Putin calls for alternative international payment system at Brics summit
Date: 2024-10-30
Vladimir Putin has opened the expanded Brics summit by issuing a call for an alternative international payments system that could prevent the US using the dollar as a political weapon.
But the summit communique indicated that little progress had been made on an alternative payment system.
Speaking at the summit in the Russian city of Kazan, Putin said: “The dollar is being used as a weapon. We really see that this is so. I think that this is a big mistake by those who do this.” He said that nearly 95% of trade between Russia and China is now conducted in rubles and yuan.
The move to de-dollarize the world economy unnerves some Brics members – notably Brazil and India – that do not want their rapidly expanding club to become solely pro-Chinese and anti-western.
Russia is working on creating a settlement and payment infrastructure that would bypass the Swift payment system based in Belgium.
The de-dollarization initiative is probably the most concrete proposal likely to emerge from the summit that has been remarkable for giving Putin his biggest international platform since the Russian invasion of Ukraine in February 2022. The summit has been attended by the nine Brics members including the Indian prime minister, Narendra Modi, the Chinese premier and the president of South Africa, Cyril Ramaphosa.
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The UN secretary general, António Guterres, also arrived late on Monday with criticism from Ukraine ringing in his ears for finding time to fly from New York to meet a Russian leader for whom an arrest warrant has been issued by the international criminal court. Ukraine complained that Guterres refused to attend the Ukraine peace conference in July.
Guterres’s spokesperson insisted that he would not retreat from any of his longstanding positions on the illegality of the Russian invasion of Ukraine, and would make that clear in his public as well as private remarks. The spokesperson added special provisions applied to allow the UN secretary general to meet world leaders that are subject to arrest warrants.
The final summit communique will contain a single reference to a joint Brazil-China peace plan for Ukraine, saving its strongest language for a condemnation of Israel in Gaza. The Ukrainian president, Volodymyr Zelenskyy, has already rejected the Brazilian alternative to Ukraine’s own peace plan saying its “half-hearted settlement plans, so-called sets of principles” would only give Moscow the political space to continue the war.
Modi was probably the most direct of world leaders saying he wanted peace in Ukraine, while Xi discussed the war in a private session with Putin. Putin has said that Moscow will not hand back the four regions of eastern Ukraine that it says are now part of Russia.
“The Brics summit, which Russia planned to use to split the world, has once again demonstrated that the world majority remains on the side of Ukraine in its quest to guarantee a comprehensive, just and sustainable peace,” the Ukrainian foreign ministry said in a statement.
The future purpose and size of the Brics summit – now in its 16th year - also proved controversial, with Putin saying it would be wrong to ignore the unprecedented interest in global south countries wishing to join the organisation, and keeping the organisation effective.
Brazil in alliance with India has been trying to prevent Brics, already expanded from five to nine members at last year’s Brics summit in South Africa, being reshaped simply into an anti-western alliance that acts as a cheerleader for Russia and China.
Speaking by video link the Brazilian president, Luiz Inácio Lula da Silva, said: “Many insist on dividing the world into friends and enemies. But the most vulnerable are not interested in simplistic dichotomies; what they want is plenty of food, decent work and quality universally accessible public schools and hospitals.”
Nations to be admitted were only agreed after Brazil successfully held out a veto against Venezuela.
The new members, a diverse geographical and political group, are expected to be Cuba, Bolivia, Thailand, Vietnam, Malaysia, Indonesia, Belarus, Turkey, Nigeria, Uganda, Kazakhstan and Uzbekistan. The decision by Turkey, a member of Nato, to attend has raised eyebrows.
Agathe Demarais, a sanctions specialist at the European Council of Foreign Relations, said: “At this stage it is hard to imagine a widespread development and adoption of Brics financial tools globally. The US dollar’s domination of the global currency landscape is entrenched, both for trade transactions and foreign exchange reserves; more than 80% of global trade transactions are invoiced in US dollars, which also accounts for nearly 60% of central banks reserves.
