Yves here. We said from the very outset of the much-ballyhooed “de-dollarization”: and “new currency/new reserve currency” vogue that it would take a very long time to dethrone the greenback. That is not to say that the so-called Global South, and the BRICS members in particular have not made important progress, that is peculiarly underplayed by these enthusiasts.
Specifically, the big object to the US misuse of its reserve currency status and therefore its control over the dollar payment system was its use of sanctions, and particularly the way sweeping sanctions against Russia hurt all sorts of innocent bystanders, like countries that wanted to buy Russian fertilizer.
The messy bi-lateral trade schemed being put in place allow these countries to escape the sanctions noose as far as trade concerned, and that (as opposed to investments and dollar capital raising) is how the US had intended to inflict pain on the likes of Russia, Iran, and Cuba.
Many major countries are already well along in this process. Russia’s central bank governor Elvira Nabiullina has pointed out that building the related payments/information infrastructure to facilitate this type of trading is a priority.
Andrew Korybko provides a new sighting confirming that even the supposed leaders of the de-dollarization effort are not planning to move it forward very quickly. As much as I like this piece, it’s frustrating to see Korybko again call out what he labels the “alt media community” (in the past he at least qualified his stereotyping with depicting the stance as held by many, as opposed to being monolithic). He described privately in some detail how he challenged a prevailing non-mainstream view; As he explained by e-mail:
I sincerely do regard it as an unofficial lobbying group that functions as the “mainstream” counterpart of non-Mainstream Media (MSM).
I discovered this in early 2017 when there was a failed community-wide attempt by the Syrian-focused influencers to “cancel” me…
Since then, I realized that they’re practically copies of one another when it comes to pushing the most popular non-mainstream narrative on whatever issue it may be.
2017 is some time back. And the most visible writers and YouTubers who have acted as if the BRICS are soon to launch a new currency are high profile enough to be independent operators. Nevertheless, his perception may be correct among the next-tier voices.
By Andrew Korybko, a Moscow-based American political analyst who specializes in the global systemic transition to multipolarity in the New Cold War. He has a PhD from MGIMO, which is under the umbrella of the Russian Foreign Ministry. Originally published at his website
Simply put, BRICS wants to “play it safe” because all of its members apart from Russia are in relationships of complex economic-financial interdependence with the West, which isn’t expected to overreact to their piecemeal reforms since their own policymakers now believe that they’re inevitable.
“Alt-Media Was In Shock After The BRICS Bank Confirmed That It Complies With Western Sanctions” last month, and now the Alt-Media Community (AMC) just got hit with two more truth bombs after other leading officials confirmed that it doesn’t want to de-dollarize and isn’t anti-Western. South African Finance Minister Enoch Godongwana told Reuters earlier this month in an interview that the group’s focus is on expanding the use of national currencies rather than de-dollarization.
That outlet also quoted New Development Bank (NDB, popularly referred to as the BRICS Bank) Chief Financial Officer Leslie Maasdorp in the same article, who told them that “The bank’s operating currency is dollars for a very specific reason, U.S. dollars are where the largest pools of liquidity are…You cannot step outside of the dollar universe and operate in a parallel universe.” The official confirmation that BRICS doesn’t want to de-dollarize directly led to the next clarification about it not being anti-Western.
South African Ambassador to BRICS Anil Sooklal corrected false perceptions about the organization’s global role in an interview with Bloomberg several days back where he told them that “There’s an unfortunate narrative being developed that BRICS is anti-West, that BRICS was created as competition to the G7 or the Global North, and that is incorrect. What we do seek is to advance the agenda of the Global South and to build a more inclusive, representative, just, fair global architecture.”
In connection with this purpose, he also confirmed what Godongwana and Maasdorp said earlier in the month about how BRICS has no desire to de-dollarize. In Sooklal’s words, “Trading in local currencies is firmly on the agenda (but) There is no agenda item of de-dollarization on the BRICS agenda. BRICS is not calling for de-dollarization. The dollar will continue to be a major global currency — that’s a reality.” These revelations about BRICS might understandably overwhelm the average member of the AMC.
After all, many of them were misled by top influencers into imagining that this group is plotting to deal a deathblow to the dollar out of hatred for the West, but nothing could be further from the truth after what leading officials revealed in the last three weeks. President of the BRICS Bank Dilma Rousseff confirmed that it complies with the West’s anti-Russian sanctions; Godongwana, Maasdorp, and Sooklal confirmed that it doesn’t want to de-dollarize; and the latter also confirmed that it isn’t anti-Western.
BRICS can still “advance the agenda of the Global South and to build a more inclusive, representative, just, fair global architecture” exactly as Sooklal clarified is its intent in spite of the ‘politically inconvenient’ facts that were just shared, but it’ll be at a gradual pace, not an accelerated one. Therein lies the crux of the misperceptions about it, which Russia sought to correct earlier in the month after finally realizing that its soft power interests are threatened by supporters’ unrealistic expectations.
A critical mass of the AMC came to be convinced that BRICS was something that it’s not through a combination of well-intentioned but naive influencers pushing their wishful thinking about it and others maliciously doing the same to generate clout, promote their ideology, and/or grift. In parallel, some of this camp’s Mainstream Media (MSM) rivals scaremongered about BRICS for the ulterior purpose of galvanizing Westerners against it, but which also extended false credence to the AMC’s populist claims.
Taken together, it’s easy in hindsight to understand why so many people fell for the false narrative that BRICS is plotting to deal a deathblow to the dollar out of hatred for the West, which is why the organization’s officials decided to set the record straight in recent weeks ahead of its next summit. They didn’t want their supporters’ unrealistic expectations leading to deep disappointment that in turn makes them susceptible to hostile suggestions, nor did they want to spook the West into overreacting either.
The first potential outcome that could have come to pass had the previously mentioned clarifications not been made risked filling its supporters with such despair that they might either become apathetic towards BRICS or possibly even turn against it after feeling that they were duped. Regarding the second, some among the West might have ramped up their pressure campaigns against BRICS and its partners, including through blackmail, political meddling, and sanctions threats, all to stop the bloc in its tracks.
After debunking the disinformation that’s been spewed about their organization by the AMC and MSM alike, each in advance of polar opposite agendas but still suspiciously relying on practically identical narratives, BRICS officials are now more confident that these worst-case scenarios can be averted. This reality check sobers their supporters up and prepares them to expect a prolonged transition to multipolarity while also reducing the chances that the West will overreact to their group’s goals.
To elaborate on the last observation, the events of the last eighteen months since the start of Russia’s special operation convinced the West that the global systemic transition to multipolarity is irreversible, which is why they’re now willing to entertain reforms to their hegemonic models. German Chancellor Olaf Scholz, former Director for Europe and Russia at the US National Security Council Fiona Hill, and Goldman Sachs’ President of Global Affairs Jared Cohen all suggested this on the same day in mid-May.
They believe that the West must engage with the Global South on a more equal level, which necessitates scaling back some of its most blatantly exploitative practices in order to not lose more hearts and minds to the Sino–Russo Entente. To that end, they’re positively inclined towards accepting gradual changes to the global financial system such as those that BRICS’ officials confirmed that they have in mind, but will resolutely respond to any revolutionary developments that risk drastically accelerating this transition.
Simply put, BRICS wants to “play it safe” because all of its members apart from Russia are in relationships of complex economic-financial interdependence with the West, which isn’t expected to overreact to their piecemeal reforms since their own policymakers now believe that they’re inevitable. Among those four members, two schools of thought predominate as represented by China and India, whose respective differences of vision were explained at length here.
In brief, China wants to speed up the yuan’s internationalization and integrate BRICS into the Belt & Road Initiative (BRI), while India wants to prioritize national currencies and keep BRICS officially separate from BRI. Both agree that changes to the global financial system must be gradual, however, in order to avoid provoking a mutually detrimental overreaction from the West with whom all of them apart from Russia are in relationships of complex interdependence.
Everyone has the right to their own opinion about this reality that was just described, but the facts that were shared throughout this analysis in support of associated observations can’t be denied. Any top influencers among the AMC who still push the debunked narrative about BRICS plotting to deal a deathblow to the dollar out of hatred for the West are dishonest. Those among their audience who now know better should politely fact-check them under their posts to prevent others from being misled.