BRICS is taking initiatives that stand as a challenge to the Empire-led world arrangement. The arrangement — Empire’s sole authority — in the world capitalist order will face stiff competition and resistance if BRICS initiatives move on steadily.
The ongoing Ukraine War has appeared as a significant lesson to all concerned standing on both sides of the war-line. The war alliance NATO, on one side, is fighting Russia in a war that has never happened since the closure of the WWII.
Not only in terms of warring countries and the war’s spread, but also in terms of weapons, this Ukraine War stands as an example of imperial capital’s power, manipulation capacity, and incapacity. The arena of war has already spread over countries, as a few countries are acting as training camps while a few have turned them as stockpiling and staging ground, and a high-pitched propaganda including psyop centre. The most significant part is one of the weapons being used in the war — sanctions. Its use tells the Empire-led system’s extent of capacity, which ultimately shows the incapacity of sanctions as a weapon.
Vladimir Putin, the president of Russia, has recently told of a few BRICS initiatives. These include development of a BRICS global reserve currency — a currency basket of BRICS countries. The Russian leader was talking recently at the BRICS Business Forum.
The countries — Brazil, Russia, India, China and South Africa — together represent more than 40 per cent of the global population with their more than 16 per cent share in world trade. The block’s share of global economy is 23 per cent while share of global investment is 25 per cent. In 2021, BRICS recorded more than $8.5 trillion in merchandise trade. These will, hopefully, increase in the coming years as the countries in the block are intensifying their cooperation, and a few more countries are going to join BRICS.
In view of the use of sanctions as weapon by the Empire-led military alliance in the Ukraine War, and the BRICS countries’ increasing trade and investment, the development of a BRICS global reserve currency, as Russian president Putin has told, is not only significant, but a necessity, and a challenge to the Empire-led system.
The Empire-led system has proved unreliable and undependable. Venezuela has already experienced this undependable character of the Empire-led pole. The Latin American country’s gold, a huge quantity, is in the UK, a major pillar of the Empire-led system. Venezuela has failed to bring in that gold from London. Venezuela’s money is in the United States. Iran has the same experience. Russia is now experiencing the same — a huge amount of its reserve, more than $300 billion, is now in the Empire-led system’s pocket. It is outright theft.
Who knows that some other country trying not to be swallowed by the Empire-led system shall not have similar experience? Who is safe and secure in this imperial reality? Who can keep trust on the Empire-led system?
None is safe in the system, and none can keep trust on the system. One is safe from the bite of the system as long as it obliges the Empire.
The Empire’s economy itself is not in a powerful position. That is another factor behind the dwindling trust on the Empire.
Even, the capital that exploits its land of origin shall aspire to be safe and secure if its interest comes into competition/conflict with the imperial interest; and there’s that possibility of competition/conflict, and that is because of nature of capital.
With this perspective, the development regarding the BRICS reserve currency Putin mentioned is a source of hope for countries aspiring to go away from the imperial orbit.
The BRICS states, according to Putin, are also developing an alternative mechanism for international payment. The countries have already initiated the process of using local currencies in trade among them. The states are also developing a joint payment network.
The Ukraine war has created this urgency — an alternative joint payment network. The imperial order planned to subdue Russia at the onset of the Ukraine war, and the payment network the imperial system dominates — SWIFT — was one of the tools in that onslaught. The alternate joint payment network will take away the reliance on the imperial system. That will be a blow to the imperial system.
Russia has already developed an alternative payment system — System for Transfer of Financial Messages, or SPFS. Putin has offered the BRICS states to freely connect to the SPFS. Fifty-two organisations from 12 countries and most of the Russian lenders are connected to the system.
China has a similar system: the Cross-border Interbank Payment System, known as the CIPS. The CIPS last year processed about $12 trillion.
Along this, the yuan, according to the SWIFT, was the fifth most active currency for global payments by value in April.
India, media reports said, was considering the possibility of using yuan as a reference currency in India-Russia payment settlement mechanism.
The BRICS states can choose between the Russian and the Chinese systems, or develop a third alternative. Whatever is chosen, any alternative payment method carries powerful possibilities beyond the imperial system.
So the message Putin conveyed at the BRICS Business Forum, at the beginning of the BRICS Summit that has formally opened on June 23, 2022 in Beijing, is meaningful, and is having a far-reaching implication.
Alberto Fernandez, the president of Argentina, has already expressed support to such system. To Fernandez, it is a way to get out of dollar’s dominance. Possibly, more countries will follow.
The 14th BRICS Summit, possibly, is going to take further steps to get rid of the Empire’s hegemony. For the countries subdued by the Empire, it is a positive development, as they are experiencing the way the Empire weaponizes dollar. The Empire uses dollar as a financial weapon, and the weapon is used to further its interests — economic, financial, political; and political interest ultimately grows out of economic interests.
Countries are to get away from this weaponization owned by the Empire, as the system is anti-self-reliance and pro-subjection, subjection to the empire, and its interest is exploitation of countries and peoples. It is part of the world order the Empire leads. Putin has already said the old world is over. The utterance was made in St Petersburg Economic Forum, which concluded days back.
Xi Jinping, the president of China, in his speech at the forum, called for an increased cooperation on e-commerce, logistics and local currencies. It is an important proposal with wide possibilities.
Russia and China conduct a part of their trade in respective currencies. Hopefully, it will expand. The two countries have similar arrangement with a number of countries. The Chinese leader called for an increased utilisation of national currencies. Xi said that the utilisation of national currencies ‘would mean that we would not need to use the banking system of either the US or the EU.’
Putin and Xi’s proposals and approaches are a direct challenge to the Empire-led system, the Empire’s leadership. The Empire cannot tolerate this, as these will hurt the Empire’s interest.
The Empire needs and demands its dollar’s domination on all. The Empire needs and demands expansion of its capital. This capital cannot survive without exploiting all. Countries across Asia, Africa, Latin America and now Europe testify to this. The dominance of the dollar will never give others space to expand.
On the contrary, BRICS, and especially China, the biggest economy in the BRICS, provides a wider possibility; and after the use of the sanctions as weapon by the imperialist pole against Russia, Russia provides opportunities.
With sanctions as weapon, the imperialist pole has burned its vehicles it touts: free market, free competition, free flow of capital, and the confusingly named globalisation. A number of capitals, other than the capitals in war industry and its associates, originating in European countries are experiencing the way the ‘brilliantly’ planned sanctions are burying those capitals in the soil of Ukraine. Along with hurting Russia the sanctions are hurting capitals in Russia’s opposite camp. The direct loss of sanctioning economies due to sanctions imposed on Russia is estimated to be a few hundred billion dollars. This amount of loss is bigger if indirect loss is calculated. This loss will rise further along with the passage of time.
Xi, on the opposite, has called for an increased representation of the emerging economies and developing countries. On sanctions, he said, it is a boomerang and a double-edged sword, which ‘only end up hurting one’s own interests as well as those of others, and inflict suffering on everyone.’
The difference is clear. The imperialist camp is already suffering. In Xi’s words, it is a ‘blind faith in the so-called “position of strength” that attempts to expand military alliances, and seeks one’s own security at the expense of others’. It is, Xi says, a security dilemma of one, the party with sanction-weapon.
Putin said sanctions are ‘mechanism of exerting pressure on competitors’, ‘intentional destruction of cooperation’, destruction of transport and logistics chains, undermining business interests on a global scale and negatively affecting people and countries.
Xi encouraged businesses to invest and develop in China, enhance trade and economic cooperation, share development opportunities.
China and Russia’s position is opposite to the Empire. Capitals in these countries need space, opportunities, not confrontation. A part of capitals in the imperial camp is looking for confrontation for own expansion.
The Empire and its camp followers are still, already suffering from its own weapon — sanctions. It may happen that the gold market will be hit with sanctions. It may happen that secondary sanctions will be imposed. This depends on the play of groups and sub-groups within the imperial camp. The objectives and approaches of these groups and sub-groups are not the same and uniform.
In this situation, BRICS stand as a counterweight, a possibility, and as a challenge to the Empire.
Farooque Chowdhury writes from Dhaka.