BRICS ministers discuss plans to form alternative global currency

By Al Mayadeen English
Source: Agencies
2 Jun 2023 19:18
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Chinese Vice Foreign Minister Ma Zhaoxu said that the idea of expanding the bloc would be highly beneficial to the developing world.

Foreign Ministers of the BRICS association in Cape Town on June 1, 2023 (Reuters)

In light of collective efforts to de-dollarize global trade, several countries have already expressed an interest in joining the BRICS association, including Iran, Venezuela, and interestingly Saudi Arabia as well, Sputnik reports.

Foreign ministers of the BRICS member states, namely Brazil, Russia, India, China, and South Africa, met in Cape Town on Thursday to discuss new modalities of challenging the US and its dollar supremacy.

This would involve the creation of an alternative financial market and global currency that will serve to shield the group's New Development Bank from the nefarious impact of US sanctions.

One of the measures would involve admitting new members into the bloc, with South African diplomat Naledi Pandor calling for further efforts to be invested in the production of a report by August.

Chinese Vice Foreign Minister Ma Zhaoxu said that the idea of expanding the bloc would be highly beneficial to the developing world, noting that the BRICS bloc "was inclusive ... in sharp contrast to some countries' small circle, and so I believe the enlargement of BRICS will be beneficial to the BRICS countries."

Russian Foreign Minister Sergey Lavrov said that "with regard to the issue of BRICS, it is still being shaped, it is still evolving."

"BRICS is a new organization based on the principles of equality, mutual respect, consensus, non-intervention, and strict adherence to the UN Charter in all its principles and in all their relationships. BRICS does not choose which principle it likes for a particular situation, and it then doesn't do the opposite," Lavrov added.

He further emphasized that the bloc "symbolizes the evolution of the multipolar world, which is being discussed more and more often."

Last month, South Africa’s envoy to BRICS Anil Sooklal said that about 19 countries expressed an interest in joining the BRICS organization. Those who have already asked to formally join the organization include Iran and Saudi Arabia, while Argentina, the United Arab Emirates, Algeria, Egypt, Bahrain, Indonesia, and three other nations from Africa have expressed an interest in joining the bloc. Since the bloc's inception in 2006, the group has added only one member, which is South Africa.

The strategy of de-dollarization was discussed among foreign ministers of the BRICS organization, during which South Africa's Foreign Minister Naledi Pandor said member states are planning to continue discussions on the introduction of an alternative currency.

Russia's State Duma Deputy Chairman Alexander Babakov said the possibility of an alternative currency could be backed not just by gold, but also by other groups of products, such as rare-earth elements.

"I think that the BRICS [leaders' summit in August] will announce the readiness to realize this project," Babakov pointed out.

Russian Foreign Minister Lavrov said in May that BRICS member states "have long been working on measures to reduce the share of the dollar in mutual payments and to switch to payments in national currencies […]," adding that "recently, Brazilian President [Luiz Inacio] Lula da Silva suggested that we consider moving toward a collective currency within the BRICS. We will participate with interest in this discussion."

The statements were delivered after da Silva called on the BRICS organization to conceive a plan of action to de-dollarize global trade.

"Why can't an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries? Who decided that the dollar was the (trade) currency after the end of gold parity?" Lula said during a visit to the Shanghai-based New Development Bank.

Prior to these statements being issued, Lavrov said that BRICS members are already in the process of working to achieve payments in national currencies in trade and financial transactions, owing to the fact that the dollar is now deemed unreliable by international standards.

"The share of national currencies in settlements between the BRICS countries is already rapidly growing. The BRICS countries have initiatives that address the need to work on the creation of their own currency. The reason is very simple: we cannot rely on mechanisms which are in the hands of those who can cheat at any time and refuse to fulfill their obligations," Lavrov told reporters.

Russian expert Mikhail Khazin told Sputnik that the "inevitable" process of de-dollarization had been facilitated by the deliberate slapping of sanctions by the US treasury and the weaponization of the dollar to subdue non-compliant countries to US hegemony.

He noted that the freeze on Russian assets, the expulsion of Russia from the SWIFT payment system, as well as the ban imposed on exports of US dollar-denominated banknotes to Russia have sent a clear message to other world players.