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BRICS at a Historical Turning Point: Unexpected Challenges



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By  Timofey Bordachev

The BRICS group (Brazil, Russia, India, China, South Africa) was created in conditions where the universal power of the West had already entered a period of slow decline, but few had any doubts that the United States and Europe would be able to determine the main characteristics of the world economy and international politics for a long time. Globalisation and the system of international institutions created with their vigorous participation were still coping, on the whole, with their tasks, and there were not enough obvious prerequisites and reasons for their landslide collapse. In fact, it was globalisation and the international institutions created by the West that determined the “packaging” of the international order, centred around the wealth accumulated over several centuries and the military and political capabilities of its founders.

The main systemic characteristic of BRICS is that it is a community of revisionists, i. e. powers that did not set as their goal the destruction of the world order, but sought to achieve the inclusion of their interests in this order. All its participants were able to extricate themselves from their previous plight thanks to the opportunities that the unjust international order led by the West gave them. All of them grew at the expense of resources, although they were dramatically curtailed in the realisation of their basic interests and values. Finally, none of the BRICS countries has plans to forcibly change the existing order of things, as revolutionary France, Germany and Japan have tried to do at one point or another over the past 250 years.

However, as contradictions accumulated in the world, even the modest revisionist wishes of the BRICS members became a factor that is leading, if not to the destruction of the existing international order, then to its most fundamental restructuring. Accordingly, the expectations regarding the BRICS countries are being shaped by their main partners, as well as opponents to their rise. Many countries throughout the world are now looking at the BRICS as a group that can, if not pick up the banner of global governance from the West, then at least become its second pillar; one that is more just and less selfish in relation to the small and medium-sized states of the world. In other words, expectations about the role of the BRICS in world affairs are shaped independently of the will of the participants in this group: they become the product of the evolution of the entire international order in a direction whose main features we have yet to witness.

The most striking manifestation of such hopes is the numerous ideas about expanding the BRICS by including new states. A list of countries has already been formed — candidates for joining the group, some of which look like real heavyweights. But in order to move forward in understanding how the BRICS’ contribution to new global governance can truly be decisive, we need to ask ourselves a few questions. First, can the BRICS group maintain internal unity in an era when even the strongest international partnerships are being severely challenged? Second, is it possible in the current circumstances for the BRICS to maintain the revisionist nature of their behaviour in relation to the order that was created with their minimal participation and, in part, at the expense of their interests?

No one can doubt that the decisive influence of the BRICS in the shaping of the main aspects of the global agenda will make the world more just and stable. Russia, which assumes the chairmanship of the group in 2024, can set this as one of its main general political goals. Such a contribution is virtually inevitable, simply because the BRICS countries are not parasitic powers whose success and achievements depend on the ability to get the rest of the world to serve their interests. Their economic opportunities and political influence aren’t grounded in a history of bloody wars, conducted with the purpose of establishing regional and global dominance. On the contrary, it was through wars — within itself and with those around it — that the modern community of Western countries, has created “its own” international order.

However, in order to fully realize the BRICS mission, this association will very likely have to answer the aforementioned questions, regarding its own destiny. We cannot ignore the fact that all the experience of strong institutions and global governance is the experience of the West, i.e. a community united by common values and, most importantly, interests in relation to the surrounding world. This is what allows them to stick together and be relatively effective in opposing the rest of humanity. Only forceful dictate of the US against its main allies would not be enough. It certainly plays an important role, but it cannot be the only fundamental factor. In the centre are the interests and values that led to the situation of the impossibility of any serious internal conflicts among the countries of the West.

Unlike the US and Europe, the BRICS community is not based on the idea of exploiting other countries and regions. The political systems of its members do not come from a single source, as is certainly the case of Europe and the United States. Moreover, the different civilizational foundations of the BRICS countries directly prevent them from creating an association whose internal discipline would be comparable to the West. Therefore, any observer can now question the ability of the BRICS to set the world agenda in the same way as the G7 countries have been doing for decades. The BRICS members may yet have to figure out how they can respond to the expectations of the international community, which has come to expect the dictatorship of the West and the patronage of Brazil, Russia, India, China and South Africa. The BRICS are already establishing concrete ways of contributing to the formation of the agenda for the whole world, and there are obvious achievements. However, as the ability of the United States and Europe to indicate the direction of movement to everyone collapses, the demand for clear support from the BRICS will only increase.

This means that the member countries of the group may, theoretically, face some challenges to their unity. Forming an alternative agenda to the dictates of the West is one thing, but creating ways to solve global development and security problems for the whole world, or at least for the countries of the World Majority, may turn out to be a more difficult task. In the near future, the BRICS may be required to be able to offer others new tools to address their core development problems, which means that the group’s degree of unity on key issues will need to go beyond weighty political statements.

An equally serious issue may be the preservation of the nature of the BRICS as a community aimed not at destroying the existing world order, but at improving it for the better. This is what makes it revisionist, and not revolutionary in terms of the intentions of the participating countries and the tasks that they set for themselves. The BRICS countries do not want the collapse of globalisation, institutions and international law. This means that their task is more complex: to create within the existing order such rules, norms and ways of cooperation that would allow for the preservation of its advantages and the elimination of its shortcomings. That revision, and not revolution, is the goal of the BRICS countries, the basis for the sustainability of this association and its relations with other countries of the World Majority. Preserving this nature is completely within the interests of the BRICS member countries and the entire international community. The alternative can only be a split in the group and the continuation of the power of that narrow group of countries, to counteract whose egoism the BRICS was created.

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Inquiry on General Babangida’s Involvement in Conventional Banking despite Introduction of Islamic Finance in Nigeria




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Dear Editor,

I hope this letter finds you well. I am writing to express my curiosity and seek clarification on a matter that has caught my attention, specifically pertaining to General Babangida’s involvement in the conventional banking industry despite his role in introducing Islamic finance during the financial reforms of his military government in Nigeria. Vide your special article commemorating his 81st Birthday published in your esteemed news website:

It is indeed noteworthy that General Ibrahim Babangida played a pivotal role in shaping the economic landscape of Nigeria by introducing Islamic finance principles. It is fascinating to witness the implementation of Islamic finance in Nigeria, as it promotes principles that align with religious and ethical values. General Babangida’s efforts to introduce this form of finance were undoubtedly commendable, reflecting his commitment to establishing an alternative financial system that adheres to Islamic principles.

However, recent observations suggest his active participation in the conventional banking sector in Nigeria. Certainly, it is intriguing to see General Babangida’s continued involvement in the conventional banking industry, which operates under different principles. While some may argue that his involvement in both sectors is simply a matter of personal choice, it raises questions about the compatibility of his actions with the ideals and principles of Islamic finance. While the former is interest driven, the latter prohibits interest related transactions completely.

I wonder if General Babangida has ever publicly addressed this matter or explained his reasoning behind being active in both sectors. It would be enlightening to hear his perspective on how he reconciles his involvement in conventional banking with his efforts towards promoting Islamic finance. This has raised questions in my mind and perhaps in the minds of others as well.

I am keen to understand the rationale behind General Babangida’s dual engagement in both Islamic finance and conventional banking. Does this reflect a strategic approach to diversify Nigeria’s financial sector, or are there specific reasons behind his involvement in conventional banking despite advocating for Islamic finance principles?

Additionally, it would be interesting to explore the potential impact of his dual involvement on the perception and growth of Islamic finance in Nigeria. Does his presence in the conventional banking industry hinder the progress of Islamic finance, or does it have the potential to bridge the gap between the two sectors?

I believe that delving into these questions could provide valuable insights and generate constructive discussions within the Islamic finance community in Nigeria. By shedding light on General Babangida’s dual involvement and the potential implications, we can further enhance our understanding of the challenges and opportunities faced by the Islamic economy in our country.

Thank you for considering my questions, and I look forward to reading more about this topic in your esteemed Focus on Islamic Economy.



Abba Musa Mamman Lagos


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10 Megatrends Shaping the World in 2024




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The report, “Navigating Megatrends Shaping Our Future in 2024”, was launched during the first day of the World Governments Summit (WGS) 2024, being held under the theme “Shaping Future Governments” from 12th-14th February in Dubai. The report examines the indicators that shape these megatrends, supported by evidence from today as well as future expectations. These trends inform decision-makers and foresight experts about various sectors and the potential opportunities in each.

Khalfan Belhoul, CEO of Dubai Future Foundation, said, “This report has been launched in line with DFF’s efforts to identify and communicate those trends with the most potential to shape opportunities and strengthen local and international partnerships to overcome current and future challenges.”

“The challenges that face us on our journey to the future require that we are agile enough to be able to adapt to rapid change. It is vital we pay attention to the signals we detect – only then can we be prepared to overcome challenges and seize opportunities. The World Governments Summit provides a platform for discussing these challenges and exploring the opportunities.”

Materials revolution

New types of materials will create a shift in the industry, with solutions based on artificial intelligence (AI) such as biopolymers, biorefineries, and chemical recycling paving the way. These solutions will facilitate the development of new biological and novel materials that could rival plastics.

Boundless Multidimensional Data

Enabled by developments such as 5G and 6G in addition to advanced connectivity, the availability of raw data will vastly increase. The Internet of Things (IoT) will continue being deployed in healthcare, agriculture, and smart cities, especially in the Middle East.

Technological Vulnerabilities

The cybersecurity sector will boom amid a sharp rise in smart home devices and wearable tech. According to a report by Allianz, the annual cost of ransomware is projected to reach around $265 billion by 2031. Meanwhile, the debate on the future of decentralised finance will continue.

Energy Boundaries

Advances in tech and the growing demand for energy will drive the pursuit of alternative sources of energy. Novel materials and machine intelligence will enhance current sources of energy, including their distribution around the world – and in space.

Saving Ecosystems

Approaches to conservation will be more interdisciplinary and future-focused, taking into account both societal and environmental factors. Driven by resource scarcity, climate change, and shifts in social values, environmental impact management will become increasingly holistic.

Borderless World – Fluid Economies

The world is witnessing a rise in unmediated transactions in finance, health, education, trade, services, and even space, which are blurring boundaries and creating more cross-border communities. Advances in communications, computing, and advanced machine intelligence will accelerate the creation of a borderless world that will change the way we work, live, and connect.

Digital Realities

The spread of 5G and 6G networks will enhance the applications of autonomous technologies and IoT. As quantum technologies become scalable and reliable, immersive experiences will become even more realistic.

Living with Autonomous Robots and Automation

Robotics and automation will increasingly be deployed across industries beyond automotive, manufacturing and supply chain logistics. This will provide opportunities for efficiency and innovation, although there will also be ethical challenges to address.

Future Humanity

New workplace norms will emerge, with people needing to adapt to non-traditional skill sets in areas such as digital literacy, communications, culture and sustainability.

Advanced Health and Nutrition

Accelerated progress in advanced machine intelligence, nano- and biotechnology, additive manufacturing, and IoT will transform health and nutrition, improving health and wellbeing for people of all ages. Technology will reduce, if not eradicate, some communicable and non-communicable diseases and enhance the sustainable use of and access to water and food.

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Africa’s New Online Foreign Exchange System will Enable Cross-border Payments in Local Currencies – what you need to know




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The high cost of making cross border payments on the African continent has driven governments on the continent to seek options of settling trade and other transactions in local currencies. This has given birth to the Pan-African Payment and Settlement System which was formally launched in Accra, Ghana, in January 2022.  Development economist Christopher Adam, who has studied the exchange rate policies of African countries, answers some key questions.

Why are African countries exposed in the international currency market?

Three main reasons. First, African economies are small and as such are highly dependent on trade with the rest of the world. Their exports are dominated by primary commodities including oil and gas, minerals and cash crop agriculture. On the import side, they purchase a whole range of goods – from essential commodities not produced at home such as fooddrugs and medicines, to capital goods and energy. A large proportion of these are sourced from China and other major economies of the global north. But because African countries are small relative to their trading partners they rarely have the power to determine the prices of imports and exports. They are “price takers” in world markets. And with world prices being set in the major reserve currencies of the world (the US dollar, euro, yen and renminbi), African countries are exposed to movements in these world prices. Second, “intra-African” trade is still a relatively small proportion of the total trade of African countries.

Finally, since African countries’ currencies mostly can’t be directly exchanged in international transactions, the dollar remains the most widely used currency in trade, even between African countries.

What’s required for the system to get off the ground?

The basic idea of the system is to be able to settle trade between African countries without having to use the US dollar.  There are two major challenges with that. First, intra-African trade accounts for less than 15% of Africa’s exports at present (although supporters of the African Continental Free Trade Area expect this to grow significantly over the coming decades). The African payment system therefore does not eliminate the role of the dollar (or other foreign currencies) in trade settlement entirely.

The second issue is that trade is not balanced between African countries. For example, Kenya exports goods of higher total value to Ethiopia than it imports from Ethiopia. If Ethiopia paid in its own currency, Kenya would end up with Ethiopian currency that it didn’t need. Some form of settlement currency that is acceptable to all is required – most likely the US dollar.

What are the challenges and potential risks?

Since trade rarely occurs instantaneously, some institution in the trade financing chain carries the exchange rate risk. Because of the gap between placing an order for imports and receiving them to sell in the local economy, there is a risk that the value of local currency will change relative to the currency in which the import is denominated.

In the “old” system, this risk is borne by the trader because everything is priced in dollars. The local currency value of the income from exports or the local currency cost of imports will change with movements between the local currency and the dollar, but the banks and those counterparts pricing in the dollar are protected.

Under the new system the same allocation of risk will remain in “external trade”. This currency risk is also present for intra-African trade.

An important question for the new African payment system is: who bears the exchange risk if one African currency depreciates relative to another? Should the importer carry the risk, or the exporter? Can and should the African payment system bear this risk of exchange rate movements itself? Where both currencies are volatile, traders might still prefer the relative stability of settlement through the US dollar.

The success of this system also depends on scale. The more trade settlement is routed through it, the easier it will be to settle in local currencies. Large currency imbalances will be less common. But until the system achieves this scale, the African payment system will need a strong balance sheet so that traders and participants can have confidence that settlement will be swift and risk free. It is unclear at the moment how this is to be achieved.

What is the best case scenario?

If the system can address the trade imbalance problem, provide clarity on risk management and reach scale, it could be very successful. But this is all going to be driven by underlying economic performance. Improved settlement will help but what is really driving this is the structure of trade. The more the economies of Africa can develop intra-African trade and the less dependent they are on extra-African trade, the less will be dollar dependence in trade. This growth in trade depends to some degree on trade settlement and trade financing but much more on production, consumption, trade policy and fiscal policy.

Christopher Adam is a Professor of Development Economics, University of Oxford

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