As Saudi Arabia eyes entry into the BRICS group of nations, there are fears that the kingdom’s vast oil reserves alongside China’s economic power could be a blow to the US dollar. But past experiences in Pakistan, along with the yuan’s peg to the dollar, indicate these concerns may be overblown.
Soon after Saudi Arabia formally joined the Shanghai Cooperation Organization (SCO) as a dialogue member in late March, it now appears Riyadh will be participating in the upcoming BRICS summit this August in an effort to formalize its inclusion in the economic bloc.
Consisting of Brazil, Russia, India, China and South Africa, the BRICS group of nations requires the consensus of present members to admit new states. Having elicited the interest of countries like Turkey, Egypt, Iran, UAE and Saudi Arabia, the consortium seems set to grow into a global powerhouse.
Ever since the news last month that Riyadh is considering accepting yuan as a currency to price some oil sales to China, the perception that Saudi Arabia’s participation in BRICS would be a gamechanger for the existing economic system has received fresh impetus.
