This week, Russian President Vladimir Putin convened more than two dozen countries in Kazan, Russia to discuss a “new world order” free from Western hegemony and the global dominance of the U.S. dollar.
Thursday culminates the three-day BRICS Summit of this year, providing President Vladimir Putin with his biggest global platform since Russia invaded Ukraine in 2022.
By reducing reliance on the dollar, the alliance hopes to evade sanctions imposed by the U.S. and the West.
“The dollar is being used as a weapon,” Putin said at the summit. “We really see that this is so. I think that this is a big mistake by those who do this.”
In a pivotal move, Chinese President Xi Jinping and Indian Prime Minister Narendra Modi used the summit to showcase their hopes for a more harmonious relationship after decades of cross-border strife.
It came days after China and India agreed to a deal meant to bring to a close their four-year military standoff over the disputed Himalayan region.
This week, Russian President Vladimir Putin convened over two dozen countries to discuss a “new world order” free from Western hegemony and the global dominance of the U.S. dollar. (Alexander Nemenov/Pool via REUTERS)
“Russia-China cooperation in international affairs is one of the main stabilizing factors in the world,” Putin told Xi at the summit.
Meanwhile, India has been propping up Russia’s economy by purchasing discounted oil that has been sanctioned by much of the rest of the world.
BRICS — which stands for Brazil, Russia, India, China and South Africa — was an idea thought up by Goldman Sachs analysts to describe the growing economic hegemony of China and other emerging markets.
The group is rapidly expanding: Iran, Egypt, Ethiopia, the United Arab Emirates and Saudi Arabia joined in January. Turkey, Azerbaijan and Malaysia formally applied — Turkey being the first NATO member to take an interest in the group. Pakistan has also expressed an interest in joining the group.
The alliance now makes up half of the world’s population and 35% of global output.
Some member states like Egypt receive U.S. military aid and the United Arab Emirates (UAE) hosts U.S. military bases.
Russian officials already view the three-day summit as a massive success: Putin’s foreign policy aide Yuri Ushakov said 36 countries confirmed participation and 24 will send representatives.
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Russia is also courting more nations to join a payment system that would serve as an alternative to SWIFT, which has been used to sanction Russian officials by the West.
While Russia is pushing an anti-western agenda at the summit, members like Brazil, India and South Africa want a less combative tone. They believe the alliance should be used to tailor international institutions to meet the needs of the Global South. They believe they could work to reform the World Bank and the International Monetary Fund to serve the needs of the developing world.
Putin shakes hands with Chinese President Xi Jinping during a meeting on the sidelines of the BRICS Summit in Kazan. (Alexander Zemlianichenko/Pool via REUTERS)
Creating an alternative to SWIFT would require BRICS-based currencies and financial institutions to conduct international business — and so far BRICS members have not presented a clear plan to replace the dollar.
Iranian President Masoud Pezeshkian said in an address to the summit that BRICS must act as more than a “dialogue club,” and said that 15 years after the creation of the alliance, many of its goals remain unfulfilled.
He tore into the West’s increasingly frequent threat of sanctions.
“Over more than three decades since the collapse of the bipolar system, it has become increasingly clear that from the perspective of Western powers, peace, democracy, prosperity, and development can only be achieved through pathways defined by them,” he said.
“This monopolistic outlook has resulted in increased violence, war, and terrorism on the one hand, and unprecedented use of economic and political sanctions on the other.”
Putin shakes hands with Indian Prime Minister Narendra Modi during their meeting on the sidelines of the BRICS Summit. (Alexander Zemlianichenko/Pool via REUTERS)
Dollar assets currently comprise around 59% of global foreign currency reserves, down from 70% in 1999.
Former President Donald Trump has promised “100% tariffs” on nations that snub the U.S. dollar, arguing that losing the dollar as the world currency would be like “losing a war.”
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“I was a user of sanctions, but I put them on and take them off as quickly as possible, because ultimately it kills your dollar, and it kills everything the dollar represents. And we have to continue to have that be the world currency. I think it’s important. I think it would be losing a war, if we lost the dollar as the world currency,” he told the Economic Club in New York in September.
“That would make us a Third World country. You’re losing Russia. China is out there trying to get their currency to be the dominant currency.”