BRICS expansion: A game changer for global economy and USD

In 2023, we may witness a significant shift towards the end of the unilateralism that has dominated for decades, with the possibility of the BRICS (Brazil, Russia, India, China, and South Africa) expanding its membership.

The BRICS was founded in 2006 and aimed to increase economic relations among its members using local currencies, thereby reducing dependence on the US dollar and its global dominance. The group comprises approximately 42% of the world's population.

According to Bloomberg, 19 countries are interested in joining the BRICS, including Saudi Arabia, Iran, the United Arab Emirates, Algeria, Egypt, Bahrain, Argentina, and Indonesia. These countries' applications will be considered at the next BRICS summit in June.

Observers believed that this move reflects the desire of these countries to become more independent from the unipolar world system and to engage in an economic confrontation with the US and the West.

The most striking factor in the BRICS expansion is its surpassing, for the first time, the Group of Seven (G7) countries, the most advanced economies in the world, with the BRICS contribution to the global economy reaching 31.5% compared to 30.7% for the G7, according to Bloomberg.

Moreover, the latest forecasts from the International Monetary Fund (IMF) suggest that China, the world's second-largest economy, will be the largest contributor to global economic growth until 2028, with a share of approximately 23% of total growth compared to 11% for the United States, the world's largest economy.

China's economic dominance is being reinforced by the success of its currency, which is replacing the dollar as the most traded currency in countries such as Russia. This trend is also being followed by other countries, such as Brazil, whose president recently called for an end to the dollar's dominance globally.

However, the ambitions of the BRICS countries and those seeking to become part of it do not negate the following facts:

- The US dollar is still the most widely traded currency.
- 70% of the world's population uses the greenback in daily transactions, and it dominates foreign reserves held by central banks worldwide by more than 58%.

So will this situation change soon?