Malaysia and Thailand keen in joining BRICS

According to NIKKEI Asia, two Southeast Asian nations, Malaysia and Thailand, have recently revealed their plans to join the BRICS grouping of emerging nations as middle power countries seek to maneuver amid growing geopolitical uncertainties, including the US-China tensions.

What kind of organization is BRICS?

BRICS, an acronym for Brazil, Russia, India, China and South Africa, was launched in 2009 as BRIC and later renamed BRICS in 2010 when South Africa joined the group. It was formed to foster economic, political and cultural cooperation among its members.

Compared to the Association of Southeast Asian Nations (ASEAN), the group operates without a formal charter or secretariat -- akin to an informal group that meets annually to allow for flexibility and prompt responses to global challenges.

Alicia Garcia-Herrero, a senior research fellow at the Brussels-based think tank Bruegel, argued in her article on the East Asia Forum that at the start of the group's formation, China dominated the bloc, and most of the growth in trade has been China-centric. However, the recent increase, mostly driven by India, has "experienced an acceleration in economic growth" of the group.

The five countries combined accounted for gross domestic product of US$25.8 trillion last year, or about a quarter of the global total, whereas Group of Seven (G7) developed nations had a combined US$46.8 trillion.

Why do Malaysia and Thailand want to join?

Participation in BRICS would foster economic cooperation with peer emerging economies, such as trade and investment.

In addition, Malaysia views this as an opportunity to engage in rising multilateralism, according to Hoo Chiew Ping, a senior fellow at the East Asian International Relations Caucus. She said joining BRICS would support a multipolar world order rather than being drawn into a new Cold War centered on the US-China rivalry.

Thailand has said a BRICS membership would enhance Thailand's role as a leader among emerging countries.

A foreign ministry spokesperson told reporters last week that the country wants to play more roles, promoting Thai potentials to co-play the roles with developed nations and underdeveloped nations to provide guidelines for global community development to promote justice and equality, adding that being a BRICS member does not mean Thailand is taking sides.

Will other countries in Southeast Asia follow?

Indonesian Foreign Minister Retno Marsudi said earlier this year that Jakarta was still assessing the benefits of joining BRICS. This follows President Jokowi Widodo's attendance at the BRICS summit in South Africa in August last year, during which he called for stronger cooperation among developing nations to fight trade discrimination.

Jokowi told reporters afterward that despite Indonesia's good economic relationships with the group's members, we don't want to rush joining the bloc.

Observers describe Indonesia's reluctance to join BRICS as a desire to avoid being seen as too close to China, already its biggest source of foreign direct investment and trading partner in recent years. China has also been the biggest trading partner to most ASEAN countries in the past decade.

This is amid Indonesia's ambition to join the OECD instead. The rich-country club opened accession discussions with Indonesia in February that, if realized, will make it the first OECD member from Southeast Asia.

Rahul Mishra, an associate professor at the Center for Indo-Pacific Studies of Jawaharlal Nehru University, said that Malaysia's and Thailand's moves will motivate Indonesia to revive its BRICS plans. Vietnam could be the next member, and a bigger BRICS would mean a collective of more voices from the Global South, he added.

Vietnam sent a delegation to attend the BRICS Dialogue with Developing Countries in Russia's Nizhny Novgorod this month. The country is watching the BRICS expansion but has not made any comments on joining the bloc. Thailand and Laos took part in the forum as well.

What would Thailand's and Malaysia's BRICS memberships mean for Southeast Asia?

The shift could put a strain on the unity and centrality of Southeast Asia's own multilateral framework, ASEAN, and the Southeast Asian bloc needs to adapt to remain relevant as its members explore other alignments, experts say.

"It is high time for ASEAN to prepare the necessary, to complement the appetite of its member states in bolstering action and crafting solutions, in which ASEAN seems to be counterproductive," said Fikry A Rahman, the head of foreign affairs at Malaysia's research institute Bait Al-Amanah.

Fikry said that ASEAN will continue to take center stage for Southeast Asia, and its members will not undermine the values, although he also pointed out that the nature of the Southeast Asian bloc limits its role in serving regional goals.

What does a bigger BRICS mean for the world?

The expansion of BRICS would amplify the voice of the Global South and point to a further disparity of a more polarized world.

In January 2024, BRICS expanded its membership to include more prominent Global South countries: Egypt, Ethiopia, Iran and the United Arab Emirates (UAE), with more countries potentially joining the group.

"The expanded BRICS membership is a direct response to heightened bipolar rivalry, which has significantly increased global geopolitical uncertainties," Hoo said, highlighting how middle powers maneuver amid the tension between superpowers.

However, Hoo cautioned that the inclusion of more countries, especially with Russia's involvement in the grouping, could send a problematic signal to the US and its allies, as membership can be viewed as adversarial to Western interests and values.

South Africa: Ramaphosa sworn in second time

South Africa's Cyril Ramaphosa has been sworn in for a second full term in office as president, despite failing to secure a majority in parliament in last month's election for his African National Congress (ANC).

Lawmakers re-elected him as president last week following a deal between the ANC, its long-time rival Democratic Alliance (DA) and other parties to form a coalition government.

The ANC, which has governed since the end of apartheid in 1994, lost its majority for the first time after the May 29 election produced no outright winner.

Many dignitaries, including several African heads of states, are attending the ceremony.

The oath of office was administered by Chief Justice Raymond Zondo.

After Ramaphosa took the oath, a band played the national anthem followed by a 21-gun salute and a fly-past by army helicopters, before he made his inaugural address.

The uMkhonto weSizwe (MK) party formed six months ago by former President Jacob Zuma says its officials will not participate in the “farcical” inauguration.

The party, which won 15% of votes and obtained 58 parliamentary seats, also boycotted parliament’s first sitting last Friday.

Ramaphosa has kept the presidency even though the ANC vote fell by 17 percentage points and it lost 70 seats in parliament.

He did this through a power-sharing arrangement with the pro-business DA, a historic rival, and other parties.

The ANC got 40% of the vote, while the DA came second with 22%.

The coalition is a move to the political centre because the ANC’s left-wing and populist breakaway parties rejected the invitation to join a national unity government.

Ramaphosa is expected to appoint a cabinet in the coming days, which is to include his new coalition partners – the DA and three other smaller parties. Together, the coalition accounts for 68% of seats in parliament.

The president is also expected to set out an agenda to rescue the flailing economy.

Under his rule, the economic performance has continued to suffer amid power cuts, rising crime and unemployment.

Ramaphosa first became president in 2018 when his predecessor, Zuma, was forced to resign because of corruption allegations - which he denied.

Iran-China-Russia naval drill in Indian Ocean

The navies of Iran, China, and Russia have initiated joint drills in the northern tip of the Indian Ocean, marking their fifth collaborative military exercise in recent years. Naval delegations from Azerbaijan, Kazakhstan, Oman, Pakistan, and South Africa are present as the observers of the exercises.

Chinese and Russian naval forces have entered Iranian territorial waters to participate in the primary stage of the naval war game, named Maritime Security Belt 2024, near the Gulf of Oman. This international exercise, involving Iran, China, and Russia, underscores a commitment to peace and security in the region.

During a joint press conference with Russian and Chinese commanders, Second Flotilla Admiral Mustafa Taj al-Dini emphasized the strategic significance of this being the fifth joint exercise among the involved countries. He highlighted the objectives of this joint naval drill, including bolstering maritime trade security, combating piracy and terrorism, and fostering cooperation among the participating nations.

According to Taj al-Dini, this security-focused exercise, covering an expansive area of 17,000 square kilometers, aims to address multifaceted challenges. Despite the approaching festivities for the Persian New Year, the spokesperson underscored that security efforts remain steadfast.

Notably, naval units from Iran, China, and Russia, comprising destroyers and missile cruisers, actively contribute to this collaborative initiative.

Iranian naval forces, along with their Chinese and Russian counterparts, have conducted several military drills in recent years to enhance the security and stability of international maritime trade. They have also collaborated in countering piracy and maritime terrorism, exchanging information in naval rescue and relief operations, as well as sharing operational and tactical experiences.

Russia's defense ministry stated that the exercises, running through Friday and involving warships and aviation, would focus on the protection of maritime economic activity.

The Russian defence ministry said its Pacific fleet, led by the Varyag guided missile cruiser and the Marshal Shaposhnikov frigate, had arrived at Iran’s Chabahar port on Monday to take part in the joint drill.

China’s defense ministry mentioned that the drills aimed at jointly maintaining regional maritime security. China sent its 45th escort task force, consisting of the guided-missile destroyer Urumqi, guided-missile frigate Linyi, and the comprehensive supply ship Dongpinghu, to the exercise.

Last month, Rear Admiral Shahram Irani, commander of the Iranian Navy, announced Tehran's plan to hold joint drills with Beijing and Moscow before the end of March, aimed at ensuring regional security.

Providing insights into the strategic maritime efforts, the rear admiral revealed that the mission to safeguard Iran's shipping lines in international waters commenced in 2009 under the direct command of the Leader of the Islamic Revolution, Ayatollah Seyyed Ali Khamenei.

Emphasizing the unwavering commitment of the Army's strategic naval force, he highlighted their continuous role in ensuring the security of the nation's economic hub in both the Gulf of Aden and the northern Indian Ocean.

The admiral further highlighted the expansion of the security mission beyond securing shipping lines in the Red Sea over the past four years. Currently, the comprehensive management of protection for Iran's shipping lines extends from the Gulf of Aden to the Suez Canal.

The Iranian Navy conducts routine exercises throughout the year. In recent years, Iranian military experts and technicians have made significant progress in developing and manufacturing a diverse range of military equipment, achieving self-sufficiency for the armed forces in the military industry.

In March 2023, Iranian, Chinese, and Russian naval forces staged the 2023 Marine Security Belt war game in the northern parts of the Indian Ocean, marking the fourth joint exercise in recent years. Alongside Chinese and Russian fleets, more than 10 Iranian Navy vessels and three helicopters reportedly took part.

 Courtesy Tehran Times

Iran, Saudi Arabia, UAE, Egypt, Ethiopia join BRICS

South Africa’s representative in the BRICS group of emerging economies, Anil Sooklal, has stated that Iran, Saudi Arabia, the United Arab Emirates, Egypt, and Ethiopia join the bloc on January 01, 2024.

At the recent BRICS meeting, which took place in Durban, South Africa, early in December, Sooklal underlined —referring to the attendance of high-ranking representatives of Iran, Saudi Arabia, the United Arab Emirates, Egypt, and Ethiopia— that the number of BRICS members will double with the addition of these nations.

He went on to add that the next conference of the economic group is scheduled for January 30, 2024 in Moscow, and it is expected that representatives of the new BRICS members will be there.

In a recent interview with Sputnik, Iran's Deputy Foreign Minister for Political Affairs, Ali Bagheri Kani, emphasized Iran's commitment, alongside other BRICS members, to actively pursue de-dollarization across various economic sectors.

Bagheri Kani highlighted the focus on trade, economic collaborations, and financial exchanges within this influential coalition of major economies. 

He emphasized ongoing initiatives and expressed optimism about reinforcing these efforts to swiftly achieve their objectives.

Bagheri Kani underscored the importance of collaborative efforts, signaling a unified commitment within BRICS to reducing dependency on the dollar.

He clarified that the initiatives aim to establish a framework fostering economic autonomy and resilience among member nations.

The BRICS group, initially comprised of Brazil, Russia, India, China, and South Africa, established in 2009, has emerged as a significant force shaping global economic discussions. 

Iran, alongside Argentina, Egypt, Ethiopia, the UAE, and Saudi Arabia, has received an invitation to join this influential bloc. Their anticipated full membership, official from January 01, 2024, marks a substantial shift in the geopolitical landscape.

Russia's Deputy Foreign Minister, Sergey Ryabkov, provided insights into BRICS countries accelerating the transition to national currencies. 

This strategic shift aligns with the shared vision of establishing a more balanced and resilient global economic framework, reducing vulnerabilities associated with a singular currency.

BRICS has announced plans to introduce a gold-backed currency for settling international trade payments, challenging the global reserve status of the US dollar. This decision adds momentum to the ongoing de-dollarization trend unfolding in the global economy.

Iran's active involvement in the BRICS initiative toward de-dollarization aligns with a broader trend among influential nations reshaping the global economic landscape.

As BRICS evolves, its concerted efforts toward economic autonomy become increasingly significant in shaping the future of international trade and finance.

Pro Israeli remarks trigger walkout at IPU meeting

The inaugural speech at the 147th Inter-Parliamentary Union Assembly in Luanda, Angola, drew an angry reaction from several Muslim delegations that deemed President Duarte Pacheco’s remarks in favor of the Israeli regime unjust and misleading.

On Monday the president, who is wrapping up his three-year term, kicked off his speech by commenting on “Israel’s right to defend itself”, referring to the regime’s heavy and relentless bombardment of Gaza in recent days.

The attacks have so far resulted in the death of more than 5,000 people, with children making up half of the casualties. Israel has also begun a full siege of the territory not allowing any food, water, fuel, and medicine inside Gaza. 

Delegations from South Africa, Iran, Kuwait, Palestine, Algeria, and some other Muslim countries reportedly walked out of the opening ceremony after a member of the Iranian delegation shouted “Israel is a terrorist entity” to protest the president’s remarks. 

The Parliamentary delegations returned to the ceremony once the speech was over and once again voiced their strong opposition to the rhetoric against the Palestinian Resistance. 

After the incident, Pacheco’s past interactions with the regime were brought to the limelight. The IPU president, who is supposed to represent 179 parliaments from around the world, visited the occupied territories in 2021 a year after being elected. 

During an interview with Israeli media, the official expressed regret that the IPU has chosen to condemn the regime at some instances. “I regret that there are such condemnations against Israel, because I don’t believe that they contribute to a spirit of dialogue,” he said while talking to the Jewish News Syndicate. 

Pacheco was also called a true friend of Israel during a meeting with the Knesset speaker Mickey Levy. 

 

Expansion of BRICS: What are the economic implications?

In late August it was announced that from 2024, the BRICS—a political grouping that currently comprises Brazil, Russia, India, China and South Africa—will admit six new members: Iran, Saudi Arabia, Egypt, Argentina, the UAE and Ethiopia.

The eleven countries combined represent around 45% of the planet’s population, over 40% of world oil production and roughly a third of global GDP. The BRICS average economic growth rate is likely to be notably above the global average. That said, the G7’s GDP is still substantially larger at market prices, and should remain so over the medium term.

The group’s key economic institution, the New Development Bank (NDB), is still tiny in comparison to other multilateral lenders. The Bank has financed projects worth around US$33 billion since 2015; in contrast, the World Bank alone committed around US$50 billion each year over the same period.

Other overarching economic structures are lacking, and a BRICS trade deal seems difficult to fathom given members’ vastly different stages of development and policy priorities.

Internal geopolitical disputes could further complicate economic rapprochement between members: Egypt and Ethiopia are at loggerheads over a dam on the Nile River, relations between Iran and its Gulf neighbors are still strained, and there are tensions between India and China over their shared Himalayan border and Indian restrictions on Chinese imports and technology.

The expansion of the BRICS could encourage greater political overtures and financial generosity from the G7 towards emerging markets going forward; the G20 summit later this year will be key to watch, with the UN calling on US$500 billion of annual financing from wealthy nations.

More countries are likely to join the BRICS in the coming years, as current members—particularly China and Russia—look to bolster an alternative to the G7-led world order.

BRICS members will increasingly conduct intra-member trade in local currencies to reduce dependence on the dollar, with the yuan and rupee set to be major beneficiaries.

That said, the US dollar will remain the global reserve currency for the foreseeable future - incumbency, dollar liquidity, the strength of the US economy, and the reliability of the US government as a debt issuer are key advantages. As for the BRICS grouping as a whole, it is likely to remain more of a political than an economic force.

On the BRICS’ prospects, EIU analysts said, “The BRICS group will not become a solid construction, regardless of how many bricks are added to the wall, and it will continue to face internal tensions and divisions. However, the expansion will bolster its geopolitical significance and its combined economic power, and the organization will continue to evolve. The relatively trouble-free and productive BRICS summit will enhance South Africa’s standing without damaging its relations with key Western partners.”

On the future of the dollar, ING analysts said, “Until international issuers and investors are happy to issue and hold international debt in non-dollar currencies – and the take-up of CNY Panda bonds has been very slow indeed – we suspect this will be a decade-long progression to a multi-polar world, a world in which perhaps the dollar, the euro and the renminbi become the dominant currencies in the Americas, Europe and Asia respectively.”

Courtesy: Focus Economics

Can BRICS currency be adopted?

Brazilian President called on Wednesday for the BRICS nations to create a common currency for trade and investment between each other, as a means of reducing their vulnerability to dollar exchange rate fluctuations. Luiz Inacio Lula da Silva made the proposal at a BRICS summit in Johannesburg.

Officials and economists have pointed out the difficulties involved in such a project, given the economic, political and geographic disparities between Brazil, Russia, India, China and South Africa.

Brazilian president doesn't believe nations that don't use the dollar should be forced to trade in the currency, and he has also advocated for a common currency in the Mercosur bloc of South American countries.

A BRICS currency increases our payment options and reduces our vulnerabilities, he told the summit's opening plenary session.

South African officials had said a BRICS currency was not on the agenda for the summit.

I n July, India's foreign minister said, "There is no idea of a BRICS currency". Its foreign secretary said before departing for the summit that boosting trade in national currencies would be discussed.

Russian President Vladimir Putin said the gathering, which he attended via video link, would discuss switching trade between member countries away from the dollar to national currencies.

China has not commented on the idea. President Xi Jinping spoke at the summit of promoting the reform of the international financial and monetary system.

Building a BRICS currency would be a political project, South African central bank governor Lesetja Kganyago told a radio station in July.

"If you want it, you'll have to get a banking union, you'll have to get a fiscal union, you've got to get macroeconomic convergence," Kganyago said.

"Importantly, you need a disciplining mechanism for the countries that fall out of line with it... Plus they will need a common central bank... where does it get located?"

Trade imbalances are also a problem, Herbert Poenisch, a senior fellow at Zhejiang University, wrote in a blog for think-tank OMFIF.

All BRICS member countries have China as their main trading partner and little trade with each other.

BRICS leaders have said they want to use their national currencies more instead of the dollar, which strengthened sharply last year as the Federal Reserve raised interest rates and Russia invaded Ukraine, making dollar debt and many imports more expensive.

Russia's sanctions-imposed exile from global financial systems last year also fuelled speculation that non-western allies would shift away from the dollar.

"The objective, irreversible process of de-dollarisation of our economic ties is gaining momentum," Putin told the summit on Tuesday.

The greenback's share of official foreign exchange reserves fell to a 20-year low of 58% in the final quarter of 2022, and 47% when adjusted for exchange rate changes, according to International Monetary Fund data.

The dollar still dominates global trade. It is on one side of almost 90% of global foreign exchange transactions, according to Bank of International Settlements Data.

De-dollarizing would need countless exporters and importers, as well as borrowers, lenders and currency traders across the world, to independently decide to use other currencies.

 

Chinese President calls for BRICS unity

Chinese President Xi Jinping has called for unity among his BRICS counterparts at a summit in South Africa on Wednesday as he pushed the case for expanding the grouping to face a global period of turbulence and transformation.

Leaders of the bloc of leading developing nations Brazil, Russia, India, China and South Africa are meeting in Johannesburg with discussions around establishing a framework and criteria for admitting new members topping the agenda.

While all BRICS members have publicly expressed support for growing the bloc, divisions remain over how much and how quickly.

Bloc heavyweight China has long pushed for expansion and views its deteriorating relations with Washington as well as heightened global tensions resulting from the Ukraine war as adding urgency to the enlargement project.

"The world is undergoing major shifts, division and regrouping ... it has entered a new period of turbulence and transformation," Xi said.

"We, the BRICS countries, should always bear in mind our founding purpose of strengthening ourselves through unity."

BRICS group countries have economies that are vastly different in scale and governments that often seem to have few foreign policy goals in common, complicating decision-making.

The economy of China for example, is more than 40 times larger than South Africa's, Africa's most developed country.

Russia, isolated by the United States and Europe over its invasion of Ukraine, is also pushing to quickly grow BRICS and forge it into a counterweight to the West.

Russian President Vladimir Putin, who is wanted under an international arrest warrant for alleged war crimes, sees BRICS membership as a way of showing the West he still has friends.

He did not travel to South Africa but used a video address to attack Western powers.

"I want to note that it was the desire to maintain their hegemony in the world, the desire of some countries to maintain this hegemony that led to the severe crisis in Ukraine," he said.

South Africa's President Cyril Ramaphosa said on Tuesday that he and Xi had similar positions on BRICS expansion. But pushback has come from Brazil and India, which have both forged closer ties with the West.

Brazil's President Luiz Inacio Lula da Silva on Tuesday rejected the idea the bloc should seek to rival the United States and Group of Seven wealthy economies.

While he is pushing for neighbour Argentina to join, he said any new members would need to meet certain conditions, so the group does not become a "Tower of Babel".

Indian Prime Minister Narendra Modi said on Wednesday his country, which is wary of Chinese dominance, fully supported expansion.

However, an Indian official familiar with discussions late on Tuesday between the leaders said Modi indicated there have to be ground rules about how it should happen and who can join.

India and China periodically clash over their disputed Himalayan border.

More than 40 countries have expressed interest in joining BRICS, say South African officials, 22 of whom have formally asked to be admitted.

Details of criteria for joining could be included in a joint declaration due to be finalized on Wednesday.

Beyond the enlargement question, boosting the use of member states' local currencies in trade and financial transactions to lessen dependency of the US dollar is also on the summit agenda.

South African organizers had said there would be no discussions of a common BRICS currency, an idea floated by Brazil as an alternative to dollar-dependence.

At least 15 potential new member countries - including Saudi Arabia, Algeria and Argentina - are under consideration to join the bloc's New Development Bank (NDB), its chief financial officer said on Wednesday.

The NDB, which has long tapped China's capital market for funding, is registering an Indian rupee bond program worth US$2.5 billion over five years, after it issued its first South African rand bond last week.

 

BRICS no rival to G7 and G20, says Lula

Brazilian President Luiz Inacio Lula da Silva said on Tuesday that the BRICS bloc of nations aims to organize the developing Global South and is not meant to rival the United States and the Group of Seven (G7) wealthy economies.

His comments point to a divergence of vision as leaders of the bloc - Brazil, Russia, India, China and South Africa - arrived in Johannesburg for a summit that will weigh expanding the group as some members push to forge it into a counterweight to the West.

Heightened global tensions provoked by the Ukraine war and Beijing's growing rivalry with the United States have pushed China and Russia - whose President Vladimir Putin will attend the meeting virtually - to seek to strengthen the BRICS bloc.

Their vision of an expanded BRICS capable of rivaling US and European global dominance has, however, been met with skepticism by some members. And the outcome of the debate over enlargement could determine the future of a bloc long criticized for a lack of cohesion.

"We do not want to be a counterpoint to the G7, G20 or the United States," Brazil's Lula said on Tuesday during a social media broadcast from Johannesburg. "We just want to organize ourselves."

Summit host South Africa welcomed China's Xi Jinping, the leading proponent of enlarging BRICS, for a state visit on Tuesday morning ahead of meetings with the grouping's other leaders planned for later in the day.

"I am confident that the upcoming summit will be an important milestone in the development of the BRICS mechanism," Xi said shortly after his arrival in South Africa.

South African President Cyril Ramaphosa said during a bilateral meeting with Xi that their two countries had similar views regarding expansion.

"We share your view, President Xi, that BRICS is a vitally important forum which plays an important role in the reform of global governance and in the promotion of multilateralism and cooperation throughout the world," he said.

Indian Prime Minister Narendra Modi is also attending the August 22 to 24 summit.

Putin, who is wanted under an international arrest warrant for alleged war crimes in Ukraine, will not travel to South Africa.

Beyond the enlargement question, boosting the use of member states' local currencies is also on the summit agenda. South African organizers, however, say there will be no discussions of a BRICS currency, an idea floated by Brazil earlier this year as an alternative to dollar-dependence.

BRICS remains a disparate group, ranging from China, the world's second biggest economy now grappling with a slowdown, to South Africa, an economic minnow facing a power crisis that's led to daily blackouts.

Russia is being hammered by sanctions over its war in Ukraine is keen to show the West it still has friends.

India, however, has increasingly reached out to the West, as has Brazil under its new leader.

Two members - India and China - have periodically clashed along their disputed border, adding to the challenge of decision-making in a group that relies on consensus.

Expansion has long been a goal of China, which hopes that broader membership will lend clout to a grouping already home to some 40% of the world's population and a quarter of global GDP.

The leaders will hold a mini-retreat and dinner on Tuesday evening where they are likely to discuss a framework and criteria for admitting new countries.

India, which is wary of Chinese dominance and has warned against rushing expansion, has positive intent and an open mind, Foreign Secretary Vinay Kwatra said on Monday.

Brazil, meanwhile, is concerned that expanding BRICS will dilute its influence, though Lula reiterated on Tuesday his desire to see neighbour Argentina join the bloc.

While a potential BRICS enlargement remains up in the air, the grouping's pledge to become a champion of the developing world and offer an alternative to a world order dominated by wealthy Western nations is already finding resonance.

Over 40 countries have expressed interest in joining BRICS, say South African officials. Of them, nearly two dozen have formally asked to be admitted, with some expected to send delegations to Johannesburg.

 

What is on top of agenda at BRICS upcoming meeting in South Africa?

BRICS leaders are scheduled to meet in South Africa next week to discuss how to turn a loose club of nations accounting for a quarter of the global economy into a geopolitical force that can challenge the West's dominance in world affairs.

Russian President Vladimir Putin, who faces an international arrest warrant over alleged war crimes in Ukraine, will not join leaders from Brazil, India, China and South Africa amid rifts over whether to expand the bloc to include dozens of ‘Global South’ nations queuing up to join.

South Africa will host Chinese President Xi Jinping, Brazil's Luiz Inacio Lula da Silva and Indian Prime Minister Narendra Modi for the BRICS summit from August 22 to 24.

Spread over the globe and with economies that operate in vastly different ways, the main thing uniting the BRICS is skepticism about a world order they see as serving the interests of the United States and its rich-country allies who promote international norms they enforce but don't always respect.

Few details have emerged about what they plan to discuss, but expansion is expected to be high on the agenda, as some 40 nations have shown interest in joining, either formally or informally, according to South Africa. They include Saudi Arabia, Argentina and Egypt.

China, seeking to expand its geopolitical influence as its tussles with the United States, wants to enlarge BRICS quickly, while Brazil is resisting expansion, fearing the already unwieldy club could see its stature diluted by it.

In a written response to questions by Reuters, China's foreign ministry said, “It supports progress in expanding membership, and welcomes more like-minded partners to join the 'BRICS family' at an early date."

Russia needs friends to counter its diplomatic isolation over Ukraine, and so is keen to bring in new members, as is its most important African ally, South Africa.

In a nod to the bloc's African hosts, the theme of its 15th summit is "BRICS and Africa", emphasizing how the bloc can build ties with a continent increasingly becoming a theatre for competition between world powers.

South Africa's foreign minister Naledi Pandor in a statement last week said BRICS nations wanted to show global leadership in addressing the needs ... of the majority of the world, namely ... development and inclusion of the Global South in multilateral systems, in a veiled swipe at Western dominance.

BRICS nations are keen to project themselves as alternative development partners to the West. China's foreign ministry said BRICS sought to reform global governance systems (to) increase the representation ... of developing countries and emerging markets.

The bloc's New Development Bank (NDB) wants to de-dollarize finance and offer an alternative to the much-criticized Breton Woods institutions.

But it has approved only US$33 billion of loans in nearly a decade -- about a third of the amount the World Bank committed to disbursing just last year -- and has recently been hobbled by sanctions on member Russia.

South African officials say talk of a BRICS currency, mooted by Brazil earlier this year as an alternative to dollar-dependence, is off the table.

With 40% of global population, the BRICS carbon-intensive nations also make up about the same share of greenhouse gas emissions. Officials in Brazil, China and South Africa said climate change may come up but indicated it wouldn't be a priority.

BRICS countries blame rich nations for causing most global warming and want them to take on more of the burden of decarburizing the world's energy supply. China was accused of blocking climate discussions at the G20, which it denied.

 

G20 members fail to reach agreement on cutting fossil oil use

According to Reuters, the Group of 20 (G20) major economies meeting in India failed on Saturday to reach consensus on phasing down fossil fuels following objections by some producer nations.

Major fossil fuel producers Saudi Arabia, Russia, China, South Africa and Indonesia are all known to oppose the goal of tripling renewable energy capacity this decade.

Scientists and campaigners are exasperated by international bodies' foot-dragging on action to curb global warming even as extreme weather from China to the United States underlines the climate crisis facing the world.

The G20 member countries together account for over three-quarters of global emissions and gross domestic product, and a cumulative effort by the group to decarbonize is crucial in the global fight against climate change.

However, disagreements including the intended tripling of renewable energy capacities by 2030 resulted in officials issuing an outcome statement and a chair summary instead of a joint communiqué at the end of their four-day meeting in Bambolim, in the Indian coastal state of Goa.

A joint communiqué will be issued when there is complete agreement between member nations on all issues.

"We had a complete agreement on 22 out of 29 paragraphs, and seven paragraphs constitute the Chair summary," Indian Power Minister R.K. Singh said.

Sections urging developed countries to deliver on the goal of jointly mobilizing US$100 billion per year for climate action in developing economies for 2020-25, and description of the war in Ukraine, also eluded consensus.

Fossil fuel use became a lightning rod in day-long discussions, but officials failed to reach consensus over curbing unabated use and argued over the language to describe the pathway to cut emissions.

A draft late on Friday reviewed by Reuters read, "The importance of making efforts towards phase down of unabated fossil fuels, in line with different national circumstances, was emphasized."

However, the chair statement released on Saturday evening included concerns from some member nations which were missing in the Friday draft, noting that "others had different views on the matter that abatement and removal technologies will address such concerns".

Singh, in a press briefing after the conference, said some countries wanted to use carbon capture instead of a phase down of fossil fuels. He did not name the countries.

South Africa faces threat of becoming a failed state

South Africa could become a failed state but has yet to reach that point, a senior official of the ruling African National Congress (ANC) has said. The admission by ANC Secretary General Fikile Mbalula comes as South Africa experiences power cuts, known as load-shedding, of up to 10 hours a day.

“This load-shedding has just made a mess of our country,” he told the BBC’s HARDtalk program.

The power cuts have worsened South Africa’s economic crisis.

The country is also battling high levels of corruption, all of which has damaged confidence in the ANC government.

“If certain things are not resolved, we will become a failed state, but we are not journeying towards that direction,” Mbalula said in an exclusive interview with BBC HARDtalk’s Stephen Sackur.

“South Africa is undergoing challenges like many other countries but I think to put it into the category of a failed state is an exaggeration,” he added.

While external forces such as global economics, the impact of COVID and the war in Ukraine had all played a role in battering South Africa’s economy, blame also lay partly with “some of our own weaknesses in terms of managing the economy well”, Mbalula acknowledged.

South Africa has an official unemployment rate of about 33%, one of the highest in the world. One in two young South Africans is unemployed and 60% are living under the poverty line.

Yet Mbalula maintained the country was “recovering well” and defended the ANC’s economic record. The party took power in 1994, following the end of the racist system of apartheid.

“We have been able to cushion our people from the worst,” he said, after a legacy of “300 years of deprivation and a mismanaged country and economy”. But he admitted the power crisis was the ANC government’s “Achilles heel”.

According to South Africa’s central bank, it is costing the country at least 2% of gross domestic product (GDP). “We can’t afford that,” Mbalula said.

With elections due next year, the continued blackouts could have seismic political consequences for the ruling party. “It will affect the fortunes of the ANC to receive just an outright majority... if it is not dealt with decisively,” he said.

South Africa’s state-owned power utility Eskom has $26 billion of debt, old infrastructure, and power stations that do not work properly.

It has led to South Africa’s worst-ever power crisis, and Eskom has warned that the situation could worsen in the winter months of July and August.

Peep into South Africa through Bloomberg eye

When Nelson Mandela’s African National Congress came to power almost three decades ago, South Africa was blessed with a surfeit of electricity—a legacy of the apartheid regime’s obsession with self-reliance in the face of crippling sanctions against its White supremacist rule.

The democratic government that replaced it prioritized expanding access, electrifying 2.5 million predominantly Black households in its first four years. The surplus from a fleet of coal-fired plants was even tapped to light up homes in neighboring nations.

Today some 86% of South African households are connected to the grid, compared with 40% for Africa as a whole. But the good news ends there. Those households go without electricity at least 10 hours a day on average. It was apparent years ago that a lack of planning by ANC governments, and their failure to build new plants while maintaining that already in place, had hobbled the continent’s most-industrialized nation.

Now the consequences of the ANC’s inability to resolve its power crisis are growing dire. As the world’s biggest economic powers court Africa with an intensity unseen in decades—the leaders of both the US and China are expected this year—South Africa risks being left in the dark.

Brownouts and blackouts aren’t the only challenges the nation faces. The continent’s biggest freight rail network is crumbling, the country’s ports are among the world’s most inefficient and crime is rampant.

South Africa’s foreign policy is also in disarray. Failing to condemn Vladimir Putin’s invasion of Ukraine and hosting naval exercises with Russia angered key trading partners, including the US and European Union. This month, the US ambassador accused the country of allowing arms to be loaded onto a Russian ship at a military base.

For a nation that’s billed itself as Africa’s leader—touting its role as the only African member of the Group of 20—South Africa is arguably starting to lose its position.

This month, Japanese Prime Minister Fumio Kishida and German Chancellor Olaf Scholz both visited Africa, but neither included South Africa on the itinerary. And South African officials weren’t invited to this weekend’s G-7 summit—for only the second time in six years. So who will be there? The leaders of its emerging-market peers: Brazil, India, Indonesia and Vietnam. 

Much of South Africa’s decline comes back to the absence of reliable electricity and the broader economic malaise it’s causing. The ANC’s responsibility for the outages, which are not only a hindrance for households but deter investment, can be traced back to around 2001, when the national utility, Eskom, was told not to build new power plants.

The government’s thinking was that new generation would be built by private investors. The problem is they never came.

And while corruption and managerial neglect have also been issues, there’s little evidence the policies that triggered the crisis have changed.  

President Cyril Ramaphosa appointed the country’s first-ever electricity minister, Kgosientsho Ramokgopa two months ago. But Ramaphosa has yet to give him any authority, leaving the minister to conduct a series of tours to power plants and TV studios.

Authority instead resides with the energy and public-enterprises ministers—strong political allies of the president who have accomplished little. 

The cost of procrastination is becoming clear. With power cuts deepening into the South African winter, Rand Merchant Bank recently reversed its prediction of 0.3% economic growth this year, and now sees a 0.8% contraction. Even central bank governor Lesetja Kganyago said this month the country was suffering from largely self-inflicted wounds. 

As the ANC is set to face its toughest-ever electoral test in a year’s time, there have been some positive steps. Private companies are now allowed to build generation plants of any size for their own use, and municipalities are seeking supplies independent of Eskom. 

But these moves will take time, and aren’t the hard decisions needed to resolve the situation.

 

 

 

 

Iran Petrochemical Forum inaugurated

The 14th Iran Petrochemical Forum (IPF) kicked off at IRIB International Conference Center (IICC) in Tehran on Monday.

The inaugural ceremony of the event was participated by Rouhollah Dehqani-Firouzabadi, the vice president for science and technology, Majid Chegeni, the managing director of National Iranian Gas Company (NIGC), and senior director of the country’s petrochemical sector.

Focusing on “Value Chain, New Opportunities”, the two-day forum revolves around eight topics, including: “Feedstock, products and supply chain”, “Solutions and advanced optimization technologies”, “Integration and coordination between petrochemical and refining complexes”, “Production process and market”, “Methanol market and its roles”, “Global energy crisis and future of the petrochemical industry”, “Investment and financial supply opportunities”, and “Energy optimization and production without pollution”.

As stated by the managing director of National Petrochemical Company (NPC), “Our today’s important objective of completing the production chain in the country’s petrochemical sector highlights the significance of holding this conference”, 

Morteza Shahmirzaei has expressed hope that IPF can pave the way to achieve all strategic petrochemical products in the world.

As reported, 15 countries, including the members of the BRICS countries (Brazil, Russia, India, China, and South Africa) as well as some European countries, are participating in IPF, which is a famous scientific conference in the world, and the latest products and achievements of the petrochemical industry are being presented and introduced in the two-day event.

 

The World Beyond Ukraine

“Ukraine has united the world,” declared Ukrainian President Volodymyr Zelensky in a speech on the first anniversary of the start of the war with Russia. The war may have united the West, but it has left the world divided. And that rift will only widen if Western countries fail to address its root causes.

The traditional transatlantic alliance of European and North American countries has mobilized in unprecedented fashion for a protracted conflict in Ukraine. It has offered extensive humanitarian support for people inside Ukraine and for Ukrainian refugees. And it is preparing for what will be a massive rebuilding job after the war. But outside Europe and North America, the defense of Ukraine is not on top of agenda.

Few governments endorse the brazen Russian invasion, yet many remain unpersuaded by the West’s insistence that the struggle for freedom and democracy in Ukraine is also theirs.

As French President Emmanuel Macron said at the Munich Security Conference in February, “I am struck by how we have lost the trust of the global South.” He is right. Western conviction about the war and its importance is matched elsewhere by skepticism at best and outright disdain at worst.

The gap between the West and the rest goes beyond the rights and wrongs of the war. Instead, it is the product of deep frustration—anger, in truth—about the Western-led mismanagement of globalization since the end of the Cold War.

The concerted Western response to the Russian invasion of Ukraine has thrown into sharp relief the occasions when the West violated its own rules or when it was conspicuously missing in action in tackling global problems.

Such arguments can seem beside the point in light of the daily brutality meted out by Russian forces in Ukraine. But Western leaders should address them, not dismiss them. The gulf in perspectives is dangerous for a world facing enormous global risks. And it threatens the renewal of a rules-based order that reflects a new, multipolar balance of power in the world.

The Russian invasion has produced remarkable unity and action from the liberal democratic world. Western countries have coordinated an extensive slate of economic sanctions targeting Russia. European states have increasingly aligned their climate policies on decarbonization with national security-related commitments to end their dependence on Russian oil and gas.

Western governments have rallied to support Ukraine with enormous shipments of military aid. Finland and Sweden aim to be soon admitted to NATO.

Europe has adopted a welcoming policy toward the eight million Ukrainian refugees within its borders.

All these efforts have been advocated by a US administration that has been sure-footed in partnering with European allies and others.

The squabbles over Afghanistan and the AUKUS security partnership (a 2021 deal struck by Australia, the United Kingdom, and the United States that irked France) seem a long time ago.

Many in the West have been surprised at this turn of events. Clearly, so was the Kremlin, which imagined that its invasion would not provoke a strong and determined Western response. The West’s unity and commitment are not matched elsewhere.

At the beginning of the war, the UN General Assembly voted 141 to 5, with 47 absences or abstentions, to condemn the Russian invasion. But that result flattered to deceive.

“Most non-European countries that voted to deplore Russia’s aggression last March did not follow up with sanctions. Doing the right thing at the UN can be an alibi for not doing much about the war in the real world.”

In a series of UN votes since the war started, around 40 countries representing nearly 50% of the world’s population have regularly abstained or voted against motions condemning the Russian invasion.

Fifty-eight countries abstained from a vote, in April 2022, to expel Russia from the UN Human Rights Council. According to the Economist Intelligence Unit, two-thirds of the world’s population lives in countries that are officially neutral or supportive of Russia. These countries do not form some kind of axis of autocracy; they include several notable democracies, such as Brazil, India, Indonesia, and South Africa.

Much of the fence-sitting is not driven by disagreements over the conflict in Ukraine but is instead a symptom of a wider syndrome, anger at perceived Western double standards and frustration at stalled reform efforts in the international system.

The distinguished Indian diplomat Shivshankar Menon put the point sharply in Foreign Affairs earlier this year when he wrote, “Alienated and resentful, many developing countries see the war in Ukraine and the West’s rivalry with China as distracting from urgent issues such as debt, climate change, and the effects of the pandemic.”

Courtesy: Foreign Affairs

 

Tehran to host Petrochemical Forum

Tehran will host the 14th edition of Iran Petrochemical Forum (IPF) at the IRIB International Conference Hall on May 1-2.

The 14th Iran Petrochemical Forum is a suitable ground for cooperation between active domestic and foreign companies so that the latest developments, plans and new investment opportunities for the development of the country's petrochemical industry are provided to the participants.

Hassan Abbas-Zadeh said during this international event, a large number of specialized meetings will be held, and a strategic meeting is dedicated to the members of the BRICS countries (Brazil, Russia, India, China, and South Africa) with the aim of examining the future cooperation of the Iranian petrochemical industry in the markets of the BRICS member countries, highlighting that for the first time, member countries of the BRICS group will attend the international conference of the Iranian petrochemical industry.

Other important event of this conference is the holding of special meetings with the presence of ambassadors and political and commercial representatives of Iran in order to examine the development of energy diplomacy, empowering the petrochemical industry with the aim of preventing crude sales (selling final products instead), and self-sufficiency in this industry, the NPC director further noted.

The petrochemical industry plays a crucial role in Iran’s non-oil economy, as petrochemical export is the second-largest source of revenue for the country after crude oil. Petrochemical exports already constitute nearly 33 percent of the country’s non-oil exports.

According to NPC Managing Director Morteza Shahmirzaei, the petrochemical industry is a value and job-creating industry, which has no risk.

The official has stated that currently, the petrochemical sector has the highest added value in the oil industry chain.

He has announced that marketing Iran’s petrochemical products throughout the world is on the agenda of the NPC’s activity, and mentioned completing the production value chain as another major program of the company.

“As we have previously announced, we will fully provide all the capacity of the National Petrochemical Company to the private sector and investors so that the plan to complete the value chain of the petrochemical industry will be realized”, he noted.

 

Lula backs replacing US dollar in foreign trade

Brazil’s Luiz Inacio Lula da Silva called on BRICS nations to come up with an alternative to replace the US dollar in foreign trade, supporting China’s crusade against US global dominance just as he prepares to meet with President Xi Jinping in Beijing. 

Lula’s remarks were made on Thursday during a visit to the Shanghai-based New Development Bank, an institution created by BRICS countries, which, along with Brazil and China, include Russia, India and South Africa. Former Brazil President Dilma Rousseff is the bank’s new chief executive. 

 “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?” he said. “Who decided that the US dollar was the (trade) currency after the end of gold parity?” 

Beijing has ramped up efforts to boost the use of its own currency in foreign trade. Last month, Brazil and China took steps to make it easier to settle their foreign trade operations in yuan or reais, with the stated goal of reducing costs by eliminating a third currency from the transactions. 

Brazil’s Finance Minister Fernando Haddad, who’s accompanying Lula in his trip to China, said local currencies are already used in bilateral trade through instruments such as credit receipts. The goal, he added, is to expand mechanisms that allow trade operations to be settled without the intermediation of a third currency. 

“The advantage is to avoid the straitjacket imposed by necessarily having trade operations settled in a currency of a country not involved in the transaction,” he told reporters in Shanghai.

 Courtesy: Bloomberg

Israeli envoy expelled from African Union summit

As African leaders gathered on Saturday in the Ethiopian capital for the two-day African Union (AU) summit, aiming to jumpstart a faltering trade deal and focusing on challenges of armed conflict and food crisis, an Israeli diplomat was expelled out of the AU assembly.

An AU official told AFP that the diplomat who was asked to leave had not been invited to attend the meeting, with a non-transferable invitation only issued to Israel’s ambassador to the African Union, Aleli Admasu.

“It is regrettable that the individual in question would abuse such a courtesy,” the official said.

While condemning the severe expulsion of a senior diplomat from the AU summit, Israel accused arch-foe Iran of orchestrating the move with help from Algeria and South Africa.

A video circulating on social media shows guards escorting the Israeli foreign ministry’s deputy director general for Africa, Sharon Bar-li, out of the AU assembly taking place in Addis Ababa.

A spokesman for the Israeli foreign ministry described the incident as severe, noting Bar-li was an accredited observer with an entry tag, a claim denied by an AU official.

The ministry spokesman said it was saddening to see the African Union taken hostage by a small number of extremist states like Algeria and South Africa, which are driven by hatred and controlled by Iran.

African states should oppose these actions, which harm the African Union movement and the entire continent, the spokesman insisted.

When asked about Israel’s accusations that South Africa and Algeria were behind the move, Vincent Magwenya, spokesman for South African President Cyril Ramaphosa, told AFP at the summit, “They must substantiate their claim.”

Israel attained observer status at the AU in 2021 after decades of diplomatic efforts, drawing protest from powerful members including South Africa and Algeria, which argued that it flew in the face of AU statements supporting the Palestinians.

Last year, unease flared over the accreditation of Israel as an observer at the AU, with the Pales­tinians, who also have an observer status at the body, urging it to be withdrawn. The 2022 summit suspended a debate on whether to withdraw the accreditation and a committee was formed to address the issue.

The row erupted when Moussa Faki Mahamat, head of the African Union Commission, accepted Israel’s accreditation, triggering a rare dispute within a body that values consensus. The AU has not said whether Israel’s status would be up for discussion at this year’s summit.

Israel previously held observer status at the Organisation of African Unity (OAU), but was long thwarted in its attempts to get it back after the OAU was disbanded in 2002 and replaced by the AU.

Most of the summit’s sessions will be held behind closed doors at AU headquarters. But eyes will be on the bloc to see if it can achieve ceasefires in the Sahel and the eastern DRC where the M23 militia has seized swathes of territory and sparked a diplomatic row between Kinshasa and Rwanda’s government, which is accused of backing the rebels.

At a mini-summit on Friday, leaders of the seven-nation East African Community called for all armed groups to withdraw from occupied areas in the eastern DRC by the end of next month.

“We cannot walk away from the people of DRC; history will be very harsh on us. We must do what we have to do,” Kenya’s President William Ruto told the meeting.

Created in 2002 following the disbanding of the Organization of African Unity, the AU comprises all 55 African countries, with a population of 1.3 billion people.

While the bloc has been credited with taking a stand against coups, it has long been criticized as ineffectual.

UN Secretary-General Antonio Guterres, who is visiting Ethiopia, addressed the assembly while Rwandan President Paul Kagame presented a report on the reform of AU institutions. Palestinian leader Mahmud Abbas was also expected to deliver a statement, according to a draft agenda.

Coal price in Europe jumps on strikes at South African port

The price of importing coal to Europe’s largest ports rose the most since May as a strike in South Africa curtails shipments of the fuel during the middle of an energy crisis.

“The action by Transnet SOC employees is lasting longer than anticipated and has started to take a serious toll on exports,” said Alex Claude, Chief Executive Officer of DBX Commodities in London.

Coal flows out of South Africa last week were 600,000 tons, the lowest in more than a year, he said.

South Africa’s troubles dovetail with those of European power producers, who are trying to stock up on coal ahead of winter to make up for dwindling supplies of natural gas from Russia.

Traders are relying increasingly on South Africa because European Union sanctions ban purchases from Russia, long the continent’s largest source.

Month-ahead European coal futures rose as much as 11%. They’re now trading at about US$290 per ton, rebounding from an almost seven-month low on October 10, 2022. The jump also may be driven by traders covering shorts or profit-taking after a long decline, Claude said.

The Transnet strike also is hobbling iron ore exports as staff refuse to work unless the company raises their pay. Negotiations are set to continue Wednesday.

Coal exports to Europe from a consortium that owns the Richards Bay Coal Terminal in South Africa increased to 4.1 million tons in the first half of 2022, as compared to 500,000 tons a year earlier, Thungela Resources Chief Financial Officer Deon Smith said in August.

 

Russia and China Creating New Global Reserve Currency

Some analysts have been talking about the possibility of Russia and China challenging the US dollar’s global reserve status. Now, it’s happening. As often happens with consequential news in the United States and the West, no one seems to notice or even care.

It shouldn’t be any surprise to those paying attention that Russia and China are strengthening their economic ties amidst continued Western sanctions on Russia.

Russia and the BRICS countries, including Brazil, Russia, India, China, and South Africa, are officially working on their own “new global reserve currency,” RT reported in late June. Nobody even seemed to notice.

“The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out,” Vladimir Putin said at the BRICS business forum in June.

Russia has been cut off from the SWIFT system; it is also pairing with China and the BRIC nations to develop “reliable alternative mechanisms for international payments” in order to “cut reliance on the Western financial system.”

In the meantime, Russia is also taking other steps to strengthen the alliance between BRIC nations, including re-routing trade to China and India, according to CNN

President Vladimir Putin said last Wednesday that Russia is rerouting trade to "reliable international partners" such as Brazil, India, China and South Africa as the West attempts to sever economic ties.

"We are actively engaged in reorienting our trade flows and foreign economic contacts towards reliable international partners, primarily the BRICS countries," Putin said in his opening video address to the participants of the virtual BRICS Summit.

In fact, “trade between Russia and the BRICS countries increased by 38% and reached US$45 billion in the first three months of the year 2022”, the report says. Meanwhile, Russian crude sales to China have hit record numbers during spring of this year, edging out Saudi Arabia as China’s primary oil supplier.

Putin said last month, "Contacts between Russian business circles and the business community of the BRICS countries have intensified. For example, negotiations are underway to open Indian chain stores in Russia and to increase the share of Chinese cars, equipment and hardware on our market."

Putin accused the West of ignoring the basic principles of the market economy" such as free trade. "It undermines business interests on a global scale, negatively affecting the wellbeing of people, in effect, of all countries," he said.

President Xi echoed Putin’s sentiments, according to a June write up by Bloomberg:

“Politicizing, instrumentalizing and weaponizing the world economy using a dominant position in the global financial system to want only impose sanctions would only hurt others as well as hurting oneself, leaving people around the world suffering. Those who obsess with a position of strength, expand their military alliance, and seek their own security at the expense of others will only fall into a security conundrum.”

There is a coordinated global challenge taking place to the US dollar - and it would be the biggest news story in decades. Now, remember that both countries have been working on, and preparing for, this situation for years.

De-dollarization has been a priority for Russia and China since 2014, when they began expanding economic cooperation following Moscow's estrangement from the West over its annexation of Crimea. Replacing the dollar in trade settlements became a necessity to sidestep US sanctions against Russia.

It seems to that the BRIC nations understand exactly how precarious of a financial situation the US and US dollar - is in. Despite the dollar’s recent strengthening, these nations have been in the midst of a multi-decade-long plan to de-dollarize.

Even before the Ukraine conflict started, both China and Russia were stockpiling gold and working on denominating transactions outside of the US dollar. It was another “secret” that was out there in the open.

Since the BRIC conference, ties between Russia and China continue to tighten, with Japan even warning this week about the pair’s strengthening of military ties - at the same time China has closely scrutinized a planned trip by House Speaker Nancy Pelosi to Taiwan.

 “As a result of the current aggression, it is possible that Russia’s national power in the medium to long term may decline, and the military balance within the region and military cooperation with China may change.

In the vicinity of Japan, Russia has made moves to strengthen cooperation with China, such as through joint bomber flights and joint warship sails involving the Russian and Chinese militaries, as well as moves to portray such military cooperation as strategic coordination.”

Japan said this alignment between the two countries “must continue to be closely watched in the future.”

While the economic gears turn behind the scenes, China is also becoming increasingly cagey about Taiwan. The country has sent warplanes into Taiwan's self-declared air defense zone identification zone many times in recent months, according to CNN, and recently alluded to the idea of a no-fly zone over Taiwan ahead of a planned visit by Nancy Pelosi.

President Biden commented on Pelosi’s travel plans this week, stating, “The military thinks it’s not a good idea right now. But I don’t know what the status of it is.”

We’re sure Pelosi will wind up going anyway. Remember, this is the same woman who danced her way through Chinatown while Covid was spreading to the US, from China, to prove she wasn’t racist.