Wednesday, May 29, 2024

Bolivian President Proposes Abandoning US Dollar and Forming Stronger Ties with China and BRICS

Bolivian President, Luis Alberto Arce Catacora (known as Lucho Arce), has proposed that the member and associated nations of the Mercosur trade bloc should consider de-dollarization and fortify strategic partnerships with international entities, including the BRICS bloc. “We stand at a pivotal point transitioning towards a multipolar world that ensures a balance of power and upholds the non-interference principle,” he underlined.

Bolivia Advocates for Shift Away from US Dollar at Mercosur Summit

At the 62nd Summit of Heads of State of Mercosur and Associated States held in Puerto Iguazú, Argentina, President Lucho Arce urged the group to contemplate the benefits of moving away from the US dollar and prioritizing stronger alliances with global organizations, such as the BRICS economic bloc.

The Southern Common Market, or Mercosur, is a South American trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay as full members. Venezuela was a full member from 2012 until it was indefinitely suspended in late 2016. Bolivia, alongside Chile, Colombia, Ecuador, Guyana, Peru, and Suriname, is an associate member of Mercosur, with Bolivia currently working towards gaining full membership.

Several key leaders were present at the summit, including Argentina’s President Alberto Fernández, Brazil’s President Luiz Inácio Lula da Silva, Uruguay’s President Luis Lacalle Pou, and Paraguay’s President Mario Abdo Benítez. President-elect Santiago Peña of Paraguay was also present, alongside Bolivia’s own president.

In a concluding tweet on Tuesday, President Arce highlighted the negative impact of restrictions placed by the northern financial system, which limit financing options and necessitate a reduction in reliance on the U.S. dollar and a diversification of economic relationships.

He further urged the seeking of strategic partnerships with other global actors like China, as well as other BRICS countries and potential integration mechanisms, all of which he sees as providing the foundation for a new global economic order. The BRICS nations include Brazil, Russia, India, China, and South Africa.

On the topic of Bolivia transitioning to a full member of Mercosur, President Arce stated: “Bolivia’s accession to Mercosur offers an unparalleled opportunity to bolster integration, expand commerce, and foster regional cooperation.” He reiterated that the world is in a crucial phase of transitioning to a multipolar system that safeguards the balance of power and respects the principle of non-interference.

As Brazil took over the rotational presidency of Mercosur on Tuesday, the Bolivian leader expressed optimism for Brazil’s leadership. He noted, “We are confident that under President Lula’s unifying vision, Mercosur will continue to make progress and address the immense challenges that our era presents.”

Lula has been a vocal supporter of abandoning the U.S. dollar and using national currencies in trade settlements. He also backs the creation of a common BRICS currency. Last month, he disclosed his plans to discuss de-dollarization at the forthcoming BRICS meeting.

What are your thoughts on the Bolivian President’s proposal for South American nations to move away from the U.S. dollar and reinforce alliances with China and the other BRICS countries? Please share your views in the comments section below.

Frequently Asked Questions (FAQs) about De-dollarization

What is Bolivia’s President’s proposal to the Mercosur nations?

Bolivia’s President, Luis Alberto Arce Catacora, proposes that the member and associated nations of the Mercosur trade bloc should consider de-dollarization and fortify strategic partnerships with international entities, including the BRICS bloc.

What does de-dollarization mean?

De-dollarization refers to the process of reducing dependence on the U.S. dollar in international trade and finance, and diversifying economic relationships with other global actors.

What is the Mercosur trade bloc?

The Mercosur, or Southern Common Market, is a South American trade bloc comprising Argentina, Brazil, Paraguay, and Uruguay as full members. Associate members include Bolivia, Chile, Colombia, Ecuador, Guyana, Peru, and Suriname.

Who are the BRICS countries?

The BRICS nations consist of Brazil, Russia, India, China, and South Africa.

What is President Luiz Inácio Lula da Silva’s view on de-dollarization?

President Luiz Inácio Lula da Silva of Brazil supports the idea of abandoning the U.S. dollar and using national currencies in trade settlements. He also backs the creation of a common BRICS currency.

More about De-dollarization

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