BRICS: Pioneering a De-dollarised and Fair Economic Order

Published: 12 May 2024

The BRICS alliance—comprising Brazil, Russia, India, China, and South Africa—stands as a formidable force poised to challenge the traditional dominance of the US dollar and advocate for a more equitable international monetary system. Writing as a political analyst, I see BRICS as pivotal in leading the charge towards a de-dollarised and fairer economic order, and here’s why they can be successful.

Firstly, the sheer economic magnitude of BRICS nations cannot be overstated. Together, they represent over 40% of the world’s population and nearly a quarter of its GDP. This collective weight affords them considerable leverage in shaping global economic policies and norms. By harnessing their combined economic power, BRICS nations have the potential to catalyse a seismic shift away from the US dollar-centric financial architecture towards a more balanced and inclusive system.


Secondly, BRICS countries have been proactive in forging alternative financial institutions that challenge the Western-dominated status quo. The establishment of the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA) exemplifies their commitment to creating parallel structures outside the purview of traditional Western institutions like the IMF and World Bank. These institutions offer avenues for financing infrastructure projects and providing liquidity during times of crisis, thereby reducing dependency on the US dollar and promoting financial sovereignty among member states.


Moreover, BRICS nations have been at the forefront of advocating for institutional reforms in international financial organisations. They argue for a fairer distribution of voting rights and decision-making powers to reflect the evolving economic landscape. By amplifying their voices on the global stage, BRICS countries seek to ensure that the interests of emerging economies are duly represented in shaping the rules of the game.


Furthermore, BRICS nations are actively diversifying their trade and investment portfolios to reduce exposure to the volatility of the US dollar. Bilateral and multilateral agreements aimed at settling transactions in local currencies foster greater resilience against external economic shocks and promote regional economic integration. This shift towards currency diversification not only strengthens economic ties within the BRICS bloc but also paves the way for a more multipolar and stable global financial system.


In addition, BRICS countries are embracing technological innovations such as digital currencies and blockchain technology to streamline cross-border transactions and reduce reliance on traditional banking channels dominated by the US dollar. China’s exploration of a digital Yuan and Russia’s plans for a digital Ruble exemplify their commitment to harnessing technology to enhance financial inclusivity and efficiency.


Lastly, BRICS nations are actively engaging in diplomatic outreach and coalition-building efforts to garner support for de-dollarisation initiatives from other like-minded nations. By fostering alliances with countries disillusioned with US hegemony or seeking alternatives to the dollar-dominated financial system, BRICS can amplify their influence and catalyse broader systemic changes on the global stage.


BRICS nations indeed possess the collective capabilities and political will to lead the world towards a de-dollarised, fairer economic system. Through strategic cooperation, institutional innovation, and diplomatic advocacy, BRICS can chart a course towards a more equitable and resilient international monetary order, ushering in a new era of fairer economic system.