BRICS summit in Brazil to focus on global governance reform

• Promoting global governance reform top agenda in BRICS 2025 summit.
• Dedollarizing global trade remains key BRICS focus.
• Brazil to host BRICS annual summit in July.

The 2025 BRICS annual summit will be held in Brazil, the trade bloc has announced. “This year, the BRICS summit will take place in Rio de Janeiro on July 6-7,” the Brazilian government said in a press statement last week.

According to the statement, Brazil will chair the bloc of developing economies through 2025 and it’s top priority will be promoting global governance reform. It will do this by promoting cooperation among Global South countries, says the statement issued by the federal government.

“We will make crucial decisions for development, cooperation, and improving the lives of all the inhabitants of these countries,” said Mauro Vieira, Brazil’s Foreign Minister in the statement.

BRICS is viewed as the counterbalance bloc against the Group of Seven leading industrialized nations.

The ‘mighty dollar’s as Trump describes it and indeed US’ very dominance of global affairs, economics and otherwise, is rooted in the World Wars; now the BRICS want to shift the dynamics.

“The devastation of the world wars left the United States relatively unscathed compared to other major powers,” an analyst writes in the BRICS Journal of economics.

“This advantageous position propelled the US to becoming a significant creditor, amassing substantial gold reserves from wartime payments made by European nations,” the paper details.

It concludes; “the subsequent stability of the US economy and political system instilled global confidence in the dollar’s stability, paving the way for its ascent to global prominence.”

As the BRICS and BRICS Plus gain ground on the global affairs platform, they are pushing for dedollarizing global trade, a move that has way more implications than just the exchange of goods and services.

BRICS dedollarizing global trade

Among other goals, the bloc is cementing cooperation among Global South countries to strategically push the depolarization of global trade.

At the moment, almost all countries across the world are forced to trade in dollars. What this means is, every country must buy dollars to import their basic development needs i.e. global trade is conducted in dollars.

The member countries are looking to offset this arrangement and already several of their members are doing international trade using their own local currencies.

“BRICS leaders have expressed their commitment to establishing an alternative payment system independent of the dollar,” the statement boldly asserts.

The five founding members of the bloc are not alone, as of the last few years and officially in 2024, the unit agreed to expand its membership, it formed the BRICS Plus, denoted BRCS+.

China’s Minister Wang Yi noted;  “We will widen the circle of friends of the BRICS and turn it into the most influential platform for south-south cooperation in the world. BRICS Plus is a global platform fostering innovation, diverse collaboration, and sustainability in 186 countries,” explains the group in its expansion declaration.

In effect, BRICS+ is about transforming the unit into an open and inclusive platform that welcomes cooperation with any country, bloc or region in the world economy.

It further details that; “BRICS Plus’s emergence involves an interplay between economic capabilities and geopolitical influence, potentially impacting existing global power dynamics.”

“The United States faces challenges, including its diminishing economic influence, which necessitates strategic choices and diplomatic measures for adaptation,” contends an analysis by Mohammed Saaida in the BRICS Journal of economics.

Titled ‘BRICS Plus: de-dollarization and global power shifts in new economic landscape’ the paper looks at among other things; “…external strategies to be designed in response to proactive economic challenges of the United States in the international context.”

“To achieve its goals, the BRICS Plus needs to address internal differences, establish institutions, and navigate complex geopolitical situations with diplomacy, not to mention US’ defense of the dollar and its own global economic positioning,” Saaida explains in his analysis.

He goes on to underline the 2023 announcement by Russia and China of their intent to abandon the US dollar in their bilateral transactions.

“This shift aligns with the broader strategy pursued by the BRICS alliance, potentially signifying a significant step towards a more diversified international monetary system,” he writes.

According to the IMF, the dollar represents roughly 58 per cent of the world’s foreign exchange reserves.

Also, major commodities like oil and other development necessities are primarily bought and sold using dollars.

It is for this reason that members of the alliance and other developing nations say they are fed up with America’s dominance of the global financial system, admits.

As expected, the US is moving to defend it’s dominance of global trade. Asserting his power, US President Donald Trump has again threatened to impose 100 per cent tariffs on the bloc’s nations if they, in his words; “act to undermine the U.S. dollar.”

The threat was directed specifically to nine member nations; Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates.”

However, with BRICS’ growing share of GDP and the alliance’s intent to trade in non-dollar currencies, the dollar’s dominance has never been more threatened.

The analist goes on to explain that; “Beyond the immediate economic ramifications, de-dollarization could engender a multitude of effects on the international monetary system, encompassing potential alterations in exchange rate volatility, trade patterns, and presenting challenges for established financial institutions.”

He says, for the United States, dedollarization  has multifaceted primarily its diminished economic leverage.

So Trump didn’t mince his words when he took to defend the dollar; “We require a commitment from these Countries that they will neither create a new BRICS Currency, nor back any other currency to replace the mighty U.S. Dollar or, they will face 100 per cent Tariffs, and should expect to say goodbye to selling into the wonderful U.S. Economy.”

Trump has every reason to be concerned, as Gouvea and Gutierrez (2023) outlined in their titled work ‘De-Dollarization: The Harbinger of a New Globalization Architecture?’ “de-dollarization extends beyond mere economic consequences, potentially influencing the global order itself.”

BRICS expansion, implications

The bloc was established in 2009 by Brazil, Russia, India, and China, with South Africa joining in 2010 as a counterbalance to the Group of Seven leading industrialized nations. Last year, it expanded by adding Iran, Egypt, Ethiopia, and the United Arab Emirates in its fold.

Saudi Arabia has also been invited to join while Turkey, Azerbaijan, and Malaysia have formally applied for membership along with several other countries that have expressed interest. Recently, the bloc welcomed Indonesia as one of its 11 members and Nigeria as a “partner country,” a designation introduced at the 2024 summit in Kazan.

Similarly, Turkey, Azerbaijan, and Malaysia have formally applied for membership, and several other countries have expressed interest.

Read also: BRICS antitrust authorities turn the heat on trade platform Covantis