BRICS Alliance vs G7: The Battle for Global Financial Supremacy
The BRICS alliance is seeking to create a new global currency for international trade, to dethrone the U.S. dollar as the global reserve currency.
Recently, 19 nations have formally applied to join the alliance, including five Arab nations. These nations, rich in oil and gold reserves, could strengthen the alliance and pose a challenge to the G7 countries – the United States, Canada, Germany, France, Italy, the United Kingdom, and Japan.
The five Arab nations that have applied to join BRICS are Saudi Arabia, the United Arab Emirates, Bahrain, Egypt, and Algeria, with Iran also expressing interest.
Bloomberg reports that the G7 nations currently contribute around 27.8% to the global economy, while BRICS will make up 35%.
If these Arab nations join BRICS, it could shift the global financial order towards the developing Eastern countries, away from the Western nations, potentially leading to a decline in the status of the U.S. dollar.
This could have serious consequences for the global economy, particularly if the U.S. fails to find new ways to fund its deficit.
Saudi Arabia’s entry into BRICS could be the first step towards the decline of the U.S. dollar, as it could start selling crude oil to Europe, forcing them to settle trades with the new BRICS currency.