Will Vladimir Putin do at BRICS what America dreads the most?

The BRICS Summit 2024 at Kazan in Russia will be watched keenly by the United States. The BRIC grouping, including Brazil, Russia, India, and China, was formally started in 2006. In 2009, the first BRIC Summit was held in Russia. In 2010, BRIC expanded to include South Africa, transforming into BRICS. In 2024, BRICS expanded further with the addition of five new members: Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates. Saudi Arabia has been invited to join the group, but has not yet taken up membership.

The group of diverse countries, some of which don't get along with each other well, is positioned as a main stage of an emerging multipolar world. The theme of this summit is 'Strengthening Multilateralism for Just Global Development and Security'. India's presence in BRICS is seen as providing a balance to the bloc where Russia and China, who are opposed to the West, play a dominant role. Russian President Vladimir Putin last week quoted Prime Minister Narendra Modi and said that the BRICS is not "anti-West", but is just "non-West". "BRICS was never meant to be against anyone. The Indian Prime Minister (Narendra Modi) said that BRICS is not an anti-western group; it is a non-western group," said Putin.

The US hasn't publically stated its concerns over the grouping, which has been seen to lack coherence so far. John Kirby, White House National Security Communications Advisor, has stated that the US doesn't view BRICS organisation as a "threat". Kirby said, "...we don't view the BRICS arrangement as some sort of, you know, threat. These countries can decide for themselves who they want to associate with and especially how they want to be economically linked with one another."


Yet, the ambition of BRICS to challenge the Western hegemony is hardly a secret, with three of its members -- Russia, China and the newly added Iran -- at various levels of conflict with the West. If you add India, with its escalating problems with Canada and the US over the Khalistani terrorism, BRICS will look like a challenge being shaped for the West.

What the US would dread the most about BRICS is Russia's possible move to turn the bloc into an anti-dollar initiative. Reportedly, Putin can announce during this summit measures towards de-dollarisation. That can pose a major threat to the US which holds sway over the world largely due to the dollar being a most commonly accepted currency.

Will Putin make a move on dollar?
There has been speculation about a BRICS reserve currency being announced at the summit but Putin has said the time has not come yet for such a currency. "At this point of time it (a BRICS currency) is a long term prospect. It is not under consideration. BRICS will be cautious and act gradually, move slowly. The time has not come yet," Putin said at a media interaction last week.

However, Putin can take another step to erode the dominance of dollar. Russia is seeking to convince BRICS countries at the summit to build an alternative platform for international payments that would be immune to Western sanctions, Reuters has reported. It wants other countries to work with it to overhaul the global financial system and end the dominance of the US dollar. Central to that is the proposal for a new payments system based on a network of commercial banks linked to each other through the BRICS central banks, according to a document prepared by Russia's finance ministry and central bank, distributed to journalists ahead of the summit.

The system would use blockchain technology to store and transfer digital tokens backed by national currencies. This, in turn, would then allow those currencies to be easily and securely exchanged, bypassing the need for dollar transactions, Reuters reported. Russia sees it as a way to resolve increasing problems in settling trade payments, even with friendly countries such as China, where local banks fear they could be hit by secondary sanctions by the US.

Yaroslav Lissovolik, founder of the BRICS+ Analytics think tank, told Reuters that the creation of such a system was technically feasible but would take time. "After the significant expansion of BRICS membership last year, the attainment of consensus is arguably harder," he said.

Russia, the world's top wheat exporter, is also urging the creation of a BRICS grain trading exchange, backed by a pricing agency, to create an alternative to Western bourses where international prices for agricultural commodities are set, as per Reuters. But in a sign that Moscow will need to work hard to push its proposals through, most BRICS members sent only lower-level officials - not finance ministers or central bankers - to a preparatory meeting. However, RT reported that Russian Finance Minister Anton Siluanov presented a proposal on reform of the international financial system to other finance ministers and central bank heads of the BRICS nations last week.

A challenge to the US
The BRICS member states are “coherently moving towards creating reliable payment mechanisms through the use of national currencies as well as the dialogue on digital currencies as priority areas. A need of the hour is to have an alternative to the SWIFT system in order to make transactions independent and uninterrupted to promote deeper integration of national financial systems,” Russian Ambassador to India Denis Alipov said ahead of the summit.

An alternative to the global bank messaging network SWIFT will essentially take the sting out of America's power to sanction countries.

Russia wants more countries participating in this alternative payment system project, allowing Moscow to trade with partners without worrying about sanctions. "The Russian idea is that if you create a platform where there is China, Russia, India and Brazil and Saudi Arabia, many countries that are vital partners for the U.S., the U.S. will not be ready to go after this platform and sanction it," Alexander Gabuyev, director of the Carnegie Russia Eurasia Center, told AP.

Russia’s leading banks were excluded from the SWIFT international payment system starting in 2022 as part of sweeping sanctions imposed on Moscow by the West over the Ukraine conflict.

(With inputs from agencies)