EVER since the term was coined by Chief Economist at Goldman Sachs, Jim O’Neill in 2001, as an acronym for countries, which were ‘deemed to be at a similar stage of newly advanced economic development’, the BRICS grouping has been little more than, a disparate think-tank of dictators, oligarchs, and yellow democrats from either extremes of the political spectrum.
That the term arose from a paper written for Goldman Sachs’ “Global Economic Paper” series by a later British life peer and lord and former conservative government minister, should have given us a hint as to what lay in store as BRICS became a metaphor for top-down rule-by-decree and the bypassing of national government checks and balances.
In 2009 the leaders of the first four countries held their first summit and in 2010 BRICS became a formal institution of 5 nations including South Africa. It was the administration of Jacob Zuma which saw BRICS as a sterling opportunity to essentially jettison parliamentary oversight in favour of a series of corrupt practices by the executive in a scheme which became known as ‘state capture’ and whose outcome is documented by the Zondo Report.
Since its inauguration, the new entity has seen the creation of the so-called New Development Bank (NDB) in 2012, followed by this year’s hasty proposals by Russia’s Putin to create a ‘reserve currency’.
Russia was recently forced to raise interest rates above 20 percent to stop capital flight following its illegal invasion of Ukraine. The country is subject of an International War Crimes tribunal and has had its foreign reserves blocked by central banks resulting in a sovereign default, which may explain the overall Russian anxiety in wanting to create an instant reserve currency, and bar the consequences for individual nations.
In fact if one reads the press releases, the new currency is a foregone conclusion, this at the same time that President Ramaphosa is at the centre of a currency scandal involving dollars placed under a mattress. Either the Kremlin assumes BRICS has jurisdiction over our Central Bank or believes every BRICS member-state is essentially run by a dictator at the head of a command economy? One may even argue that Russia’s position in BRICS has emboldened its aggression in Ukraine, instead of acting as a moderating force much like the African Union which it seeks to surpass.
If you read the Russian propaganda spewing from news agency Sputnik, BRICS’s individual constituents may be about to forego their own sovereign currencies in order to create a brand new currency, in all likelihood a parallel version of the Chinese Renminbi, or perhaps an exchange note based upon a basket of currencies such as the Ruble? In effect a Ponzi scheme whose beneficiaries will most likely be heavily indebted nations struggling to pay off sovereign debt.
The only way a currency could ever be considered a ‘reserve currency’ is if it were frequently traded like the Euro or Dollar. Such a feat would require all BRICS members to replace their own currencies as legal tender, a costly exercise in and of itself, since this would mean replacing Randelas with new bank notes.
Exactly how all of this effects South Africa’s Rand status and our Reserve bank’s inflation targeting is anyone’s guess, but as the they say, caveat emptor, let the buyer beware.
China for instance has conducted a policy of currency deflation for decades while routinely implementing currency controls, pegging its fiat currency to the dollar. This is quite the opposite of the current Rand-based regime, based as it is on floating exchange rates and moving away from an apartheid-era siege economy.
There is also talk of expanding BRICS membership to include Iran (a country with a death penalty for homosexuals), in a mad dash to upsize by increasing the size and weight of BRICS, in the so-called multipolar world. Generating in effect a de facto Putin Support Committee? So much for the effete idea about South Africa being non-aligned and LGBTQIA-friendly? The BRICS NDB has already accepted countries such as the United Arab Emirates, Uruguay, Bangladesh, and Egypt’s military dictatorship as tentative members.
Iran and Argentina (with 90.2% inflation) have already applied to join.
In short, South Africans can kiss their democratic constitution and sovereignty goodbye, and should get ready for news of our tax-Rands flowing into Russia’s frontline. This should come as no surprise, as the ruling ANC has already signed the national treasury up to at least a decades worth of foreign aid for Cuba and other dictatorships.
Which is why our foreign policy looks a lot like a badly-thought out campaign of bribery to support anyone opposed to the current UN Charter, rather than a means of furthering the aims and objectives of our constitution via the exercise of soft power and diplomacy.
As Ray Hartley and Greg Mills put it “While democracy is vital to South Africa, it is apparently not necessary in other countries with whom we wish to be friends for opaque reasons.”