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A12 business
Monday 21 august 2023

Emerging economies are pushing to

end the dollar's dominance

By CHINEDU ASADU, GER-
ALD IMRAY, FARAI MUT-
SAKA and PAUL WISEMAN
Associated Press
ABUJA, Nigeria (AP) — Busi-
ness has vanished at King-
sley Odafe's clothing shop
in Nigeria's capital, forcing
him to lay off three employ-
ees.
One culprit for his troubles
stands out: The U.S. dollar's
strength against the Nigeri-
an currency, the naira, has Tattered $1 U.S. bills are shown at a market in Harare, Zimbabwe,
pushed the price of gar- on Oct, 21, 2020.
ments and other foreign Associated Press
goods beyond the reach
of local consumers. A bag have, however, discussed "Developing nations are
of imported clothes costs expanding trade in their itching to loosen the grip of
three times what it did two own currencies to reduce Western dominance and
years ago. The price these their reliance on the buck. open the door to a new
days is running around At a meeting of BRICS world order where the East
350,000 naira, or $450. foreign ministers in June, commands equal, if not
"There are no sales any- South Africa's Naledi Pan- greater, influence," said
more because people dor said the bloc's New De- Martin Ssempa, a Ugan-
have to eat first before velopment Bank will seek dan political activist who
thinking of buying clothes," alternatives "to the current has defended a law Ugan-
Odafe said. internationally traded cur- da passed this year pre-
Across the developing rencies" — a euphemism scribing the death penalty
world, many countries for the dollar. Pandor was for some homosexual acts.
are fed up with America's sitting alongside Russia's The legislation prompted
dominance of the global fi- Sergey Lavrov and China's the World Bank to an-
nancial system — especial- Ma Zhaoxu — representa- nounce this month that it
ly the power of the dollar. tives of two countries that was halting new lending to
They will air their grievanc- are especially eager to the East African country.
es next week as the BRICS weaken America's interna- Critics in the developing
bloc of Brazil, Russia, India, tional financial clout. world are especially un-
China and South Africa The BRICS grouping dates easy about America's will-
meet with other emerging to 2009. Originally, it was ingness to use the dollar's
market countries in Johan- just BRIC, a term coined by global influence to impose
nesburg, South Africa. Goldman Sachs economist financial sanctions against
But griping about King Jim O'Neill to refer to the adversaries — as it did to
Dollar is easier than actu- rising economies of Brazil, Russia after the invasion of
ally deposing the de facto Russia, India and China. Ukraine last year.
world currency. South Africa joined in 2010, They also complain that
The dollar is by far the most- adding the "S" to the name. fluctuations in the dollar
used currency in global More than 20 countries — can destabilize their econ-
business and has shrugged including Saudi Arabia, Iran omies. A rising dollar, for
off past challenges to its and Venezuela — have ex- instance, can cause chaos
preeminence. pressed interest in joining abroad by drawing invest-
Despite repeated talk of BRICS. In 2015, the BRICS ment out of other coun-
the BRICS countries rolling countries launched the tries. It also increases the
out their own currency, no New Development Bank cost of repaying loans de-
concrete proposals have — an alternative to the U.S. nominated in dollars and
emerged in the run-up to and European-dominated buying imported products,
the summit starting Tues- International Monetary which are often priced in
day. Emerging economies Fund and World Bank. dollars.
Kenyan President William
Ruto has grumbled this
year about Africa's depen-
dence on the dollar and
the economic fallout from
its ups and downs, while
the Kenyan shilling plunges
in value. He's urged African
leaders to join a fledgling
pan-African payments sys-
tem that uses local curren-
cies in a push to encour-
age more trade.q