New Delhi

Russian President, Vladimir Putin has opened the expanded Brics summit by issuing a call for an alternative international payments system that could prevent the US from using the dollar as a political weapon. The goal behind this call is to reduce the dependence of the world on the dollar as a reserve currency as detailed in a report by The Guardian.

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Still, the summit communique indicated that little progress had been made on an alternative payment system as all member Brics nations have diverse views. The Guardian report further explained that speaking at the summit in the Russian city of Kazan, Putin stated: “The dollar is being used as a weapon. We see that this is so. I think that this is a big mistake by those who do this.”

He said that nearly 95 per cent of trade between Russia and China is now taking place in rubles and yuan. The move to de-dollarize the world economy unnerves some Brics members – notably Brazil and India – who 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 hence is probably expected to be 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.

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The Brics summit has been attended by nine members including the Indian Prime Minister, Narendra Modi, the Chinese premier and the president of South Africa, Cyril Ramaphosa. 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.

Modi called for peace in Ukraine

Indian Prime Minister 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. Whereas, Putin has said that Moscow will not hand back the four regions of eastern Ukraine that it says are now part of Russia.

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“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 keep the organisation effective.

Brazil and India have 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.

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.

Dollar dominance is difficult to dislodge

Agathe Demarais, a sanctions specialist at the European Council of Foreign Relations, according to the Guardian stated: “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 per cent of global trade transactions are invoiced in US dollars, which also accounts for nearly 60 per cent of central banks reserves.