The world order is experiencing a paradigm shift as the financial powers are revolving from the West to the East. The BRICS+ which is now a nine-member alliance accounts for 40% of crude oil production and exports. They also account for one-quarter of the global GDP and command nearly half of the world’s population. They are now stronger in terms of trade, purchasing power parity, and GDP than ever before. BRICS is a new world order in progress that is looking to trample the Western powers.
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The first target is to pull the US dollar down from the world’s reserve currency status and replace it with local currencies. Emerging economies are systematically burdened to carry the US dollar to fund America’s deficit. In return, their native economies are unable to gain any surplus as the US dollar stands in the way. Ending reliance on the US dollar and pushing local currencies for trade is the main agenda of BRICS to under into the new world order.
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BRICS: An Emerging New World Order
Source: AFP
The BRICS alliance is the only contender that can usher the world into a new financial order. It has good ties with other developing countries that share similar ideals of de-dollarization. Several nations are on the sidelines and could jump in on the bandwagon if the BRICS de-dollarization agenda becomes a success. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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The development adds further strain on the US dollar as it could lose out on the supply and demand mechanism. If more countries begin trading in local currencies, the US dollar could face massive deficits. A deficit could lead to hyperinflation in America making the prices of daily essentials skyrocket. This could also lead to job cuts and a serious threat to the stock market looms.