Russian President Vladimir Putin will host a summit of BRICS leaders next week. The meeting comes at a critical time as Putin seeks support in his ongoing standoff with the West. The expanded BRICS group now accounts for roughly a third of global economic output, making it a significant platform for international influence.
Leaders from Brazil, India, China, South Africa, Egypt, Ethiopia, Iran, and the UAE are expected to attend. Saudi Arabia, which has been invited to join BRICS, will send its foreign minister as its representative. During the summit, Russia plans to present several key proposals aimed at strengthening cooperation and reducing reliance on Western-dominated systems.
BRICS Cross-Border Payments Initiative
One of the major proposals on the table is the BRICS Cross-Border Payments Initiative. This alternative payment system would allow transactions in national currencies rather than relying on the US dollar. It would establish a secure messaging system and connect BRICS commercial banks via their central banks.
The system, designed to withstand external pressures, will use blockchain technology to manage digital tokens. These tokens, backed by national currencies, will provide a secure and cost-efficient way to conduct cross-border trade. This initiative ensures that trade flows remain stable even if one or more members lose access to the international financial system.
BRICS International Settlement And Reinsurance
Russia also plans to introduce BRICS Clear, a settlement and depository system to facilitate cross-border trade in national securities. This would provide BRICS countries with uninterrupted access to financial markets, even if they are excluded from Western financial networks.
Additionally, Russia is proposing the establishment of a BRICS Reinsurance company. This would provide a solution to ensure that goods and key commodities can be shipped between member countries, even if Western firms refuse to offer their reinsurance services. This issue has been particularly problematic for Russia due to Western-imposed price caps on its oil, which restrict access to shipping and insurance services.
BRICS Financial And Commodity Trade Initiatives
To further strengthen economic ties, Russia will propose the creation of a BRICS Contingent Reserve Arrangement. This facility would act as an alternative to International Monetary Fund (IMF) support, offering financial aid to member countries during economic crises.
Additionally, a BRICS Grain Trade Exchange is on the agenda. This initiative would provide a platform for trading grain and other major commodities, with an associated pricing agency to offer price data and market analytics. Currently, international prices for these commodities are primarily set on Western exchanges.
Cooperation On Credit Ratings
Another important proposal is for greater collaboration between BRICS credit rating agencies. This would involve sharing experiences and improving communication to counter potential bias from Western credit rating agencies. Artificial intelligence could be used to remove human bias and ensure that BRICS markets are not adversely affected by the withdrawal of Western rating agencies.
