While experts debate the instability of the financial market and the US currency, other economic alliances and other currencies are strengthening.

Asia's richest banker and CEO of India's Kotak Mahindra Bank, Uday Kotak, recently lashed out at the US dollar, calling it "the world's biggest financial terrorist."

“I sincerely believe that the biggest financial terrorist in the world is the US dollar,”

declared the magnate, arguing that “all our money is in our accounts [those that a national bank has in a bank in another country in the foreign currency] and someone in the US you can say: 'cannot be withdrawn from tomorrow morning'.

So you're stuck."

“That is the power of the reserve currency,” Kotak warned, and in that sense, he stated that

, in which the world “is desperately looking for an alternative reserve currency”.

The Indian banker assured that "these changes occur once every hundreds of years" and recalled that, previously, the pound sterling was the main global reserve currency, but it was replaced by the dollar.

“The question is which country in the world can take that position”

now, emphasized Kotak, considered a renowned specialist in the world of finance, who believes that Europe, the United Kingdom and Japan are unlikely to be able to do so.

However,

In the last year, to cite just a few examples, the yuan, the Chinese currency, has replaced the US dollar as the most traded currency on the markets of the Russian Federation.

Other countries like Argentina also replace the dollar with the yuan in their bilateral trade with China.

The Central Bank of Iran is studying the possibility of creating, together with Russia, a gold-backed stablecoin that could be accepted as a means of payment in foreign trade settlements instead of the dollar, ruble and Iranian rial.

The United Arab Emirates (UAE) and India are discussing ways to boost non-oil trade in rupees and dirhams.

Even

“There is a risk, when we impose financial sanctions, that they are linked to the role of the dollar, which over time can undermine the hegemony of the dollar,” US Treasury Secretary Janet Yellen said in mid-April.

The official stressed that "for other countries it will not be easy to find an alternative with the same properties."

Challenges to the Bretton Woods model

Photo: Grigori Sysoev/ Sputnik.

In July 1944, representatives of more than 40 countries met at a hotel in Bretton Woods, in New Hampshire, United States, to design a new model of commercial and financial relations between those who emerged as powers after the end of World War II. .

The agreements emanating from that appointment had a strong influence on the part of the United States, the largest world power already established.

It was under these conditions that the use of the dollar was defined globally, as long as its value was backed by gold. In 1971, during the presidency of Richard Nixon, this relationship was broken.

Therefore, the dollar is no longer supported by gold, but exclusively by the trust that society grants it, consolidating its full character as a fiduciary currency.

Almost 80 years have passed, but the institutions born at that meeting in 1944 -the International Monetary Fund (IMF) and the World Bank- have continued to reproduce the same domination schemes, for the exclusive benefit of big capital, in the hands of the powers westerners.

Not infrequently the loans granted by the IMF or the World Bank have implied "leonine conditions" for developing countries and in a critical situation, with a reduction in public spending, reduction of state powers and unemployment.

However,

Thus, in 2014, the Contingency Reserve Agreement and the BRICS Development Bank were launched, mechanisms through which emerging economies such as Brazil, Russia, India, China and South Africa decided to begin to change the existing order and claim their role -each increasingly important - in the international economy.

But the "rupture" of the status quo established by the so-called "Bretton Woods twins" would not only have implications for this group of five countries.

As expressed in 2014 by the then Brazilian president, Dilma Rousseff, host of the VI BRICS Summit, the nascent BRICS Development Bank would represent "an alternative for the financing needs of developing countries" and "compensate for credit deficiencies ” that exist in multinational financial institutions.

This 2023, Rousseff assumed the presidency of the BRICS Development Bank, which after several years of operation is consolidated as a fund destined to grant loans, financing and technical assistance for projects of the members of the economic bloc and other developing countries.

Dilma will finish the five-year term of her predecessor Marcos Troyjo, appointed by former President Jair Bolsonaro in 2020, and will remain in office until July 6, 2025.

In her inaugural address, the new president of the BRICS Bank highlighted the importance of the bloc made up of Brazil, Russia, India, China and South Africa for global development.

“It is a reflection of its members' role as global leaders and their ability to come together to tackle today's biggest and most pressing challenges.

Together, the BRICS members are stronger and more capable," said the former Brazilian ruler.

Regarding his activity at the head of the BRICS Bank, he announced:

. "

“We will also try to finance projects in local currencies, favoring national markets and reducing exposure to exchange rate fluctuations,” he said.

The president of Brasio, Luiz Inácio Lula Da Silva, who attended Rousseff's inauguration ceremony held in Shanghai, highlighted, for his part, the reasons why the new financial institution was created and its role in the current global context.

"The Development Bank emerges as a tool to reduce inequality between rich countries and emerging countries that translates into social exclusion, hunger, extreme poverty and forced migration," he mentioned.

“Climate change, the covid-19 pandemic and armed conflicts have a negative impact on the most vulnerable populations,” he added.

"Many developing countries accumulate unpayable debts (...) No ruler can work with a knife to his throat because he has a debt, the banks have to be patient and if it were possible to renew the agreements, put the word tolerance in each renewal”, said the Brazilian head of state.

He pointed out that "it cannot be that the banks suffocate the economy of the countries as the International Monetary Fund is doing now with Argentina, and as they did with Brazil for so long and with all the third world countries."

"I dream that the BRICS can create a development tool that is strong and that lends money with the perspective of helping countries and not suffocating countries," added Lula da Silva.

"Why can't an institution like the BRICS bank have a currency to finance trade relations between Brazil and China, between Brazil and all the other BRICS countries?"

Lula maintained.

BRICS, pillar for a fairer world order

Experts recall that since 2009, when the first summit of the BRIC group was held, then made up of Brazil, Russia, India and China, the world began the transition towards a form of integration that aims at a true world political balance.

Now as BRICS, after the incorporation of South Africa in 2010, this group has generated such real prospects that other nations with productive capacity and diversified economies have expressed interest in joining it, including Saudi Arabia, Algeria, Argentina, the United Arab Emirates and Mexico. .

Experts point out that the economic influence of the BRICS could increase in the short term due to the 

.

Today the BRICS group is one of the pillars for a fairer world order and guardian of true multilateralism, with growing importance in the face of the decline of the entire system of global economic relations, with the US and its neocolonial policies at the forefront. .

As a whole, the BRICS countries have already surpassed the Group of Seven (Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and the European Union), by representing a greater part of the world's gross domestic product.

Chart from Acorn Macro Consulting, a UK-based macroeconomic research company, shows the steady growth of the BRICS compared to the G7 and predicts that the gap will only widen in the coming years.

According to the data provided,

An Emerging Market Century?

The BRICS are a larger share of the Global economy than the G7.

pic.twitter.com/AyEIx2TwTO

— Richard Dias (@RichardDias_CFA) March 9, 2023

As predicted, by 2028 the BRICS share will increase to 33.6%, compared to 31.6% in 2022, while the G7 share will decrease to 27.8% compared to 30.4% last year.

At the end of 2020, the numbers were similar, with the two groups of countries contributing 31% each to global economic growth.

In addition, the IMF predicts that between 2023 and 2028 China's contribution to global economic growth will be twice that of the US.

India's index will also outperform the North American country, constituting 12.9% compared to 11.3% last year.

Experts warn that the BRICS now make up almost half of the world's population, a quarter of world GDP.

The main attraction of the proposal made by the BRICS is the lack of dependence on the United States and the European Union.

The use of the economy as a tool for political pressure has undermined the reputation of these two players as reliable partners in international trade.

Meanwhile, it is considered that

The introduction of a collective currency of the BRICS depends to a large extent on the political will and the agreement of the member countries of the bloc to use such a mechanism as part of the application of monetary policy.

As a reserve or payment instrument in foreign economic and commercial activity, it is beneficial for the BRICS countries themselves, since it would increase the stability of their financial systems and strengthen their sovereignties.

In video, economic influence of the BRICS