In Defiance of the Dollar, BRICS Alliance Gathers Momentum

Oct 26 , 2024
By Hintsa Andebrhan

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At last week's summit in Kazan, Russia, the BRICS bloc — Brazil, Russia, India, China, and South Africa — and their newly added friends gathered with a clear agenda. Leaders from these countries have the expressed desire to see the global order refined, thereby challenging the dominance of the US Dollar in international trade. The coalition seeks to free the world from what it perceives as "Dollar economic colonialism," asserting greater autonomy for emerging economies.

Countries with economic and political clout are increasingly interested in joining BRICS. Countries like Turkey, Australia, Vietnam, Malaysia, and Thailand have expressed a desire to join this expanding bloc. The surge in membership signals the emergence of a powerful alliance that not only influences affairs in the global south but also poses a formidable resistance to Western political and economic hegemony.

The ascent of BRICS comes at a time when the European Union (EU), once a vigorous coalition, faces internal and external problems. Russia's invasion of Ukraine two years ago followed the United Kingdom's (UK) exit from the EU, prompting questions about its geopolitical ramifications. In a 2015 interview with the BBC, former President Obama stated the importance of the UK's role within the EU. He argued that its presence in the EU would give his country's allies much greater confidence in the strength of the transatlantic union.

But he was not lucky to have his wishes fulfilled, as the UK's perceived influence in the EU waned over time.

However, Obama's remarks implied that the UK served as Washington's ally within the EU. It raised the question of whether London was aware of impending geopolitical shifts, including the proxy war that some argue was initiated by Washington to diminish Moscow's influence in the Black Sea region, potentially at the expense of European economies.

BRICS expanded its membership last year to include Iran, Egypt, Ethiopia, and the United Arab Emirates (UAE). Iran's political path has long diverged from that of the United States.

However, Egypt, Ethiopia, and the UAE have traditionally been strong allies of Washington, which brings into focus the strategic implications of their BRICS membership. Egypt has historically been considered the heart of the Arab world. Despite some politicians and activists in the Arab world contending that this era has long gone, the US State Department maintains that Cairo is a key economic and peace partner in the Middle East. The Central Bank of Egypt reported that the US is the largest source of foreign direct investment, with American companies investing 2.3 billion dollars, accounting for 10pc of total FDI inflows.

Washington views Egypt as an anchor of regional stability. According to a memo by Senator Chris Murphy dated September of this year and statements from the State Department, the US considers Egypt to be a vital security partner following the Camp David Accords of 1978, which established peace between Israel and Egypt. Since then, the US has provided Egypt with over 50 billion dollars in military aid and 30 billion dollars in economic assistance.

Its historical adversary down south, Ethiopia, also has a relationship with the United States, dating back to 1903. Since 1998, the two countries have cooperated closely on counterterrorism efforts, with Washington investing billions to combat al-Shabaab. The US once endorsed Ethiopia to anchor stability in the Horn of Africa before attention shifted to Kenya. However, American investments in Ethiopia have primarily been in aid, a soft power tool to influence policy.

It was no surprise that Egypt and Ethiopia's inclusion in BRICS raised questions - in the same manner India and China are in the bloc - about Washington's strategic repositioning.

If these countries have notable economic ties and security arrangements with the US, why would Washington tolerate them to join a bloc that seeks to diminish Western hegemony?

One possible explanation is that the US might leverage its relationships to influence BRICS from within. Prime Minister Abiy Ahmed's (PhD) administration has been criticised for adhering to economic policies prescribed by the International Monetary Fund (IMF) and the World Bank, which some argue keeps his country within the Western sphere of influence. The Emirates, too, presents a complex case. While Abu Dhabi does not seek economic assistance from the US, mutual economic and political benefits define the relationship. The UAE relies heavily on Washington's security guarantees and intelligence cooperation. This dependence suggests that US influence remains noteworthy, even as it joined BRICS.

Speculation abounds that Washington could plot to undermine BRICS through these new members, acting as insiders. While this notion might seem far-fetched, it shows the intricate web of international relations and the strategic manoeuvres governments employ to advance their respective interests.

However, BRICS's evolving configuration, coupled with its members' shifting allegiances, should reflect a global landscape in flux. It tells about emerging economies' demand for greater autonomy and the challenge of established orders as the traditional Western-led liberal world faces unprecedented tests. Whether Washington is attempting to counter BRICS from within or adapt to new geopolitical realities remains a subject of debate among analysts.

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PUBLISHED ON Oct 26,2024 [ VOL 25 , NO 1278]

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