AMAC Exclusive – By Arthur Camman
Are the United States and the Dollar facing a new – and potentially ruinous – challenge?
For almost two decades, scholars of geopolitics have talked of the “BRICS” nations – an acronym which stands for Brazil, Russia, India, China, and South Africa – as a potential challenger to the US-led G7, which includes the U.S., leading European states, and Japan. Originally coined by Goldman Sachs during a call to investors, the loose organization has become a rallying point for local politicians in Brazil, India, and South Africa who resent their perceived second-class status in relations with the West, and whose ideas and language harken back to the “third world” rhetoric of the 1960s and 70s which lionized Fidel Castro and the Vietcong.
In turn, BRICS has been used by Russian President Vladimir Putin to reinforce the image of Russia as a major global power in the face of increasing isolation, and by China to portray itself not as an aspiring hegemon, but as merely another, poor, “global south” nation facing the hostility of the “West”.
The organization therefore serves a purpose for all involved, albeit a purpose that is largely cosmetic. Brazil, India, and South Africa tend to evince enthusiasm for the BRICS concept in inverse proportion to the state of their relations with the United States. That goes a long-way to explain why the most recent BRICS summit took on a noted anti-Western tone, and India, in particular, was the odd man-out.
China, Russia, and South Africa all are currently in conflict with the United States, while Brazil is enjoying an unusual moment of unified anti-Americanism. Brazilian President Lula da Silva is an old-style Marxist, whose nostalgia for the days of Fidel Castro lead him to champion the cause of BRICS currency which would end the dominance of the U.S. Dollar and pave the way for the liberation of the “global south” from the “colonialism” of an international financial system pegged to American currency.
“The creation of a currency for trade and investment transactions between BRICS members increases our payment options and reduces our vulnerabilities,” the Brazilian president declared in his opening remarks to the summit, charging “We cannot accept new global colonialism.”
Lula’s anti-American idealism is not necessarily shared by his partners, which is why he received encouraging words – Putin declared that the decline of the dollar was an “objective and irreversible” process – without promising action. The organization only agreed to study the request and deliver a report in time for the next summit in 2026 – conveniently, the year of Brazil’s next election.
A single currency would serve the interests of few members, including Brazil, which along with South Africa and Russia would leave itself at the mercy of the Chinese Central Bank, which in turn might face calls to open its books.
What did serve the interests of most of Lula’s fellow leaders was the announcement that the body had approved the inclusion of several new members. These were Egypt, Iran, and Saudi Arabia, formerly fierce rivals. Invitations were also extended to Argentina, Ethiopia, and the United Arab Emirates.
Lula had championed the expansion of the BRICS, and in particular the extension of an invitation to Argentina, a decision he struggled to justify on the basis of “geopolitical weight” when that country is facing 117% inflation and the likely election of a pro-American libertarian president this fall. Both Javier Milei, who came first in the preliminary round of Argentina’s presidential election, and Patricia Bullrich, who came second, announced they opposed membership.
The inclusion of Saudi Arabia, Iran, and Egypt, geopolitical rivals, looks less like a triumph than an act of cynicism on all sides. While historically enemies, both Saudi Arabia and Iran are united by hostility toward the Biden administration, and joining BRICS gives Iran’s leaders the chance to undermine the impression that Tehran is isolated on the world stage. Saudi Crown Prince Muhamad Bin Salman, meanwhile, has a further platform from which to triangulate a better deal for his country from Washington.
That may have been why India, locked in a border conflict with China and feeling the “odd man out” when it comes to the America bashing, went along with it. The New York Times quoted an analyst of Indian politics suggesting that New Delhi only went along with the expansion because it did not wish to “play the role of villain” and was concerned with the “changing nature of this platform from a geoeconomic one to a geopolitical one.” India has some use for a forum for sending signals of discontent to Washington, but the inclusion of Iran actively undermines its utility for that end. As the BRICS become more explicitly anti-Western, India either must take steps to publicly distance itself, thereby reducing leverage with Washington, or risk actively alienating the United States on behalf of nations it sees as unfriendly.
The relations of the other existing members are not lacking tensions of their own. Lula was joined by South African President Cyril Ramaphosa, Indian Prime Minister Narendra Modi, and Chinese President Xi Jinping. Absent was Russian President Vladimir Putin, who was instead represented by his Foreign Minister, Sergei Lavrov. Putin has been indicted by the International Criminal Court for war crimes tied to his actions in Ukraine, and South African law requires the enforcement of ICC warrants. His absence saved South Africa’s Cyril Ramaphosa an awkward situation in which he would either have to block Putin’s arrest or risk being upstaged by ambitious underlings in the security services who might attempt an arrest to humiliate their president on the global stage.
Such cynicism seems foreign to Brazil’s Lula, who, since returning to the presidency in January, has conducted himself as if it is 2003, if not 1973. He has shown scant concern either for geopolitical realities, Brazil’s domestic politics, or the nature of his own election. Lula defeated the pro-American Jair Bolsonaro by the narrowest of margins, 51%-49%, last fall with the international backing of the Biden administration, which sent National Security Adviser Jake Sullivan to discourage generals, judges, and politicians from backing the incumbent.
Far from being a mandate for the left, Lula won on the back of center-right voters, and his vice president, Geraldo Alckmin, was his conservative opponent in 2006. Right-wing parties control almost 70% of the seats in the Brazilian Congress, and the nation’s politics are being transformed by a rapidly growing population of evangelical Christians.
Lula’s ability to conduct what is in effect an anti-American foreign policy in the form of aligning with Putin over Ukraine is enabled not by voter resentment of “colonialism,” but rather by the hostility of Brazilian conservatives to the Biden administration for its role in the overthrow of Bolsonaro. They perceive Ukraine as near and dear to the heart of Joe Biden and those around him, and hence enabling Lula to make neutral statements about the conflict is a cheap way to get revenge for America’s 2022 intervention against Bolsonaro.
Lula will be able to conduct this approach up to the moment it shifts from rhetoric to anything of substance, or there is a change of administration in the United States. At that point, the 77-year-old Lula might find himself redundant and facing impeachment in favor of his vice president – the likely plan of the Brazilian establishment all along.
Which brings us back to the BRICS summit and the expansion of the organization. Should America be worried? Yes. While the BRICS are more an alliance of extreme cynicism, one as apt to devour a deluded anti-American idealist such as Lula as provide him a platform, demand for any product is an important market signal.
The expansion of the BRICS in general, and the willingness of Saudi Arabia and Egypt to join an organization with Iran, shows that there is an enormous demand, even among traditional American allies, for a forum to express their cynicism about the Biden administration. Even Lula’s ability to champion the BRICS indicates how the Biden team has managed to turn the most pro-American, Christian, free-market elements in Brazil into enemies of American foreign policy.
The dollar can survive cynical photo-ops, as can the American-led order. But they can be seriously threatened by a world in which an American administration alienates even its closest friends and allies.
Arthur Camman is the pseudonym of a regular writer on current affairs who has taught history at the University level for eight years. He has worked on Capitol Hill, and is familiar with the historical development of the American and British political systems.
