BRICS Summit in Russia aims for alternative to the dollar and the IMF

Among the various issues that will be discussed at the 16th summit of BRICS leaders, scheduled to take place between October 22nd and 24th, the highlights are negotiations to reduce dependence on the dollar in trade between the bloc’s countries, as well as measures to strengthen institutions financial alternatives to the International Monetary Fund (IMF) and the World Bank, controlled mainly by Western powers.

The event will be in the city of Kazan, Russia, and will be the first BRICS summit with the participation of the five new members that joined the bloc this year: Egypt, Iran, United Arab Emirates, Saudi Arabia and Ethiopia. Until last year, Brics was made up only of Brazil, Russia, India, China and South Africa.

The Russian government presides over the bloc in 2024 and has established a series of priorities for this yearamong them, the integration of new members, in addition to “strengthening the role of the Brics states in the international monetary and financial system” and “expanding the use of the national currencies of the Brics states in mutual trade”.

This week, in a meeting between the countries’ finance leaders, Russia’s Finance Minister, Anton Siluanov, asked the bloc to create an alternative to the IMF.

“The IMF and the World Bank are not playing their roles. They are not working in the interests of the BRICS countries. It is necessary to form new conditions or even new institutions, similar to the Bretton Woods institutions, but within the structure of our community, within the structure of BRICS”, defended the Russian minister, according to reported Reuters.

In addition to its own financial institutions, the bloc is also discussing the creation of an alternative payment system to the dollar, the so-called Brics Bridge, which would be a platform for digital settlement and payment between the group’s members.

Brazil

Brazilian president, Luiz Inácio Lula da Silva, at the last Brics summit, in South Africa, in 2023, defended an alternative to the dollar. “The creation of a currency for commercial transactions and investments between Brics members increases our payment conditions and reduces our vulnerabilities,” said Lula on that occasion.

The Brazilian government has also criticized the main global financial institutions. “Will these institutions be used to finance the development of poor countries or will they continue to exist to suffocate poor countries?” asked Lula at the African Union summit in Ethiopia, citing the IMF and the World Bank.

For now, the only Brics financial institution in operation is the Novo Banco de Desenvolvimento (NBD), chaired by former Brazilian president, Dilma Rousseff. The so-called BRICS Bank is used to finance infrastructure and development projects between member countries.

For some experts, the BRICS projects aimed at reducing the dollar’s influence on global trade and creating financial institutions beyond the control of Western powers represent a certain threat to the powers benefiting from the current financial model.

The foreign policy advisor to the Russian Presidency, Yuri Ushakov, rejected that the bloc is an anti-Western association, highlighting that BRICS seeks to create independent centers of development and influence.

“Let’s be honest – they are openly jealous of our expansion, as well as the fact that global majority countries would like to come together more closely for cooperation on the BRICS platform. We have seen considerable evidence of Western opponents trying to harm and weaken our association,” said Russian President Vladimir Putin’s advisor.

BRICS Summit

The Russian government reported that 32 countries confirmed their presence at the event, 24 of which were represented by state leaders. Of the ten members of the bloc, nine will be represented by heads of state, including President Luiz Inácio Lula da Silva. The exception is Saudi Arabia, which will send its Foreign Minister to the summit.

“The meeting could turn into the biggest foreign policy event ever held in our country”, said Yuri Ushakov this Thursday (10).

It is estimated that the Brics concentrate around 36% of the global Gross Domestic Product (GDP), surpassing the G7, a group of the largest economies on the planet with the United States, France, the United Kingdom and Germany, which concentrates around 30% of the world’s GDP. .

Brics emerged in 2006, when representatives from Brazil, India, China and Russia formed a discussion forum. The group began as Bric (which combines the initials of the founding countries). The first summit of heads of state only took place in 2009. In 2011, South Africa joined the organization, which gained the letter ‘s’ and became BRICS.