WILL BRICS ENLARGEMENT RESTART ITS EXPANSION?

 

Contrary to what is mentioned in the article below, the BRICS (an acronym made up of the names of Brazil, Russia, India, China, and South Africa) are not attempting to settle trade in their own local currencies. They want to keep their own currencies on their own territories and trade between themselves in a new currency, still unnamed.

Only India prefers not to go on that path and wish instead to keep the roupie for internal AND external use. The BRICS, enlarged or not, would thus create a kind of exclusive economic club (think Costco).

Only the members will be allowed to use the new currency. It will be as if the Eurozone had retained the German mark, the French or Belgian franc, or the Italian lira for the internal, day to day citizen's transactions inside each country of that zone. To put it simply, an Italian worker coming home would continue to pay lira to get a quart of milk. But then, an Italian company would have to use the brand-new currency (let's call it a brics, for the sake of simplicity) to sell (or buy) a container-full of wheat (milk, steel, paper, etc.), to (or from) a German company, or from a Greek one, or a Dutch one, etc.

In such an instance, the obvious next step could be, then, for the countries that will be part of the BRICS economic association, to abolish their various national currencies altogether and replace them with the new intra-members currency. The countries using the brics currency would then form a brics-zone all over the three main parts of Eurasia, including the European subcontinent, the Indian subcontinent, and the Chinese subcontinent), plus the gigantic continent of Africa (the second largest in the world, after Eurasia). The two of those giga-continents, incidentally, Eurasia and Africa, can be seen as the two lobes forming a great giga-mega-continent that can be call Afro-Eurasia, 'lobes' because such a new word describing the tricontinental Afro-Eurasia makes one thinks about the pair of lungs all humans have all over the globe. So, such a lobe is Africa, second largest continent, which mean that the second lobe would be Eurasia, THE largest continent, especially with the subcontinental (European) part that forms a peninsula to its west (Ponant, as opposed to Levant).

The new currency would also be adopted in Brazil, the Portuguese-speaking part of the American hemisphere. Additional countries in the Spanish-speaking part of said Americas, a giga-continent with also two lobes (North and South) may also join. Of course, such a (quite still hypothetical) step may (or may not) become a reality in the next 20, 30, 40, 50, 60 (who knows?) years, depending upon the course of events, it goes without saying.

As a corollary to all this, all BRICS countries will have to use the roupie for selling or buying goods or services with India. It is not clear at this stage if India will insist to also use the roupie with non-BRICS members like the US, France, or Japan. Next week, we should know more...

 

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THE ECONOMIST

The London-based The Economist just published an article (see below) about the BRICS Summit.

It's not easy to decipher this strange kind of Anglo-Novlangue and put it in plain English. In clear: BRICS is just a big paper tiger, a smoke show that's likely to blow away come morning, when the vapors of smoke and booze dissipates. Anyway, the whole thing will be blown by the wind in a few years, if not months.

It's underlying message: Have no fear, Anglosphere: The Economist is here.

Bande d'inconscients. After the event, you'll see, they will start to shout: "Remember The Alamo, the Maine, Pearl Harbor, and now Jo'burg! It's a stab in the back. A stab in the back! Revenge! This is our Treaty of Versailles! We've been stabbed in the back"

Let's just hope they will not go as far as being pre-emptive, like Israel did in 1967...

 

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SUB-SPHERES OF INFLUENCE

A word about the map above. It shows the underlying economic components of a hypothetical BRICS +, covering Afro-Eurasia and Latin America. The groupings form sub-spheres of influence under a larger sphere centered, inevitably, on China, given its economic weight. Anglophone New Zealand will probably leave by itself or be removed from the red area (Belts and Roads). The European countries that are a part of it will maybe remain, it's difficult to say. The Turkophones countries of Central Asia are already inside China's own sub-sphere of influence. Pakistan and Myanmar should be considered into China's own sub-sphere. Afghanistan, though, like Tajikistan, should rightly belong to Iran's sub-sphere, since the three dialects that made the Persian language, which is to say Farsi (locally called Ariani in Iran), Dari (Afghanistan) and Tajik (Tajikistan) are all part of the Iranian cultural universe, same as the Ossetian population, which lives on both sides of the Caucasus mountain range, A few large cities of Uzbekistan still retains hundreds of thousands of speakers of the Tajiki variety. As for India, it is continuing to build its own sub-sphere, to balance the need of preserving its probable future as the next superpower, and the need to stay part of what may well became the most gigantic economic engine to ever see the light of day in the whole history of Terra.

 

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WILL MORE MEMBER BRING A RENEWED EXPANSION?

To put it on a simplified way, between 1989 and 1991, China saw the dissolution of the Soviet Union and draw lessons out of that important event. It decided to diversify its economy and grew it. It could make use of many natural advantages: a large territory, a large population, a large range of different and abundant natural resources (minerals, agricultural products, wooded areas, etc.). It could also make use of its most important resource: a low-cost workforce. Most ot the population worked the land and had few means and few needs. To work in factories would be a betterment for most of the peasant class, while providing a valuable advantage to factory owners (governmental bodies, private companies, cooperatives, etc.) in the field of production at low-cost. The result was a flood of a wide variety of industrial products, with the corresponding and progressive rising in the degree of complexity of those products. Japan went through the same process awhile ago. It was able to master the manufacturing process in the case of the automobile industry, but not with the aeronautical industry. China is in the process of mastering the automobile industry, is starting to wader in the waters of the aeronautic industry, strongly dominated by the European Airbus and the America Boeing. It may also, thirdly, make inroads in the aerospace industry, after having been excluded from the International Space Station and forced to go its own way. All through those decades, salaries have slowly risen across the Chinese manufacturing industry in general, enough to make China less competitive vis-à-vis lesser cost competitors, like Vietnam, Bangladesh, and others, who have started to undercut it. Manpower remains an issue in the determination of cost.

At this point in time, a reversal of the above-mentioned process is tor expected. China enriched itself by selling low-cost goods to wealthier countries like Japan, Russia, the European countries, North American countries, any country willing and able to buy its products. This point of time may prove to be a pivotal moment in the Chinese empowerment process. China, along with the other BRICS countries, will probably repeat the same process with the possible new members of said association of emerging countries, but with a twist. The new members will be encouraged to develop furthermore their own manufacturing capacity by using the low-cost manpower available in countries located in Africa, Latin America, the Middle East, South-East Asia, the Caribbean, etc. Those countries will then export to the BRICS original members, with low-cost products. To be more precise, they will export to whoever wish and is able to buy their products. It is quite likely that it will have the effect of rising tens of million of workers from the depths of relative poverty. That process is already in play in many countries, like Ethiopia, Laos, Egypt, Benin, where Chinese companies (and any other companies for that matter, whether locally based, or originating from Europe, North America, Japan, South Korea, Australia, etc.).

Life is a cycle, going in circles, generation after generation, renewed periodically with the arrival of new children.

That may explain why yesterday's losers may eventually become today's winners, and why today's winners may eventually become tomorrow's losers.

Hope springs eternal in the Home of Gaïa.

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https://www.kitco.com/news/2023-08-14/Global-de-dollarization-Are-factions-within-the-U-S-pushing-for-it-Is-this-a-lead-up-to-a-CBDC-and-a-monetary-reset.html

https://www.economist.com/international/2023/08/17/the-brics-are-getting-together-in-south-africa

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PLUS:  @charles.millar3 (Twitter)