Former Goldman Sachs Chief Economist Jim O'Neill, known as the "Father of the BRICS", said that the BRICS countries should expand and try to fight against the hegemony of the US dollar.
The economic expert who first coined the four acronyms of the BRIC countries "BRIC" published an article in the magazine "Global Policy" published on the 26th, calling on the BRICS countries to adopt strict standards to add new members , "Teammates" have been added, which can promote more ambitious goals, and should focus on climate financing, improving medical services, and promoting trade.
"The U.S. dollar plays a dominant role in global finance," O'Neill said. "Whenever the Fed starts a monetary easing cycle, or the opposite, a monetary tightening cycle, the impact and knock-on effect on the value of the U.S. dollar is huge." .
In 2009, the original BRICS countries were only Brazil, Russia, India and China, and South Africa joined them a year later. If it continues to expand to include other "emerging countries with persistent surpluses," O'Neill said, a more equitable, multi-currency global system could emerge.
He argues that dollar dominance means other countries' dollar-denominated debt burdens can rise or fall with exchange rates, destabilizing their own monetary policies, and that dollar movements ultimately play a bigger role than domestic decision-making.
However, O'Neill cautioned that the BRICS should admit only those countries that meet the original criteria, namely, large populations, large economies and potential. For example, he disagreed with the inclusion of South Africa on the grounds that South Africa was too small compared to the other four countries.
O'Neill's article is titled "The Future of the BRICS and the New Development Bank." He mentioned that "if the BRICS countries as a bloc mainly aim at its symbolism, which often seems to be the case, then it is understandable to attract other countries, especially emerging countries with large populations". However, if there is an economic purpose, "the criteria for the inclusion of new members need to be focused".
O'Neill believes that the BRICS countries should strengthen their voices in some global organizations, such as the World Bank and the International Monetary Fund. Think about it, the BRICS countries account for 42% of the world's population, but their voting power in these two international financial organizations is less than 15%.
This year, the BRICS countries plan to admit new members. O'Neill said that if this is really going to happen, the criteria for new members to join must be carefully considered. It is understood that there are more than a dozen countries interested in joining the BRICS group, including Saudi Arabia and Iran. O'Neill advocated that the population of new members should be at least 100 million. Asian countries such as Indonesia, Bangladesh, Vietnam, Pakistan, and the Philippines will be potential candidates. For other regions, Mexico, Turkey, Nigeria, Egypt, and Ethiopia can be considered.
O'Neill said that if the BRICS aims to counter the dollar's supremacy, it only makes sense to include Saudi Arabia and Iran, because these two countries are the world's largest oil producers.
Comments