South Africa
Source: iol.co.za


When Goldman Sachs’ Jim O Neil coined the term BRIC in 2009, his frame of reference was emerging market destinations that were attractive for global capital investment from the North.
In 2009, Brazil, Russia, India and China hosted an inaugural summit where the acronym BRIC was adopted. South Africa joined the organisation in September 2010, and the bloc was renamed BRICS.
Today, these nations are co-shaping geoeconomics, globalisation and geopolitics. At the time, China was a regional power; today, it is the largest economy and exporter in the world, with a GDP larger than the combined economies of the BRICS core nations. 

Above all, the story of BRICS is the story of Global South nations whose aspirations date back to the Non-Aligned Movement (NAM) and G77 in the early days of Decolonisation. The New International Economic Order (NIEO) articulated an alternative model of development oriented toward transforming the colonial division of labour through industrialisation, productive diversification, economic sovereignty, and practices of restitution for centuries of colonial exploitation and resource drain.
The BRICS main purpose is to promote the transformation of the global governance system established after World War II through the reform of traditional financial institutions such as the International Monetary Fund (IMF) and the World Bank.

It also seeks to contribute to the construction of a multipolar order that reflects the distribution of power in the twenty-first century and offers greater decision-making power to countries.
This moment of multipolarity has generated new IR concepts - Multilateralism, Non-Alignment, ‘Middle Powerdom’, and Strategic Autonomy. But make no mistake, beyond these postures, it is ‘core national interests’ that drives nations states engagement in international relations.

Brazil’s 2025 BRICS Chairmanship put much emphasis on developing common approaches. In a period of rapid transformation of the world order, this is one of the most important tasks.

During Brazil’s chairmanship, the member countries managed to agree and form a common position on a wide range of issues: from the development of cross-border payment systems to combating the consequences of climate change and global governance of artificial intelligence. However, the path to common approaches was not without challenges. 

Here, China is the outlier as it has successfully established the Development State model - aka the Beijing Consensus, which has trumped the Washington Consensus. Backed by technology and investment, its 5-year plan iterations have seen the most remarkable growth and development, uplifting 600 million out of poverty into middle-class status. 

By contrast, all other BRICS nations had effectively adopted neo liberal policies in the 1990s as prescribed by the WTO. Subsequently, they become net importers of FDI from the G7 core. This model of extractive FDI and IP-driven MNC investments has drained flows from BRICS and G77 towards the North. 

Ironically, Russia’s resurgence and contest with the West has seen sanctions, and with the Ukraine war has pushed it to adopt a national development pathway delinked from globalisation. Today, its currency is stabilised, and it has generated significant surpluses.

Contradictions or Convergence

The current escalation and contest in the Middle East between the UAE and Saudi Arabia is an example of divergence on key issues. UAE’s intervention in Sudan violates the UN and AU's Silencing the Guns initiative, yet it was invited to South Africa’s G20 summit in 2025. 

India’s embracing of Israel as an ally is generally opposed by the Non-Aligned Movement NAM) and Hague Groups consensus on Palestine and Western Sahara solidarity, of which South Africa is a key player. 

Martha Fernanzdez of IPEA Brazil, a leading think tank in Brazil, says:

For example, Brazil has consistently called for the democratisation of the Security Council and has pressed for the inclusion of the issue in BRICS declarations. However, when the time came to expand the number of full BRICS members beyond the original five, Brazilian diplomacy showed hesitation, fearing that expansion could transform BRICS into a new G77, create coordination problems, hinder consensus, and reduce Brazil’s influence within the grouping. ( February 2026) 

A bridge between G20 and G77 or a bridge too far? 

In an era of deepening multilateralism and multipolarity and the rise of Trumpism and narrow nationalism in the North, the BRICS nations’ institutional capacity and geopolitical influence have seen the bloc moving towards a position of equivalence within the G20. BRICS nations have been co-shaping the G20 core agenda for several years. 

Many of the themes from the G20 are similar to the BRICS agenda, with Brazil’s leadership at UN COP 30 in Belen and South Africa's G20’s sustainability, solidarity and inclusion agenda are examples of BRICS anchoring the UN Pact for the Future agenda. 

The G77 demanded equity in international trade rules, resulting in the inclusion of Special and Differential Treatment (SDT) in their constitutive agreements. SDT constituted an important victory for these countries, as it recognised that the post-war order was asymmetric, requiring greater flexibility, time, technical support, and capacity-building for developing countries to implement trade agreements. Notions of NDCs at UN COP processes are another.

The big challenge is how BRICS will use geopolitical weight to ensure the masses of G77 - and humanity to have a fighting chance for a fairer world order. Herein lies the biggest challenge for genuine multilateralism.

While the G7, G20 and BRICS are the apex of international institutions co-shaping the UN, they dominate a plethora of regional forums that shape global norms, the bottom billions of the G77 bear the real brunt of trade wars, climate risk, war, civil wars, youth unemployment, AI risks, and health pandemics. 

In the midst of Trump 2.0 trade wars in 2025, BRICS nations have acted individually rather than as a bloc, each nation-state negotiating individually. Sigh. For instance, India has opted for a mega India EU free trade agreement, while the Chinese approach has been strategic trade deals per G7 country, as French, Canadian, UK and German leaders visiting China in the past several weeks.

This mega Chinese market offers a massive opportunity for all nations to export, and this ‘holy grail of international trade’ is being unlocked. Fortunately, China has agreed to duty-free access to all African nations, a huge boost. 

Martha Fernandez further unpacks: 
Ironically, today BRICS has become one of the main defenders of a rules-based international order—albeit one that is qualified, reformed, and democratised. In BRICS declarations, we find support for sovereignty and territorial integrity, multilateralism, the centrality of the United Nations, and a rule-based multilateral trading system.

Whither the WTO or new green shoots? 

If BRICS nations are now engaging in a myriad of free trade agreements, what does this fact mean for the WTO? It should be noted that the decline of the G77's influence goes back to the ill-fated Doha Development Round of 2004, which failed, and since then, the G77 has been in limbo.

Will BRICS nations ensure the Doha round is maintained and the core issues of trade, agriculture, and digital economy are developed in line with the UNCTAD agenda of equity, fairness, justice and emancipation?

And as BRICS core nations gains more currency, quotas and votes in the IMF and World Bank, what does that mean for the alternative world economic order? Would it mean a converging capitalist consensus within the G20 (G7, EU and BRICS)? Or will BRICS genuinely transform these institutions and revert to its original mission to serve the broader G77 and core Global South agenda as envisaged by the founding fathers and mothers of NAM and UNCTAD in the 1960s? 

As famous development economist Ha Joo Chung observes - Kicking down the Ladder or pulling up the Ladder for the Global South? Will the BRICS bloc step up to this monumental historical task?

* Ashraf Patel is a Senior Research Associate at the Institute for Global Dialogue, UNISA.
** The views expressed do not necessarily reflect the views of IOL, Independent Media or The African.

India
Source: www.orfonline.org

At a time of acute diplomatic friction with Washington, “Will for Peace 2026” forces a reassessment of whether South Africa’s strategic signalling serves its long-term national interests

At a moment when South Africa’s relations with the United States stand at an all-time low, Pretoria appears to have added further friction to an already delicate relationship. Following joint maritime exercises in South African waters involving fellow BRICS members such as China, Russia, and Iran, Washington’s accusation that South Africa is “cosying up” to Iran has further strained their relations. The episode, centred on the naval drills dubbed “Will for Peace 2026”, raises a larger question: does this controversy signal emerging fault lines within BRICS, or does it underscore the complexities of South Africa’s diplomatic positioning?

This downturn in South Africa–US relations did not begin with Iran. Ties started deteriorating when Pretoria brought Israel, a close US ally, before the International Court of Justice over alleged violations of the Genocide Convention in Gaza. While the move was welcomed in parts of the Global South, it was deeply resented in Washington.

The situation worsened when South Africa was accused of indirectly supporting Russia’s war in Ukraine. While Pretoria never provided material assistance to Moscow, its pattern of neutrality in UN votes and the docking of a US-sanctioned Russian vessel near Cape Town were interpreted by the Trump administration as tacit support for Russian President Vladimir Putin. The decision to relocate Taiwan’s liaison office from Pretoria to Johannesburg further reinforced perceptions in Washington that South Africa was drifting decisively away from Western strategic preferences.

US officials described South Africa’s decision to host Iranian naval forces as morally indefensible, arguing that Pretoria could not credibly lecture the world on justice while engaging militarily with a regime violently repressing its own citizens.

These tensions reached a nadir in May 2025, when US President Donald Trump hosted South African President Cyril Ramaphosa in the Oval Office and openly accused Pretoria of allowing what he described as a “white genocide”, alleging that the government was failing to protect white farmers. Against this already fraught backdrop, the announcement of fresh naval exercises involving Iran was bound to provoke a reaction.

Will for Peace 2026, conducted between 9 and 16 January near Simon’s Town, featured participation from China, Russia, and Iran, among other BRICS members. China and Iran deployed destroyers, Russia and the United Arab Emirates sent corvettes, while South Africa contributed a frigate. Indonesia, Ethiopia, Brazil, and Egypt attended as observers. For Washington, the most alarming element was Iran’s inclusion, particularly given the timing.

The exercises coincided with one of the most severe waves of domestic unrest Iran has experienced since the 1979 revolution. Protests that began in late December 2025 over inflation and currency collapse escalated into a nationwide uprising. Iranian security forces responded with lethal force. Supreme Leader Ayatollah Ali Khamenei acknowledged that several thousand people had been killed, while activists claimed the death toll was even higher. Another tens of thousands were reportedly arrested.

In this context, US officials described South Africa’s decision to host Iranian naval forces as morally indefensible, arguing that Pretoria could not credibly lecture the world on justice while engaging militarily with a regime violently repressing its own citizens.

South Africa attempted damage control after the backlash. While initial government statements defended the exercise as routine and non-aligned, Ramaphosa reportedly ordered Iran’s exclusion on 9 January. Pretoria later shifted blame onto China, claiming Beijing had taken the lead in inviting Iran and that South Africa had merely provided the maritime space. On 16 January, Defence Minister Angie Motshekga announced an inquiry to determine whether the president’s instructions had been ignored or miscommunicated, an admission that civilian oversight over defence diplomacy may be fraying.

India, the current chair of BRICS, stayed away entirely and publicly distanced itself from the event, clarifying that it was neither institutional nor representative of the bloc. New Delhi emphasised that not all BRICS members participated and that India had never joined similar ad-hoc exercises in the past.
Crucially, despite Pretoria’s rebranding effort, calling the drills “Will for Peace” did little to alter perceptions. Neither can the exercise credibly be described as a BRICS initiative. India, the current chair of BRICS, stayed away entirely and publicly distanced itself from the event, clarifying that it was neither institutional nor representative of the bloc. New Delhi emphasised that not all BRICS members participated and that India had never joined similar ad-hoc exercises in the past.
India’s absence is telling. New Delhi was careful to underline the difference between this exercise and IBSAMAR, which is the institutionally established trilateral India–Brazil–South Africa maritime drill. Ironically, the last IBSAMAR in October 2024 also took place in Simon’s Town, a strategic naval hub housing one of South Africa’s most important bases. This contrast underscores that Will for Peace was likely not an extension of the BRICS mandate but a South African choice.

Domestically, the political fallout has been equally damaging for Ramaphosa. Opposition parties, particularly the Democratic Alliance, accused the government of sidelining Parliament and failing to disclose key details about the exercise, including its costs, legal basis, and command structure. Coalition partners warned that South Africa risked abandoning its long-standing non-aligned posture in favour of closer alignment with authoritarian states. The controversy also revived criticism of Defence Chief Rudzani Maphwanya, who had previously drawn backlash for visiting Tehran and praising shared strategic goals shortly after heightened Iran–Israel tensions.

Ultimately, Will for Peace 2026 does not represent a formal split within BRICS. Instead, it likely highlights the absence of a shared strategic vision within the grouping and, more pointedly, exposes South Africa’s growing difficulty in navigating great-power politics.

The international consequences may be more severe. The United States has already imposed tariffs of up to 40 percent on certain South African exports. Despite South Africa’s role in the G20 troika, Washington has signalled reluctance to support Pretoria’s participation in the 2026 G20 summit in Miami. The Iran episode only deepens this estrangement and reinforces the perception in Washington that South Africa is an unreliable partner.

Ultimately, Will for Peace 2026 does not represent a formal split within BRICS. Instead, it likely highlights the absence of a shared strategic vision within the grouping and, more pointedly, exposes South Africa’s growing difficulty in navigating great-power politics. As BRICS expands and geopolitical polarisation sharpens, Pretoria’s choices raise urgent questions about the meaning of non-alignment, the cohesion of emerging blocs, and the real costs of diplomatic signalling.

If this pattern continues, South Africa risks finding itself diplomatically isolated, misunderstood by allies — old and new alike, and paying a tangible economic price for symbolic gestures that offer little strategic return.

United Kingdom
Source: www.e-ir.info

Across Africa, Asia, Latin America, and the Middle East, there is a tendency for states to increasingly reject the muscular transactionalism of great powers. Many in the Global South tend to hedge rather than align, resist rather than submit, diversify markets, reroute finance, and preserve their strategic options. Power today is seen not simply as the capacity to dominate, but as the capacity to try to choose—and to revise those choices without forfeiting autonomy. The task is complex and challenging yet widely viewed as worthwhile. The modern political relationship between Africa and Asia — or Afrasia (Mazrui and Adem 2013) — is conventionally traced to the 1955 Bandung Conference in Indonesia. Co-sponsored by Burma, India, Indonesia, Pakistan, and Sri Lanka, Bandung brought together nearly two dozen Asian and African countries at a moment when much of Africa remained under colonial rule. Six African states — Egypt, Ghana, Sudan, Ethiopia, Libya, and Liberia — were represented, symbolizing Africa’s emerging political agency and its determination to engage Asia as an equal partner in shaping a postcolonial international order. Never before had Asia and Africa met in this way on the same stage. 

Bandung was not merely a diplomatic gathering but a foundational moment in the articulation of a shared political imagination. Emerging from common experiences of colonial domination and marginalization in the Eurocentric hierarchies of power, it marked the first collective political assertion by non-white peoples on the world stage. Bandung articulated what later came to be known as the Bandung Spirit, which was grounded in anti-imperialism, sovereign equality, and the principle of nonalignment (Weber and Winanti 2018). 

The continuing relevance and enduring legacies of Bandung and nonalignment in contemporary times become clearer when viewed through four paradoxes that emerged from the Afrasian experience (Adem 2023: 5-6). The space–time paradox—shorter but more comprehensive colonial rule in Africa versus longer but more selective colonization in Asia—helps explain divergent postcolonial trajectories. The time–change paradox—Asia’s relative cultural resilience despite prolonged colonial domination—challenges linear assumptions about Westernization and modernity. The culture–economy paradox—Africa’s cultural Westernization without commensurate economic transformation, contrasted with Asia’s economic modernization without deep cultural Westernization—raises fundamental questions about autonomy and development. Finally, the paradox of divisive peace and prosperity reveals that Afrasian solidarity was strongest under conditions of shared struggle and weakest during periods of relative success, suggesting that nonalignment functioned more effectively as a strategy of resistance. 

At its core, the Bandung Spirit rested on a set of overlapping solidarities that shaped relations within the Global South in the decades that followed. These included pigmentational solidarity, arising from shared experiences of European racial prejudice; cultural solidarity, a reaction to common exposure to Eurocentric civilizational prejudice; anti-imperial solidarity, based on direct or indirect experiences of colonial domination; and the solidarity of nonalignment, expressed through collective efforts to avoid subordination within Cold War bipolarity by rejecting the notion of automatic alignment with either camp. 

However, nonalignment was also an attempt by countries in the Global South to reclaim autonomy in a world structured by imperial legacies and superpower rivalry (see Abraham 2008: 195-219). Participation in Bandung was defined less by a uniform colonial experience than by a shared condition of being non-white within a racially stratified international order. While many participants were from former colonies, others were not. Over time, the basis of solidarity expanded from affinity by color to affinity based on economic underprivilege. With the extension of Bandung’s ethos beyond Asia and Africa, the broader concept of the Third World emerged. In this sense, Bandung anticipated later South–South cooperation frameworks and remains a reference point for contemporary efforts to diversify global partnerships without reproducing new forms of dependency. 

But Asia’s postcolonial industrialization further complicates Bandung’s legacy. Japan’s early transformation, followed by the second wave led by the East Asian tigers in the 1970s and 1980s, initially appeared to vindicate Bandung’s vision of autonomous development. Africa’s weaker performance, however, exposed the uneven capacity of postcolonial states to translate political independence into economic sovereignty. Asia’s third wave of industrialization, led by China, presents an even more ambiguous moment. Afrasian solidarity today appears weaker than during earlier phases —not because Bandung’s principles have been exhausted, but because the historical conditions that once gave them urgency — colonial domination and Cold War bipolarity — have receded. This is a part of what is called above, the paradox of divisive peace and prosperity. 

Contemporary debates (for example, see Adem and Thomas 2018: 153-166; Dale and Bhattacharya 2023; Shanmugaratnam 2025; Duncan McFarland 2025) ask whether BRICS+ is a potential successor of Bandung. The suggestion is tempting — and partially justified — but it is also misleading. Like the Bandung Conference of 1955, BRICS+ emerges from dissatisfaction with a global order, or aspects of it (Wong 2026). Both Bandung and BRICS+ speak the language of protest, although the orientation of the protest ranges widely, from restoration and transformation to corrective measures. Both Bandung and BRICS reflect the aspirations of societies that entered the international system not as its architects. 

In another sense, Bandung was also more than a protest. It was a moral project. It articulated a shared civilizational critique of empire and hierarchy, grounded in anti-imperialism, nonalignment, and the ethical rejection of domination in all its forms. Bandung possessed a normative coherence that allowed diversity to coexist with purpose since what brought them together was deemed more important. BRICS+, by contrast, is a coalition without a creed. It aggregates power, but it does not yet organize meaning. Its members differ sharply — sometimes antagonistically — over governance, security alignments, and development pathways. These divergences limit its capacity to function as the moral or institutional nucleus of a new world order. 

BRICS+ thus resembles not the Bandung moment itself, but the historical condition that followed it: a world in transition, unsettled but not yet reconstituted. It is a sign of erosion of a system rather than a blueprint for its replacement. The global order is loosening. But it has not yet been fully reimagined. Under the circumstances, Western anxiety about the fate of the so-called “rules-based international order”, as concisely summed up last month by Prime Minister Mark Carney of Canada in Davos, Switzerland, is understandable, as the system is indeed under strain. Ironically, however, its most significant undermining has come from its principal architect, the United States. From its 2003 invasion of Iraq to its intervention in Venezuela this year, repeated unilateral departures from multilateral commitments by the U.S. have weakened the very norms it had claimed to defend.  

At a deeper level, however, this pattern reflects not individual leadership failures but the structural dynamics of unipolarity. This fact was noted by, among others, Ali Mazrui (1991), who had put forward a structuralist explanation for it: “The United States and the Soviet Union check-mated each other on some issues on the world scene and in the United Nations. Now, a world with only one superpower may be a global system without adequate checks and balances.” Almost two decades after Mazrui, the prominent structural realist Kenneth Waltz (2009: 31) also echoed the same notion in a strikingly similar language: “…An international system in which another state or combination of states is unable to balance the might of the most powerful is like a political system without checks and balances.” In short, the concentration of economic and military power in a single pole encourages hegemonic irresponsibility. In this sense, the maxim that absolute power corrupts absolutely retains relevance in international relations, too. 

The unease of the United States about BRICS+ and multipolarity stems from a recognition that a historic transition is underway in which Europe and the United States are likely to constitute merely two poles among several in a multipolar international system. For the Global South, this transition revives core Bandung dilemmas. Engagement with China and other Asian powers echoes earlier aspirations of the non-aligned for diversification and autonomy, even as it introduces new risks of dependency. The challenge, therefore, is not about aligning with rising powers but about the necessity of what may be called strategic nonalignment—conscripting multiple partners and preserving policy space in an increasingly polarized international system. 

In addition, as Ali Mazrui (2000: 279) argued: 

Two forms of solidarity are critical for [developing countries] if the global system is to change in favor of the disadvantaged. Organic solidarity concerns South-South linkage designed to increase mutual dependence among [developing countries]. Strategic solidarity concerns cooperation among [developing countries] in their struggle to extract concessions from the industrialized Northern world. Organic solidarity concerns the aspiration to promote greater integration among developing economies. Strategic solidarity aspires to decrease the South’s dependent integration into Northern economies. The focus of organic solidarity is either a North-South divorce, a new marriage settlement, or a new social contract between North and South. The terms of the North-South bond have to be renegotiated.  

More specifically, Mazrui (2000: 279) asked, “How can organic and strategic solidarity help ameliorate the [Global South’s] predicament of dependency and its persistent economic vulnerability?” His answer was simple: “[The Global South] has many sources of power, among them producer power, consumer power, and debtor power.” The Bandung Spirit remains relevant not as nostalgia but as a flexible framework for navigating hierarchy, preserving autonomy, and asserting agency in a rapidly changing world. 

References 

Abraham, Itty. 2018. “From Bandung to NAM: Non-alignment and Indian Foreign Policy.” Commonwealth  & Comparative Politics, vol. 46, no. 2, pp. 195-219.  
Adem, Seifudein. 2023. Africa’s Quest for Modernity: Lessons from Japan and China. Springer. 
Adem, Seifudein and Darryl Thomas. 2018. From Bandung to BRICS: Afro-Asian Relations in the 21^st  Century. In Routledge Handbook of Africa-Asia Relations, edited by Pedro Carvalho, David Arase and Scarlett Cornellisen. London and New York: Routledge.  
Bello, Walden. 2025. “The Long March from Bandung to the BRICS.” Focus on the Global South. https://focusweb.org/the-long-march-from-bandung-to-the-brics
Dale, Gareth and Tithi Bhattacharya. 2023. “Are the BRICS the new ‘Bandung’?” Brunel University of London. https://www.brunel.ac.uk/news-and-events/news/articles/Are-the-BRICS-the-new
Dinkel, Jürgen. 2018. The Non-Aligned Movement: Genesis, Organization and Politics (1927-1992). Trans. by Alex Skinner. Brill. 
Mazrui, Ali A. 1991. The World with One Superpower: Is It a More Dangerous Place? Paper Prepared for the 16^th Sir Winston Scott Memorial Lecture. Institute of Global Cultural Studies, Binghamton University, New York.  
Mazrui, Ali A. 2000. Technological Underdevelopment in the South: The Continuing Cold War. In Principled World Politics: The Challenges of Normative International Relations, edited by Paul Wapner and Lester Edwin J. Ruiz. Rowman and Littlefield, pp. 275-283. 
Mazrui, Ali A. and Seifudein Adem. 2013. Afrasia: A Tale of Two Continents. Lanham, MD: University Press of America. McFarland, Duncan. 2025.
“’Heir to the Non-Aligned Movement’: BRICS Presents Alternative to U.S.  Hegemony.” 11 July 2025. https://peoplesworld.org/article/heir-to-the-non-aligned-movement-brics-presents-alternative-to-u-s-hegemony/ 
Shanmugaratnam, Yohan. 2025. “Vent litt – systemet oppdateres.” Klassekampen, January 23, 2025.  https://klassekampen.no/artikkel/2025-01-24/vent-litt-systemet-oppdateres
Waltz, Kenneth. 2009. The United States: Alone in the World. In Imbalance of Power: US Hegemony and International Order, edited by I. William Zartman. Lynne Rienner. 
Weber, Heloise and Poppy Winanti. 2016. “The ‘Bandung Spirit’ and Solidarist Internationalism.” Australian Journal of International Affairs, vol. 70, issue 4, pp. 391-406. 
Wong, Brian. 2026. “BRICS Could Become a New Pillar of Global Governance—If Its Rapid Growth Doesn’t Erode Its

Hong Kong
Source: www.scmp.com

Brazil’s dismissal of the idea of a Brics currency suggests that the bloc may continue to pursue less politically fraught monetary cooperation that stops short of challenging the US dollar’s dominance, such as swaps and seamless payment systems, according to analysts.

During Brazilian President Luiz Inacio Lula da Silva’s recent trip to India, Lula sought to play down speculation that the 10-member grouping of developing nations was drafting plans for a shared currency.

In an interview with an Indian news channel on Friday, he said there had been “no proposal, no draft and no internal discussion to create a Brics currency”.

“India and Brazil can trade in their own currencies and do not need to rely on the US dollar for bilateral deals,” Lula added.

Speculation about a Brics currency has swirled in the past few years as the push towards dedollarisation continues.

During the Brics summit in South Africa in 2023, leaders discussed ways to settle more trade within the bloc without using the US dollar. At the bloc’s summit in Brazil in 2025, Russian President Vladimir Putin urged member states to make greater use of their currencies for trade.
During the 2024 US presidential campaign, then candidate Donald Trump warned that he would slap tariffs of up to 100 per cent on Brics countries’ exports to the US if the bloc created a rival currency to “replace” the dollar.

Lula’s comments dismissing a Brics currency have fuelled speculation about what other options the bloc could consider to reduce its reliance on the US dollar.

Analysts say a plausible path would be to expand local-currency settlements and central bank swap arrangements, as well as linking national payment systems.

Brics members “can do direct payment in their own currencies”, said James Chin, director of the Asia Institute at the University of Tasmania.

“The second option is a currency swap, which is already in place. A big currency swap between China and Russia, India and China, or India and Brazil would effectively bypass the US dollar.”

Chin added that creating an integrated electronic payment system or a cryptocurrency across Brics could further cut the bloc’s dependence on the dollar. Wider use of China’s cross-border interbank payment system could also be part of the solution.

Shanthie Mariet D’Souza, founder and president of the Mantraya Institute for Strategic Studies, said that while Russia and China had championed reduced reliance on the US dollar, Brics had never made a formal proposal to replace it as the main currency for trade.

“Iran has also joined this call for its own reasons. However, other members, such as India, Brazil and South Africa, do not support this initiative,” she said, adding that a Brics currency remained little more than an idea.

D’Souza also pointed to other obstacles to a currency union, including the volatility of the Russian rouble and the Iranian rial, as well as India’s concerns about the wider use of the Chinese yuan.

India, which will host this year’s Brics summit, has emphasised the expanded use of local currencies for trade and linking payment systems.

Last month, the Reserve Bank of India suggested linking digital currencies issued by Brics central banks to facilitate cross-border trade and tourism payments and asked that its proposal be discussed at the 2026 summit, according to media reports.

Jhanvi Tripathi, an associate fellow with the Observer Research Foundation think tank’s geoeconomics programme, said broader trade in local currencies was feasible as a hedge against foreign exchange risks.

She noted that India and the United Arab Emirates were already trading in local currencies before the UAE joined Brics.

The discussions on closer currency cooperation come as trade within the bloc continues to surge.
Trade in goods among Brics members jumped from US$84 billion in 2003 to US$1.17 trillion in 2024, according to data from the UN Trade and Development. Brics accounted for 5 per cent of global trade and 20 per cent of trade in the Global South in 2024, the UN agency reported.

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Aleksei Zakharov, a fellow with the Observer Research Foundation’s strategic studies programme, said Brics had been exploring ways to mitigate risks arising from trade involving members under international sanctions, while increasing bilateral settlements in national currencies, such as between India and Russia.

However, the dominance of the US dollar was likely to persist for the foreseeable future, he said.
Tripathi agreed that the US dollar would likely remain unchallenged for some years to come, even as Brics members worked towards closer currency cooperation.

“Within Brics, there are obvious strategic competitions that create hurdles to agreeing on interoperable standards and data transfers. These issues will take a significant amount of time to solve,” she said.

Referring to Lula’s comments, Chin said any abrupt shift away from the US dollar was risky given that all Brics countries held substantial reserves denominated in the currency.

“They slowly need to change their reserves to non-US dollars. Until it happens, most of them prefer flexibility.”