Growing alliance
The West has attempted to isolate Moscow from the global economy over the Ukraine war. But this week’s BRICS summit in Russia may have proved the nation’s significant diplomatic role as emerging economies look to challenge Western dominance.
Leaders convene: The BRICS concluded its 16th annual summit in Kazan, Russia on Thursday, which was the first since the bloc’s expansion and saw participation from more than 20 countries – including those hoping to join the alliance. The Kazan declaration issued at the summit included support for interbank cooperation, cross-border payments, a grain trading platform, and the New Development Bank within the bloc. Creating an international precious metals exchange was also discussed, and a symbolic BRICS banknote was unveiled.
Geopolitics in focus: Leaders called for de-escalation of regional wars, although no specific action was discussed. UN Secretary General Antonio Guterres, whose attendance at the summit was criticized by Kyiv, called for peace in Gaza, Lebanon, Sudan and Ukraine. Notably, when asked about Donald Trump’s promise to end the Ukraine war if elected as president, Vladimir Putin said the statement seemed sincere. “We certainly welcome statements of this kind, no matter who makes them,” he added.
Bigger picture: As for challenging U.S. dollar dominance, Putin said the goal was not to reject the currency, but instead find alternatives if access is restricted. ING believes BRICS has the most potential to forward its de-dollarization agenda in FX reserves. But how successful would BRICS be in providing alternatives to Western dominated institutions? “In some ways, it is repeating the experience of the EU,” Seeking Alpha analyst Marc Chandler recently noted. “The more countries join, the wider range of interests, the more difficult to arrive at timely decisions.”