Moscow- In light of the continuing crisis between Russia and the West, Moscow is betting on achieving a new breakthrough in its approach to laying the foundations for a new global financial system, through the BRICS summit scheduled to be held in Kazan (the Russian capital of Tatarstan, east of Moscow) from October 22 to 24. This October.
According to Russian observers, the upcoming summit constitutes a link in a series of goals that include – among other things – establishing starting points for launching a new currency for the group’s countries and a new international financial settlement system.
Goals and challenges
BRICS emerged in response to the global financial crisis of 2008-2009 as a reaction by developing countries to what they saw as a lack of responsibility on the part of the Western system, particularly the United States, which – according to them – showed a lack of control over their financial institutions, which unleashed Unleash a severe financial crisis.
If developing countries are the ones suffering most from the global financial crisis, Russia has become the biggest victim within the group after the Western sanctions imposed against it since 2014, due to the annexation of Crimea and the war with Ukraine in 2022.
Because of these sanctions, Russia faces unprecedented financial sanctions in terms of strength and number from Western countries, as about 7.7 thousand Russian individuals and legal entities are currently subject to sanctions, and the country faces an unprecedented freeze that it calls “theft” of its foreign assets (worth about 300 billion dollars), with Freezing its accounts and payments in global markets by Western financial institutions.
She was also denied access to the international payment system “SWIFT”. Moreover, the West, with the threat of secondary sanctions, began to force countries neutral or friendly to Moscow to block financial settlements with it.
Account inventory
The upcoming Kazan Summit also represents an opportunity to evaluate the extent of success or failure of the group’s basic projects and initiatives on the economic and financial fronts, especially with regard to the New Development Bank and dealing in national currencies instead of the dollar, and the issue of the unified currency and the international payment system.
Russian Foreign Minister Sergei Lavrov had previously stated that a report would be prepared for the summit on options for creating alternative payment platforms for settlements between the organization’s countries.
In the opinion of economic researcher Vladimir Olchenko, the whole world saw how Western countries could unite against any country that did not agree with their policies, as happened with Russia, which opened the eyes of many countries and made them think about whether the current global financial system, based on the dominance of the dollar and the euro. , fair and viable.
He explained to Al Jazeera Net that a rapprochement process began several years ago that was taking hold among developing countries towards getting rid of the dollar in their international payments and moving away from the dollar and the euro in their country’s financial reserves, and that BRICS – according to his opinion – began to work as a coordination platform to unify these countries in this process, as indicated by this. Figures and list of countries seeking to join the organization.
Solutions and alternatives
The researcher, Olchenko, continues that Russia has made important steps in its efforts to redirect trade to new reliable partners, including 4 of the fastest growing economies in the world, despite the intense pressure it is exposed to from the Western system.
According to him, the new payment system will begin to take shape more clearly after the conclusion of the summit, as it will examine the strengths or weaknesses that have emerged during the past years of its work, to help move forward to reduce the dependence of the BRICS economies on the dollar.
He adds that the share of national currencies in the accounts of participants in the organization reached 65%. Although a complete abandonment of the dollar will lead to the imposition of new sanctions by the United States, this does not mean that we should sit idly by, as we can introduce a cashless currency that transcends national borders.
It’s not just a brand
For his part, the writer in economic affairs, Vladislav Dyashov, told Al Jazeera Net that the organization is not just a brand, but an appropriate framework for the major and medium powers to enhance economic and trade cooperation among them, increase their political capital in the foreign arena, and strengthen their negotiating positions with the larger powers.
In his opinion, the talk in the Western media – that BRICS is economically stagnant and has failed to achieve its goals because its foundations are purely political – is not consistent with reality, as brown trade between the BRICS countries has revived significantly.
He explains that skeptical parties ignore the necessary time factor required to formulate a new international economic system, which is a mandatory stage that all international organizations went through when they were established, including the Group of Seven industrialized countries.
He considers that the concerns of the Western system that prompted it to direct threats to some BRICS are the greatest evidence of the danger represented by the establishment of a new global development bank for the group, which primarily means gradually abandoning the euro and the dollar in payments and strengthening national currencies.
He points out that even if the agreement to develop financial cooperation and provide reciprocal lines of credit in national currencies between members is of a general framework nature, the first step towards getting rid of “dollarization” has still been taken.
The last BRICS summit in Johannesburg, South Africa, last year was scheduled to discuss the possibility of creating a unified currency for member states, but this did not happen. It is expected that this issue will be returned to at the Kazan summit.
In this regard, Russian Deputy Foreign Minister Alexander Pankin said that work is underway to move towards a unified currency for use within the BRICS framework, but this process faces some complications due to legislation, as each country has its own national circumstances in this regard, as he put it.
