-Analysis-
PARIS — In the popular concept of the “global south,” which refers to the non-Western world that expresses its distrust of the West, Brazil plays an important role. And its President, Luiz Inácio Lula da Silva, who returned to power in January, wasted no time in demonstrating this.
Lula has been in China this week at a time when the balance of power of the new century is being redefined. Brazil and China are both members of the BRICS, a club of emerging countries that also includes South Africa, India, and Russia. (Wrapping up
When the BRICS first emerged in the 2000s, during Lula’s first term in office, he believed that he’d found a model for an alternative world. However, the club did not live up to its promises, partly due to China’s disproportionate weight compared to its partners and its ambitions as a superpower.
Upon returning to office, Lula quickly booked his path to Beijing, after a first trip to Washington. His statements show that he has not lost his vision of a post-Western world in which the BRICS would occupy a central place.
The Sino-Brazilian relationship has been the world’s largest South-South commercial link for years: $150 billion per year. Lula’s first priority was to strengthen this relationship after the not-so-successful years under his predecessor Jair Bolsonaro. With Lula, confidence has returned.
But above all, Lula has developed an idea that is important to China, and beyond: ending the dominance of the dollar in the global financial system. The Brazilian president devoted a significant part of a recent speech to this idea, asking with feigned naivety: “Every night, I wonder why all countries must carry out their exchanges in dollars. Why can’t we trade in our own currency? Who decided one day that the dollar would be the reference currency after the disappearance of the gold standard?”
Ukraine war and the global south
What’s more interesting is that this rhetoric which was widely praised was uttered at the headquarters of the BRICS Development Bank, a competitor to the post-World war institutions such as Bretton Woods and the World Bank. Lula also attended the installation of the new leader of the BRICS Bank, who is none other than former Brazilian President Dilma Roussef.
President Lula’s initiatives will need to be scrutinized.
The BRICS club is certainly full of contradictions, especially with Russia being included despite its drowning in sanctions, with a President facing charges from the International Criminal Court. This renders the holding of the next summit in South Africa all the more complicated.
Nonetheless, the war in Ukraine has reshuffled the cards and revived the ambitions of those who contest the Western-led global order. (Indeed, in wrapping up his visit to China on Saturday, Lula told reporters that the U.S. “”needs to stop encouraging war and start talking about peace. The European Union needs to start talking about peace.”)
Ending to dollar’s dominance
China has been seeking to end the dollar’s dominance in international trade for a long time now, a determined effort proven quite efficient as the Chinese Yuan is increasingly being used, to the point of overtaking the Euro in exchanges.
French President Emmanuel Macron, in an interview upon his return from Beijing last week, expressed concern about the over reliance on the dollar : “We must not depend on the extraterritoriality of the dollar.” which went relatively unnoticed.
New balances are being established, incrementally, and President Lula’s initiatives will need to be scrutinized if they have a chance to succeed. Few get a second attempt at shaping a post-Western world.
