Sputnik
Sputnik has hosted an international discussion on the current economic agenda. The videoconference, Global Majority in the 21st Century: Countering Sanctions and Searching for an Alternative to the Dollar, focused on major issues, with leading experts on international financial relations speaking about the prospects for using national currencies for intra-BRICS transactions, the future of the dollar, the BRICS currency plans, as well as the impact of sanctions on the Russian economy.
The speakers included Marcos Caramuru, former Executive Director of the World Bank, member of the International Board of the Brazilian Center for International Relations (CEBRI); Sergey Afontsev, Corresponding Member of the Russian Academy of Sciences, Deputy Director of IMEMO of the Russian Academy of Sciences, Head of the Global Economy Department at the Faculty of Economics, Lomonosov Moscow State University; Ekaterina Arapova, Director of the Center for Sanctions Policy Expertise at the Institute for International Studies; Abdul Aziz Shabani, Research Fellow at Al Riyadh Center for Political and Strategic Studies; Mostafa Ahmed, specialist in regional security at the Al Habtoor Research Center; and Xu Wenhong, Deputy Secretary General of the Belt and Road Center, Chinese Academy of Social Sciences.
Commenting on the prospects for BRICS new currency, former Executive Director of the World Bank and member of the International Board of the Brazilian Center for International Relations (CEBRI) Marcos Caramuro noted that in order to stimulate the use of national currencies in trade, interested nations should consider a reserve asset similar to the SDR (the acronym stands for Special Drawing Rights). “The idea of transforming this potential asset into a BRICS currency is more complicated,” the expert stressed. “This will certainly require additional research, but it is not impossible to discuss, at least in an experimental vein, the concept of an agreement creating assets similar to SPDs, which will be used as a benchmark in trade between the BRICS countries.”
Sergey Afontsev, Deputy Director of IMEMO of the Russian Academy of Sciences, underscored the Russian economy’s stability: “Despite the significant toll the sanctions are taking, as well as the lost profits, the Russian economy is functioning very well under sanctions. Last year, for the first time in many years, economic growth in Russia exceeded the growth rate of the global economy. This trend will continue this year. This is not just the opposite of the intended effect the initiators of the sanctions had in mind; this has actually turned the logic of their actions 180 degrees.” The expert also noted that the choice of foreign partners for economic cooperation is the sovereign right of every sovereign state.
Ekaterina Arapova, Director of the Center for Sanctions Policy Expertise at the Institute for International Studies, pointed out that the current geopolitical situation is actually conducive to the formation of a resource for national economic growth and stability in Russia under the external sanctions pressure. According to the expert, the integration of national payment systems among the BRICS member states is one of the tools for adapting to sanctions risks and, despite certain constraints, it is also an important factor in stabilizing the situation. Arapova emphasized the importance of opening branches of Russian banks in friendly jurisdictions, citing VTB Bank’s experience in Shanghai.
Abdul Aziz Shabani from the Al Riyadh Center for Political and Strategic Studies said that “BRICS is challenging the traditional dominance of Western institutions,” creating a platform for expressing its interests loud and clear. The expert highlighted some of the group’s major achievements, such as the creation of the BRICS Development Bank, which represents an alternative to traditional Western institutions and makes it possible to implement projects in emerging markets. Saudi Arabia’s accession to BRICS, the expert maintained, indicates geopolitical changes in the energy market and suggests that developing economies are beginning to play an increasingly prominent role in the world.
Mostafa Ahmed, specialist in regional security at the Al Habtoor Research Center, noted that countries around the world should strive for greater flexibility of trade ties to overcome excessive dependence on the dollar: “Until now, the US dollar has been the dominant currency in international transactions, but today, we are making small steps to ensure that governments, including in the Middle East, agree to work out bilateral mechanisms that would give us alternative solutions in international trade. And it is quite possible that in the future, such bilateral agreements will pave the way for creating a new common currency, possibly in the BRICS format.”
Xu Wenhong, Deputy Secretary General of the Belt and Road Center of the Chinese Academy of Social Sciences, speaking about the current state of the international financial system, stressed that the modern financial infrastructure, in particular, the SWIFT payment system, has long lost the potential to meet the interests of most countries, becoming a political and economic pressure tool instead: “Over the past decades, Western countries, led by the United States, have been promoting their payment system, one that suits exclusively their interests. Political factors are increasingly playing a role in international trade today, and international financial institutions are being weaponized in political squabbles.”
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Many depict BRICS as “Dollar killer”, ‘the catalyst for De-dollarization’ so on and so forth… however, BRICS is not the only and new emerging platform that may perhaps reduce the use of the US dollar, there is also ‘mBridge’ ( Multiple CBDC Bridge) a platform designed for ‘real-time’ cross-border peer to peer payment (foreign exchange) system under development by 5 member banks which includes Bank of Thailand, Bank of China, Central Bank of Saudi Arabia, Central Bank of UAE, and Bank of International Settlement (BIS) based in Hong Kong. mBridge It is a Blockchain based CBDCs transaction, or payment system.
The US is not likely to join this CBDC based system for two reasons (1) according to congress there is not going to be USD CBDC (at least for the foreseeable future) due to “Privacy’ issue re US constitution. (2) it will further erode the GRC status of the US dollar more than the BRICS system will be able to do in the short run.
BRICS, as a mechanism for bilateral-trade between member states using ‘local currencies’ , and can better be described as “currency multi polarity” instead of the terms mentioned at the beginning of the first paragraph. Plus BRICS members have to trade internationally to get goods & services that are not available within BRICS, therefore they still have to use existing currencies including the dollar, and Pound, and Euro…
As the Russian economist & Central Bank Governor put it, the BRICS blockchain based trading system is capable of providing the sell of dollar, pound, Euro directly without disclosing the transaction amount and buyer and seller to anyone but those involved in the transaction. That means it is ‘sanction’ free ( out side SWIFT).
Here is an outstanding detailed explanation provided by Dr. W. Powell
“Dollar ‘s Demise: End of Hegemony, Currency Multipolarity, mBridge, Global Economics| Dr. W. Powell
Link = youtube.com/watch?v=fejTgAhOvww
Alongside the BRICS trading system, there is another very important development within the BRICS system, “The BRICS Grain Exchange'” that is under development, once completed it is going to be a game-changer for Farmers of the developing nations, that is going to be setting its collective Grain product prices uniformly among BRICS producers big or small. instead of the current Western based and controlled by International Grain Council (IGC) which sets the price for all grain-commodities ( most think its practices are lopsided in favor of the West).
For example Ethiopian Coffee producers could form a single Cooperative or a TRANSPARENT Blockchain based government run ‘Coffee Board’, to do the ‘value added’ processing in the country and get it the the global marketplace using BRICS Grain exchange system by removing the foreign middle-men altogether, creating good paying & specialized job opportunities for our young people.
“Why BRICS Grain Exchange Will Transform Global Food Trade! (7 Surprising Benefits)”
Link = youtube.com/watch?v=C_YJAAtPGfc
Furthermore, considering Africa’s large mineral deposits, it is probable the best time governments nationalize all natural-deposits in the nation and collaborate with BRICS member states that have mining expertise such as Russia, India China, and the rest that are prepared to collaborate in skills transfer in mining, production of finished products here within the country eliminating export of raw materials.
“U.S. vs CHINA: Global Race is ON for Critical Minerals as the Focus Shifts to Africa’s Resources”
Link= = youtube.com/watch?v=wh6IOBvYW3U
Be well
“It is the economy, stupid”, Bill Clinton
Why China is succeeding where USSR failed, the USSR under Joseph Stalin became the military industrial complex powerhouse of the WARSAW Pact, comparable to the US MIC. However, the USSR collapsed because its commercial economy was not given equal attention, therefore its promotion and export of its ‘ideology’ backed with military assistance to its followers worldwide took a toll on its overall economy and got to ‘the place of no return’ & collapsed.
China (a disciple of USSR) took a page out of its supporter’s ‘fatal strategic plunder’ and decided to do the reverse, by developing a strong industrial economy across industries, first and then followed by its military industry at home. Unlike the USSR, China focused on expansion in manufacturing, trade, and export, followed by building its BRI platform in 2013. Promoting trade and economic development while keeping its ‘ideology’ at home, was the key.
As a consequence of that strategy China became the top economy in the world in PPP terms since 2014, (from 0 to the top in less than 50 years).
Bill Clinton applying his “it is the economy stupid” strategy, he left office in 2000 with the ‘surplus” in the US treasury books, and US debt at $5.656 trillion.
Baby Bush ( like father like son) came into office in 2000 reversed that, as if saying “it is war stupid'” went on a rampage non-stop, destroying one country after another for 8 years, adding another $5 trillion to the US debt ($10.2 trillion).
Today the US debt stands at a whopping $ 35 trillion +, and has budget spending increase of $1 trillion every 3 months, with $1 trillion + in interest payment per year ( which means adding $6 to 7 trillion on top of the $35 every year from here).
To put it in perspective, $1 trillion in debt is equivalent to spending $1 million everyday for 2739.73 years ( 1,000,000,000,000/ 365,000,000) or with $1 trillion one can feed the world for 10 years.
Imagine this, the US spent $35 trillion in 250 years of its existence, meaning it is robbing its future generation by 2739 * 35 = 95,890.41095890411 years ( in just 250 years) of WAR spending.
Talk about “Huma rights “.
Now, you may ask what this has to do with the Abiy government?
Since Abiy came to power in 2018 he has been waging war non-stop since 2020, and now he is going to start a new one with Somalia for no reason at all, while but he let Sudan take 40 square Km Ethiopian territory in the Amhara region, and had no response, in fact his military chief of staff General B. Jula said at the time “… we are not going to fight for land”, What???
But they are willing to start a war with Somalia to fulfil Abiy’s dream to have a NAVY (“a money pit”, cost but no income generation potential) without having a Port.
Yes, Ethiopia needs a port to conduct import & export commerce not to build a NAVY.
Abiy could have made further progress with Eritrea after the relationship was renewed in 2018, and without a doubt there was a STRONG possibility to get a deal made to get the use of Assab port. No, for unknown reasons (I suspect US pressure to not include Eritrea & Amhara region in the Pretoria negotiation, what a blunder of epic proportions, and resulted in the conflict with FANO, and creating unnecessary animosity with Eritrea.)
Ethiopia is $30 billion in debt, and is borrowing more from IMF & WB to pay interest on the old debt, and he brings a new WAR to build a NAVY.
This is where Bill Clintons “It is the economy, STUPID’ comes into play, and the Chinese understand it and as a result we are witnessing the consequence of it, while Abiy is struggling to understand it , seem out of his depth.
Hope he will reverse course, and mend the very Special family relationships Ethiopia and Eritrea have had for the longest time, more than any other in our neighborhood.
Ethiopia and Eretria are family and our family ties need an urgent repair, at all cost, period.
The BRICS membership will bring unimaginable economic strength to both our peoples, expanding Assab Port and making it the state-of-the-art modern Import Export hub of Africa.
Again, “it is the economy, stupid”, (not wars) .
Be well.
Singapore’s former UN Ambassador Kishore Mahbubani REVEALS China’s Strategy to Counter the US
( Explaining how US is heading the way of ‘the late’ USSR)
Link = youtube.com/watch?v=B6reZTScNIs
Be well.
Singapore’s Lee Kuan Yew himself : Predicted About China WILL SHOCK You!
( Explaining ‘changing course’ is vital to achieve ‘success’… (instead of doubling-down (war, war, war) expecting different results) )
Link = youtube.com/watch?v=4VDP3Jf5uD4
Bew well.
“Tether and the BRICS’ central bank digital currencies are creating parallel, de-dollarized economies”
Link = youtube.com/watch?v=jy29vJXPX7s
“China is completing a global ports network for the BRICS economic bloc, and nobody”
Link = youtube.com/watch?v=2KlIBDMpFNM
Be well
Prof. Kishore Mahbubani:
“Is the Belt and Road Initiative (BRI) a Debt Trap?”
Link = youtube.com/watch?v=E8wC_pgPtS0
Be well.