The need to face up to the deficiencies of the Western-controlled monetary and financial system should lead the BRICS to better organize themselves going forward in order to remove at least in part the internal obstacles to change. Although some sensitive matters, such as the possibility of creating a new reserve currency, are only feasible in the longer term, the group should continue to work towards providing practical alternatives not only for themselves but for developing countries as a whole.
This paper discusses the topic of BRICS monetary and financial initiatives with a focus on Russia’s chairmanship of the group in 2024 and next steps. In so far as monetary and financial matters are concerned, the point of departure of the BRICS is the widely recognized dysfunctionality of the dollar-centered system, a consequence of two distinct factors: a) the weaponization of the US dollar and of the Western crossborder payment network; and b) the structural weaknesses of the economy of the United States, the country issuing the hegemonic international currency. The BRICS, rightly or wrongly, are often seen as the main potential source of alternatives to the current flawed international monetary and financial system.
Paradoxically, as we will see, the US wants to monopolize the role of undermining the dollar and the current international system. Among the countries of the BRICS, Russia is one of the most, if not the most interested country in promoting the discussion and implementation of alternatives to the current international monetary and financial system dominated by the United States and its allies.
The reason is well-known: Russia and Russian banks and firms have been a direct target of sanctions, including exclusion from the Western-sponsored cross-border payments framework and, most notably, the freezing of as much as half of the country’s international reserves, to the tune of US$ 300 billion, after the beginning of Russia’s special military operation in Ukraine. A number of other countries, including Iran, one of the new BRICS members, have also been targeted by the West in similar ways. Thus, it was to be expected that Russia would do its best to advance BRICS discussions of financial matters.
