Thailand has announced its intention to become a member of the BRICS economic bloc in a move that could accelerate the demise of the U.S. dollar.
This is according to Thai government spokesman Chai Wacharonke, who said in a statement that the country’s cabinet in Bangkok has now given the go-ahead to an official letter of intent.
Chai reported that Thailand underscored in its letter the importance of multipolarity and the rising role that developing nations like Thailand are playing on the international stage. The country believes its vision for the future aligns with BRICS principles.
Thailand also identified a number of ways they believe joining BRICS would be beneficial, including the chance to participate in shaping a new world order and taking on a greater role in the international arena. If it is approved, Thailand would be the first Southeast Asian member of BRICS.
Thailand is just one of several non-member countries that has been invited to participate in a BRICS summit in October with a view to eventually joining the coalition. According to Chai, their attendance there could accelerate their application.
BRICS was originally made up of Brazil, Russia, India, China and South Africa. Earlier this year, Ethiopia, Iran, the United Arab Emirates and Egypt joined their ranks. Other countries that have expressed a desire to join include Venezuela, Senegal, Pakistan, Belarus, Cuba, Bahrain and Kazakhstan.
Is the dollar on its way out?
The addition of Thailand would bolster the growing financial power of BRICS and its desire to move away from the dollar. The coalition is considered a competitor in an international order that is currently led by developed economies in Europe and the United States. The recently expanded bloc now accounts for roughly 30% of the global economy as well as a population of 3.5 billion, or 45% of the global population. Crucially, it accounts for more than 40% of global oil production.
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BRICS countries have been working toward creating a single currency that will enable them to reduce their dependence on the U.S. dollar, which could cause shock waves in the current global economic power hierarchy.
With their own common currency, BRICS countries would be able to carry out trade without using American dollars, reducing the supply and demand of the dollar and possibly weakening its value.
In addition, it would chip away at the dollar’s current position as the main reserve currency for global trade. Right now, many countries keep dollar reserves to provide economic stability; they could seek to diversify their reserves in the presence of an alternative BRICS currency, which would further weaken the dollar’s dominance and influence on the global stage.
At the same time, a common currency could enable BRICS nations to bolster their own local currencies, challenging the dollar in foreign exchange markets.
BRICS nations are also looking to move away from the dollar to diminish the impact of financial sanctions from the West, as was recently seen when the Western financial system SWIFT cut off Russia following its activities in Ukraine in 2022. Nearly half of all of Russia’s foreign currency reserves were frozen. Later the same year, the U.S. restricted exports of semiconductor technology to China.
A senior visiting fellow at the London School of Economics, Shirley Ze Yu, told Al Jazeera: “As the US weaponises the dollar in the Russian and Iran sanctions, there is increasing desire by other developing countries to seek alternative currencies for trade, investment, and reserves, as well as developing alternative multilateral clearance systems outside of SWIFT.”
As BRICS continues to expand its footprint, it is just a matter of time before the dollar is knocked off its throne.
Sources for this article include: