Why the cooperative spirit of ‘greater BRICS’ resonates worldwide

The 17th BRICS Summit is being held from July 6 to 7 in Rio de Janeiro, Brazil. This marks the first high-profile gathering of the "greater BRICS family" in its new "11+10" format - comprising 11 member countries and 10 partner countries - following Indonesia's official entry into the BRICS cooperation mechanism in January and Vietnam's official joining as a BRICS partner country in June. The summit is themed "Strengthening Global South Cooperation for More Inclusive and Sustainable Governance." As the host country, Brazil has outlined three key priorities for the meeting: deepening cooperation in public health, promoting a unified stance on climate change, and establishing mechanisms to facilitate trade and investment among member states.

On the eve of the summit, Colombia and Uzbekistan formally joined the New Development Bank as full members. Today, the BRICS family represents over half of the world's population, accounts for one-fifth of global trade, and contributes nearly 30 percent of global GDP. This remarkable momentum is no accident - it reflects the growing appeal of the "BRICS spirit" of openness, inclusiveness, and win-win cooperation. According to data from the International Monetary Fund (IMF), in 2024, BRICS collectively reached 4 percent GDP growth, significantly outpacing the global average. This demonstrates that the "greater BRICS" has become a "southern engine" that continuously fuels global development.

According to some foreign media outlets, this year's summit will discuss important topics, including the establishment of a new guarantee fund and the "Tropical Forests Forever Facility," and will voice collective positions on IMF reform. As the world is entering a new period of turbulence and transformation, characterized by rising unilateralism and protectionism, and some major powers increasingly disengaging from international governance, BRICS remains steadfast in its original aspiration, focusing squarely on cooperation and development. All its agendas and agreements are being gradually implemented, turning words on paper into real development outcomes. As of 2024, the BRICS New Development Bank has approved 120 projects worth a total of $39 billion, covering key sectors such as transport infrastructure, clean energy, healthcare, and social development. As the "vanguard of the Global South," the "greater BRICS" governance proposals are receiving global attention, and the world is looking to the "greater BRICS" for wisdom and contributions.

The growing influence of the "Greater BRICS" is evident in Western reporting. From the very start, the Rio BRICS Summit has become a focal point of global attention. Reuters noted that the expansion of the "Greater BRICS" "has added diplomatic weight to the gathering" and the bloc is presented "as a defender of multilateralism in an increasingly fractured world." The New York Times focused on the new role of "BRICS" in global governance, emphasizing its ambition to "rebalance global power dynamics." Although some media outlets maintain a "critical" and "skeptical" attitude toward the BRICS Summit, the inherent "traffic appeal" of the Rio Summit is enough to reflect the international community's attention to and recognition of BRICS.

The BRICS countries differ in terms of historical culture, political systems, economic size, and development levels, and there are differences between overall interests and individual interests. However, this precisely reflects the valuable inclusiveness and complementarity of the BRICS mechanism. BRICS cooperation is a systematic collaboration of the Global South; it is both comprehensive cooperation and open-door cooperation. It embodies the voices of the Global South, providing more development opportunities and equal rights for countries in the Global South, and promoting an equal and orderly multipolar world as well as a universally beneficial and inclusive economic globalization. This not only aligns with the interests of the Global South but also contributes to the common good of the world.

From promoting the establishment of the New Development Bank to advocating for the "BRICS+" cooperation model; from articulating the "four major partnerships" among BRICS countries to building new industrial revolution partnerships within BRICS, China's contributions to the BRICS mechanism are evident. According to the "Hand in Hand: China-LAC Mutual Perception Survey," released by the Global Times Institute during the "Global Times' Overseas China Week and Global South Dialogue" series of events held in Latin America in late June, a majority of respondents from six Latin American countries believe that the BRICS can represent the Global South to voice its concerns on the international stage. Furthermore, 93 percent of Latin American respondents believe that China has brought opportunities for development to the region, and 84 percent recognize China's development prospects. Through its own actions, China has built a bridge of hope for common development, making the gears of "greater BRICS" cooperation operate more smoothly.

IIn the face of the ever-changing international landscape, BRICS countries have demonstrated strong cohesion and action, providing a "BRICS answer" to the changes unseen in a century, which enhances the credibility of BRICS. The Rio Summit will mark a new starting point. Looking ahead, BRICS countries will continue to uphold the "BRICS spirit," deepen cooperation in various fields, promote reforms in the global governance system, and make greater contributions to world peace and development.- Global Times

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How Asean can ease the birth pains of the multipolar world

 

Power shift: Asean has a big opportunity this week to help usher in the new world order. — Bernama

ON April 2, US President Donald Trump smashed the World Trade Organisation’s system of multilateral trade by announcing the imposition of tariffs, starting at midnight on April 9, on imports from “cheater” countries that were engaging in unfair trade practice. To Trump, a cheater is one that exports more goods to the United States than it imports.

This is nonsensical reasoning. A bilateral trade deficit is not evidence of being “cheated” because the payment to my barber does not mean that I have been cheated and my salary does not imply that my employer has been bamboozled. This nonsense shows that the tariff war is only marginally related to unfair trade practices. The two key reasons for the tariffs are to increase wages by bringing manufacturing jobs back to America and to cement US primacy in the global order with a show of force.

Tragically, the tariffs will neither revive manufacturing nor preserve US primacy. Tariffs will temporarily expand employment in a few sunset industries, but wages will remain stagnant because productivity growth potential in those sectors is nonexistent.

The immediate response to Trump’s show of force were precipitous collapses in the prices of US stocks and bonds, and the value of the US dollar. Investors recognised that this Great Wall of Tariffs had isolated the US economy, inevitably impoverishing it. Hence, 13 hours after the tariffs came into force, Trump suspended them for every trading partner except China. This climbdown made clear that the real target is China, which the US perceives to be an unfriendly power (eg, being friendly to Iran) that is engaging in unfair trading practices (eg piracy of US technologies).

The economist Adam Smith had anticipated this kind of clash in 1776. He observed that the three centuries of globalisation that began with the discovery of the Americas in 1492 and the discovery of the sea route from Europe to India in 1498 had overwhelmingly benefited Europe because its much greater military might enabled it to pillage instead of trade.

Smith, however, foresaw a reversal: the diffusion of technology through trade would eventually narrow the gap between the two groups. The economic rise of Japan, South Korea, China, and India is ushering in today’s messy transition from a unipolar to a multipolar order.

Asean should be guided by two understandings in navigating this transition.

The first is that the current US-China confrontation stems from their shared recognition that the prevention of war would require an eventual agreement on their respective spheres of influence. We are witnessing a defensive race between them to expand their spheres of influence, which is why the US has asserted its rights over Canada, Greenland, Panama, and Gaza; and China’s nine-dash line in the South China Sea has brought its maritime border to the doorstep of several Asean nations.

States that lock themselves into Washington’s orbit will be under strong pressure to decouple from Chinese technology and to shrink commercial ties with the world’s largest trader – sacrificing not only today’s access to the Chinese market (prospectively, tomorrow’s access to India) and compromising their sovereignty.

The second understanding is that this transition has created systemic dangers that require institutional responses. These new dangers include the Thucydides Trap which is the risk of war between rising and established powers; the Kindleberger Trap where inadequate international cooperation leads to ineffective handling of global disasters like climate change; and the Tragedy of the Commons which identifies the coming collapse of the food chain.

The Cold War 2.0 is causing growing collateral damage to Asean. A viable alternative to membership by Asean states in one of the spheres of influence is for Asean to cooperate with other middle power countries to form a nonpartisan club that functions as a buffer zone between the spheres of influence.

It is crucial for this club to achieve critical mass quickly – being big enough in population and GDP to earn begrudging acceptance by Washington, Beijing, and Moscow for its right to remain a neutral force. To achieve critical mass quickly, the founding group of countries must be kept to a manageable number to ease negotiations.

Asean must avoid instinctively shaping a Global South response like convening a new Bandung Conference (which brought together 29 newly independent Asian and African countries in 1955). The goal is not to accentuate class warfare at the international level but to maintain economic globalisation, world peace, and environmental sustainability.

To achieve critical mass quickly, this club must also bridge the Global South and the Global North. After establishing deep cooperation among Asean, Japan and South Korea (thereby setting the tone of North-South cooperation), this Asian grouping should propose to the European Union and United Kingdom the formation of the Atlantic-Pacific Sustainability Partnership (APSP).

The APSP would serve three core functions: (a) defend economic globalisation with a free trade area based on open regionalism; (b) defend global peace and environmental sustainability with a sustainability caucus to reduce tensions among major powers and coordinate actions on common challenges like pandemics; and (c) defend mutual aid with a development assistance agency guided by the 17 United Nation’s Sustainable Development Goals (SDGs) to counterbalance the use of development aid by major powers as a means of political influence.

Given the accelerated growth of Asean under this new system, the economic weight of the APSP would be more than twice that of China or the US by 2045, making it necessary for US and China to join the APSP to avoid defeat through self-marginalisation.

When this happens, the APSP would have crowded out Cold War 2.0 with cooperative multilateralism.- by  Prof Datuk Dr Woo Wing Thye

Renowned economist Prof Datuk Dr Woo Wing Thye is a visiting professor at Universiti Malaya and research professor at Sunway University. He is also Professor Emeritus of Economics at the University of California, Davis; University Chair Professor at Liaoning University; and Distinguished Fellow at the Penang Institute. 

The views expressed here are solely the writer’s own.

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US dollar’s monopoly in payments will soon be over

 

Safe asset: US dollars being displayed at the Vietnam International Bank in Hanoi. The risk is rising that the greenback’s monopoly in payments is headed for the history books. — Reuters

THE social-media video where Donald Trump’s artificial intelligence (AI) avatar is making Nike sneakers may be just a spoof on the United States president’s quixotic bid to re-industrialise America by eliminating bilateral trade deficits.

But the meme contains a kernel of truth.

The world’s farmers, fishermen, and factory workers labour hard to earn the US$100 bill that the US Federal Reserve (Fed) prints at no cost.

This exalted status, which a French politician from the 1960s termed as the US dollar’s “exorbitant privilege,” has been taken to a breaking point by the tariff war.

No matter what happens in the long run to the United States currency’s value or its role as a safe haven for central banks and private investors, one thing is clear: The greenback’s monopoly in payments, whereby it’s exchanged in 88% of all trades, is headed for the history books.

A weekend trip to Vietnam brought that home to me.

In Hoi An, a 15th-century trading port repurposed as a tourist attraction, tailors and shoemakers pay for visitors’ taxi rides to their shops and shell out commissions to hotels for directing guests their way.

If they didn’t have to charge customers a 3% credit-card fee, they might be able to do more to nudge inveterate shoppers.

For instance, they could raise their prices by 1% and still throw in a dinner voucher for high spenders – if they purchase one more linen shirt. The buyers will be richer, as will the sellers.

The reason they can’t fund such sales promotions is the US dollar.

Or, to be more precise, a financial architecture built around the idea that a payment made on a foreign credit or debit card must set off a chain of expensive activity underpinned by the greenback.

For 18 major global currencies that settle without much friction, those costs are negligible.

But for the Vietnamese dong, and most other Asian currencies, they’re a burden, which a highly competitive apparel and footwear industry working on tight margins can’t absorb.

So it passes on all of it – and sometimes more – to a buyer who would much rather take the free meal.

Take my example. To pay the tailor in Hoi An, my bank had to obtain the local currency, which doesn’t have a liquid market outside Vietnam.

So my money most probably got converted into US dollars in Hong Kong. After reaching Vietnam, the funds got exchanged again into Vietnamese dong.

Almost 40% of the greenback’s US$7.5 trillion daily turnover comes from its role as a vehicle of value. Neither the buyer nor the seller has any direct interest in it. Yet they can’t transact without it.

Trump is aware of America’s special status: He has even threatened countries looking to come up with alternative global reserve currencies with 100% tariffs.

A high-profile disengagement with the US dollar – for instance, when it comes to Saudi Arabia’s invoicing of its oil – may not go down well with Washington.

What the White House can’t control, however, are low-profile shifts in the engine room of the payment industry.

Even before Trump’s inauguration, I noted that the world of money was splintering into Western and Eastern blocs.

The trade war may have accelerated the schism, though the separation is now more likely to be along a US/non-US axis than a West/East split.

I can already pay a Thai merchant in baht from my Hong Kong bank account by scanning a QR code.

Vietnam plans to establish similar connectivity with Singapore.

These links are between commercial institutions, with third parties providing foreign-exchange services.

However, some central banks in Europe are working with their counterparts in Asia to explore automated conversion using blockchain technology.

If the pilots succeed, there may be no room for middlemen – software embedded in digital representations of fiat currencies will act as money changers.

Ergo, there may be no need for the US dollar to act as a go-between in transactions that don’t involve Americans.

This is just one of the many experiments underway to boost the efficiency of cross-border retail payments. They’re underpinned by US$800bil in remittances by overseas workers.

And then there’s what tourists spend. In Asia, they’re staying 7.4 days on average, 1.3 days more than before the pandemic, according to Mastercard Inc’s latest data.

For a small business in a lesser-known beach town competing against larger firms in more popular holiday destinations, each hour is valuable – and an expensive payment system an irritant.

It has been tolerated so far because nothing cheaper was available, and Asian policymakers’ focus was on shipping goods to the United States, a much larger opportunity.

But everything has changed since the April 2 reciprocal tariffs.

Chinese President Xi Jinping was about to arrive in Vietnam just as I was leaving.

Beijing has been pushing the so-called mBridge initiative in which financial institutions can swap digital currencies issued by their central banks to settle cross-border claims.

If the Trump administration is going to upset friends and foes alike to pursue a chimerical vision of labour-intensive industrialisation, then it has to be prepared for geopolitical realignments, and an erosion of at least one form of America’s exorbitant privilege.

Those who still view the US dollar as a relatively safe asset may want to hold it, as long as the United States remains the world’s predominant superpower.

But for tourists buying shoes or shirts in Vietnam, the 3% extra charge on payments is an avoidable, anticlimactic loss after haggling for – and winning – a nice discount on the merchandise.

Rather than incurring outsize fees to Visa Inc and its partner banks, a dinner at Hoi An’s Morning Glory restaurant seems like a fairer use of my money – while I wait for the last buttons to be sewed on. — Bloomberg

-  Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. The views expressed here are the writer’s own.

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US dollar’s monopoly in payments will soon be over

 

Safe asset: US dollars being displayed at the Vietnam International Bank in Hanoi. The risk is rising that the greenback’s monopoly in payments is headed for the history books. — Reuters

THE social-media video where Donald Trump’s artificial intelligence (AI) avatar is making Nike sneakers may be just a spoof on the United States president’s quixotic bid to re-industrialise America by eliminating bilateral trade deficits.

But the meme contains a kernel of truth.

The world’s farmers, fishermen, and factory workers labour hard to earn the US$100 bill that the US Federal Reserve (Fed) prints at no cost.

This exalted status, which a French politician from the 1960s termed as the US dollar’s “exorbitant privilege,” has been taken to a breaking point by the tariff war.

No matter what happens in the long run to the United States currency’s value or its role as a safe haven for central banks and private investors, one thing is clear: The greenback’s monopoly in payments, whereby it’s exchanged in 88% of all trades, is headed for the history books.

A weekend trip to Vietnam brought that home to me.

In Hoi An, a 15th-century trading port repurposed as a tourist attraction, tailors and shoemakers pay for visitors’ taxi rides to their shops and shell out commissions to hotels for directing guests their way.

If they didn’t have to charge customers a 3% credit-card fee, they might be able to do more to nudge inveterate shoppers.

For instance, they could raise their prices by 1% and still throw in a dinner voucher for high spenders – if they purchase one more linen shirt. The buyers will be richer, as will the sellers.

The reason they can’t fund such sales promotions is the US dollar.

Or, to be more precise, a financial architecture built around the idea that a payment made on a foreign credit or debit card must set off a chain of expensive activity underpinned by the greenback.

For 18 major global currencies that settle without much friction, those costs are negligible.

But for the Vietnamese dong, and most other Asian currencies, they’re a burden, which a highly competitive apparel and footwear industry working on tight margins can’t absorb.

So it passes on all of it – and sometimes more – to a buyer who would much rather take the free meal.

Take my example. To pay the tailor in Hoi An, my bank had to obtain the local currency, which doesn’t have a liquid market outside Vietnam.

So my money most probably got converted into US dollars in Hong Kong. After reaching Vietnam, the funds got exchanged again into Vietnamese dong.

Almost 40% of the greenback’s US$7.5 trillion daily turnover comes from its role as a vehicle of value. Neither the buyer nor the seller has any direct interest in it. Yet they can’t transact without it.

Trump is aware of America’s special status: He has even threatened countries looking to come up with alternative global reserve currencies with 100% tariffs.

A high-profile disengagement with the US dollar – for instance, when it comes to Saudi Arabia’s invoicing of its oil – may not go down well with Washington.

What the White House can’t control, however, are low-profile shifts in the engine room of the payment industry.

Even before Trump’s inauguration, I noted that the world of money was splintering into Western and Eastern blocs.

The trade war may have accelerated the schism, though the separation is now more likely to be along a US/non-US axis than a West/East split.

I can already pay a Thai merchant in baht from my Hong Kong bank account by scanning a QR code.

Vietnam plans to establish similar connectivity with Singapore.

These links are between commercial institutions, with third parties providing foreign-exchange services.

However, some central banks in Europe are working with their counterparts in Asia to explore automated conversion using blockchain technology.

If the pilots succeed, there may be no room for middlemen – software embedded in digital representations of fiat currencies will act as money changers.

Ergo, there may be no need for the US dollar to act as a go-between in transactions that don’t involve Americans.

This is just one of the many experiments underway to boost the efficiency of cross-border retail payments. They’re underpinned by US$800bil in remittances by overseas workers.

And then there’s what tourists spend. In Asia, they’re staying 7.4 days on average, 1.3 days more than before the pandemic, according to Mastercard Inc’s latest data.

For a small business in a lesser-known beach town competing against larger firms in more popular holiday destinations, each hour is valuable – and an expensive payment system an irritant.

It has been tolerated so far because nothing cheaper was available, and Asian policymakers’ focus was on shipping goods to the United States, a much larger opportunity.

But everything has changed since the April 2 reciprocal tariffs.

Chinese President Xi Jinping was about to arrive in Vietnam just as I was leaving.

Beijing has been pushing the so-called mBridge initiative in which financial institutions can swap digital currencies issued by their central banks to settle cross-border claims.

If the Trump administration is going to upset friends and foes alike to pursue a chimerical vision of labour-intensive industrialisation, then it has to be prepared for geopolitical realignments, and an erosion of at least one form of America’s exorbitant privilege.

Those who still view the US dollar as a relatively safe asset may want to hold it, as long as the United States remains the world’s predominant superpower.

But for tourists buying shoes or shirts in Vietnam, the 3% extra charge on payments is an avoidable, anticlimactic loss after haggling for – and winning – a nice discount on the merchandise.

Rather than incurring outsize fees to Visa Inc and its partner banks, a dinner at Hoi An’s Morning Glory restaurant seems like a fairer use of my money – while I wait for the last buttons to be sewed on. — Bloomberg

-  Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services in Asia. The views expressed here are the writer’s own.

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De-dollarisation - Digital renminbi RMB, (数字人民币 Chinese Yuan)

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