Topic: Common Currency for Brazil and Argentina: Africa Why? (Read 173 times)

It can actually be a good idea for neighboring countries to come together under a common currency because it does bring down so many barriers to trade and generally you will make a lot of trade with those around you. You can share things like tourism much easier and in a wider sense you are likely to bring down other barriers like border controls which slow down business plus leisure. However it works best when the economies are similar, but you will inevitably have certain countries in the group that are weak and some who are strong. The weak ones gain some credibility while the strong ones have the power of their currency weakened slightly, which is good when they're trying to export. However it takes a lot of preparation and unless it's managed well it can go badly wrong.

Africa's main problem is corruption, its second problem is also corruption and the third is corruption. Note that eight African countries already have a single currency called the West African CFA franc, yet Togo, Niger, Burkina Faso, Senegal Benin, Côte d'Ivoire, Guinea-Bissau, and Mali are some of the poorest in the world.

A common currency is good because it removes some of the barriers that different currencies cause during international trade and it could also help reduce the overdominance of the dollars. Such a single currency might end up becoming strong and widely used internationally because of the unified economic strength of African countries.

Even with a single currency, we don't need to expect anything good from a continent where the stealing of public funds and lack of accountability has become the norm. Few economically stable countries in Africa would always oppose a single currency because they are scared that the current woes of other African countries might have a ripple effect on their fragile economy.

Lets go piece by piece

Brazilian proposal will face two serious obstacles

First, South American national currencies are among the most stable in the developing world, with 3 exceptions, Venezuelan, Argentinian and Brazilian ones, furthermore, Brazil has a tradition of currency mismanagement, the country changed its monetary unit seven times since they dropped the gold standard in 1933, every time because of excesive inflation (that's without counting the times they "rounded up zeros" from the existing currency, i.e. reissuing the notes denomined in thousands as denomided in units [for example, a 10000 note became a 10 one])

From the point of view of the other agents in the region, it may look like they most troubled neighbors are trying to escape forward

Second, they planned to extend the system to the MERCOSUR, whose other two founders (Uruguay and Paraguay) have the most stable currencies of the region (the fifth wheel is Venezuela, they literally prefer WoW gold to their national currency), though historically Brazil and Venezuela have obtained the two minor countries support by the simple expedient of bribing their representatives this method is unlikely to work this time, the Argentinian monetary situation is as infamous in the region as in the rest of the world and would likely cause unsumournable resistance in other countries

The only good selling point would be an easier access by the Spanish speaking countries to Brazilian consumer market, but even this is a moot point, Brazilians pay for their imports in USD. On the other hand...


The SUR is exactly like the supranational currencies championed by these people, a scheme where one government buys international validation and support by subsidizing its economically weaker authoritarian neighbors. Cold war era USA's "development aid" to their supporting dictators with extra steps. I.e. it's not about "strengthen their economy in the future" is about letting Lula bribe his neighbors with more ease and without the USA, EU or China sticking their nose

Creating a common currency will not spare Venezuela and Brazil the use of the dollar because foreign exchanges impose that since the prices of the most important products (oil, gold, gas...) are determined in US dollars. But this currency may be useful for exchanges between the two countries.
For African countries, they cannot do this easily. First, because of the widespread corruption of the political class, which leads us to the second reason, which is the dependence of most African countries on indirect Western colonialism. For example, countries that adopt the CFA franc cannot get rid of it because France will not allow it.

At least the US has more of a common identity, and share the same language and government.
Europe doesn't have that, and Africa would have the same difficulties if they go down that road.

And isn't that the same for different states in the US? Some need a strong currency some need to devaluate their exports!
Oh, but it would be the same even for regions of the same country, like North and South Italy, or even in Germany Brandenburg versus Westphalia.
So, why not revert to the middle ages where each town could print its own currency and we would have..hmm..this is weird, it's like talking about each town and country printing its own shitcoin that can be manipulated in price and supply as they see fit. 


Oh yeah, let's bring in another genius in the equation, the former cab driver that is running a country into the ground while his masterplan is urging its citizens to raise rabbits in their apartments for food.  That will work wonders!

They saw that it worked after the west sanctioned Russia which Russia was isolated but when they make transactions with countries who are still trading with them using Rubles, Russia's economy survived.  With Marudo on thier side who already are willing to join, they might also have success. But of course, what this means is that there might be a regime change in these 3 countries.

More countries are trying to escape the debt and these 3 are also going to do it. Inflating thier currency is the escape.

There's a reason exchange rates fluctuate. By creating one currency, that can't happen anymore and you'll end up in a situation like Europe now: different countries have different needs, and both are bound by the needs of the other side. In short: the South needs to devaluate their currency, the North needs a strong currency.
Euro has been in crisis for most of its existence. Don't copy that.

I don't know why a country like Argentina or Brazil will create a common currency for their trade and what's the benefit of creating this currency for the two countries. The most similar thing to this idea is the creation of a currency between Russia and Iran while both countries are suffering economic sanctions and creation of a common currency can help to survive but since they don't have this problem in Argentina or Brazil I can't understand why they want to create this thing, or maybe that's just a currency to avoid using other currencies like US dollar.

I believe each country has to solve the problems inside their own houses, before partnering with others. By mixing argentinian and brazilian currencies, they are bringing the consequences of internal economical problems from Argentina to the brazilians, and vice-versa.

Each country has its political and economical systems which were chosen by citizens in democractic elections. By doing this, authorities might be mixing systems people from one country or another aren't confortable with. And considering how chaotic is the economical situation in Argentina and Brazil right now, I don't see it as productive measure.

Anyway, the proposal doesn't replace the currently Real and Peso by a new currency. It's different from the Euro in Europe. They would coexist and the usage wouldn't be imposed to every citizens from both nations.

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Regards Africa, well, it's not a common currency for the whole continent which is going to be the solution for their problems.

I believe that is one major problem in Africa, the rampant corruption happening in their politics.
So even if there are investors on their region, you can't expect them to improve their economy.
Let alone, think of their common currency as I believe, each government has their own take on this matter.
As mentioned above, Africa consists of about 54 countries. Now, how can those leaders agree into using only one currency?
They will have their own decisions and most probably, they will stick to the currency that they have been using.

Africa is a huge continent and there are 54 countries in there as per this source. There are many differences I think that each country won't agree with. But, CAR is making a difference on that region.

Unlike the two that you've mentioned, they're pretty few and can easily agree to any terms that they may agree with.

We can even think of a one world currency and that will start with bitcoin but, I think that we're still not yet there and the world isn't ready to embrace it.

I think Africa is not afraid of the policies that Brazil & Argentina want to do, I think African leaders have reasons for that, if you have ever read the history of the Netherlands did the same thing that Brazil & Argentina wanted to do, left their own currency and joined the euro.

My understanding is to print or unite one currency with different countries to make one currency, there will be problems of course, because of the nature of money that 'represents' besides each country has a long history of their own local currency, the actions that Brazil & Argentina want to determine and carry out are likely to reduce or eliminate self-esteem / identity for Brazil & Argentina.

I think that if Brazil & Argentina aim to boost the economy and trade creating one currency is not a good idea, creating and planning cooperation between several Asian and European countries and trading local money may be more effective than creating one currency with several countries.

The economies of one, two or more countries can’t be strengthened by a common currency alone. For any economy to thrive, there must first be peace and stability. Without peace, there is no way any economy would grow.

There are countries in Africa that are going through internal wrangling and conflicts. Countries like that just can’t have a good and strong economy. Besides, just cause everyone’s doing it, doesn’t mean Africa should also adopt a currency.

Also, corruption which is EVERYWHERE, is prevalent in African politics. With that in mind, how would economic growth take place?

Africa countries in the Africa Union already has plans set aside to implement a single currency for the intra Africa trading and this was what prompted the creation of African Union bank presumed to be implemented on or before 2028. Just like the Euro it will help boost the inter region business and African economy. This has not sit well with some countries though.
The fear could that the bigger countries could have much influence on it than the under developed ones. Overall it could boost Africa market and help the other currencies against the dollar and Euro used in intra Africa trade

Maduro the president of Venezuela expresses his support and calls for cryptocurrency inclusion in this monetary system which is quite odd for authoritarian socialists.  These are just 3 countries I guess. Behind it, maybe this is still part of countries moving away from USD.

It can't be done in Africa because there are too many countries and too many Cheeta.  Just for the meme   
Basically, BTC is already in action in Africa they didn't even have to create a bill for the government to declare.

Oh yeah, the colonialism, let's still blame it in 2600.
Before you think of a unified Africa you have to think of things like Ikiza, Rwanda, Garissa, Gukurahundi and how many do I have to list cause there is a ten-foot long Wikipedia page on massacres and genocides.
Is there a country on the whole continent that hasn't been at war in the last 30 years with its neighbors or hasn't gone through the mandatory 10 civil revolts and civil war and coup d'etat?

You can't have one currency before you have peace, and the EU hasn't been born until there was peace and people stopped trying to kill each other for a piece of land, once you have that then you can start thinking of a common economy and a common currency, until that it's just daydreaming.


Oh yeah, please bring back authoritarian socialists and winners of Lenin awards, cause that's going to do wonders!

If you unify a currency do you strengthen certain modes of corruption and weaken others too? Who's making that currency and what will stop them printing too much for themselves?

All countries have high levels of corruption already when it comes to managing government spending but I think a unified currency would make that worse (I'd be inclined to say the same for the UK too if it aligned its currency with another country's again).

As a mode of exchange, you could of course argue for one but then gold (or another asset) might already be able to serve that purpose.

You are mistaken when you assume that African leaders are afraid to speak up, I am hundred percent sure that they are not afraid, but rather, pride and ego is what is driving them.

Pride and ego has eaten deep into their system that non is ready to accept that he or she needs help, less, he or she will be referred to as a weaklin or not strong and courageous enough to be a leader by his or her pairs..
They would rather sit on their high mountain and suffer the scorching heat of the sun, rather than come down and deliberate with each other on how they can bring the height of the mountain to a level where no of them has to suffer the high heat anymore, and the unfortunate of it all is that, the masses, that is the citizens are the ones who feel the impact of the heat the most.

Brazil and Argentina is to create one currency to be used and to strengthen their economy in the future, https://news.bitcoin.com/brazil-and-argentina-to-start-working-on-creation-of-latam-common-currency/?utm_source=OneSignalPush&utm_medium=notification&utm_campaign=PushNotifications. If Brazil and Argentina can join hands together to create one currency why Africa as a whole can't create one currency in the continent to strengthen their economy? And worse is that no country is even brave enough to tell the others that they should create one currency in the continent except the post colonial African leaders and not the neo-colonial leaders. African leaders are Afraid. African Radical Leaders should come back and speek for us. Gadafi, Nkwame Nkruma, Leopold Sedar Senghor, should return to African scene.