BRICS Discuss an Alternative Currency System to Further Trade

The rejection of the West’s idea of a “unipolar world” was made clear at the annual summit of the heads of state and governement of the BRICS (Brazil, Russia, India, China, South Africa) in Beijing on June 23-24. As stated in the “Beijing Declaration” adopted there, they intend to ensure that all nations, including those least developed, have a greater say “in global decision-making”.

In opening the summit, host Xi Jinping took onWestern policy directly, noting that the BRICS must ensure “equity and justice” in world affairs, rejecting “the Cold War mentality and bloc confrontation”, “unilateral sanctions and abuse of sanctions”, and hegemonism, “by forming one big family belonging to a community with a shared future for humanity”.

The urgent issue of a new international reserve currency was raised publicly by Russian President Putin on June 22 at the BRICS Business Forum. This adds a new dimension to the debate around the need to replace the current dollar-based system, which has become totally unreliable and subject to the arbitrary whims of Washington. Putin stated that “Together with BRICS partners, we are developing reliable alternative mechanisms for international settlements. The Russian Financial Messaging System is open for connection with the banks of the BRICS [i.e., outside of the SWIFT system] countries. The Russian MIR payment system is expanding its presence. We are exploring the possibility of creating an international reserve currency based on the basket of BRICS currencies.”

The exceptionally harsh unilateral sanctions imposed on Russia by the United States and its allies have already pushed a number of major trading partners of Russia – including India and China — to switch to trade in national currencies.

Given the focus of the BRICS on economic development, partnerships with the group are increasingly appealing for many other developing countries. Thus, on the margins of the second day of the summit, a “High-Level Dialogue on Global Development” in video format took place, to which the leaders of thirteen additional nations were invited (Algeria, Argentina, Cambodia, Egypt, Ethiopia, Fiji, Indonesia, Iran, Kazakhstan, Malaysia, Senegal, Thailand and Uzbekistan).

A number of those leaders have been under very heavy pressure from the United States and Great Britain, in particular, to distance themselves from both China and Russia, but they have refused to give in. And for good reason, since what the Anglo-Americans have to offer is simply less attractive.

Argentine President Alberto Fernandez, for example, took the occasion to request offical membership for his country, saying “We aspire to be a full member of this group of nations that already represents 42% of the world’s population and 24% of the global gross product.” His Egyptian counterpart, Abdel Fatah Al Sisi, who continues to develop excellent trade and energy relations with Russia, praised “the keenness of the BRICS grouping to adopt a common vision towards political and economic issues of interest to developing countries, particularly regarding the exploration of prospects for development cooperation”. Indonesia’s President Joko Widodo, who currently heads the G20, is adamant that the group’s next summit, to which he has invited Vladimir Putin, will focus on economic development and not geopolitics.