March 30, 2012
The statist rulers of the so-called “BRICS” countries — Brazil, Russia, India, China, and South Africa — have been subtly calling for an end to the U.S. dollar’s status as the world reserve currency for years. Now, they are making more moves to turn that rhetoric into reality, proposing a jointly controlled “development” bank and working to sideline America’s already-troubled Federal Reserve Notes in trade by relying more heavily on their own fiat currencies.
The overarching theme of this year’s gathering in New Delhi was “BRICS Partnership for Global Stability, Security and Prosperity,” according to a declaration issued after the summit. And despite being filled with fluff, the final statement adopted by leaders of the respective regimes dealt with a wide range of topics. Overall, the five rulers called for increasing centralization of power at the international level on almost every issue.
Among the most important topics were discussions on currencies and reform of the international monetary system and the global financial regime. The five rulers called for an “improved international monetary and financial architecture,” as well as “the establishment and improvement of a just international monetary system.”
While the widely touted BRICS bank failed to materialize at the 2012 meeting, the final declaration noted that the nations’ “Finance Ministers” had been tasked to study the possibility and report back before next year’s summit. But significant progress was made on expanding the role of the nations’ own currencies in intra-BRICS trade.
“We welcome the conclusion of the Master Agreement on Extending Credit Facility in Local Currency under BRICS Interbank Cooperation Mechanism and the Multilateral Letter of Credit Confirmation Facility Agreement,” the declaration explained. As The New American reported last year, increasing the role of their own currencies — at the expense of the U.S. dollar — has been at the top of the coalition’s agenda almost from the beginning.
"The agreements signed today by development banks of BRICS countries will boost trade by offering credit in our local currency," Indian Prime Minister Manmohan Singh noted after the summit. "A suggestion has been made to set up a BRICS development bank, we have directed our [Finance Ministers] to examine the proposal and report back by next summit."
Analysts had varying views on the significance of the move. Some experts claimed it was yet another nail in the dollar’s coffin, while others downplayed its importance. But the globe did take notice.