Factbox-What proposals will Russia push at the BRICS summit?
2024.10.16 11:09
MOSCOW (Reuters) – Russian President Vladimir Putin will host a summit of BRICS leaders next week, seeking support in his standoff with the West from the expanded group that now represents about a third of global economic output.
Russia says the event will be attended by leaders from Brazil, India, China, South Africa, Egypt, Ethiopia, Iran and the UAE, and Saudi Arabia – which has been invited to join – will be represented by its foreign minister.
Here are some of the proposals Moscow will put forward:
BRICS CROSS-BORDER PAYMENTS INITIATIVE
An alternative payment system in national BRICS currencies that would include a new messaging system and a network of national commercial banks linked to each other through the BRICS central banks, removing the need to exchange local currencies through the U.S. dollar.
The system would be immune to external pressure and will use blockchain technology to store and transfer digital tokens, backed by national currencies, to make it more secure and reduce transaction costs. The aim is to keep trade flows between member countries running smoothly even if one or more members are denied access to the international financial system.
BRICS CLEAR
An international settlement and depository infrastructure that Russia says would enhance cross-border trade in national securities. The idea is to allow all members to retain full access to BRICS financial markets even if they are cut off from Western financial infrastructure.
BRICS REINSURANCE
The proposal is to establish a BRICS reinsurance company to allow uninterrupted shipment of goods and key commodities between members in the event that Western reinsurance firms, who dominate international trade, refuse to provide their services.
This issue is especially relevant to Russia as Western countries have since 2022 applied a price cap on its oil, blocking access to Western shipping and insurance services if the oil is sold for more than $60 a barrel.
BRICS CONTINGENT RESERVE ARRANGEMENT
An international financial facility aimed at supporting member countries during times of economic crises that would serve as an alternative to funding from the International Monetary Fund (IMF).
BRICS GRAIN TRADE EXCHANGE
The proposal calls for the establishment of a trading platform for grain and other major commodities, with an associated pricing agency that will provide price data and market analytics. Currently, international prices for major commodities are set on Western bourses.
COOPERATION ON CREDIT RATINGS
Better communication and experience-sharing between the member countries’ credit rating agencies, with the use of artificial intelligence to help eliminate human bias. This measure would shield BRICS markets from a pullout by Western credit rating agencies.
