KUALA LUMPUR: The Global South should unite, even in small ways to pursue shared goals, particularly because US President-elect Donald Trump has threatened tariff specifics for BRICS nations.
Khazanah Research Institute research advisor Jomo Kwame Sundaram said the South must overcome its differences to become more effective and better equipped to navigate global challenges collectively.
Trump had demanded that the bloc commit to using the greenback as its reserve currency, or he would impose a 100 per cent tariff on any BRICS country that attempts to move away from the US dollar in international trade.
Trump also pressured them to use the greenback as their reserve currency and refrain from creating a new BRICS currency or backing alternatives.
Highlighting a critical point, Jomo stated that the region has consistently subsidised the United States by adopting the US dollar as the common currency of the world.
"We are essentially, by buying and trading the US dollar for assets each week. We are basically and constantly subsidising the United States. This is a reality," Jomo said in his speech at the Common Action Forum (CAF) 2024 titled "Challenges of a Post-Growth Financial Architecture".
"So, what we find is that the de-dollarisation proposal is not as special.
"I think it is important to recognise that recently China's central bank, the People's Bank of China, has decided to issue US-denomiated bonds, which it will finance internally," he noted.
He said that Brazil, South Africa, and occasionally Russia are the primary supporters of the (de-dollarisation) proposal, but cited that progress has been slow.
Therefore, he stated that, without the West's readiness, temporarily influenced by the pandemic, there is a genuine opportunity to explore and expand possibilities within the system, provided there is a collective goal.
"But this is not going to come about unless the South gets together at least minimally," he said.
He also called on the South to strengthen financial cooperation and develop alternative financial architecture to reduce dependency on a Western-led system and "to think seriously about the future".