How BRICS challenges the dominance of the dollar – INTERVIEW
Photo: indicworldview.com
As global tensions rise over the ongoing geopolitical shifts and the conflict in Ukraine, News.az sat down with Dr. Shoaib Khan, an esteemed expert from the Centre for Central Eurasian Studies at the University of Mumbai and Founder and President of ALFAAZ Education and Cultural Society. In this insightful discussion, Dr. Khan explores the complexities of U.S. policies towards BRICS, the implications of India's unique stance on the Russia-Ukraine conflict, and the broader impact of de-dollarization efforts on the global economy. His analysis sheds light on how nations like India navigate between strategic partnerships while advocating for a multipolar world order.
- US President Donald Trump has threatened to impose 100% tariffs on BRICS countries if they abandon the dollar. How did India react to this statement?
- Donald Trump has threatened to impose 100% tariffs on the BRICS group of nine nations if they attempt to replace the U.S. dollar with another currency. He stated that such tariffs would target countries moving to create a new rival currency to the dollar or supporting an alternative currency to replace the greenback as the world's reserve medium of exchange.
The BRICS nations aim to advance the interests of emerging economies and reduce dependence on the U.S. dollar, which remains the most commonly used currency in global commerce. The dollar's primacy in international trade provides the U.S. with significant advantages, including lower borrowing costs for its government and substantial geopolitical influence.
At the recent BRICS summit held in Kazan, Russia, discussions centered on boosting non-dollar transactions and strengthening local currencies. The bloc has explored creating a shared currency to facilitate trade among member nations, a move seen as a direct challenge to the dollar’s supremacy in global trade and finance. Proponents argue that such a currency could shield their economies from the volatility of U.S. sanctions and monetary policies.
Trump's protectionist stance is not new, as he previously threatened tariffs on Mexico, Canada, and Chinese imports. His latest threat could severely impact India's exports, particularly in critical sectors such as pharmaceuticals, textiles, and information technology. The U.S. is India’s largest trading partner, with bilateral trade exceeding $120 billion in 2024. A 100% tariff would increase costs for Indian exporters, making their products less competitive in the U.S. market.
India, like other BRICS nations, has expressed interest in reducing reliance on the dollar but has approached this goal cautiously, prioritizing monetary policy autonomy and economic stability.
- Why does the US want to restrain the development of BRICS, including alternatives to the dollar?
- De-dollarisation refers to the process of reducing reliance on the U.S. dollar as a medium of exchange, reserve currency, or standard for international trade. Countries adopting this strategy often shift to using national or regional currencies or explore digital currencies like cryptocurrencies.
The U.S. benefits immensely from the dollar's dominance, gaining significant geopolitical influence and the ability to impose sanctions, restricting other nations' access to trade and capital. However, this dominance has also caused volatility. For instance, fluctuations in the dollar have spelled disaster for Brazil, while U.S. capital flows have led to instability in India’s stock market.
Countries like South Africa, Russia, and China have faced U.S. sanctions targeting financial firms and government entities. These sanctions underscore how the dollar’s supremacy supports the U.S.’s geopolitical strategy, often hindering international cooperation in a world moving towards multipolarity.
- What consequences could the policy of aggravating relations with the BRICS countries lead to for the US itself?
- The BRICS bloc, now comprising over a quarter of the global economy and nearly half of the world’s population, has sought to coordinate economic and diplomatic policies, establish new financial institutions, and reduce dependence on the U.S. dollar. This growing influence challenges Western dominance in global institutions.
The group’s 2024 expansion underscores its geopolitical ambitions but also highlights internal divisions on issues such as Russia’s war with Ukraine. While some analysts view BRICS as a counterweight to the Western-led international order, skeptics question the feasibility of its plans, such as creating a unified currency.
BRICS nations are striving to reform institutions like the UN Security Council and create negotiating blocs within multilateral organizations. Many members have opposed Western positions, including on issues like Russia’s war in Ukraine and conflicts in Gaza and Syria.
However, increasing membership also presents challenges, such as internal disagreements and growing resistance from Western countries. The bloc’s ability to navigate these tensions will determine its success in becoming a unified voice on the global stage.
- The US is taking a tough stance on the Ukrainian conflict, continuing to pump weapons into Kyiv. At the same time, Washington is not listening to peace initiatives, including those coming from India and its BRICS partners. Why does the US continue to pursue such a policy without taking real steps towards resolving the conflict?
- The US has pledged to support Ukraine’s manpower challenges by offering to train new troops outside Ukrainian territory. This comes alongside a nearly finalized $20 billion in loans, backed by profits from immobilized Russian sovereign assets.
Washington has also announced plans for additional sanctions aimed at complicating Russia’s ability to sustain its war effort while strengthening Ukraine’s bargaining power in potential negotiations.
However, the Biden administration has not provided a comprehensive strategic rationale for the significant costs and risks of its policies in the Russia-Ukraine war. While some objectives have been defined concerning Ukraine itself, there has been little discussion about how U.S. actions align with overarching national goals.
One perspective suggests that allowing Russian aggression to go unchecked could embolden Moscow, leading to further threats to NATO allies and European security. From this viewpoint, the U.S. and its Western allies perceive a security interest in helping Ukraine resist Russian advances, fearing that a victory for Putin in Donbas could encourage further incursions.
By sidelining peace initiatives from India and BRICS, the U.S. underscores its prioritization of specific strategic interests in Ukraine. Yet, critics argue that this approach fails to account for the broader implications, including the potential for direct confrontation with Russia and the deepening of a Russo-Chinese axis.
Ultimately, the U.S. strategy in Ukraine reveals a lack of clarity on how the conflict fits into its grand strategic framework. A more pragmatic approach, balancing costs and risks, could be necessary as demands on U.S. power grow in other regions.
- Why does India, unlike the US and the EU, insist on resolving the Ukrainian conflict while considering Russia's position?
- India maintains strong relationships with both Russia and the West, Ukraine’s primary backers. This unique position has driven India to adopt a studied neutrality toward the conflict, despite its discomfort with Moscow’s actions.
While standing alongside the U.S. against Chinese assertiveness in the Indo-Pacific, India remains tolerant of Russia’s actions in Europe. This dual stance reflects India’s strategic interests, which prioritize maneuvering between multiple global poles to maximize benefits.
India’s historical ties to Russia, particularly regarding military exports, are a significant factor. Over 85% of India’s arsenal comprises Russian or Soviet-made weaponry. Despite recent efforts to diversify its military imports, reliance on Russian equipment is unlikely to decrease significantly in the short term.
New Delhi’s position also stems from its desire to prevent Russia from becoming overly dependent on China, a move that could shift the balance of power in ways unfavorable to India. By avoiding public condemnation of Moscow, India aims to sustain its strategic partnership with Russia while quietly signaling disapproval of its actions.
India’s approach underscores its preference for a multipolar international order, enabling it to navigate complex geopolitical landscapes without permanent alignments.
- India insists on the need to consider Russia's position in the Ukrainian conflict, arguing that a settlement is impossible without it. Why is India convinced that the West cannot impose its own settlement scenario on Russia?
- India has consistently called for an immediate cessation of violence and emphasized the importance of diplomacy and dialogue in resolving the Ukraine conflict. Indian leaders have engaged with counterparts in Russia, Ukraine, and other major powers to advocate for this approach.
India’s diplomatic stance reflects its historical ties with Russia, dating back to the Indo-Soviet Treaty of Peace, Friendship, and Cooperation in 1971. This longstanding relationship has fostered strategic and military cooperation, with India relying heavily on Russian equipment and spare parts for its defense arsenal.
While India has diversified its military imports in recent years, transitioning away from Russian reliance will take time—perhaps a decade or more. This dependency shapes India’s cautious approach, ensuring it avoids alienating Moscow while navigating pressures from the West.
Despite not openly condemning Russia’s actions, India’s diplomacy suggests a nuanced disapproval of the war. New Delhi’s position also reflects skepticism about the West’s ability to unilaterally impose a settlement on Russia. U.S. attempts to drive a wedge between India and Russia have proven ineffective, as India continues to balance its partnerships with both nations.
By advocating for a diplomatic resolution that considers Russia’s interests, India seeks to preserve its strategic autonomy and foster a balanced global order.
- US President Donald Trump has threatened to impose 100% tariffs on BRICS countries if they abandon the dollar. How did India react to this statement?
- Donald Trump has threatened to impose 100% tariffs on the BRICS group of nine nations if they attempt to replace the U.S. dollar with another currency. He stated that such tariffs would target countries moving to create a new rival currency to the dollar or supporting an alternative currency to replace the greenback as the world's reserve medium of exchange.
The BRICS nations aim to advance the interests of emerging economies and reduce dependence on the U.S. dollar, which remains the most commonly used currency in global commerce. The dollar's primacy in international trade provides the U.S. with significant advantages, including lower borrowing costs for its government and substantial geopolitical influence.
At the recent BRICS summit held in Kazan, Russia, discussions centered on boosting non-dollar transactions and strengthening local currencies. The bloc has explored creating a shared currency to facilitate trade among member nations, a move seen as a direct challenge to the dollar’s supremacy in global trade and finance. Proponents argue that such a currency could shield their economies from the volatility of U.S. sanctions and monetary policies.
Trump's protectionist stance is not new, as he previously threatened tariffs on Mexico, Canada, and Chinese imports. His latest threat could severely impact India's exports, particularly in critical sectors such as pharmaceuticals, textiles, and information technology. The U.S. is India’s largest trading partner, with bilateral trade exceeding $120 billion in 2024. A 100% tariff would increase costs for Indian exporters, making their products less competitive in the U.S. market.
India, like other BRICS nations, has expressed interest in reducing reliance on the dollar but has approached this goal cautiously, prioritizing monetary policy autonomy and economic stability.
- Why does the US want to restrain the development of BRICS, including alternatives to the dollar?
- De-dollarisation refers to the process of reducing reliance on the U.S. dollar as a medium of exchange, reserve currency, or standard for international trade. Countries adopting this strategy often shift to using national or regional currencies or explore digital currencies like cryptocurrencies.
The U.S. benefits immensely from the dollar's dominance, gaining significant geopolitical influence and the ability to impose sanctions, restricting other nations' access to trade and capital. However, this dominance has also caused volatility. For instance, fluctuations in the dollar have spelled disaster for Brazil, while U.S. capital flows have led to instability in India’s stock market.
Countries like South Africa, Russia, and China have faced U.S. sanctions targeting financial firms and government entities. These sanctions underscore how the dollar’s supremacy supports the U.S.’s geopolitical strategy, often hindering international cooperation in a world moving towards multipolarity.
- What consequences could the policy of aggravating relations with the BRICS countries lead to for the US itself?
- The BRICS bloc, now comprising over a quarter of the global economy and nearly half of the world’s population, has sought to coordinate economic and diplomatic policies, establish new financial institutions, and reduce dependence on the U.S. dollar. This growing influence challenges Western dominance in global institutions.
The group’s 2024 expansion underscores its geopolitical ambitions but also highlights internal divisions on issues such as Russia’s war with Ukraine. While some analysts view BRICS as a counterweight to the Western-led international order, skeptics question the feasibility of its plans, such as creating a unified currency.
BRICS nations are striving to reform institutions like the UN Security Council and create negotiating blocs within multilateral organizations. Many members have opposed Western positions, including on issues like Russia’s war in Ukraine and conflicts in Gaza and Syria.
However, increasing membership also presents challenges, such as internal disagreements and growing resistance from Western countries. The bloc’s ability to navigate these tensions will determine its success in becoming a unified voice on the global stage.
- The US is taking a tough stance on the Ukrainian conflict, continuing to pump weapons into Kyiv. At the same time, Washington is not listening to peace initiatives, including those coming from India and its BRICS partners. Why does the US continue to pursue such a policy without taking real steps towards resolving the conflict?
- The US has pledged to support Ukraine’s manpower challenges by offering to train new troops outside Ukrainian territory. This comes alongside a nearly finalized $20 billion in loans, backed by profits from immobilized Russian sovereign assets.
Washington has also announced plans for additional sanctions aimed at complicating Russia’s ability to sustain its war effort while strengthening Ukraine’s bargaining power in potential negotiations.
However, the Biden administration has not provided a comprehensive strategic rationale for the significant costs and risks of its policies in the Russia-Ukraine war. While some objectives have been defined concerning Ukraine itself, there has been little discussion about how U.S. actions align with overarching national goals.
One perspective suggests that allowing Russian aggression to go unchecked could embolden Moscow, leading to further threats to NATO allies and European security. From this viewpoint, the U.S. and its Western allies perceive a security interest in helping Ukraine resist Russian advances, fearing that a victory for Putin in Donbas could encourage further incursions.
By sidelining peace initiatives from India and BRICS, the U.S. underscores its prioritization of specific strategic interests in Ukraine. Yet, critics argue that this approach fails to account for the broader implications, including the potential for direct confrontation with Russia and the deepening of a Russo-Chinese axis.
Ultimately, the U.S. strategy in Ukraine reveals a lack of clarity on how the conflict fits into its grand strategic framework. A more pragmatic approach, balancing costs and risks, could be necessary as demands on U.S. power grow in other regions.
- Why does India, unlike the US and the EU, insist on resolving the Ukrainian conflict while considering Russia's position?
- India maintains strong relationships with both Russia and the West, Ukraine’s primary backers. This unique position has driven India to adopt a studied neutrality toward the conflict, despite its discomfort with Moscow’s actions.
While standing alongside the U.S. against Chinese assertiveness in the Indo-Pacific, India remains tolerant of Russia’s actions in Europe. This dual stance reflects India’s strategic interests, which prioritize maneuvering between multiple global poles to maximize benefits.
India’s historical ties to Russia, particularly regarding military exports, are a significant factor. Over 85% of India’s arsenal comprises Russian or Soviet-made weaponry. Despite recent efforts to diversify its military imports, reliance on Russian equipment is unlikely to decrease significantly in the short term.
New Delhi’s position also stems from its desire to prevent Russia from becoming overly dependent on China, a move that could shift the balance of power in ways unfavorable to India. By avoiding public condemnation of Moscow, India aims to sustain its strategic partnership with Russia while quietly signaling disapproval of its actions.
India’s approach underscores its preference for a multipolar international order, enabling it to navigate complex geopolitical landscapes without permanent alignments.
- India insists on the need to consider Russia's position in the Ukrainian conflict, arguing that a settlement is impossible without it. Why is India convinced that the West cannot impose its own settlement scenario on Russia?
- India has consistently called for an immediate cessation of violence and emphasized the importance of diplomacy and dialogue in resolving the Ukraine conflict. Indian leaders have engaged with counterparts in Russia, Ukraine, and other major powers to advocate for this approach.
India’s diplomatic stance reflects its historical ties with Russia, dating back to the Indo-Soviet Treaty of Peace, Friendship, and Cooperation in 1971. This longstanding relationship has fostered strategic and military cooperation, with India relying heavily on Russian equipment and spare parts for its defense arsenal.
While India has diversified its military imports in recent years, transitioning away from Russian reliance will take time—perhaps a decade or more. This dependency shapes India’s cautious approach, ensuring it avoids alienating Moscow while navigating pressures from the West.
Despite not openly condemning Russia’s actions, India’s diplomacy suggests a nuanced disapproval of the war. New Delhi’s position also reflects skepticism about the West’s ability to unilaterally impose a settlement on Russia. U.S. attempts to drive a wedge between India and Russia have proven ineffective, as India continues to balance its partnerships with both nations.
By advocating for a diplomatic resolution that considers Russia’s interests, India seeks to preserve its strategic autonomy and foster a balanced global order.
Similar news
