After a long time the throne of the currency king was held by the United States dollar (USD), there are actually efforts by some countries to disable that dominance.
This is a step to create more stability and justice for all countries in the world in terms of global business affairs and others. From here the formation of BRICS.
Initially, Brazil, Russia, India and China formed the BRIC, a group of developing countries that have the potential to dominate the world economy beating the G7.
The G7 countries include Canada, France, the United States, Japan, Germany, Italy and the United Kingdom.
In 2001, Jim O'Neil, who was then an economist at Goldman Sachs, proposed the use of the acronym BRIC for the combination of countries.
By 2010, South Africa was invited to join the BRICs to become BRICS.
Goldman Sachs stated that BRICS will dominate the world economy by 2050.
This is because Brazil, Russia, India, China and South Africa are among the countries that have been classified as having the fastest economies in the world for many years.
Low labor costs, good demographics and rich raw material resources make those countries have an advantage over the G7.
In 2013, BRICS held 27% purchasing power in global GDP.
The population of the BRICS countries is 2.88 billion, equivalent to 42% of the world's population.
The land area of the 5 countries reaches 26% of the total land area of the earth.
In 2014, BRICS launched an alternative bank to the World Bank and the International Monetary Fund (IMF), namely the New Development Bank with a capital of $50 billion.
In addition, they have also introduced a mechanism called Contingent Reserve Arrangement to help members who face difficulties in making payments.
This has created interest in other countries to also join BRICS, especially countries that have a bad record with the IMF or the World Bank.
Furthermore, this BRICS bank also opens membership to foreign countries.
In 2021, the United Arab Emirates, Egypt, Uruguay and Bangladesh are shareholders in the bank.
Many companies also say that BRICS has opportunities in developing international investment or foreign direct investment (FDI).
According to data released by the IMF, at the beginning of 2020, BRICS contributed more in purchasing power parity (PPP) to global GDP than the G7.
Therefore, it is believed that more countries will join this pact.
So in your opinion, will BRICS really be a challenger and destroy the dominance of the United States and the USD currency?
