This year’s BRICS summit was held in Russia this week with war, currency and payment systems on the agenda.
The founding nations of BRICS, Brazil, Russia, India, China and latterly South Africa are joined by ministers from Egypt, Ethiopia, Iran, Saudi Arabia, the United Arab Emirates and more in Kazan to discuss strategic decisions and multilateral cooperation.
One focal issue discussed at the summit was international payment system reform. There are legitimate reasons for BRICS countries to develop a new international payment system. It could facilitate increased access to global trade for developing countries and balance the dominance enjoyed by Western countries and the dollar.
However, as discussed in BBC World Service coverage of the summit, Russia hopes to establish an international payment system from which it is impossible for them to be excluded. Putin might hope that the ability to circumvent the G10-controlled SWIFT payment system would permit increased financial flows into Russia. This unleashing of Putin would empower him to continue with renewed vengeance in the invasion of Ukraine.
Whilst not officially the leader of Russia during the inception of BRICS, Vladimir Putin was involved in the formative discussions of the group. His country’s invasion of Ukraine in 2022 has resulted in an International Criminal Court (ICC) arrest warrant, trade sanctions and exclusion from the international payment systems SWIFT.
The international arrest warrant was reported to have prevented Putin from travelling to last year’s summit in South Africa who would have been obliged to arrest him upon arrival. With Brazil also being a member of the International Criminal Court it will be likely that he dials into the next summit virtually.
A meagre source of relief for Ukraine may be the denunciation of the Russian invasion by Xi Jinping and Lula, with Narendra Modi also making vague noises of disapproval of war generally.
The first meeting in years between Xi Jinping and Narendra Modi is hoped to signal an improvement in the relationship between China and India who have endured long standing territorial disputes.
New members Egypt and Ethiopia are engaged in diplomatic disputes over water and hydro-powered electricity fuelled by the construction of the Grand Ethiopian Renaissance Dam. Iran’s membership brings the Middle-Eastern regional conflict into consideration within the group.
This comprehensive set of disputes and conflicts has contributed to a fraught atmosphere surrounding the summit. However, the turbulence attributed to Trump’s potential election or anticipated rejection of election results in America has the potential to be advantageous to BRICS economies. A perceived instability in the American economy could lead investors to be attracted by BRICS countries as risk diversification locations.
Other than reaffirming the tenet of cooperation, the Kazan declaration noted the high numbers of countries applying to join BRICS. With the current unease already at the heart of the group, future member accession will be discussed tentatively.
Characteristically, Lula hauled the human aspect of these grand macroeconomic and geopolitical issues into view. He acknowledged that “the most vulnerable are not interested in simplistic dichotomies”, instead they are concerned about subsistence and daily security.
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