Key facts
- Economist Jim O'Neill believes BRICS nations can build alternatives to the dollar, a view that has shifted from 'fantasy' to possibility.
- Advances in payment technologies have influenced O'Neill's perspective on de-dollarisation efforts.
- O'Neill noted that despite powerful symbolism, BRICS has achieved limited concrete policy successes beyond the New Development Bank.
- BRICS countries are exploring payment system alternatives, including digital currencies and linking existing domestic platforms.
- The BRICS+ initiative aims to foster collaboration on global issues like climate change and AI governance.
Economist Jim O'Neill, renowned for coining the BRIC acronym, has stated that the prospect of BRICS nations developing alternatives to the U.S. dollar is no longer a 'fantasy.' O'Neill, a former Goldman Sachs economist, indicated in a Reuters interview that recent advancements in payment technologies have significantly altered his view on the feasibility of such financial arrangements among Brazil, Russia, India, China, and South Africa.
O'Neill recalled that approximately 18 months prior, he would have dismissed the idea of BRICS countries creating alternative financial vehicles as pure fantasy. This earlier skepticism was partly shaped by the long-standing dominance of the dollar in the global monetary system, a status solidified after the collapse of the Bretton Woods system in the 1970s. Despite growing de-dollarisation efforts by many emerging economies aiming to reduce reliance on the greenback for trade, investment, and reserves, the dollar remains the preeminent global currency.
He acknowledged that while the symbolism of the BRICS grouping is powerful, its members have faced challenges in translating their collective vision into concrete policy actions. Divergent geopolitical and economic interests have complicated efforts to reshape the global economic system in their favor. O'Neill noted that, with the honorable exception of the New Development Bank, he struggled to identify other significant achievements.
The BRICS nations have been discussing various alternatives to dollar-based payment systems. These discussions include initiatives like the BRICS Pay platform and the potential integration of existing domestic systems such as India's UPI, China's CIPS, and Brazil's PIX. The future use of Central Bank Digital Currencies (CBDCs) is also being considered.
The original BRIC group, formed in 2009 with South Africa joining in 2010, has evolved into BRICS+, a broader platform representing the interests of the Global South. This expanded group includes nations such as Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates.
O'Neill, along with Gemma Chenger Deng, co-founded BRICS+ Thinking, a non-profit policy platform designed to commission research that fosters collaboration between Western countries and BRICS+ nations. The platform also intends to develop its own indexes and publish growth forecasts for BRICS+ economies. Deng stated that the platform, supported by seed funding from O'Neill, aims to inform policymaking on critical global issues, including climate change, energy transition, global health, and AI governance, emphasizing the need for international cooperation.
O'Neill also observed that the BRICS group is garnering increased attention, humorously noting that unlike previous U.S. presidents, Donald Trump frequently mentions the group.