Former Goldman Sachs Chief Economist Jim O’Neill, who coined the abbreviation ‘BRICS’ in a Global Economic research paper in 2001, spoke about the upcoming common currency during an interview with Business Today. The 16th summit in Russia’s Kazan region ended on Thursday with several developments and announcements taking place at the gathering.
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The first development was a mock-up BRICS currency given to Vladimir Putin showcasing the need for a common tender. The alliance is looking to end reliance on the US dollar and settle payments in the common currency. Read here to know how many sectors in the US will be affected if BRICS ditches the dollar for trade.
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Former Goldman Sachs Economist Predicts the Future of BRICS Currency
The ex-Goldman Sachs Economist O’Neill, who coined the phrase BRICS is skeptical about the future of the currency. He said that the alliance cannot move forward in its global agenda without the help of the US and Europe. Similarly, he added that the US and Europe cannot do much in the Eastern region without the help of China, India, and to a lesser extent Russia and Brazil.
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O’Neill stressed that the BRICS currency will remain a “distant dream” as internal divisions remain the bloc’s biggest challenge. The member nations stand united during the summit but go nationalistic when it comes to protecting their borders and finances. Take for example China and India, the two nations will remain at loggerheads in border disputes, and draw trade lines.
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The former Economist at Goldman Sachs said that the “group had achieved very little over the past 15 years.” He said that “the day China and India manage to get over their long historic battles and cooperate on big issues, then I would have a different view and consider they deserve a place in the global organization. For now, it doesn’t look to me that the day is around the corner,” he said. Therefore, the BRICS currency gaining global dominance will be a pipe dream as the bloc is not united, he explained.
