10 hrs ago
Vince Cable Says BRICS Is Challenging Dollar Dominance
Vince Cable says India will not become another China in exactly the same way.
China grew by making many goods and selling them to wealthy countries.
Cable says that path is harder now because Western countries are more protective of their own industries.
He believes India’s democracy can make change slower, but it also helps leaders hear when policies are failing.
He says China moved earlier and more strongly on reforms, education, land reform and international trade.
India has a smaller share of global manufacturing but may benefit as services and data become more important.
Cable also says India is building relationships with several major powers instead of relying on one country.
BRICS countries are creating new ways to make payments without always using the US dollar.
He thinks this may weaken the dollar’s role in payments slowly, but not replace it as a reserve currency soon.
Vince Cable says India cannot replicate China’s export-led industrialisation because Western economies are more protectionist.
He argues Indian democracy slows major reforms but provides feedback that can improve policymaking.
Cable attributes China’s lead to earlier, deeper reforms, land reform, education and stronger engagement with trade and foreign investment.
He says India’s multi-alignment is adapting to an increasingly unreliable United States while preserving ties with Russia and others.
Cable argues BRICS payment initiatives are gradually reducing the dollar’s role in global payments, though no replacement reserve currency is imminent.
- Who
- Vince Cable, a former UK Cabinet minister, was interviewed by Scroll about India, China and the changing international order.
- What
- Cable argues that China’s development model cannot be repeated by India and that BRICS payment arrangements are challenging the dollar’s dominance.
- Where
- The discussion concerns India, China, the United States and the wider global economy; it was published by Scroll.
- When
- The interview’s exact date is not specified; it refers to a recent BRICS Summit and the last 12 years of Narendra Modi’s government.
- Why
- Cable says protectionism, changing trade patterns, geopolitical uncertainty and sanctions are encouraging countries to develop alternatives to dollar-based payments.
Cable’s Assessment
Qualifications and Counterpoints
Democracy and reform speed
Cable’s Assessment
Indian democracy can delay rapid and difficult reforms because governments face political opposition.
Qualifications and Counterpoints
Cable argues democracy also creates a feedback loop, allowing leaders to learn when policies are going wrong, and may prove stronger over time.
India’s economic future
Cable’s Assessment
India missed the opportunity to copy China’s export-led manufacturing model because China already captured that path and Western markets are becoming more protectionist.
Qualifications and Counterpoints
Cable says India may benefit from the growing importance of services and data, while China’s manufacturing dominance becomes a less valuable advantage.
Challenge to the dollar
Cable’s Assessment
BRICS payment initiatives and arrangements involving countries such as India, the United Arab Emirates, Saudi Arabia and China could gradually reduce US leverage over global payments.
Qualifications and Counterpoints
Cable says no alternative currency is likely to replace the dollar as a store of reserves in the near future.
Key facts
- China’s manufacturing share
- About one-third of global manufacturing by value added, according to Cable.
- India’s manufacturing share
- About 3% of global manufacturing by value added, according to Cable.
- China’s reform period
- Deng Xiaoping’s major market-led reforms began about 10 years before India’s major reforms.
- India’s economic framework
- Cable says Narendra Modi’s government broadly retained the framework inherited from the Manmohan Singh era.
- BRICS payment efforts
- Member countries are pursuing cross-border payment arrangements, including bilateral and other specific schemes.
- Dollar outlook
- Cable says the dollar’s role in global payments is gradually weakening, while its role as a reserve currency remains difficult to replace.
- Globalisation
- Cable says goods trade has slowed and shifted between markets, while services trade and data flows have been less affected.
Quotes
Vince Cable
Author and former UK Secretary of State for Business, Innovation and Skills
“What BRICS [an international organisation comprising Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, Saudi Arabia, South Africa and the UAE] has done is act as a catalyst for attempts to break the dollar’s hegemony.”
scroll.in
“But in terms of payments, the grip of the United States through the dollar on global payments is slowly but gradually diminishing thanks to these innovative schemes which are being developed amongst the BRICS countries.”
scroll.in
Sources
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