BRICS, Putin, Xi and challenge to empire
Russian President Vladimir Putin, left, and Chinese President Xi Jinping pose as they meet in Beijing on February 4. — Agence France-Presse/Sputnik/Alexei Druzhinin
The BRICS are taking initiatives that challenge the Empire-led global arrangement. The arrangement – the sole authority of Empire – in the global capitalist order will face fierce competition and resistance if BRICS initiatives progress steadily.
The ongoing war in Ukraine has emerged as an important lesson for all who stand on both sides of the war line. The NATO war alliance, on the one hand, is fighting Russia in a war that hasn’t happened since the end of World War II.
Not only in terms of the warring countries and the spread of the war, but also in terms of weapons, this Ukraine war is an example of the power, manipulative capacity and incapacity of imperial capital. The arena of war has already spread to several countries, as a few countries act as training camps while a few have turned them into storage and staging grounds, and acute propaganda including a psyop center. The most important part is one of the weapons used in war – sanctions. Its use indicates the extent of the capability of the Empire-led system, which ultimately shows the inability of sanctions as a weapon.
Vladimir Putin, the President of Russia, recently talked about some BRICS initiatives. These include the development of a global BRICS reserve currency – a basket of currencies from the BRICS countries. The Russian leader was speaking recently at the BRICS Business Forum.
The countries – Brazil, Russia, India, China and South Africa – together represent more than 40% of the world’s population with their share of more than 16% in world trade. The bloc’s share in the global economy is 23%, while the share of global investment is 25%. In 2021, the BRICS recorded over $8.5 trillion in merchandise trade. These will hopefully increase in the coming years as the countries of the bloc intensify their cooperation and a few more countries will join the BRICS.
Given the use of sanctions as a weapon by the Empire-led military alliance during the Ukrainian War, and increased trade and investment from BRICS countries, the development of a global reserve currency BRICS, as Russian President Putin said, is not only important, but a necessity and a challenge for the Empire-led system.
The Empire-run system proved unreliable and unreliable. Venezuela has already experienced this unreliability of the Empire-led pole. The Latin American country’s gold, an enormous amount, is found in the United Kingdom, a major pillar of the Empire-ruled system. Venezuela failed to bring this 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, over $300 billion, is now in the pocket of the Empire-run system. It is pure and simple theft.
Who knows that another country trying not to be swallowed up by the Empire-run system won’t have a similar experience? Who is safe in this imperial reality? Who can keep faith in the system run by the Empire?
None are safe in the system, and none can maintain trust in the system. We are safe from the bite of the system as long as it obliges the Empire.
The Empire’s economy itself is not in a strong position. This is another factor explaining the loss of confidence in the Empire.
Even, the capital which exploits its land of origin must aspire to security if its interest comes into competition/conflict with the imperial interest; and there is this possibility of competition/conflict, and it is because of the nature of capital.
In this perspective, the evolution of the BRICS reserve currency mentioned by Putin is a source of hope for countries aspiring to leave the imperial orbit.
The BRICS states, according to Putin, are also developing an alternative international payment mechanism. The countries have already initiated the process of using local currencies in exchanges between them. States are also developing a joint payment network.
The war in Ukraine has created this emergency — an alternative joint payment network. The Imperial order planned to subjugate Russia at the start of the Ukrainian War, and the Imperial system’s dominated payment network – SWIFT – was one of the tools of this assault. The alternative joint payment network will remove reliance on the imperial system. It will be a blow to the imperial system.
Russia has already developed an alternative payment system — the Financial Message Transfer System, or SPFS. Putin offered BRICS states to freely connect to the SPFS. Fifty-two organizations from 12 countries and most Russian lenders are connected to the system.
China has a similar system: the Cross-Border Interbank Payment System, known as CIPS. Last year, CIPS processed approximately $12 trillion.
Meanwhile, the yuan, according to SWIFT, was the fifth most active currency for global payments by value in April.
India, according to media, was considering the possibility of using the yuan as a reference currency in the payment settlement mechanism between India and Russia.
BRICS states can choose between the Russian and Chinese systems, or develop a third alternative. Regardless of the choice, any alternative payment method offers powerful possibilities beyond the Imperial system.
Thus, the message conveyed by Putin to the BRICS Business Forum, at the start of the BRICS summit which officially opened on June 23, 2022 in Beijing, is significant and has far-reaching implications.
Alberto Fernandez, the president of Argentina, has already expressed his support for such a system. For Fernandez, it’s a way out of dollar dominance. Maybe other countries will follow.
The 14th BRICS Summit may take new steps to get rid of the Empire’s hegemony. For Empire-subjugated countries, this is a positive development, as they experience how the Empire weaponizes the dollar. The Empire uses the dollar as a financial weapon, and the weapon is used to advance its interests – economic, financial, political; and political interest ultimately flows from economic interests.
Countries must move away from this militarization held by the Empire, because the system is anti-self-sufficiency and pro-subjugation, submission to the empire, and its interest is the exploitation of countries and peoples. It is part of the world order ruled by the Empire. Putin once said the old world was over. The statement was made at the St. Petersburg Economic Forum, which ended a few days ago.
Chinese President Xi Jinping, in his speech at the forum, called for increased cooperation on e-commerce, logistics and local currencies. This is an important proposition with wide possibilities.
Russia and China conduct part of their trade in their respective currencies. Hopefully it will expand. Both countries have similar agreements with a number of countries. The Chinese leader called for increased use of national currencies. Xi said using national currencies “would mean we wouldn’t need to use the US or EU banking system.”
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 it will harm the interests of the Empire.
The Empire needs and demands the domination of its dollar over all. The Empire needs and demands the expansion of its capital. This capital cannot survive without exploiting everything. Countries in Asia, Africa, Latin America and now Europe bear witness to this. Dollar dominance will never give others the space to grow.
On the contrary, the BRICS, and in particular China, the largest BRICS economy, offer a wider possibility; and after the use of sanctions as a weapon by the imperialist pole against Russia, Russia offers opportunities.
With sanctions as a weapon, the imperialist pole has burned its vaunted vehicles: the free market, free competition, free movement of capital and globalization with a confused name. A number of capitals, other than the capitals of the war industry and its associates, originating from European countries, experience how the “brilliantly” planned sanctions bury these capitals in the soil of Ukraine. In addition to hurting Russia, the sanctions are hurting the capitals of the anti-Russian camp. The direct loss of sanctioning economies due to the sanctions imposed on Russia is estimated at a few hundred billion dollars. This amount of loss is greater if the indirect loss is calculated. This loss will further increase with the passage of time.
Xi, on the contrary, called for increased representation from emerging economies and developing countries. Regarding the sanctions, he said, it is a boomerang and a double-edged sword, which “only ends up harming his own interests as well as those of others, and inflicting 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 its own security at the expense of others.” It is, Xi says, a one-man security dilemma, the party with the sanction weapon.
Putin said the sanctions were a “mechanism of pressure on competitors”, an “intentional destruction of cooperation”, the destruction of transport and logistics chains, undermining business interests on a global scale and negatively affecting people and countries.
Xi encouraged companies to invest and grow in China, strengthen trade and economic cooperation, share development opportunities.
The position of China and Russia is against the Empire. The capitals of these countries need space, opportunities, not confrontation. Part of the capitals of the imperial camp seeks confrontation for its own expansion.
The Empire and its camp supporters are still, already, suffering from their own weapon: sanctions. It may happen that the gold market is hit with sanctions. Secondary sanctions may be imposed. It depends on the game of groups and subgroups within the imperial camp. The objectives and approaches of these groups and sub-groups are not the same and uniform.
In this situation, the BRICS present themselves as a counterbalance, an opportunity and a challenge to the Empire.
Farooque Chowdhury writes from Dhaka.