BRICS doubled its membership at the start of 2024, and faces huge tasks ahead: integrating its newest members, developing future admission criteria, deepening the institution’s groundings, and most importantly, launching the mechanisms for bypassing the US dollar in international finance.
MOSCOW – Across the Global South, countries are lining up to join the multipolar BRICS and the Hegemon-free future it promises. The onslaught of interest has become an unavoidable theme of discussion during this crucial year of the Russian presidency of what, for the moment, is BRICS-10.
Indonesia and Nigeria are among the top tiers of candidates likely to join. The same applies to Pakistan and Vietnam. Mexico is in a very complex bind: how to join without summoning the ire of the Hegemon.
And then there’s the new candidacy on a roll: Yemen, which enjoys plenty of support from Russia, China, and Iran.
It’s been up to Russia’s top BRICS sherpa, the immensely capable Deputy Foreign Minister Sergey Ryabkov, to clarify what’s ahead. He tells TASS:
We must provide a platform for the countries interested in rapprochement with the BRICS, where they will be able to work practically without feeling left behind and joining this cooperation rhythm. And as to how the further expansion will be decided upon – this should be postponed at least until the leaders convene in Kazan to decide.
The key decision on BRICS+ expansion will only come out of the Kazan summit next October. Ryabkov stresses that the order of the day is first “to integrate those who have just joined.” This means that “as a ‘ten,’ we work at least as efficiently, or, rather, more efficiently than we did within the initial ‘five.'”
Only then will the BRICS-10 “develop the category of partner states,” which, in fact, means creating a consensus-based list out of the dozens of nations that are literally itching to join the club.
Ryabkov always makes a point to note, in public and in private, that the twofold increase of BRICS members starting on 1 January 2024 is “an unprecedented event for any international structure.”
It isn’t an easy task, Ryabkov says:
Last year, it took an entire year to develop the admission, expansion criteria at the level of top officials. Many reasonable things were developed. And many of the things that were formulated back then got reflected in the list of countries that joined. But it would probably be improper to formalize the requirements. At the end of the day, an admission to the association is a subject of political decision.
What happens after Russia’s presidential elections
In a private meeting with a few select individuals on the sidelines of the recent multipolar conference in Moscow, Foreign Minister Sergei Lavrov spoke effusively of BRICS, with particular emphasis on his counterparts Wang Yi of China and S. Jaishankar of India.
Lavrov holds great expectations for BRICS-10 this year – at the same time, reminding everyone that this is still a club; it must eventually go deeper in institutional terms, for instance, by appointing a secretariat-general, just like its cousin-style organization, the Shanghai Cooperation Organization (SCO).
The Russian presidency will have its hands full for the next few months, not only navigating the geopolitical spectrum of current crises but, most of all, geoeconomics. A crucial ministerial meeting in June – only three months away – will have to define a detailed road map all the way to the Kazan summit four months later.
What happens after this week’s Russian presidential elections will also condition BRICS policy. A new Russian government will be sworn in only by early May. It is widely expected that there will be no substantial changes within the Russian Finance Ministry, Central Bank, Foreign Ministry, and among top Kremlin advisers.
Continuity will be the norm.
And that brings us to the key geoeconomics dossier: the BRICS at the forefront of bypassing the US dollar in international finance.
Last week, top Kremlin adviser Yury Ushakov announced that BRICS will work towards setting up an independent payment system based on digital currencies and blockchain.
Ushakov specifically emphasized “state-of-the-art tools such as digital technologies and blockchain. The main thing is to make sure it is convenient for governments, common people, and businesses, as well as cost-effective and free of politics.”
Ushakov did not mention it explicitly, but a new alternative system already exists. For the moment, it is a closely, carefully guarded project in the form of a detailed white paper that has already been validated academically and also incorporates answers to possible frequently asked questions.
The Cradle was briefed on the system via several meetings since last year with a small group of world-class fintech experts. The system has already been presented to Ushakov himself. As it stands, it is on the verge of receiving a final green light from the Russian government. After clearing a series of tests, the system in thesis would be ready to be presented to all BRICS-10 members before the Kazan summit.
This all ties in with Ushakov publicly declaring that a specific task for 2024 is to increase the role of BRICS in the international monetary/ financial system.
Ushakov recalls how, in the 2023 Johannesburg Declaration, the BRICS heads of state focused on increasing settlements in national currencies and strengthening correspondent banking networks. The target was to “continue to develop the Contingent Reserve Arrangement, primarily regarding the use of currencies different from the US dollar.”
No single currency for the foreseeable future
All of the above frames the absolute key issue being currently discussed in Moscow, within the Russia–China partnership, and soon, deeper among the BRICS-10: alternative settlement payments to the US dollar, increased trade among “friendly nations,” and controls on capital flight.
Ryabkov added more crucial elements to the debate, saying this week that the BRICS are not debating the implementation of a single currency:
As for a single currency, similar to what was created by the European Union, this is hardly possible in the foreseeable future. If we are talking about clearing forms of mutual settlements such as the ECU [European Currency Unit] at an early stage of development of the European Union, in the absence of a real means of payment, but the opportunity to more effectively use the available resources of the countries in mutual settlements to avoid losses due to differences in exchange rates, and so on, then this is precisely the path along which, in my opinion, BRICS should move. This is under consideration.
The key takeaway, per Ryabkov, is that the BRICS should not create a financial and monetary alliance; they should create payment and settlement systems that do not depend upon the shifty “rules-based international order.”
That’s exactly the emphasis of the ideas and experiments already developed by Minister of Integration and Macroeconomy at the Eurasia Economic Union (EAEU) Sergei Glazyev, as he explained in an exclusive interview, as well as the new groundbreaking project on the verge of being greenlighted by the Russian government.
Ryabkov confirmed that “a group of experts, led by the Ministries of Finance and representatives of the Central Banks of the respective [BRICS] countries,” is working nonstop on the dossier. Moreover, there are “consultations in other formats, including with the participation of representatives of the ‘historical west.'”
Ryabkov’s own takeaway mirrors what the BRICS as a whole are aiming at:
Collectively, we must come up with a product that would be, on the one hand, quite ambitious (because it is impossible to continue to tolerate the dictates of the west in this area), but at the same time realistic, not out of touch with the ground. That is, a product that would be efficient. And all this should be presented in Kazan for consideration by the leaders.
In a nutshell: the big breakthrough may be literally knocking at the BRICS door. It just depends on a simple green light by the Russian government.
Now compare the BRICS devising the contours of a new geoeconomics paradigm with the collective west mulling the actual theft of Russia’s seized assets to the benefit of the black hole that is Ukraine.
Apart from being a de facto declaration by the US and EU against Russia, this is something that carries the potential, in itself, of totally smashing the current global financial system.
A theft of Russian assets, would it ever happen, will render livid, to put it mildly, at least two key BRICS members, China and Saudi Arabia, who bring to the table considerable economic heft. Such a move by the west would completely destroy the concept of the rule of law, which theoretically underpins the global financial system.
The Russian response will be fierce. The Russian Central Bank could, in a flash, sue and confiscate the assets of Belgian Euroclear, one of the world’s largest settlement and clearing systems, on whose accounts Russian reserves were frozen.
And that on top of seizing Euroclear’s assets in Russia – which amount to roughly 33 billion euros. With Euroclear running out of capital, the Belgian Central Bank will have to revoke its license, causing a massive financial crisis.
Talk about a clash of paradigms: western robbery versus a Global South-based equitable trade and finance settlement system.
