The central theme that unites BRICS members is their disillusionment with Western-led institutions of global governance, especially when it comes to the economy.The sanctions imposed on Russia after its 2022 full-scale invasion of Ukraine have spooked many Global South nations, worried that the West could weaponise tools of global finance against them.“In the aftermath of the war in Gaza [in which the US is sending Israel weapons], Russia and China have more effectively harnessed this anti-Western sentiment, capitalising on frustrations over Western double standards as well as the use of sanctions and economic coercion by the West,” Asli Aydintasbas, a Turkish foreign policy expert, said in comments to the Brookings Institute, a Washington, DC, think tank.“It doesn’t mean that middle powers want to trade US dominance for Chinese, but it means they are open to aligning with Russia and China for a more fragmented and autonomous world.”To that end, BRICS partners want to reduce their dependence on the US dollar and the SWIFT system, an international messaging network for financial transactions that Russian banks were cut off from in 2022.
Alternative to SWIFT
The alternative international payment system for BRICS proposed by Russia seemed to be the main takeaway of the Summit in Kazan. The Guardian reported:
Putin calls for alternative international payment system at Brics summit
Russian president’s goal to de-dollarize world economy alarms members that do not want bloc to turn against west
Patrick Wintour, diplomatic editor
Wed 23 Oct 2024 17.08 BST
Vladimir Putin has opened the expanded Brics summit by issuing a call for an alternative international payments system that could prevent the US using the dollar as a political weapon.
But the summit communique indicated that little progress had been made on an alternative payment system.
Speaking at the summit in the Russian city of Kazan, Putin said: “The dollar is being used as a weapon. We really see that this is so. I think that this is a big mistake by those who do this.” He said that nearly 95% of trade between Russia and China is now conducted in rubles and yuan.
The move to de-dollarize the world economy unnerves some Brics members – notably Brazil and India – that do not want their rapidly expanding club to become solely pro-Chinese and anti-western.
Russia is working on creating a settlement and payment infrastructure that would bypass the Swift payment system based in Belgium.
The de-dollarization initiative is probably the most concrete proposal likely to emerge from the summit that has been remarkable for giving Putin his biggest international platform since the Russian invasion of Ukraine in February 2022.
Read on HERE.
Noticeable in Malaysia is NST columnist Samirul Ariff Othman's who had initially doubted the dedollarisation trend in his December 25th 2023 column has shifted to view "the process of dedollarisation will be gradual" in his latest column.
TIME magazine chose to paint a picture of dissenting views to highlight the different attitude towards dedollarsiation and different approaches undertaken by BRICS countries. Excerpt below:
Even as the grouping attracts growing interest as a political and economic counterweight to the West, tensions are simmering over its direction and influence. Members are split over efforts to reduce reliance on the dollar as a global reserve currency, and on the wisdom of continued expansion of the group.
While BRICS favors greater use of national currencies in bilateral trade, members including India reject attempts to promote China’s yuan as an alternative reserve currency.
Russia has produced a summit report outlining possible changes to cross-border payments among BRICS countries aimed at circumventing the global financial system, though it acknowledges the proposals are mainly to promote discussion. They include developing a network of commercial lenders to conduct transactions in local currencies as well as establishing direct links between central banks.
Still, other BRICS states don’t have the same incentives to escape the dollar-based system as Russia, whose economy is straining under sweeping sanctions imposed over Putin’s February 2022 invasion of Ukraine.
Russia wants to push for a de-dollarized payment system at the summit, which China regards as too ambitious, said Wang Yiwei, director of Renmin University’s Center for European Studies in Beijing.
TIME continued to paint a picture of reluctance and non-commitment among BRICS members:
The meeting is the first since BRICS agreed to extend membership to six additional nations at last year’s summit in South Africa. But Argentina pulled out under its new President Javier Milei and Saudi Arabia has remained non-committal.
Nations ranging from Malaysia and Thailand to Nicaragua and NATO-member Turkey are eager to join BRICS, though there’s unlikely to be an agreement on enlargement at the Russia summit.
India is against further expansion for now and supports a category of “BRICS partner countries” without voting rights because it wants to steer the group away from becoming an anti-U.S. body dominated by China and Russia, Indian officials said on condition of anonymity because the issue is sensitive.
Brazil and South Africa support India’s view, said officials in the two countries. Any bid to dilute South Africa’s influence by inviting Nigeria or Morocco into BRICS will be resisted, said the South African officials.
The UAE completely rejects any attempt to present BRICS membership as a sign that the Global South is in opposition to the West, according to a person familiar with the matter, asking not to be identified discussing internal policy. The Gulf state has very good relations with countries in the West including the U.S., according to another official.
BRICS “expansion is a clear sign that the global balance of power is shifting,” said Alicia Garcia-Herrero, a Hong-Kong based economist who’s a senior research fellow at the Bruegel think tank. “But the future of the grouping is uncertain, given its heavy economic dependence on China and the deteriorating sentiment toward China among its members.”
Jim O’Neill, the Goldman Sachs economist who first coined the BRIC acronym in 2001, said expansion had made the group “highly political.” He told a forum in London in November: “I am not sure what fruitful purpose it serves other than being a club that the U.S. is not a part of.”
The western media propaganda to discredit BRICS is obvious, but Asli Aydıntaşbaş of the American think tank, Brooking Institute warned:
For years, Western policymakers have largely dismissed BRICS as more bark than bite. After all, the bloc long aimed to create an alternative to Western dominance in the global financial system—and failed. BRICS has not rewritten the rules of international trade, no common BRICS currency has materialized, and its alternative payment systems have yet to dent the U.S. dollar’s global dominance.
But it is not a good idea to take BRICS lightly—if nothing else, for the political symbolism surrounding the upcoming meeting in Kazan, Russia. Who would have thought that only two-and-a-half years after his brutal invasion of Ukraine, Russian President Vladimir Putin would be hosting a summit attended by dozens, including U.S. partners like Egypt and NATO ally Turkey, which has recently expressed an interest in membership?
The fact that such a meeting is happening at all signals a shift in global politics and exasperation with the U.S. role in the world—and that should concern Washington. BRICS represents more than just the fragmentation of the international system—it embodies growing resentment among middle powers toward the U.S.-led world order. In the aftermath of the war in Gaza, Russia and China have more effectively harnessed this anti-Western sentiment, capitalizing on frustrations over Western double standards as well as the use of sanctions and economic coercion by the West. It doesn’t mean that middle powers want to trade U.S. dominance for Chinese—but it means they are open to aligning with Russia and China for a more fragmented and autonomous world.
On trade, BRICS has neither established its own trade regime nor institutions, but key trends hint at its growing influence. For example, China now has an alternative to the SWIFT payment system, though limited in use, and countries like Turkey and Brazil increasingly restructure their dollar reserves into gold. Currency swaps for energy deals are also a popular idea—all suggesting a desire for greater financial independence from the West.
Washington should not ignore BRICS.
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