De-dollarization agenda, action steps

BRICS is not a motley group, talk shop, or brigand of rebels. They are damn serious in bringing about the multi polar system. A key method of doing that is de-dollarization. Here are the geoeconomics action steps to proceed in this venture systematically:

Step one relates to pulling out USD from the elevated status of number one trading currency. Roughly half of global trade is still denominated in dollars. Once upon a time in the globe trade USD was as high as 90%. The decline is remarkable because it has robbed almost half of dollar’s position in less than couple of decades.

Member states which are ten right now would be increased to about 18 by end of this year and all of them are encouraged to reduce international trading relationship with USA and to move towards inter-regional as well as intra-regional one where the focus is to help each other by building up currency reserves of members rather than clinging onto USD. The current estimate is that US dollar is involved in almost 90 per cent of foreign exchange transactions be it trading, investment or parking as reserves.  

Another geoeconomics step is emerging on the horizon. Change the demand-supply dynamics that is at present under the domination of USA to an inward looking one that promotes inter-BRICS trade as a first step thereafter to be extended to the global south. This itself tantamount to delivering a fatal blow to the global north which was enjoying so far super profits in the field of trade with countries in the global south.

Sourcing raw materials, semi-finished goods for further processing or adding value from BRICS members and thereafter exporting to the fellow members with a reasonable profit margin added is a useful geoeconomics step. This way the super profits hitherto booked by the global north would dissipate altogether.

Geoeconomics gerrymandering presents yet another bold challenge to the global north in the form of non-US & non-EU trading system. Beginning with inter-regional trade base say, ASEAN countries, this trade type could be easily enlarged to the Asian region as a whole. Once that is stabilised trading relationship would be extended to Africa, Latin America and Oceania. The dominoes would start to fall as USD is dethroned and the next season of attack would be mounted at EURO.

Bringing fear syndrome over keeping USD reserves as a risk asset is a crucial step to be followed by BRICS. Citing the example of freezing of Russian monetary assets in the western banks and the constant beating of the war drums of expropriating the entire cash assets and recently the EU announcing to divert the use of income earned from the frozen reserves to fund Ukraine war, BRICS can technically outlaw members from holding dollar and EURO reserves as high-risk monetary assets.

The final step is to go for the kill. That is to trigger a dollar run in the globe. Not only BRICS members even non-member countries would be persuaded to return their dollars to USA for exchange into gold or other products of value. There is already a colossal mountain of dollar debt staring at USA. The added discomfiture of trying to sell USD back to America itself would be a major disaster for US hold over geoeconomics!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist