BRICS UAE, Saudi expansion marks biggest challenge to the US dollar in the 21st century

I shared some more perspectives with Tala Michel Issa of Arabian Business on the changing dynamics of Great Power Competition, increasingly crystalised on the push for de-dollarization of the world economy.

While acknowledging that “A big part of this (Saudi Arabia dis-aligning itself from the US) is to develop the strongest relationship with economies that will play as big of a role as the West in the coming years. This is where BRICS membership becomes so crucial”, I reminded readers that “For all the push towards de-dollarisation – and the appetite for it – this will be a slow and painful process”.

Indeed, “reducing reliance on the US dollar presents several economic challenges. Entire payment and pricing mechanisms would need to be reinvented for new cross-border arrangements. Central banks hold trillions in dollar reserves that would need to be diversified. Fluctuations between currencies could create unintended risks. (…) Managing all this requires a gradual, coordinated effort – hence why full de-dollarisation remains distant”. “There will be push-back by the US, by some Global South nations even, as exemplified by Argentina.”

That being said, I concluded that “anything short of full de-dollarisation can already be seen as a victory”. “The very existence and expansion of BRICS+ is a challenge to the US-led world order. And every year that passes is a testament that an alternative is viable”.