The idea of the Brics group challenges the US dollar It’s a lot of talk as long as China and India remain so divided and refuse to cooperate on trade, Jim O’Neill, the former Goldman Sachs economist who created the Bric acronym, told Reuters.
Russian President Vladimir Putin is using the BRICS leaders’ summit to show that Western attempts to isolate Russia over the war in Ukraine have failed and that Russia is forging ties with Asia’s emerging powers.
O’Neill introduced the term Bric in 2001 while working at Goldman Sachs, in a research paper that highlighted the enormous growth potential of Brazil, Russia, India and China — and the need to reform global governance to include them.
“The idea that BRICS could be a genuine global economic club is obviously a bit of a fairy equivalent, in the same way as the G7, and it is very worrying that they see themselves as some kind of global alternative, because it is obviously unfeasible .”
Jim O’Neill, in an interview with Reuters
“It seems to me to be basically a symbolic annual meeting where important emerging countries, especially noisy ones like Russia, but also China, can come together and highlight how good it is to be part of something that doesn’t involve the US and that global governance It’s not good enough.”
READ MORE: To circumvent sanctions, Russia proposes that Brics develop a payment system
Challenge to the dollar
Russia is trying to convince BRICS countries to create an alternative platform for international payments that would be immune to Western sanctions.
O’Neill, 67, said people have been talking about alternatives to the dollar since he began working in finance, but that none of the countries with the potential to challenge the dollar had done anything to seriously pursue it.
According to him, any BRICS currency would be highly dependent on China, while Russia and Brazil would not be significant parts of the currency, he said.
“If they really wanted to take economic issues seriously, why wouldn’t they genuinely seek less tariff-based trade among themselves?” O’Neill said.
“I will take the BRICS group seriously when I see signs that the two countries that really matter — China and India — are actually trying to reach an agreement, rather than trying to effectively confront each other all the time.”
Jim O’Neill
India has been trying to restrict Chinese investment in the country since a decades-old border dispute turned into a clash between border guards in 2020. The two countries pledged to increase cooperation on Wednesday in their first formal talks in five years .
Little progress
O’Neill, who admitted that he will be called “Mr. Brics stamped on the forehead forever”, said that the group has achieved very little in the last 15 years.
He added that it is not possible to resolve truly global issues without the United States and Europe, just as it is not possible for the West to resolve truly global issues without China, India and, to a lesser extent, Russia and Brazil.
The Brics group emerged from meetings between Russia, India and China, who later began to meet more formally, eventually adding Brazil, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Saudi Arabia has not yet formally joined.
The group now represents 45% of the world’s population and 35% of the global economybased on purchasing power parity, although China accounts for more than half of its economic power.
Putin opened the summit this Wednesday (23) saying that more than 30 countries expressed interest in participating in the group, but that it was important to find a balance in any expansion.
Bringing more members into BRICS would make it even harder to get anything done, O’Neill said.
(Por Guy Faulconbridge)
