BRICS vs. the West: Will Russia and China’s Efforts Fall Short?
The economic bloc has embraced the attempt to challenge the global power balance. However, there is a possibility that Russia and China's BRICS may struggle to compete with the West. Is it more likely that they will continue to rise and dominate?
The economic bloc was established in 2009 and has gained increasing prominence recently, partly due to Western sanctions on Russia, which isolated the country, and the diminishing significance of the US dollar. But can its ongoing growth guarantee victory over the established Western power?
The original concept of the BRIC nations emerged as a marketing ploy, promoted by Goldman Sachs in 2001 to champion international growth from a collective of countries. It eventually materialized as an economic bloc nine years later.
Currently, the BRICS nations have experienced a noticeable rise in prominence, driven by their efforts to reduce reliance on the US dollar. Furthermore, with 20 countries seeking membership, it is evident that the world is growing weary of Western dominance.
However, the growth of Russia and China’s BRICS bloc could lead to its failure in competing with the West. Why? Primarily because the desire to challenge Western dominance may not be sufficient to dismantle the established systems.
Internal conflicts within the bloc have long been discussed as a major impediment. China and India, in particular, have been historical rivals, with the latter attempting to establish a Chinese alternative in the manufacturing sector. As China seeks to promote its own interests through the bloc, India stands in opposition to that growth.
This challenge becomes even more significant as the bloc expands. Saudi Arabia and Iran, both seeking entry, have similar relationships with India and China. Moreover, while de-dollarization efforts have gained momentum, the practical complexities of this process should not be underestimated.
For instance, if Brazil conducts trade with China using the yuan or renminbi, what happens to the funds received? Brazil still maintains debt in US dollars and relies on purchasing manufacturing equipment from Japan, necessitating the use of both currencies, in addition to its other global trade interests.
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China’s One Belt, One Road initiative has granted the country substantial influence by investing in over 150 countries worldwide. How will China respond when these countries offer similar influence within the BRICS bloc?
Furthermore, the premise of the BRICS collective is not revolutionary. Hugo Chaves and Fidel Castro once developed a collective called ALBA (the Bolivarian Alliance for the Peoples of America), which aimed for Latin American integration and sought support from Russia and China.
However, both Russia and China used their influence to prevent ALBA from expanding beyond their control. Moreover, despite advocating for the euro to replace the US dollar, similar to the current call for the yuan, the US dollar proved to be a necessary safety net when it truly mattered.
In conclusion, the BRICS bloc undoubtedly faces significant challenges. These challenges are not mere disagreements but rather systematic developments that have led to the current position of the US dollar and the West. Can these circumstances change? Absolutely. However, the truth remains that the BRICS must first evolve and adapt, and whether they will or not will eventually determine their fate.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
