BRICS is controlling the decision-making of trade, commerce, and payment settlements across developing countries and not the US. The stronghold of the US among non-Western countries is declining and the vacuum of power is being filled in by BRICS. The alliance is appealing to the majority of developing countries as it’s the only bloc that’s challenging the US dollar.
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On the other hand, the US is losing control of global domination as developing countries fear three things:
- Sanctions
- US debt
- Decline of local currencies
BRICS Filling The Global Power Vacuum Left By the US
All three economic developments are occurring in real-time, making developing countries stay away from the US dollar. The US Treasury Secretary Janet Yellen confirmed earlier that the White House pressing sanctions on other countries is what led to BRICS and other countries deciding to cut ties with the dollar.
Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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In addition, the US debt is now above $34 trillion. Therefore, keeping the US dollar as a reserve is a bigger risk to the developing nations’ economies. The debt affects their native economies and stunts their growth at the global level affecting local businesses.
The development leads to the decline of local currencies as they’re importing US debt in their respective reserves. This makes developing countries rely less on the US and more on the BRICS alliance.
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It’s a safer option to reclaim their lost financial territory which was hampered by the US in the first place. Russia’s Foreign Minister Sergey Lavrov said that BRICS is now the mouthpiece of non-Western countries and not the US. “I can say without exaggeration that BRICS today acts as a mouthpiece for the interests of the entire non-Western world,” he said.