BRICS trade surges by 56% in 5 years, plans to ditch dollar

November 06, 2023 (MLN): The trade volume among the five BRICS countries - Brazil, Russia, India, China, and South Africa - has increased by 56% in the last five years, reaching $422 billion in 2022, Bloomberg reported.

Economically, the natural resources and farm products of Brazil and Russia make them natural partners for Chinese demand.

To note, the biggest achievements of the BRCIS bloc have been financial, Bloomberg added.

The countries agreed to pool $100bn of foreign currency reserves, which they can lend to each other during emergencies. That liquidity facility became operational in 2016.

They founded the New Development Bank — a World Bank-inspired institution that has approved almost $33bn of loans — mainly for water, transport, and other infrastructure projects — since it began operations in 2015.

South Africa borrowed $1bn in 2020 to fight the Covid-19 pandemic. By comparison, the World Bank Group committed $70.8bn to partner countries in fiscal 2022.

Suggestions that the BRICS countries adopt a common currency haven’t gained traction.

But its expansion to incorporate major fossil fuel producers gives it more scope to challenge the dollar’s dominance in oil and gas trading by switching to other currencies, a concept referred to de-dollarization.

Diverging interests have made it hard for them to agree on how to tackle some other pressing global issues, such as climate change.

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