The idea of ​​the BRICS group continuing to challenge the U.S. dollar is a fantasy as long as China and India remain so divided and refuse to cooperate on trade, the former Goldman Sachs economist who coined the acronym BRIC.

Russian President Vladimir Putin is using the BRICS leaders’ summit to show that Western attempts to isolate Russia over the war in Ukraine have failed and that Russia is building ties with Asia’s emerging powers.

Jim O’Neill, then chief economist at Goldman Sachs, introduced the term BRIC in 2001 in a research paper, which highlighted the massive growth potential of Brazil, Russia, India and China – and the need to reform global governance to include them.

“The idea that BRICS can be a truly global economic club is obviously a bit of a fantasy in the same way that the G7 can be, and it’s very worrying that they see themselves as some kind of alternative global thing , because it’s obviously not feasible,” O’Neill told Reuters.

“It seems to me that this is essentially a symbolic annual gathering where important emerging countries, particularly noisy ones like Russia, but also China, can come together and emphasize how good it is to do part of something that does not involve the United States and that global governance is not enough.”

O’Neill, who admitted he would “have Mr BRICS etched on my forehead forever”, said BRICS as a group had achieved very little in the past 15 years.

He added that it was not possible to solve truly global problems without the United States and Europe – just as it was not possible for the West to solve truly global problems without China, l India and, to a lesser extent, Russia and Brazil.

The BRICS group emerged from meetings between Russia, India and China, which then began to meet more formally, eventually adding Brazil, then South Africa, Egypt, Ethiopia, Iran and the United Arab Emirates. Saudi Arabia has not yet officially joined.

The group now represents 45% of the world’s population and 35% of its economy, based on purchasing power parity, although China accounts for more than half of its economic power.

Putin opened the summit Wednesday by saying that more than 30 states had expressed interest in joining the group but that it was important to strike a balance in any expansion.

Attracting more members into BRICS would make achieving all this even more difficult, O’Neill said.

A DOLLAR CHALLENGE?

Russia is seeking to convince BRICS countries to build an alternative platform for international payments, sheltered from Western sanctions.

O’Neill, 67, said people had been talking about alternatives to the dollar since his early days in finance, but none of the countries with the potential to challenge the dollar had done anything to do so seriously. .

Any BRICS currency, he added, would be heavily dependent on China, while Russia and Brazil would not constitute a significant part, he added.

“If they wanted to be really serious about economic issues, why aren’t they actually looking to reduce tariffs between them?” » said O’Neill.

“I will take the BRICS group seriously when I see signs that the two countries that really matter – China and India – are actually trying to agree on things, rather than trying to fight each other permanently.”

India has tried to curb Chinese investment in the country since a decades-old border dispute erupted into a clash between border guards in 2020. The two countries pledged Wednesday to strengthen cooperation in their first negotiations formal in five years.

Chinese President Xi Jinping told Putin that the international situation was in chaos, but that the strategic partnership between Beijing and Moscow was a force for stability amid the most significant changes seen in a century.

O’Neill said the G20 had failed to become a nerve center of true global governance because the United States and China had both turned inward since the middle of the last decade.

BRICS, he said, lack clear objectives and should tackle major problems for humanity, such as the search for vaccines or drugs against infectious diseases, or the fight against climate change.