BRICS countries aim to establish an alternative payment mechanism, fostering trade relationships, while challenging existing global financial norms. Picture: Supplied
The weaponisation of the US dollar and the SWIFT system has raised profound concerns about the security of an America-centred global financial order.
As sanctions increasingly target countries like Russia, the exclusion from SWIFT has serious economic implications, not just for targeted nations but for global trade at large.
One example comes from Ethiopia, where a friend recently visited and shared a clear illustration of the problem.
Ethiopia has a friendly visa regime toward Russia, but for a visa application, you need to pay with a bank card. With Russia cut off from SWIFT, simple tasks like paying for a visa become difficult.
This situation highlights the urgent need for alternatives to SWIFT and a less dollar-dependent financial system to mitigate such risks.
As Lance Witten editor-in-chief for IOL, notes: "It's important that we have a payment mechanism that allows for easy trade between BRICS bloc countries. This would further support the BRICS bloc's autonomy in international trade."
The idea of a BRICS currency has long been discussed, potentially a currency basket backed by natural resources like gold, oil, and gas.
Combined, BRICS countries have more monetary gold reserves than the IMF and European Central Bank combined.
Eugene Pavlov a journalist with Sputnik Agency pointed out, "For this currency to function properly, we need an alternative financial messaging system, much like SWIFT, and digital currencies for cross-border transactions."
At the core of these discussions is the broader issue of BRICS' expansion, especially with the inclusion of new members like Iran, Saudi Arabia, UAE, Ethiopia, and Egypt.
This expansion significantly increases BRICS' influence, particularly in energy and natural resources.
As Bahru Yidnekachew a director of current affairs with Fana Broadcasting Corporate in Ethiopia, explained, "The inclusion of these major oil producers helps stabilise global energy prices, diversify energy sources, and increase BRICS' bargaining power on the global stage."
With Ethiopia being a large oil importer, Yidnekachew emphasised how these new BRICS members Saudi Arabia, UAE, and Iran would improve energy security, reduce dependence on external sources, and mitigate risks from geopolitical tensions.
The energy cooperation within BRICS is now at a critical juncture. The bloc’s expansion offers new opportunities to diversify energy supplies and stabilise prices.
In South Africa, for example, where energy shortages and rolling blackouts have been a persistent issue, Witten noted that funding from the New Development Bank (NBD) has been crucial for projects like Eskom’s renewable energy program.
He added, "If we've got Iran, UAE, and Saudi Arabia in the group, we could stabilise prices and negotiate better deals for BRICS member countries. It’s vital for energy security."
In media, however, the BRICS bloc faces a different challenge: narrative control. BRICS is often misrepresented in Western media, creating a skewed global perception.
Yasmin Scali, journalist with Sputnik Brasil, noted, "In Europe, BRICS is often misunderstood. Many people see it as a counterbalance to Western influence, but they don’t fully understand its objectives or values."
She suggested the establishment of BRICS media hubs in non-member countries to broaden the bloc’s narrative beyond its borders.
Similarly, Pavlov emphasised the need for closer cooperation among BRICS media outlets to "create a sense of community of journalists" that could present a more balanced and fair representation of BRICS initiatives.
As the BRICS summit in Kazan approaches, these discussions reflect the bloc’s broader ambitions to challenge the current global financial and energy order.
The expansion not only increases BRICS' economic weight but also offers new opportunities to reshape global governance, trade, and even media narratives.
The summit will provide further details on key initiatives, such as the BRICS currency and alternative financial systems, setting the stage for a more multipolar world order.
The summit takes place on Tuesday, October 22 to 24.
IOL