Opera Mundi: Possibilities of BRICS expansion under the Western gaze

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Ideological apparatuses of neoliberalism project a threat to US power, even though this is exaggeration and more propaganda than reality.

The 16th BRICS Summit, which will now feature new members (and with President Lula in physical absence), marks a turning point in relation to the similar event in 2023.

According to the hegemonic media in the West, Russia (and Iran) are using the bloc as a platform for an “anti-Western” policy, who knows what that might mean.

Thus, on a speculative level, the ideological apparatuses of neoliberalism project a threat to the power of the United States.

This is still an exaggeration, more propaganda than reality.

For example, the bloc is very far from a military alliance or pact.

Nothing similar to the extinct Warsaw Pact, which was the military alliance equivalent to the North Atlantic Treaty Organization (NATO), only on the side of the former Soviet Union.

The instrument of global power struggle is another, and by the way, a very welcome one according to even the founding economists of modern capitalism, such as the British John Maynard Keynes and the American Barry Eichengreen.

Both see the dollar as a source of exorbitant privilege on the part of Washington, even in the face of its European allies.

As Paul Volcker (former chairman of the Federal Reserve, the Central Bank of the United States) stated, repeating the phrase of John Connally, former Secretary of the Treasury in the first Nixon administration, “the dollar is our currency and your problem”.

It’s no coincidence that the economy that operates in continental Asia and the Eurasian Union seeks to transact without this use, in order to interrupt the feedback flow of the purchase of “hot money” through US public debt securities.

It’s also no coincidence that Iran is present in both economic cooperation associations, the Shanghai Cooperation Organization and the Eurasian Economic Community.

Faced with this continental economic colossus, pressure from the West (in general) and the United States (in particular) has led the most important oil kingdom on the planet to take a step back.

 

The Saudi position and the pressured West

On January 1 of this year, Russia received the presidency of BRICS, an association that, according to the decision adopted by the 15th Summit of the bloc in August 2023, now includes 10 countries, or almost. Egypt, Ethiopia, Iran, the United Arab Emirates and Saudi Arabia (still under evaluation whether or not to join fully) joined BRICS as new full members, which is a strong indication of the association’s growing authority and its role in international affairs.

Another milestone that could be increased via BRICS is the so-called “oil account” transactions outside the dollar.

The recalcitrant position of Saudi Arabia, which had joined and then placed itself under observation, ends up being the deciding factor due to the production capacity of the state oil company Saudi Aramco.

The partnership and bilateral investments between the Kingdom of the House of Saud and China have already made it possible to reestablish diplomatic relations between Riyadh and Tehran.

Therefore, if Beijing counts on Saudi oil, “the sky is the limit”.

At the same time, with the succession in sight, Prince Mohammed bin Salman seems to want to expand his possibilities and room for maneuver.

Thus, a week before the Kazan meeting, there was a summit between the European Union and the Gulf Cooperation Council (GCC, composed of Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman).

Nothing is a “coincidence” and if the commercialization of oil, gas and derivatives follows the rhythm of complementary trade between Iran, Turkmenistan, Russia, Kazakhstan and China (as the final destination of more than half of this production), Western hegemony in the commercial flows of energy commodities will be seriously threatened.

 

BRICS Pay: a new payment method

A week before the summit and almost concurrently with the meeting between leaders of the European Union and the Gulf Council, the BRICS Business Forum was held.

Participants of the event, also held in Kazan, had the opportunity to try out a demonstration version of a new payment system: BRICS Pay.

With the presence of more than a thousand businessmen from the member countries (Brazil, India, China, South Africa, Egypt, United Arab Emirates, Ethiopia and Iran), the card with 500 rubles (R$ 29) free of charge could be used within the framework of the forum, from October 17 to 18, in stores with special BRICS Pay symbols.

To activate the money, it was necessary to register in the system and scan the QR code on the card.

To pay, it was enough to scan the QR code on the screen of the store employee’s phone.

It is clear that the clearing system implemented through the Russian and Chinese central banks (soon to be expanded to include the Iranian one) can be expanded on a large scale within the Asian continent itself.

Sanctioned and blockaded countries such as Cuba and Venezuela can also easily join.

The payment system, as well as the form of compensation and productive financing through the New Development Bank (NDB) can grow exponentially.

Considering that the bloc as a whole reach 36% of the world’s GDP, surpassing the G7 (the bloc of the richest countries and militarily subordinate to the United States), the first global dispute to be won is in the economic systems (productive, commercial and financial).

 

BRICS and Brazil

The bloc’s fundamental move is to advance the financial architecture that allows for commodity trade without going through the insurance and guarantee scheme within the Swift system.

The most reasonable move would be to advance these agreements by taking advantage of the sine qua non condition of sanctioned countries.

In the case of Latin America, trade flows could take advantage of Venezuela (through the state oil company PDVSA complex) and set up a consortium backed by digital currencies via the bloc’s central banks, following the model described above for credit cards and electronic clearing.

One of the five largest food producers in the world, Brazil, whose flow necessarily depends on the Chinese economy (and which, therefore, has a surplus in yuan) would only benefit from this advanced architecture and due strategic coordination.

Unfortunately, our internal correlation, and even more so within a coalition government, is still far from this understanding.

Geo-economics blindness?

It could be, in addition to an absolute lack of pragmatism.

What is left in the relationship with the oligarchs in Congress is still lacking at a high decision-making level.

Even though it is difficult, moving forward in this debate is literally the only “proud and sovereign” path for our country in the first quarter of the 21st century.

 

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