An Optimized BRICS Currency Matrix Is Just What The Global South Needs To Escape Neocolonialism
Streamlining the BRICS monetary networks is just what the Caribbean, Latin America and Africa need to be able to move towards sovereign behaviors and thus finalize their decolonization processes.
Russia and BRICS member countries recently revealed that the leaders of the five major emerging economies are in the midst of streamlining a multipolar matrix of international reserve currencies. Russian Federation President Vladimir Putin unveiled the optimization of the multipolar matrix of international reserve currencies at the 14th BRICS Summit, just as Turkey, Egypt and Saudi Arabia are in talks to consider joining. During this summit, it was announced that the five member economies, Brazil, Russia, India, China and South Africa, and as the top leader of the Russian state said, "The issue of the creation of the international reserve currency based on the basket of currencies of our countries is under consideration.... We are ready to work openly with all fair partners".
This strategic desire for greater monetary independence on the part of the BRICS nations is longstanding, so this multipolar talk of evading Western sanctions and the logic of the Rules Based Order of the Pax Americana was long overdue. In this regard, China's President Xi Jinping pointed out how the West's behavior was responsible for antagonizing the Russian Federation, emphasizing that "politicizing, instrumentalizing and weaponizing the world economy by using a dominant position in the global financial system to impose sanctions for free would only harm others in addition to harming itself, leaving people around the world suffering [....] Those who obsess over a position of strength, expand their military alliance and seek their own security at the expense of others will only fall into a security conundrum."
The streamlining of the BRICS monetary networks is just what the Caribbean, Latin America and Africa need to be able to move towards sovereign behaviors and thus finalize their decolonization processes without fear of being attacked by the West with destabilization through economic Hybrid Warfare. This is ultimately good news for all the nations of the Global South, from the Big 8, to the medium and small countries of the multipolar Global South such as Nicaragua, Cuba and Venezuela, which find themselves in the crosshairs of the West on a continuous basis. The transformative and beneficial aspect of this monetary move is that it enables the multipolar integration of a third category of countries and I am referring ofcourse to states like Haiti and Puerto Rico, that are currently neo-colonized by the West led by the United States. These countries, even if they wish to diversify their business relations, cannot actualize this potential and therefore cannot join the Multipolar Order on their own. Rather, a transition empowered by a systematic substitution of transactional methods/services as well as of the international reserve currency would be safer.
The Beijing Declaration of the 14th BRICS Summit contained some precious informative golden nuggets that clarify the intent of this body as it reads, "We recognize the importance of strengthening the Contingent Reserve Arrangement (CRA) mechanism, which contributes to strengthening the global financial safety net and complements existing international monetary and financial arrangements [...] We look forward to the finalization of the amendments, which will enhance the flexibility and responsiveness of the CRA mechanism. We look forward to the successful completion of the fifth test of the CRA by the end of 2022. We support the work to improve the coordination framework between the CRA and the IMF." The other point relevant to the streamlining of the alternative reserve currency matrix is found a little further on in the joint statement, "We encourage the BRICS Interbank Cooperation Mechanism to continue to play an important role in supporting BRICS economic and trade cooperation and appreciate the renewal of the Memorandum of Understanding between the member Development Banks of the BRICS Interbank Cooperation Mechanism and the New Development Bank." It is now clear that, while the statement is terribly careful to skirt overtly anti-American content, the effects of these policies, when effected, will materialize a non-US dollar based trading platform that will enable BRICS agreements among member states and possibly serve as a bridge to reach out to non-members. Russia stated at the Summit that its SPFS payment system is ready to be expanded to include BRICS members.
The US-led West has always blacklisted countries that dare to act with too much sovereignty and foster relations with countries it considers enemies. Since 2010 it has significantly expanded the list of its potential targets, exporting chaos as never before – through coups, Lawfare, InfoWar, economic sanctions, exercising power through its Ngos and monetary control – to nations that attempt to establish a balance between the West and the multipolar world itself. This intensification of Hybrid Warfare by the US and its proxies against the world led many countries to urgently seek alternatives to make their economic and financial functions viable outside the political games and tantrums of the West.
The West exerts pressure against countries by disconnecting them from international payment services, such as SWIFT and western credit card systems, so Russia and China have created and optimized their own alternatives to these transactional technologies, such as the Mir System and UnionPay respectively. Their use appears to be invaluable for most states in the Global South seeking to strengthen their sovereignty. Supplying this need for alternative monetary and mercantile systems, as well as alternative reserve currencies, are an attempt to undermine Western tools of economic chaos of the US dollar and the IMF's SDRs. From 1973 the US opted for a less regulated system of floating exchange rates, de facto untethering monetary creation from the reality of the constraints of a fixed world monetary standard with finite quantities, in essence a deformation of the Bretton Woods system. From this point forward, pressures on the global demand for US dollars begin to threaten the US economy. The US government aided by its corporatocracy forced the adoption of the dollar in the Global South for certain transactions with the countries of the world, and found an exchange reference that allowed them to artificially preserve the supremacy of the dollar through the oil market among others. This mandatory adoption of the dollar forces the world's importing and exporting countries to buy dollars from the US Federal Reserve, the only institution authorized to issue such currency. It is imperative to emphasize that the SWIFT network itself was created in 1973 right in the middle of these changes and since then it provides transactional information between users allowed to use it by the West led by the US.
Multipolar economic/financial institutions, as well as South-South projects already in place, serve as a support platform for those strong states that already have sovereignty to optimize their capabilities, fostering multipolar diplomacy among them. This allows the creation of real commercial, mercantile and financial alternatives to the products or services controlled by the main Western nations. But what about those states that want to be sovereign but for different circumstances, be it a debilitating decades-long Hybrid War by the US and EU – and possibly some of their neighbors – or simple geo-economic incompetence, are unable to reach the crescendo of being sovereign states, capable of functioning independently, What methods and practices might make it easier for these weak states to join the rest of the multipolar free world and reach their potential without fear of breaking the neocolonial chains of the US-led West? Can multipolar nations that enjoy a greater degree of independence – and thus reap the rewards of controlling their own economy and finances – offer additional help to states captured in the hostile orbit of Western states?
As the world gradually moves toward multipolarity, these questions, which were also pertinent in the original Cold War, have reappeared in the ongoing New Cold War. The ability to be neutral is a powerful thing. The ability to be neutral and not be destroyed – politically or economically – by one of the disputing parties is a strong capacity that every state must have, but not all of them possess. This vulnerability leads them, painfully, to be slaves of other stronger states that will control them with carrot and stick – through punishment – if they try to be neutral and protect their state from being a party to aggressive foreign intrigue.