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Geopolitical Economy Report

BRICS expanding into economic powerhouse: Petrodollar under threat

Aug 25, 2023
Ben Norton analyzes the importance of the recent BRICS meeting where new members were invited, challenging the US petrodollar system. The bloc now represents 37% of global GDP, over 40% of global oil production, and 1/3rd of global gas production. Topics include the threat to the petrodollar, BRICS' massive economic weight, de-dollarization, Saudi-Iran peace, BRICS vs. G7, new BRICS currency, and Africa-Latin America cooperation.
59:47

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Podcast summary created with Snipd AI

Quick takeaways

  • BRICS expands to challenge the US petrodollar system by including major oil-producing nations and promoting the use of local currencies in trade and investment.
  • The expansion of BRICS signifies a shift towards resource nationalism, economic independence, and empowerment of countries in the global South.

Deep dives

Expanding BRICS and the Importance of De-dollarization

The BRICS economic block, consisting of Brazil, Russia, India, China, and South Africa, held its 15th summit in Johannesburg, South Africa. The summit announced the expansion of BRICS by adding Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. The focus of the summit was on de-dollarizing trade between BRICS countries and encouraging the use of local currencies. This move aims to reduce reliance on the US dollar and promote trade and investment among member countries. Additionally, the summit emphasized the role of the BRICS Bank, the New Development Bank, in gradually de-dollarizing and increasing the use of local currencies in financing development projects. The importance of the expansion of BRICS lies in challenging the petrodollar system, as it now represents more than 40% of global oil production and over one-third of global gas production. Moreover, the BRICS economies together represent a larger share of the global economy than the G7 countries. The summit speeches by BRICS leaders highlighted the need for a multipolar world order, fair trade, and the promotion of development and cooperation among emerging countries. Amidst discussions on economic integration, value addition to raw materials, and the creation of new safe transport routes, the expansion of BRICS marks a step towards creating a new global economic and geopolitical order.

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