By Karin Strohecker
LONDON, July 6 (Reuters) – A quarter of a century since he spotted the growing clout of emerging-market countries, the economist who coined the BRIC acronym said those countries could eventually build alternatives to the dollar, an idea which had seemed a “fantasy” until only very recently.
Jim O’Neill told Reuters that recent advances in payment technologies have changed his view on the prospects for alternative financial arrangements among BRICS nations — Brazil, Russia, India, China and South Africa.
“About 18 months ago, if you would have quizzed me about all of this, I would have said it’s a fantasy, the idea that the BRICS countries can create some kind of alternative financial vehicle,” he said in an interview.
That belief was in part due to much of the thinking about the global monetary system being shaped by decades of dollar dominance following the collapse in the 1970s of the system established by the Bretton Woods Agreement, he said.
“Who knows quite what the monetary system will be in the future?”
De-dollarisation — efforts by countries to reduce reliance on the greenback in trade, investment and central bank reserves — has become a growing goal for many emerging economies in recent years, though the dollar remains by far the world’s dominant reserve and trade currency.
POWERFUL SYMBOL, LIMITED ACHIEVEMENTS
O’Neill, a former Goldman Sachs economist, said BRICS members have struggled to turn their collective vision into policy. Divergent geopolitical and economic interests have complicated efforts to transform the global economic system in their favour.
“The symbolism is really powerful,” O’Neill said. “But in terms of achieving specific things, with the honourable exception of creating the New Development Bank, I’m struggling to think of another thing.”
The BRICS grouping has been discussing alternatives to dollar-based payment systems, ranging from the BRICS Pay platform initiative to linking up already existing domestic systems such as India’s UPI, China’s CIPS and Brazil’s PIX or looking at the potential future use of Central Bank Digital Currencies.
The original four BRIC nations held their first summit in 2009 and invited South Africa to join a year later. It later evolved into BRICS+, a broader platform to champion the interests of the Global South, with Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates among those filling out the group.
O’Neill and Gemma Chenger Deng co-founded BRICS+ Thinking, a non-profit policy platform that will commission research aimed at fostering collaboration between Western countries and BRICS+ nations. The platform also plans to develop its own indexes and publish growth forecasts for BRICS+ economies.
She said the platform, backed by seed funding from O’Neill, aimed to inform policymaking on issues from climate change and energy transition to global health and AI governance.
“It’s really to look at issues that are genuinely global, that would affect all of us — and it would be disastrous if we don’t work together,” she said.
O’Neill noted that the BRICS group is already getting more attention.
“I joke that I never recall any American presidents of the preceding 25 years even mentioning the BRICS. And Donald Trump can’t shut up about them.”
(Reporting by Karin Strohecker; editing by Elisa Martinuzzi and Paul Simao)
