World Geostrategic Insights interview with Tatiana Pokrovskaia on the main results of the 16th BRICS Summit and future prospects, including the possibility of a gradual “de-dollarisation” of the international financial system.
Tatiana Pokrovskaia is an international business development professional with more than 20 years of experience in the markets of Africa, CIS, Asia and the Middle East, repeatedly bringing Russian companies into international markets. She is based in St. Petersburg, Russia.
Q1 – The 16th BRICS Summit, held in Kazan from 22 to 24 October under the Russian presidency, brought together the key players of the so-called new global economic order of the 21st century. The event was attended by delegations from “35 countries”, including some 20 heads of state. Vladimir Putin said that the BRICS summit in Kazan was a success for the nations committed to building a more democratic, inclusive and multipolar world order. What do you consider to be the main results of the Summit?
A1 – It should be remembered that the BRICS member countries consist of 45% of the world’s population. Until 2024 BRICS included 5 countries: Brazil, Russia, India, China and South Africa, then since the beginning of this year Egypt, Iran, Ethiopia, Saudi Arabia, and the UAE have joined the Organization. Also, another 34 countries have officially expressed interest in joining BRICS, and more than 20 countries are currently applying to join. Thirteen countries have received the status of BRICS partner: Turkey, Kazakhstan, Uzbekistan, Algeria, Belarus, Bolivia, Cuba, Indonesia, Malaysia, Nigeria, Thailand, Uganda and Vietnam.
The importance of this group is evidenced by the inclusion of two permanent members of the United Nations Security Council: the Russian Federation and China, and three nuclear powers: the Russian Federation, China and India, while at the same time including four countries that are among the largest economies on the planet: the Russian Federation, China, India and Brazil. The BRICS 2024 Summit in Kazan was attended by 35 countries, as you rightly noted. An important factor was the presence of UN Secretary-General Antonio Guterres.
The 16th BRICS Summit, held Oct. 22-24, revealed the growing authority of the association, whose members focus on equal economic cooperation, respect for each other’s sovereignty and rejection of confrontation.
As a result of the summit, a Declaration, reflecting almost every issue on the international agenda, from economics and finance to women’s rights and the preservation of the planet’s biodiversity (proposed by India), was formulated and proclaimed.
The adopted document indicates the emergence of new centers of power in the world, laying the foundations of a “more just, democratic and balanced multipolar world order” (the quote is from the Kazan Declaration of the BRICS Summit 2024).
The Declaration consists of 134 points, which begin by acknowledging the legitimacy of existing international organizations (UN, WTO, WHO, IMF, and others), and the programs they implement, while noting the imperfection of existing mechanisms, making proposals for their reform, and outlining specific steps by the BRICS in this direction.
The document also emphasizes the “decisive role of the BRICS in improving the international monetary and financial system” and the entire financial and economic sphere, and use of national currencies among BRICS countries and their trading partners. One of the four sections of the final declaration is devoted to global and regional security issues.
Accordingly, the main outcome of the Summit was the confirmation of the change of course on the multipolarity of the world, the construction of a new world order with the decisive participation of the countries of the Global South and East in the systems of international governance based on the rule of law, the inadmissibility of the use of neo-colonial approaches, interference in the internal affairs of states, political and financial pressure, unilateral coercive measures.
Q2 – The BRICS Leaders’ Meeting in Kazan was preceded by the BRICS Business Forum, which brought together more than 1,000 business representatives, including heads of companies, associations, trade unions and chambers of commerce and industry from the BRICS countries. Addressing the Forum, President Putin said that the combined GDP of the BRICS countries exceeds $60 trillion, and its overall share in global GDP far exceeds that of the so-called G7 and is growing steadily. Putin also emphasized the importance of a close economic partnership between the BRICS countries by expanding trade and investment and deepening cooperation. In your opinion, what are the prospects for cooperation between the economic players in the BRICS area?
A2 – 2024 went down in BRICS history as the year of doubling and the accession of new members, and given the applications submitted for membership, consideration of cooperation by other countries, further expansion is only a matter of time.
The flexibility and informal status of BRICS only contributes to the increased interest in the association and the desire of countries to join. Countries around the world want to develop, and businesses want to work, despite the most severe sanctions and pressure.
The BRICS Business Council discussed issues of infrastructure, transport and logistics, financial services, professional training, applied technologies and innovations, digital economy, trade and investment, industrial cooperation and aviation, energy, “green economy” and climate, agriculture (agribusiness), as well as issues of technological cooperation.
On October 18, the BRICS Business Council hosted the BRICS Business Forum, dedicated to strengthening cooperation for sustainable economic development and international trade.
It should be noted that the BRICS countries are located on the axes of key international transport corridors, which certainly creates conditions for accelerated development and increased trade interaction.
Taking into account the BRICS Principle of developing an “open, transparent, non-discriminatory and inclusive multilateral trading system” (from the BRICS Declaration), great prospects for cooperation and trade turnover are seen here. Moreover, each of the BRICS member countries considering the prospect of joining sees the cooperation from a pragmatic point of view. For example, for Egypt (the world’s largest importer of wheat), joining the Organization is to ensure food security, for Ethiopia to attract investment from the bloc’s member countries, primarily from Russia, for creating economic zones and industrial parks in the country. The arrival of Prime Minister of Malaysia Anwar Ibrahim at the Eastern Economic Forum 2024 in Vladivostok was noted by his statement on the creation of a regional economic hub, as well as on strengthening cooperation in the field of Islamic finance, the development of high-tech solutions in the field of energy efficiency with the Russian Federation and BRICS as a whole.
Q3 – According to President Vladimir Putin, the existing financial and monetary infrastructure in the BRICS countries is sufficient for cross-border payment transfers. Russia therefore supports an alternative international trade payment system based on the national currencies of the BRICS countries, a new bank messaging system and a network of national commercial banks linked through the BRICS central banks. However, there seems to have been no concrete steps at the summit to create a real intergovernmental BRICS payment system in competition with Swift (Society for Worldwide Interbank Financial Telecommunication), nor any progress on a BRICS-specific currency. What do you think about the possibility of a gradual “de-dollarisation” of the international financial system?
A3 – The creation of a BRICS international payment system is a vital necessity for increasing trade turnover. The new payment system of the BRICS countries, which is being worked on continuously, will include the use of digital financial assets, and will also include a system for transmitting financial messages.
The slowdown in this direction was due to the expansion of the BRICS member countries this year and an ambiguous approach to the System. Some countries, such as India and South Africa, still have reservations about both the project of creating a single currency and the development of a common BRICS payment system, while China prefers the free ride strategy “passive income”, to promote the internationalization of its payment system. There is also the issue of the security of the payment systems, and of the significant budget and debt problems that new BRICS members (Egypt, Ethiopia) are experiencing.
Given these and a number of other differences in the economies of the BRICS countries, as well as of the countries planning to join, it is too early to talk about the imminent creation of a new payment platform.
However, there are also ardent supporters of the development of a common payment system, such as Russia and Iran, experiencing the most severe sanctions, and Brazil, which will chair the BRICS in 2025, seeking to free the Brazilian economy from the dollar.
One way or another, large-scale change is underway in the world, mainly involving economic processes. The financial crisis of 2008-2013, as well as the imposition of sanctions, and capital freezes for certain countries, have forced the world community to think about an alternative to the dollar. Therefore, there is a clear need for a gradual transition to a new, more flexible and independent financial system based on national currencies, which would strengthen macroeconomic stability.
Tatiana Pokrovskaia – International business development professional.
XVI BRICS Summit Kazan Declaration
Image Source: https://brics-russia2024.ru/en/news/