Fragmented Globalisation - An Economic Oxymoron
by Janice Goh
Globalisation has made distance increasingly irrelevant. A consumer in China can effortlessly purchase a can of Coca-Cola produced in the United States, while a migrant worker in Singapore can instantly send remittances home to the Philippines. Geography no longer limits our economic interaction. Yet beneath this surface of integration, cracks are emerging between Western-led economic systems and the rising BRICS+ bloc. This article examines the BRICS+’s attempt at de-dollarisation as evidence for this fragmentation and what it means for the future of the global economy.
What is BRICs?
What began as a simple acronym—Brazil, Russia, India and China (BRIC)—has since evolved into a significant international grouping. Now expanded into BRICS+, the bloc includes emerging economies such as Egypt, Iran, Saudi Arabia, and the United Arab Emirates. With ten member states, BRICS+ represents roughly 45% of the world’s population and around 35% of global GDP (measured in purchasing power parity). It also encompasses a two-fifth share of global trade, particularly in energy, with members accounting for both major production and consumption.
Despite its growing economic weight, BRICS remains an informal institution. Its members are united by a shared objective: to strengthen cooperation among the Global South and push for a more inclusive and equitable system of global governance. In doing so, BRICS signals a potential shift in the international economic order—one that seeks to amplify the voice of emerging economies while challenging the dominance of Western-led institutions.
In this sense, BRICS+ is not merely an economic group, but a reflection of an increasingly polarised and fragmented globalised world.
Economic Fragmentation and De-dollarisation
At the 2023 BRICS summit in Johannesburg, member states broached the possibility of introducing a gold-backed digital currency to challenge the dominance of the U.S. dollar and enhance financial sovereignty. While still speculative, the proposal underscores a broader push towards de-dollarisation, whereby reliance on the U.S. dollar is reduced in favour of local currencies or alternative financial arrangements.
At present, the U.S. dollar remains the dominant medium for cross-border trade. This dominance stems partly from the lack of direct exchange markets between many emerging market currencies, making the dollar a necessary intermediary. For instance, a business seeking to exchange Indian rupees for Brazilian reais typically must first convert rupees into U.S. dollars before exchanging those dollars into reais. In addition, the dollar plays a central role in pricing and settling global commodities, particularly oil. For energy-rich BRICS+ economies such as Russia and Saudi Arabia, this entrenches the dollar’s structural importance in international trade.
Yet recent geopolitical developments have intensified efforts to move away from dollar dependence. Following Russia’s invasion of Ukraine, U.S. and European sanctions froze Russian central bank reserves and cut off several banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), the dominant global financial messaging system. This effectively excluded Russia from key international financial channels. As South Africa’s president observed, “global financial and payment systems are increasingly being used as instruments of geopolitical contestation.” In response, emerging economies are seeking to “disaster-proof” their financial systems by reducing reliance on dollar- and euro-based infrastructure, instead pursuing greater monetary and institutional autonomy.
In line with this objective, BRICS+ countries have accelerated the development of alternative financial systems. Most notably, China’s Cross-Border Interbank Payment System (CIPS) offers a partial alternative to dollar-dominated payment networks. By 2023, approximately thirty Russian banks had joined CIPS as indirect participants. Similarly, Russia has developed the System for Transfer of Financial Messages (SPFS), an alternative to SWIFT. These developments facilitate greater use of local currencies, particularly the renminbi, and signal the emergence of parallel financial infrastructure. Together, they point toward a gradual fragmentation of the global financial system, in which alternative networks coexist alongside Western-led institutions.
Challenges to De-dollarisation
Despite the push towards de-dollarisation, a unified challenge to dollar hegemony remains a distant prospect. The primary constraint lies in the lack of alignment among BRICS+ members.
In relation to the Western world, BRICS+ members exist along a spectrum—from anti-Western countries such as Russia and Iran, to more neutral actors like India and Brazil. This diversity of political and economic priorities creates an uneven push for de-dollarisation. While Russia and China have actively developed alternatives to Western financial institutions, other members remain cautious.
Notably, India stands out as a vocal sceptic of de-dollarisation. As the U.S. dollar denominates a significant proportion of global public and private debt, central banks continue to hold substantial dollar reserves to service liabilities and stabilise domestic currencies. In this sense, the U.S. dollar functions as a cornerstone of international economic stability. As India’s External Affairs Minister Subrahmanyam Jaishankar noted, reducing dependence on the U.S. dollar introduces hurdles that may undermine economic stability. Such views underscore the divergence of economic perspectives within BRICS+ on de-dollarisation.
These disparities are further compounded by external pressures. During the wave of tariffs imposed by President Trump in 2025, BRICS+ countries were threatened with tariffs of up to 100% should they proceed with de-dollarisation. In response, members wavered in their stance. For instance, Brazilian President Luiz Inácio Lula da Silva ultimately dropped the proposal for a common BRICS currency from Brazil’s 2025 presidency agenda, opting instead to promote trade in local currencies.
Taken together, these factors highlight the internal divisions within BRICS+, limiting the traction required for a fully coordinated de-dollarisation strategy.
Conclusion
While BRICS+’s push toward de-dollarisation reflects a gradual shift toward a more multipolar financial order, the enduring dominance of the U.S. dollar suggests that globalisation is not being replaced, but reconfigured. Rather than a singular system, the global economy may evolve into one characterised by the coexistence of parallel financial frameworks. This raises an important question for the future: not whether one system will replace another, but how these competing systems will coexist and what this means for global economic stability.
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