BRICS Summit: Key Takeaways
Posted on 08/29/2023
Brazil, Russia, India, and China started out as a group of four with plans to boost their place in the world’s financial order. South America joined, and now oil majors Saudi Arabia and the UAE will likely join in January, with four others. Chinese authorities called the expansion “historic.”
Financial media expected BRICS to challenge the U.S. dollar. This did not happen at the summit. Across the world, oil continues to trade primarily in U.S. dollars. If the BRICS intend to unseat the dollar, it will be some time before this potential threat develops due to a wide variety of systems in place to support the dollar. However, BRICS represent over a third of the world’s economy by purchasing power parity. The commodity reserves of BRICS countries is substantial. The BRICS currently have no currency to compete with the dollar. A potential commodity-backed currency and international payments system might be compelling, should it come to fruition, but there has been no unveiling of such a system.
India had preferred not to expand BRICS, with China preferring to expand. Now China is expected to have more influence among BRICS countries than India, due to the expansion.