BRICS is the association of five major emerging countries from the perspective of economically developing Brazil, Russia, India, China and South Africa. Initially, the group consisted of four countries, but in 2011, South Africa joined, resulting in the current combination of five emerging nations. The inaugural summit of the BRICS Countries took place in Russia in 2019. This country boasts a substantial population, and all developing nations exert a significant influence on the surrounding regions. Developing countries account for 40% of the total population and 20% of the global GDP. In 2016, China and India held a historic summit in India, where they signed a declaration aimed at strengthening bilateral ties and enhancing the level of cooperation to strengthen their economies.
Multilateral Development Bank
BRICS role is to use the renewable energy to promote the use of energy sources the sole purpose of these countries economic development law BRICS countries promoting their economic development through establish Multilateral Development Bank which headquarter in Shanghai China. The role of MDP Multilateral Development Bank established by the BRICS countries for the sustainable development projects and financial interest structures. Now one of the important point that is establishing the one currency in BRICS countries. Model of Euro currency is one of the important for the BRICS countries to make a one currency in BRICS countries. The creation of the one currency share the monetary policy that ties between the BRICS are countries to promote the prosperity and economic integration and stability.
BRICS Nation Is To Promote Equality and Reduce Poverty
BRICS countries possess a substantial gold reserve, which they can utilize to enhance their economic and international standing. The goal of the BRICS Nation is to promote equality and reduce poverty. Therefore, they are planning to develop a currency that will be feasible and easy to access among the BRICS countries, thereby facilitating trade and enhancing their economic and international standing.
Example of EURO currency
The stability and economic growth of the countries from which they originate pose a significant challenge to the establishment of a unified currency. An actual example of this was when the EU introduced the euro currency in 1999. This was the currency used for the year in which EU countries began to trade using a single currency. Only accounting and electronic purposes used the Euro in the first three years after its announcement in 1999, but the launch of coins and bank notes in 2002 marked the largest cash changeover in history, with most European Union countries now using the Euro.
Clash of India and China
It is important to make a currency but India and China relationship are the most considerable element in the competition to make the currency. India China work together for the promotion of economics build the cooperation and makes the joint projects and initiative. Tension between China and India due to the boundary dispute that imbalanced important of cooperation and that may effects on the economic growth. The platform of the BRICS countries to related security issues aims to promote peace development and corporations.
Western Monopoly on Financial System
The international financial system is dominated by a Western monopoly, and the BRICS are creating their own currencies to challenge this monopoly. Breaking currency is an interesting and very good idea among the corporations between the countries to fulfill the needs that increase the success level of each country. Most superpower countries collaborate in various sectors such as trade, science, and culture, making currency creation crucial in countering the influence and monopoly of the international financial system in Western countries.
Asset-Backed Parallel Currencies
Implementing a universal currency eliminates the effectiveness of monetary policy, thereby depriving central banks of the ability to regulate the economic cycle. This can lead to significant dysfunction and subpar performance. Asset-backed parallel currencies are already present in financial markets, including precious metals and other financial or tangible assets. These could potentially serve as the foundation for bilateral trade between individuals.
Currency Based On Debt (IOU Notes)
However, at a national level, a currency based on debt (IOU notes) that is managed through the interest rate mechanism has proven to be the most efficient form of currency we have discovered so far. This currency is able to adapt to the state of the economy and does not require the use of costly resources like gold, which serves no productive purpose. In addition to meeting the fundamental criteria of a currency, such as being a dependable store of value, a widely accepted medium of exchange, a standard unit of account, and possessing consistent quality and value.
Rival Currencies’ Existence
What is the reason for other rival currencies’ existence? Given the multitude of motivations that currency issuers have for establishing and controlling their own monetary units, their inclination to do so will persist indefinitely. Governments frequently desire the ability to exert control over inflation and debt levels in response to the demands of their constituents. Establishing their own currency enables them to achieve this in ways that mere alterations to tax and spending policies cannot.
If you want to read the other articles related to this topicÂ
China’s Financial Strategy: Criticisms on IMF Policies
https://scienceresearchs.com/chinas-financial-strategy-criticisms-on-imf-policies/
IMF Cure or Curse: It Depends On the Country
https://scienceresearchs.com/imf-cure-or-curse-it-depends-on-the-country/
Dr. Abid Hussain Nawaz
