Brics can solve our problems

YOU read of Brics first in this space last year.
It was then only a fledgling economic alliance of the most unlikely partners.
There was Brazil, Russia, India, China and South Africa (Brics ).
It was an unimaginative and limiting name because it did not provide for more nations joining or that more nations would mean an ever-changing name which would be getting longer and longer with each addition.
And the membership has changed – incredibly fast but the name remains.
As of Jan 1 this year, Egypt, Ethiopia, Iran, and the United Arab Emirates were invited and they have joined.
With the addition of Saudi Arabia last Wednesday, the group now controls 47 per cent of the world’s oil supply.
Brics now holds 45 trillion dollars in combined wealth. With that the bloc is said to have surpassed the western G7’s combined wealth.
Thirty-four countries are now said to be queuing up to join.
We urge Papua New Guinea to seriously consider membership of Brics .
Brics is an economic alliance with one major agenda – that is to move away from the US dollar monopoly as a currency of choice in international trade.
While it might have had its uses in the past, in the last decade, the PNG economic suffered much in the shortage of the green buck.
Try as we might, shortage has never been alleviated and it seems a semi-permanent glitch.
Brics economies are now conducting trade using their own currencies, and it seems a tempting offer in light of PNG’s present plight.
How much better would that be for PNG, which has faced constant US foreign dollar shortage for close to a decade now.
There will obviously be pitfalls in such a policy shift, but such a shift would not mean a total abandonment of the dollar.
Trade with non-Brics nations would still be done using the dollar.
Even with Brics members, one can still use the dollar.

“The difficulty lies not so much in developing new ideas as in escaping from old ones.” – John Maynard Keynes

What membership would do is to give PNG a choice that it does not presently have.
Today, persistent Forex shortage has a stranglehold on PNG’s economy.
If PNG could trade with China or India or Indonesia using the Kina, or that country’s currency, it would be so much easier.
With certain currencies, the gains in conversion might be huge.
Proceeds of trade would be brought onshore immediately. The benefits to the nation would also be immediate in other ways as well.
PNG does not need to fret over its bilateral relationship with the United States of America.
This would be a purely commercial decision in PNG’s best interest.
It is the same as membership to APEC or any other organisation.
There might be gains in other ways as well from joining Brics .
With Saudi Arabia formally joining Brics last week the alliance now controls 47 per cent of the world’s oil while the US holds only 2.1 per cent.
If the alliance demands developing countries to pay in local currencies, the US dollar will be the hardest hit.
That might drive up us dollar prices for fuel.
Fuel shortage, as we know, which is attached to Forex shortage, is another of this country’s big problems.
It promotes economic cooperation, trade and investment among member countries.
It also allows for sharing knowledge, technology and expertise.
It also gives countries a platform to address global issues together.
So, if the economic brains in Government and the Central Bank could give this proposal a wee bit of thought, it would be a most useful exercise.