for a substantial part of the treasury bonds held by foreign entities. The tariff war unleashed on the global economic order highlights the close linkage between geopolitics and geo-economics today. Countries around the world are also discovering that the private interests of political leaders, political parties and corporates can drive strategic choices and shape national policies. Today, private entrepreneurs and Big Tech are working in tandem with sovereign governments whether in the West or in China. This is not unlike the colonial age in which explorers like Vasco de Gama and Christopher Columbus had the financial and military backing of their sovereigns for their expeditions to distant lands for trade and treasure, with the spoils being equitably shared later with the sovereigns. The larger question to be posed is why the global economic order is so weakened and vulnerable today. Why is there geo-economic fragmentation with a growing yen for protectionism and regional or bilateral free trade arrangements? The genesis of major power contestation lies in the inability of the existing global order to reform adequately. The United Nations and the Bretton Woods institutions, established in 1945 in a different era, have failed to accommodate the changes in the balance of power since then. The General Agreement on Tariffs and Trade (GATT) in 1948 was a by-product of the Bretton Woods institutions, and it segued into the Uruguay Round of trade negotiations in 1986, following by the establishment of the World Trade Organisation (WTO) which came to symbolise the opportunities offered by the conduct of free trade in a rules-based system in an era of globalisation. STORY CONTINUES BELOW THIS AD In many ways, the broad consensus held for a few years even after the entry of China into the WTO in 2001, but the subsequent Global Financial Crisis debilitated the Western economies and reordered the balance of economic power. China has exhibited a far more combative posture, backed by far greater financial and economic wherewithal since 2008. After President Xi Jinping's ascendance to power in 2013, this trend has only strengthened with the Belt and Road Initiative (BRI) complementing several other Chinese initiatives such as the establishment of the AIIB and the NDB of Brics. In a new era of global friction and issue-based alignments, both trade and technology are being increasingly weaponised. China's monopoly over critical supply chains has signalled to others the potential for manipulation and driven home the need for diversification and risk mitigation. The most recent challenges concern the long-term availability of critical supply chains, whether semiconductors, critical minerals or rare earth magnets for EVs. STORY CONTINUES BELOW THIS AD The acceleration of the US-China competition has resulted in the imposition of binary choices upon the vast majority that continue to have trade and economic ties to both the powers. For the US, unilateral imposition of tariffs, re-shoring and protectionist measures have taken precedence over the logic of market forces or cooperation with strategic partners. This has resulted in a high degree of uncertainty, pushing the majority towards membership of exclusive blocs even though crystallised alliances are not easy to form in an era of hedging and multi-alignment. A tit for tat approach only compounds problems as do export controls, sanctions and denial regimes. The tariff war points to the Trump administration's notion that the massive adverse balance of trade with China can be used as a leverage since tariffs are more likely to impact Chinese exports to the US than the other way around. US tariffs on China are no doubt aimed at reducing the trade deficit and encouraging US and Western companies to de-risk and move away from the strong gravitational pull of the Chinese economy. The calculus could be that slower growth rates in China would promote economic stress, put a brake on China's military modernisation, and limit its prospects for overtaking the US economy in the near future. STORY CONTINUES BELOW THIS AD Until recently, globalisation was underwritten by the World Trade Organisation which was created to ensure a fair and equitable multilateral rules-based trading order. However, the WTO was unable to prevent unfair practices that border on exploitation. Not all of the 166 members benefited equally from globalisation. Ironically, both the US and China are blaming one another. The US, and many others around the world, believe that China has failed to play by WTO norms. On its part, China accuses the US of abandoning the liberal trading order and resorting to economic coercion. To wit, the WTO is ill-prepared for the largest economy, that is, the US, turning its back on the multilateral trading order and dispute settlement mechanism. For that matter, the WTO is also ill-equipped to deal with the challenge of a hybrid Chinese economy which continues to be a 'non-market economy' 24 years after the country's admission to the WTO. US tariffs do not distinguish between friend or foe. Tariffs on Southeast Asian countries, even EU nations, are aimed at discouraging Chinese companies from relocating their operations to ASEAN economies or to Europe as a means of bypassing US tariffs. The US focus on 'rule of origin' is meant to shut out Chinese goods and components. The US appears keen to reorient Asian economies with itself as the core, and perhaps weaken the RCEP which revolves around the Chinese economy. In any case, the US is absent from the CPTTP. Four years on, China's application to join the CPTTP still languishes and is unlikely to be approved. STORY CONTINUES BELOW THIS AD However, a point to note is that any weakening of the economic partnership between China and Asian economies at this juncture would have a deleterious effect on China's GDP growth rates. After all, China's trade with Asia, particularly Asean, is growing at a much faster rate than trade between China and the US or the EU. Today, ASEAN is China's largest trading partner accounting for 16.8 per cent of its total foreign trade. Intra-Asian trade has proved mutually beneficial for China and Asean. Therefore, higher US tariffs on goods from China and ASEAN countries may provide a fresh impetus to intra-Asian trade and investment flows. For the US, tariffs are also intended to boost domestic manufacturing through reshoring. That is easier said than done. The US has neither the supply chain ecosystem nor the labour cost arbitrage to substitute China as a manufacturing hub. This means that China will continue to be a preferred source of goods and components for major Asian and European economies as they prioritise controlling consumer prices and inflation. The manufacturing industry in many countries, whether for domestic consumption or exports, is in any case heavily dependent on China-centric supply chains. STORY CONTINUES BELOW THIS AD Reforms are imperative if the WTO is to work well as a non-discriminatory rules-based system. India attaches importance to tackling non-tariff barriers that restrict market access, addressing distortions caused by non-market economies, and reviving the WTO's dispute settlement system. India considers agriculture and dairy to be sensitive sectors in trade negotiations. In his remarks at the session on Reform of Global Governance and Peace and Security at the BRICS Summit in Brazil on 6 July, Prime Minister Modi stated that global governance institutions such as the UN Security Council, IMF, World Bank, and WTO must undergo urgent reform to reflect contemporary realities. Institutionally, US primacy survives in the IMF for instance, where it wields a veritable veto with nearly 17 per cent voting share against the requirement of a majority of 85 per cent consensus for bringing about any change. China-backed institutions such as the AIIB epitomise multi-alignment, with several close US allies such as the UK, France and Australia being members. AIIB too needs to move away from its current focus on infrastructure financing to a broader thrust on poverty alleviation and human indices if it is to compete with the established Multilateral Development Banks (MDBs). STORY CONTINUES BELOW THIS AD Lack of reforms in global financial, trade and economic institutions is a setback for the realisation of the 2030 Sustainable Development Goals, including climate action, as well as food and energy security. The worst affected by a global gridlock in decision-making, as always, are the countries of the Global South. Regional cooperative structures can play an important role at a time when multilateralism represented by the UN and the WTO stands weakened. They can enhance economic stability, promote infrastructure, connectivity and facilitate regional FTAs. However, it is imperative that the national priorities of certain member states do not dominate the discourse within a regional mechanism. For regional economic structures to succeed, they must be inclusive and must eschew combative postures. India is today the fastest growing large economy. It is the fourth largest and will soon be the third-largest economy. India's focus is on inclusive growth and development. India is emerging as an attractive destination for trade, investment and supply chain diversification as part of global risk mitigation. The philosophy of vasudhaiva kutumbakam, which was the leitmotif of India's successful G20 presidency, can help the world forge a better values-based normative consensus for development and prosperity around the world. The author is the Director General of the Manohar Parrikar Institute for Defence Studies and Analyses; views expressed are personal.
Time of India
08-07-2025
- Business
- Time of India
Trade tensions, not BRICS, are the bigger threat to global stability: Geoff Dennis
"The Chinese are desperate for the RMB to play a bigger role. But frankly, I do not see what the BRICS are doing or what they are trying to do represents a currency related threat to the US whatsoever," says Geoff Dennis , Independent EM Commentator. When we speak about the idea of de-dollarisation and we have seen countries like India for instance, we have publicly stated that we are not going to move away from the dollar and de-dollarisation is not a policy that India essentially is looking at. But is there an immediate threat to the United States or to the G7 group of nations from BRICS because Donald Trump is making these comments over and over again. So, do you anticipate an immediate threat A) to the dollar and, of course, to US' hegemony? Geoff Dennis: I do not believe so. This is an issue which has allegedly impacted markets for the best part of 50 years. I am an old guy, I have been around a long time and we were talking about potentially the Deutsche Mark replacing the US dollar as a key reserve currency or the key reserve currency in the late 70s and it has just never happened. Now, right now there is some evidence, of course, that central banks are diversifying out of the dollar. The Chinese are desperate for the RMB to play a bigger role. But frankly, I do not see what the BRICS are doing or what they are trying to do represents a currency related threat to the US whatsoever. I just do not get it frankly. And so, there is some de-dollarisation going on for sure, but I am not sure it is major and I am not sure it is involving the BRICS. In fact, frankly, my own interpretation of all of this is that anything that anybody does overseas, especially if countries get together is almost automatically defined by Trump is anti-America and there is nothing about what the BRICS are doing that is really seriously anti-America and this all boils down at the end of the day to the fact that I just think de-dollarisation is not something that is going to go far in the world even if the dollar's really truly dominant position has pulled back a little bit over the last few years. Given the fact that the reform Bretton Woods and reduce dollar reliance in fact is not new, but is BRICS gaining structural momentum this time in your opinion? Geoff Dennis: It is gaining structural momentum in the sense that you have got a number of other large countries as everybody knows joining BRICS that over and above the original BRICS which was defined by my old friend Jim O'Neill in 2001 which was, of course, just Brazil, Russia, India, China. There are some very important countries that have joined. But still I am not sure exactly what a BRICS summit achieves. Yes, they say all the right things about we support free trade. We condemn tariffs whatever it might be or non-tariff barriers, but as to how much power this group actually can demonstrate currently in the world economy especially against a US president who frankly is a bully to everybody who seems to threaten in some vague way the US dominant position of the world economy. Live Events So, I think it does not sort of matter to me within reason what the BRICS does at this point, whether it gets bigger, whether it gets smaller, whether a lot of presidents and heads of state come to the conferences or not. At the end of the day I do not think it has a lot of power except to say all the right things about trade policy and meanwhile President Trump is rampaging around the global economy like a bull in a China shop and the BRICS will become part of that unfortunately and yet, I do not know how the BRICS particularly fights back and I certainly do not see it as I said earlier being something that is going to turn into a brics-led currency, whatever reserve currency that is going to replace the dollar. The problem here is Trump's tariff policy and it is as simple as that frankly. ETMarkets WhatsApp channel )
