Leaders of the BRICS nations will focus on ways to reduce dependence on the dollar when they meet starting Tuesday, South African Deputy President Paul Mashatile said.
The BRICS bloc — Brazil, Russia, India, China and South Africa — will also discuss expansion at the summit in Johannesburg.
An enlarged group would represent about half of global output by 2040, Bloomberg Economics estimates show, double the share of the Group of Seven, a reversal from the turn of this century.
The bloc expects their growing heft to help reduce dependence on the greenback. Leaders will look at ways to boost payments in members’ currencies, part of a wider ambition to challenge the geopolitical leadership of the US. Longer term, one idea is to launch a common currency to challenge the dollar.
“Today the world takes notice of this bloc because it’s at the forefront of the global discourse,” to reduce dependence on the dollar, Mashatile told business leaders from the BRICS late on Monday.
“We are not here to compete with the West. We want our space in global business.”
In June, BNP Paribas SA said in a note that conditions were ripe for the dollar’s dominance in global trade to diminish, even if the process was “a slow, incremental burn.”
“I want to buy from India. Why should I use dollars?” former Nigerian President Olusegun Obasanjo told the gathering to loud cheers from the audience.
“It’s a payment and settlement system that will allow me to buy whatever I want to buy in India, whatever I want to buy in Brazil, without looking for dollars.”
Still, to date, deep divisions among members have limited the consensus-driven bloc’s ability to increase its sway at institutions such as the International Monetary Fund, the World Bank or the United Nations Security Council.
A BRICS development bank has lent only $32.8 billion in eight years in operation, a tiny fraction of the amount the IMF and World Bank have disbursed over the period.
During the summit, a “strategic discussion” will take place on how to enhance multilateral institutions, South Africa’s foreign minister Naledi Pandor said in a speech at the forum.