President participated in a meeting in Russia, in 2009, and was host in 2010; group already discussed the use of local currencies to circumvent the dollar
President Luiz Inácio Lula da Silva (PT) landed in South Africa on Monday morning (21.Aug.2023) to participate for the 3rd time in the BRICS summit (acronym for the bloc formed by BBrazil, Russia, Inndia, China and africa Sul). The Brazilian Chief Executive participated in the first two editions of the bloc’s presidential meetings at the end of his 2nd term, in 2009 and 2010.
The Bric, as it was initially called, was formed in 2001, but the 1st summit of presidents was held in 2009, in Yekaterinburg, Russia. The host was former Russian President Dmitry Medvedev. He is currently the Deputy Chairman of the Security Council of Russia. South Africa was not yet part of the group. It only joined in 2011. But it participated in the summit as a guest.
According to reports in the Brazilian media at the time, the 1st meeting of the group of emerging countries was aimed at consolidating the strategic partnership between them to press for reforms in the global financial system and in political governance.
Members also wanted the group to be a counterbalance to the G7. On the eve of the summit, then Chancellor Celso Amorim had said that the G8 (G7 + Russia) “had died”. Amorim is currently Lula’s special advisor and works directly on international issues.
Global financial crisis marked first encounters
The world was still grappling with the global financial crisis, precipitated by the bankruptcy of the US investment bank Lehman Brothers. In this way, the members of the Bric could also act in a coordinated way in the G20, the group that brings together the largest economies in the world.
One of the discussions in vogue at the time was to use the local currencies of each country or to establish a common currency unit for commercial transactions between countries. It would be a way of not depending on the exchange rate fluctuations of the US dollar for its exports and imports.
Lula resumed the discussion on the subject with other countries at the beginning of his 3rd term. On his 1st international trip, to Argentina, in January, he and President Alberto Fernández released a letter in which they said they agreed to move forward in discussions for the creation of the currency. According to the 2 heads of state, the idea was aimed at reducing operating costs and dependence on the dollar.
During the visit to the President of China, Xi Jinping, in April, Brasilia and Beijing strengthened cooperation to strengthen trade in the local currencies of the two countries. Currently, China is Brazil’s largest trading partner.
In July, when participating in the Mercosur Summit, held in Puerto Iguazú, also in Argentina, Lula returned to the subject in his speech. She reinforced that the idea does not aim to eliminate the respective national currencies.
In the 1st presidential summit there was also a political division between the countries of the bloc. Brazil and India claimed permanent seats on the UN Security Council (United Nations) and had the support of Russia. China, in turn, was against the expansion of the Security Council for fear that Japan, its then regional adversary, could claim to join the group as well.
The summit’s final document did not present objectives in the form of actions. It only reinforced the group’s intentions. At the time, the Bric represented 40% of the world’s population and 15% of global GDP.
The 2nd Bric presidential summit was held in Brasilia in 2010. Lula was the host of the event, which also received other countries as guests, such as South Africa.
At the meeting, the countries signed an agreement for the financing of projects by the 4 development banks of the group’s members with a focus on infrastructure, energy and energy efficiency, environmental sustainability, agribusiness and technological innovation.
There was consensus for World Bank and IMF reforms to take place at that time. The discussion on the use of common currencies to circumvent the dollar also continued, although the perspective was less optimistic than in the 1st meeting.
The countries also supported the aspirations of Brazil and India to increase their weight in the UN, but did not specify the ambition of the 2 to have a seat in the Security Council.
During the meeting, which took place in the midst of bilateral meetings and specific agreements with China, Lula also tried to attract support from emerging countries against sanctions led by the US, with the consent of Russia and France, against Iran. the Iranian nuclear program, Brazil defended that there were no sanctions. Lula said the measures were ineffective and counterproductive.