The BRICS, led by Brazil, Russia, India, China, and South Africa, is set to expand further, increasing its commodity dominance. Thailand, a major rice exporter, has expressed its intention to join the group, aiming to enhance its global presence.
Notably, the country’s government finalized plans to submit its application, potentially becoming the first Southeast Asian member of BRICS. Nikkei Asia reported this international finance and political development on May 29.
Thailand’s decision to join BRICS highlights the bloc’s growing influence among emerging nations and commodity producers. With the recent addition of the United Arab Emirates, Iran, Ethiopia, and Egypt in January, BRICS has strengthened its position. Essentially, the group’s expansion challenges the dominance of developed economies, such as the United States, European Union, and United Kingdom.
As a leading rice exporter, Thailand’s inclusion in BRICS could significantly impact the global food supply chain. Rice, a staple for over half of the world’s population, plays a key role in international trade. Thailand, along with other top rice exporters like India, China, and Brazil, could leverage their collective bargaining power within BRICS.
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BRICS de-dollarization plans
Interestingly, the BRICS bloc has been actively working on reducing its reliance on the U.S. dollar in settlements. Plans are underway to create an independent payment system based on digital currencies and blockchain technology, as reported by Coindesk. This move aims to provide a convenient, cost-effective, and politically neutral alternative to the current international monetary system.
Kremlin aide Yury Ushakov emphasized the importance of developing the Contingent Reserve Arrangement within BRICS, focusing on using currencies other than the U.S. dollar. The group’s efforts to de-dollarize settlements reflect its desire to challenge the dominance of the U.S. dollar in global trade.
Moreover, its partners, along with Russia’s Finance Ministry and the Bank of Russia, are collaborating to establish the BRICS Bridge multisided payment platform. This initiative aims to improve the global monetary system and provide an alternative to the current U.S.-led financial infrastructure.
BRICS dominance in the commodity market amid geopolitical tensions
The expanding dominance of commodity producers within it has significant implications for the global economy. In particular, as more countries, such as Thailand, join the bloc, their collective economic power and influence on international trade dynamics are expected to grow. This shift could potentially reshape the balance of power in the global financial landscape.
However, the alliance of BRICS with countries involved in escalating tensions with the U.S., E.U., and U.K. raises concerns. The bloc’s increasing economic and political clout could further strain relations between these major powers, potentially leading to heightened geopolitical risks.
As it continues its expansion, the global community will closely monitor its impact on the international monetary system and geopolitical dynamics. The inclusion of leading commodity producers, like Thailand, and the development of alternative payment systems could significantly alter the current financial landscape, challenging the long-standing dominance of the U.S. dollar, Euro, and GBP.
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