The Yellow BRICS Road

Developing Countries, Warts and All, Are Showing Leadership

by Bill Paton, 5 October 2024, Phuket

In "The Wizard of Oz," Dorothy and her eclectic companions—a straw scarecrow, a tin man, and a cowardly lion—journey along the Yellow Brick Road in pursuit of their dreams and the Emerald City. Eventually, they triumph over the Wicked Witch of the West by dousing her with water. Recently, Türkiye has sought to join BRICS, and will be attending their next meeting in Kazan this month, chaired by Russia's President Putin. BRICS is also a wildly diverse coalition united by a common goal, and like Dorothy and her friends, they should not be underestimated.

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Russia is set to host the 2024 BRICS Summit from October 22-24, bringing together leaders from over 20 major emerging economies. While some skeptics predict a dysfunctional gathering and doubt the ability of these countries to collaborate, the leaders of BRICS are united by a shared vision: creating a more equitable world with a more balanced distribution of international power.

BRICS members include India, Brazil, and South Africa, which have functional multi-party systems; China with its unique one-party structure; Russia's constitutional strongman regime; Saudi Arabia's monarchy; the UAE's federation of absolute monarchies; Iran's Islamic theocracy with an elected government; and Egypt's dictator, sustained by US support a decade after a military coup. It's an ironic twist for the West—often so intolerant of differing systems—that this diverse coalition can collaborate, overcoming significant political differences in pursuit of greater global democracy.

BRIC was established by Russia in 2009, along with Brazil, India, and China, aiming to challenge the US-dominated global order and transform it into a multi-polar system. South Africa joined the group in 2010, expanding it to BRICS. This year, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates also became members, though Argentina's newly-elected far-right president backed out.

The 10 BRICS members now account for 45% of the world's population, compared to just 9.5% for the G7. BRICS' combined GDP in terms of purchasing power parity (PPP) has risen to 35% of the global total, surpassing the G7's 30%. In nominal GDP, both groups are nearly equal, each contributing about 30%. However, BRICS countries produce nearly half of the world's oil and 40% of its exports, and are growing significantly faster than the G7, with a projected growth rate of 3.6% in 2024, compared to the G7's 1%.

At the core of this rivalry is a deeply moral conflict. Western nations, at times justifiably and at times not, highlight human rights abuses within BRICS countries, such as the treatment of women in Iran. They portray China and Russia as repressive regimes, while framing life in their own countries as the embodiment of 'freedom.' Many in the West accept this narrative, believing their moral superiority justifies their continued dominance on the global stage.

However, most in the Global South increasingly reject the West's claim to the ethical high ground and world leadership. A recent poll by *Politico* revealed growing negative perceptions of the US worldwide, and including in Europe. The US and its allies' repeated opportunism—tolerating and even materially supporting widespread human rights abuses by their own partners—has led many to view the US as a hypocritical moral authority, resembling a pedophile priest. While loudly sermonizing about the virtues of its type of democracy, and proclaiming itself its champion, the US often works to block democratic outcomes in international affairs. It also routinely undermines democracy in countries where it dislikes the results, most recently in Pakistan (where Washington prefers military rule). At home, the US electoral system itself has become remarkably dysfunctional.

Meanwhile, brutal wars continue to ravage many regions, with the Russia-Ukraine-NATO conflict and the Israel-Gaza-Lebanon crisis drawing the most attention. Neither conflict would be feasible without vast supplies of US weapons. Even fundamental rights, like those protected under the Geneva Convention on the Protection of Civilian Persons in Time of War, are selectively upheld or ignored depending on Washington's strategic interests. More than 200,000, mostly civilians, killed in Gaza are just the most recent, stark example. (1)

It’s no surprise, then, that 34 additional countries are expressing interest in joining BRICS, viewing it as a coalition against US dominance. If they were to join, BRICS would represent 56% of the world’s population, further solidifying its role as a counterweight to Western influence:

Algeria, Afghanistan, Angola, Bahrain, Bangladesh, Belarus, Comoros, Cuba, D.R. Congo, Gabon, Guinea Bissau, Haiti, Indonesia, Kazakhstan, Malaysia, Mexico, Morocco, Myanmar, Nicaragua, Nigeria, Oman, Pakistan, Peru, Senegal, Sudan, Syria, Tajikistan, Thailand, Tunisia, Türkiye, Uganda, Uruguay, Venezuela, and Zimbabwe.

Türkiye's bid to join BRICS comes as a surprise because it is a NATO member, though it may just be an attempt to balance its relations between BRICS and the West. While Turkiye has strongly condemned Russia’s invasion of Ukraine, it also recently defied intense US opposition by accepting delivery of Russian S-400 air defense missiles. President Erdoğan’s recent statements, particularly at the UN Summit in September regarding Gaza, have been strikingly outspoken and powerful:

"Along with children in Gaza, the United Nations system is also dying, the truth is dying, the values that the West claims to defend are dying, the hopes of humanity to live in a fairer world are dying one by one."

"Those who are supposedly working for a ceasefire continue to send weapons and ammunition to Israel behind the stage, so that it can continue its massacres. This is inconsistency and insincerity." （https://webtv.un.org/en/asset/k1q/k1q3qd2bmm - from minute 8:00.)

A Dose of Cold Water

One of BRICS' most critical upcoming activities is the introduction of a new international trade currency, tentatively called the "Unit." Approved by the BRICS Business Council, it will now be a central topic at the upcoming meeting in Kazan, where it may even be announced or launched. The Unit is expected to be backed by up to 40% in gold and the rest by the national currencies of BRICS members.

The momentum behind the Unit grew as the US increasingly weaponized the dollar and the SWIFT inter-bank messaging network for political purposes, such as when the US and Europe seized more than $600 billion in Russian assets, shut Russia out of SWIFT, and went on to threaten any country that did not comply with that edict. Although the arbitrary seizure of another nation's foreign assets is widely considered illegal, the precedent set by the US and EU has raised concerns that in future they could easily target any other country they disfavor in the same way.

The United States has long benefited from what former French President Charles de Gaulle famously called the "exorbitant privilege" of having the dollar as the world’s primary reserve currency. This status allows the US to borrow at lower interest rates than it otherwise could, and finance massive deficits without significantly devaluing the dollar. A key element of this system was a 50-year-old agreement with Saudi Arabia to sell its oil exclusively in dollars, regardless of the buyer, effectively anchoring the global dollar-trading system. It is difficult to comprehend but the US insists, even today, that China—indeed all countries, including the Euro zone—must pay Saudi Arabia for its oil with US dollars rather than with euros or renminbi! However, there are indications that Saudi Arabia may soon abandon this bizarre deal, further undermining the dollar's shrinking dominance. Additionally, the rise of digitization and e-currencies is increasing the vulnerability of both the dollar and the SWIFT system to disruption.

Despite these shifts, the US remains brazenly insistent that other nations must continue to conduct trade in US dollars in their transactions with third-party countries:

"You leave the dollar and you're not doing business with the US because we are going to put a 100% tariff on your goods." (Donald Trump addressing the Economic Club of New York on September 5, 2024)

This US stance only deepens the erosion of confidence in the dollar. Over the next decade, its influence is expected to continue to steadily decline, eventually leading to a tipping point: a sudden collapse in its value and a sharp rise in US borrowing costs. While this will come as a severe shock to the US, the reaction in the Global South is likely to be schadenfreude, a moment akin to Dorothy's triumphant delivery of a bucket of cold water.

The dollar's continuing decline is likely irreversible. China today already conducts 53% of its cross-border trade in renminbi. With a post-crunch US dollar worth perhaps only 1:5 against the renminbi—compared to the current 1:7—China’s economy, even in nominal GDP, will then overtake the US by a large margin almost overnight (if it hasn't already).

What is hastening the US's decline is not just economic shifts, but a combination of arrogance, loss of any moral compass, and thus fading respect for its leadership. The US is increasingly seen as a force holding back global progress by refusing to share power equitably or uphold the values it claims to champion.

Recently, the US and its European allies have also moved to defend their long-standing advantages in global trade, attempting to sabotage high-value exports and technological advancement from the developing world. Having become used to selling high-value goods while buying cheaper wares, they now label any change in these trade dynamics as "unfair." For example, they accuse Beijing of somehow miraculously making money by selling electric vehicles (EVs) at a loss, even as they themselves subsidize the purchase of EVs at home. While these actions are mainly aimed at China today, countries like India recognize that they too will be targeted in the future.

The irony in the BRICS narrative is palpable. Many of the nations the US and its allies still consider inferior have begun showing genuine leadership together on the global stage. Like Dorothy’s diverse band of companions, BRICS members—despite their flaws and differences—are united by a shared belief in their mission, giving them the courage to push on down the road.

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1) The death toll in Gaza has continued to climb, despite many media reports that suggest it has somehow remained static at around 40,000. According to an estimate from *The Lancet*, for every Palestinian killed by bombing, another four have died due to hunger, disease, or other illnesses left untreated due to the war. They estimated the real total killed at 186,000 in July. Additionally, thousands of bodies remain uncounted, buried beneath the rubble. Gaza’s entire remaining population of 2 million is being denied basic protection, even the minimum of food, slowly starving in makeshift shelters, with the majority of their homes, hospitals, schools, and water infrastructure destroyed. See: https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(24)01169-3/fulltext. Ralph Nader has estimated the real toll may have already exceeded 300,000. See: https://www.democracynow.org/2024/9/10/ralph_nader_gaza_death_toll.

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