6 New Nations Are Set To Join BRICS

6 New Nations Are Set To Join BRICS

As The G7’s Political Counterweight Grows, Is The Dollar At Risk To A New Rival?

Will Daniel  Thu, August 24, 2023

The bloc of emerging market nations known as BRICS—which currently includes Brazil, Russia, India, China, and South Africa—is expanding its membership for the first time since 2010.  On the final day of the annual BRICS summit in Johannesburg on Thursday, leaders of the group announced Saudi Arabia, Iran, Egypt, Argentina, Ethiopia, and the United Arab Emirates (UAE) will join their ranks starting Jan. 1.

"BRICS has embarked on a new chapter in its effort to build a world that is fair, a world that is just, a world that is also inclusive and prosperous," South African President Cyril Ramaphosa said of the move, noting that this is “the first phase of this expansion process and other phases will follow."

BRICS nations have long sought to bolster their group's geopolitical power in order to counter the West on economic and political issues, and the addition of some of the world’s largest energy exporters—Saudi Arabia, Iran, and the UAE—will certainly help with that goal. BRICS also has a waiting list of dozens of nations that are ready and willing to join the group amid dissatisfaction with the current, often U.S.-led, world order.

But Gregory Daco, chief economist at Ernst & Young's global strategy consulting arm EY-Parthenon, questions whether BRICS can really compete with the West on the global stage in the near term, given the differing priorities of its constituent nations.

“It's a nice acronym, but it's not really something that would rival the G7 in the next 15 years, 20 years; that's more of a long-term consideration,” he told Fortune after the BRICS summit Thursday, referencing the rival bloc of Western nations that includes Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States.

And when it comes to BRICS's ambitions of de-dollarization, or the goal of becoming less reliant on the dollar, Daco is even more incredulous.

“The problem is the current lack of trust, lack of alignment, and lack of priorities when it comes to each country's strategic plan,” he said. “What this means is that we currently have an environment in which these large emerging markets cannot represent a viable alternative to the dollar.”

Don’t Expect A Common Currency

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