Is the BRICS Currency Trustworthy or Just Sophistry?

Omar Sindi | Exclusive to iKurd.net

The countries currently forming are Brazil, Russia, India, China, and South Africa- these nations, known by the acronym BRICS, are thinking of a new formulation of a new joint currency.

The idea behind this de-dollarization comes out of competition between these autocracy-political systems in the East and the liberal democratic systems in the West.

There are countless articles and narratives these days in the Media Outlets on the pros and cons of this on the economy in a broader sense, and on the International Trade Market in transactions between countries.

It’s noticeable that the ones expressing their desire to join BRICS for de-dollarization at international trade transactions, are mostly from authoritarian regimes- they are ‘intolerant of tolerance’, countries such as Turkey, Saudi Arabia, and the Iranian Mullahs regime with their rule of the “Iron Fist Policy,” political system in place, they are a pariah on the view of their people… With other countries on the African continent, which are interestingly looking into joining BRICS, country like Zimbabwe, which has no economy, etc… or in South/Central America with economic malaise, such as Nicaragua with Daniel Ortega as the president of the country and where his spouse is his Vice President; Nicolas Maduro‘s regime in Venezuela who’s politically and economically in a very weak status, surviving on a fragile political lifeline… International Trading Market transactions would be like a currency with a trustable economy or a stable political system in place; for example when Recep Tayyip Erdogan elected a third term as president of Turkey, Turkish Lira (currency) significantly plunged, which shows that the market doesn’t like political polarizations and fragmentations.

This Narrative should not be construed as a mockery to any BRICS countries or other actors who are in process of attempting de-dollarization in their International Trading transactions, but the trustability or sophistry of these systems is in question.

For example, during the Spanish Civil War in the late 1930’s, the Spanish government transferred their reserve gold to both Russia (Former Soviet Union) under Joseph Stalin’s rule and to France, however after the civil war was over, France did return that gold to the Spanish government, but there is no record that Stalin ever returned that gold to Spain. This shows that a dictator is not trustworthy and that authoritarian regimes do not adhere to international norms or agreements, if he can get away without punishment?

There are also discussions in transactions with the Indian rupee, even though India has been called the largest democracy in the world; India is still having the Caste System, which is a social classification of the people (also in the same manner that Turkey is referred to as a “Democracy”); in addition India under the premiership of Narendra Modi rule, the Indian nationalist government has put that democracy in a precarious position.

Media outlets have reported on the oppression of minority groups by Modi’s government apparatus. Even Taj Mahal, one of the “ 7 Wonder of the World” has been demoted, because the fame is not based on the Hindu nationalism “According to the mandatory ‘new’ history taught to millions of India’s children, 300 years of Muslim Mughal rule never happened. Instead, Modi is mandating a revisionism that centers Hindu nationalist supremacy”-HAARTZ.

India has been mired with a sort of perennial economic corruption for a long time. India has more Than 300 million people lacking running water, or electricity in their households and outdated/old infrastructure in many cities, which were built during the British colonial period.

The ‘brain drain’ where highly educated people leave when they have the opportunity, is not a positive trend trajectory for the country. India’s GDP per capita is less than $3,000, while in the US, the GDP per capita reported by the World Bank in 2021 is between $30,000, and $50,000. Calculating these factors, it will be difficult to trustworthy the Indian rupee over the US dollar, particularly a low income per capita in India.

Brazil: even though Brazil is a federal presidential constitutional republic, that is based on a representative democracy. “ Foggy Future of Brazilian Democracy [-] The recent coup in Brazil challenged the country ‘s democracy even more than January 6 did in the United States” according to Theo Almeido. ‘Companies face a high risk of corruption in Brazil’s judicial system.

‘The judiciary in Brazil is formally independent, but is hampered by corruption and limited capacity’- BTI 2016. Any country which has a fragile political system, along with economic corruption, it’s unlikely the economic outlook will inspire trust in their currency transaction trading. Brazil’s GDP per capita was reported to be less than $ 8,000.00 US$-Brazil, in 2021 reported by the World Bank).

South Africa: South Africa is now representative of democracy. However, after the end of the Apartheid rule, everyone was hopeful that the African National Congress (ANC) would play a positive role in eradicating racial disparities and promoting racial equality. Regretfully, many ANC leaders have been involved in corruption scandals and misuse public funds for personal gain, leading to mismanagement in the government and prevalence like epidemic corruption and untrustworthy public trust in the system. South Africa’s GDP per capita is just over $7,000.00, as reported by the World Bank in 2021.

All three Aforementioned Countries have a ‘representative democracy’ and are current members of BRICS. However, their internal political affairs involve political scandals and corruption. Their economic outlook, whether current or future, does not appear to trend positively or promising capacity to compete or overtake in the US dollar, at international trading transactions, any foreseeable future.

Chinese government: The 1980’s Chinese economy was unable to manufacture Coca Cola products. This is not to tell that Chinese people are incapable of producing anything or inventing anything, but the rigid and unworkable Communist dogma system rather prevented people from reaching their full potential.

Afterward, Chinese leader Deng Xiaoping’s visit in1979 to the United States, China slowly deregulated it’s centrally state controlled economic policies and tilted more towards private sectors, incentivising people within China and attracting foreign investment. This led to fast a rapid productivity growth-with the technical assistances and expertise from the liberal states.

Over a span of 30 years, the Chinese economy has become the second largest economy in the world. At the same time, China has gross human rights violations especially against minority groups. Many areas and villages in China are still undeveloped, with people living in preemptive society without basic facilities like paved roads or access to electricity, etc.

Nevertheless, when a single political party runs a country without checks and balances in the system, or an independent judiciary, many Companies are facing difficulties in China, posing a high risk of political upheaval and an untrustable economic. system. and faces rampant corruption, etc. The Chinese Communist party should be no exception to this kind of high risk of governance.

Tank Man protester at the Tiananmen Square, Beijing, China 1989 — “Tank Man” blocks a column of Type 59 tanks heading east on Beijing’s Chang’an Boulevard (Avenue of Eternal Peace) near Tiananmen Square during the Tiananmen Square protests of 1989. Photo taken on June 5, 1989. Creative Commons/wikimedia

The 1989 Tiananmen Square students uprising against the repressive regime is an example of the consequences of absolute power. “According to a study by economist Angus Maddison, China was the world ‘s largest economy in 1820, accounting for an estimated 32.9% of global GDP. However, foreign and civil wars, internal strife, weak and ineffective governments…[and] distortive economic policies caused China’s share of global GDP on a PPP basis to shrink significantly…”

Russia’s economy : The Russian economy is the 11th largest economy of the world, but the US is the top economy of the world; Russia with much lower GDP, just above $12,000.00. Furthermore, a larger portion of Russia’s income is obtained from petrostate revenue. In addition, Russia exports weapons to many countries.

The war in Ukraine has exposed the quality limitations of Russia’s most sophisticated offensive weapons compared to the defensive weapons provided to Ukraine by the United States, and the European countries. This is most likely, to affect future military hardware and weapons exports. Western Sanctions imposed on Vladimir Putin’s regime in Russia are justifiable due to the unprovoked war in Ukraine. and atrocities they committed in Ukraine.

Russia’s faces instability, or maybe a civil war, perhaps a coup d’etat, because Russian government is run by an absolute dictator, Vladimir Putin, along with oligarchs and kleptocrats. This puts the country on a dangerous path economically and politically, making international trading market untrustworthy of their currency.

Furthermore, how can an organization or its currency be trusted when one of its key players or most important member has been indicted by the International Court and has an arrest warrant issued for the Russian President Vladimir Putin for unlawful transfer of children out of Ukraine, basically kidnapping kids from their parents? .

(If Russian and Chinese governments had any ethical or moral value for humanity or adherence to international norms and standards; they would not have supported both the Kim Jong-un Regime of North Korea and Burmese military Junta in Myanmar… Both of these two regimes have one of the worst human rights records)

Saudi’s government, the Iranian regime, and Turkey have expressed their desire about BRICS new future currency. Also, all three countries are rogue states.

The Crown Prince of Saudi Arabia, Mohammed bin Salman, sort of Known by his initials (MBS), who is the de facto ruler of Saudi Arabia, is trying to shift his country ‘s political and economic policies more toward Russian policy or China.

This animus shift can be observed of defying democratic states in the West by telling me I have the other alternatives, you pushing me vis-a-vis toward political reforms, or discussing human rights abuses. The gruesome killing of Jamal Khashoggi at the Saudi consulate in Istanbul, Turkey caused worldwide outrage, with MBS and his close associates being accused of the murder.

It forced many politicians and human rights defenders in the democratic states in the West to strongly condemn Jamal ‘s killing; at that time President Joe Biden was vying to be nominated as a Democratic nominee for the US presidential race against then President Donald J. Trump; the candidate Biden Called MBS a ‘Pariah’ This irrational deed caused a strain on relationships between Saudi and democratic states in the West, particularly the United States, it appears this is one of the reckless acts done by MBS “tit for tat”.

The Turkish government and Iranian Mullahs regime in Tehran, have severely damaged their economies through their malign behaviors, which is resulting in imposed international sanctions and old colonial ambitions in the Middle East and beyond. Therefore, their currencies have little value, and when they import foreign products, they must mostly use US dollars.

Turkey ‘s neo-Ottomanism ambitions and Iran’s “Shia Crescent” grandiose strategy, aided by affiliated groups, have marshaled their colonization of Iraq and Syria. Politicians and political parties within Iraq and Syria remain silent about Iran and Turkey skullduggery project in their countries, due to realpolitik, acting as if they are living off in “la-la land…”

American Foreign Policy: “Promoting freedom and democracy and protecting human rights around the world are central to U.S. foreign policy. The values captured in the Universal Declaration of Human Rights and in the global and regional commitments are consistent with values upon which the United States was founded centuries ago.” However many of the BRICS country leaders are not interested in Human Rights issues or promoting democracy globally. Consequently millions of people are on the move around the world toward to liberal democratic states.

Over the past decade, thousands upon thousands of people have drowned while attempting to reach the shores of Western European countries through the Mediterranean Sea in pursuit of living under democratic rule and achieving better living standards.

Most of these migrants come from countries under undemocratic rule, corrupt regimes, nepotism, embezzlement, and kleptocracy, which have led to an exhausted economy and no future prospects in their native land. People need to question why they are leaving their countries, changing geopolitical currents, and why they seek to live in countries with democratic governance rules? However, this does not mean or indicate that the democratic states do not have their defaults too!

The countries which are forming the BRICS coalitions, focusing for the de-dollarization process, and to new currency trading transactions, namely Brazil, Russia, India, China, and South Africa, are not unitary states, like the United States which is a unitary States, or European Union in terms of economic policy. Each of these countries has a different economic policy agendas, size, and geopolitical circumstances. Mostly, it is probably unlikely they will fully trust each other’s policies; particularly considering the significant economic policy gap between India and China.

Nikki R. Haley, the American ambassador to the United Nations, held photographs of victims of the chemical attack in Syria during a Security Council meeting, April 5, 2017. Photo: AFP

There have been many Media Outlets in the Middle East speculating that the US foreign policy is weakening or that the United States is withdrawing from the Middle East; even though there were signs of foreign policy weakness during the Obama administration, such as Obama’s warning to the Syrian dictator Bashar Assad not use chemical weapons in Syria ‘s civil war conflict, and the alleged use of chemical weapons going unpunished Syria’s civil war crisis, or Obama ‘s consultations with Turkish President Recep Tayip Erodogan regarding Syrian civil war conflict crisis, afterward, President Donald J Trump pursued an isolationist foreign policy, perhaps these kind of inconsistent policies have given political pundits speculation that the US is dwindling from the Middle East, it’s important to note that Iraq and Syria are not the same as Afghanistan geopolitically.

Reports indicate that the US has reinforced its force with a new sophisticated artillery defensive weapons system in Syria. The speculation of US withdrawal from the Middle East is likely wishful thinking for the rogue states, like the Iranian regime and The Turkish president regime. While it is not impossible, there is no indication that US forces will withdraw in the near term future.

Without the presence of US forces in the Middle East, Iran and Turkey will create more wars, more chaos. The threat of ISIS is still present, and they have a large number of sympathizers within the Arab Sunni Muslim community in Iraq and Syria. Other Islamic Terrorist organizations in Syria are also receiving financial support from Arab Gulf states via Turkey, funding their housing construction Projects in Afrin, Syria.

Meanwhile, the US economic outlook is good, technologically advanced compared to the other nations, and the labor force is productive and innovative. Since the war began in Ukraine, many nations around the world are lining up or waiting to purchase the US weapon systems to protect themselves. Despite high levels of partisan polarization in the United States; the US is still a stable democracy.

Often, the power posture of dictators or authoritarian regimes is overrated (as observed by instability in Russia under Putin these days,) While Russia and China, the two most important players in the BRICS, have political systems that are not trustworthy, India and China have a major border dispute in Himalayan region and do not trust each other. Moreover, the two BRICS members, Brazil and South Africa, have weak economies compared to the US and their democracies are in precarious states.

In international trade transactions, political stability and economic trustworthiness are important. Under dictatorial regimes, both political stability and economic trustability are questionable. It appears that the US dollar will remain a strong hegemony currency in international trading transactions for a long time.

Nevertheless, those leaders of countries expressing their desire to do trading transactions using BRICS currency, without the US dollar, while they are waiting for the creation of, may proceed with montage Bitcoin Coins transactions; the same way that the Salvadoran government lost about $60 million with their Bitcoin trading transactions.

Omar Sindi, a senior writer, analyst and columnist for iKurd.net, Washington, United States.

The opinions are those of the writer and do not necessarily represent the views of iKurd.net or its editors.