THE scheduled summit meeting of the BRICS bloc — comprising Brazil, Russia, India, China and South Africa — is set to mark a pivotal moment in global financial geopolitics. The BRICS bloc is preparing to expand by welcoming new members, including Pakistan.
As such, the group’s intention to develop its own financial system is becoming clearer, and the meeting later this month is likely to take a significant step in that direction.
One of the key developments leading to the summit is China’s gradual reduction of its United States Treasury bond holdings that have fallen from $1.3 trillion in 2018 to $750 billion today.
This signals a clear shift in China’s intention, moving from the US-controlled financial system. On its part, the US debt is mounting, with interest payments alone worth $1 trillion. Meanwhile, Russia is advocating for the creation of a new BRICS trading currency. The initiative, when and if realised, could significantly reduce US influence in global trade.
As China and Russia drive these shifts, the BRICS summit could mark the onset of a multipolar financial order. While such transitions historically take time, the momentum for change is unmistakable.
Adil Hanif Godil
London, UK
Published in Dawn, October 8th, 2024
