BRICS summit in Kazan, Russia, discusses elimination of dollar amid global war

The three-day summit of the BRICS (Brazil-Russia-India-China-South Africa) coalition ended yesterday in Kazan, Russia. Representatives of a total of 36 countries were present; Iranian President Masoud Pezeshkian, Turkish President Recep Tayyip Erdogan and Egyptian President Abdel Fattah el-Sisi, as well as heads of state of the original five BRICS countries, also attended.

Russian President Vladimir Putin (R) greets Vietnamese Prime Minister Pham Minh Chinh during a bilateral meeting during the BRICS summit in Kazan, Russia, Thursday, October 24, 2024. (Alexander Nemenov/Pool Photo via AP) (AP Photo)

The Kazan Summit brought into sharp focus the desperate economic and geopolitical crisis underlying world capitalism. This event occurred at a time when US imperialism and its European allies were waging war with Russia in Ukraine while supporting the genocide of Gaza and a possible Israeli attack on Iran. Many countries that participated in Kazan (especially Iran, Russia and China) are now denounced in the US media as the “Axis of Evil”.

Faced with the relentless aggression of imperialist powers, the BRICS countries are trying to develop regional allies and reduce international dependence on the US dollar.

The Kazan summit declaration adopted on Wednesday called for an end to the Ukrainian war “through dialogue and diplomacy” and expressed “serious concern” over the “mass killing and injury of civilians, forced displacement and widespread destruction of civilian infrastructure” in Gaza. He also criticized Israel’s attack and bombardment of southern Lebanon.

The report also touched upon the “devastating impact of illegal unilateral coercive measures, including illegal sanctions, on economic life.” Since the US unilaterally canceled the Iran nuclear deal in 2018 and the outbreak of the Ukraine war in 2022, Washington has strangled the economies of first Iran and then Russia by cutting off their access to the US dollar and the associated international interbank payments SWIFT system. . Amid NATO’s military debacle in Ukraine, Washington is also imposing sanctions on Chinese banks that finance trade with Russia.

Threats by Washington and its European allies to seize Russian dollar reserves have alarmed many countries that are or might join the BRICS; This includes Saudi Arabia, which has large dollar reserves from oil sales but now has close trade ties with China.

Therefore, the Kazan Summit established or evaluated the issue of payment systems that exclude the dollar and the establishment of financial markets outside US control. It approved “the use of local currencies in financial transactions between BRICS countries and their trading partners.” It also approved “the initiative of the Russian side to establish a grain (commodity) trading platform within BRICS (BRICS Grain Exchange).” Currently, most Russian and Iranian oil is traded outside the dollar, particularly with China and India, to avoid US sanctions.

The summit communiqué also instructed the BRICS interbank cooperation mechanism (ICM) to “examine the feasibility of establishing BRICS Clear, an independent cross-border settlement and custody infrastructure” that could potentially rival SWIFT.

Russia and China are also accelerating their purchases of gold, which can be an alternative to the US dollar. This is reportedly critical for their ability to continue trading, even though US regulators have threatened Chinese banks with sanctions for trying to end trade with Russia amid the Ukraine war. Last month, in the article titled “601 Percent Increase: Russia Starts Unique Gold Buying Spree,” Jerusalem Post noted:

Russia and China have developed a new approach using gold as a means of payment for goods and services. The process involves buying gold in Russia, shipping it to Hong Kong to be sold, and depositing the proceeds into local bank accounts. This workaround allows both countries to continue trade while avoiding sanctions.

However, this alternative method is not without its obstacles. Russian organizations had to hire couriers to physically transport documents across borders and obtain necessary approvals from Chinese bankers.

At the press conference held before the summit, Putin commented: “Since the US restricted the use of the US dollar as a universal international payment unit for political reasons, the whole world began to think about whether the US dollar should be used.” He added that 95 percent of Russia’s foreign trade, especially its trade with China, is traded in national currencies rather than dollars.

Washington and its European imperialist allies greet such initiatives with anger. US imperialism has long tried to encourage or force other countries to use the dollar. Particularly after the Stalinists’ dissolution of the Soviet Union in 1991, it unleashed a wave of imperialist wars in the oil-rich Middle East based on financial calculations that went far beyond allowing US and European oil companies to plunder countries like Iraq or Libya.

Experiencing a steady decline in competitiveness, the United States has been struggling with massive trade and current account deficits of hundreds of billions of dollars a year for decades. It financed these deficits and provided the goods it needed by printing dollars from world industry (mostly through massive bailouts). Other countries agreed to take these dollars even though they did not need them in such large quantities to buy U.S.-made products because they purchased other countries’ goods, such as energy or grain, that were sold in dollars in U.S.-controlled markets.

US imperialist strategists were therefore determined to avoid exactly the kind of event the BRICS summit had set in motion: the establishment of international trade in critical commodities not denominated in dollars and in markets that had escaped US-NATO geopolitical control.

This danger was well understood in NATO official circles. In 2019, Denmark’s Saxobank published a study on what would happen if Eurasian trade was no longer denominated in dollars, saying it would “shift a large share of global trade away from the US dollar, causing the flow of money into the US to shrink further.” predicted. It needs to finance its double-digit deficits.” The report predicts that the “US dollar” will lose “20 percent within months” against average Asian currencies and 30 percent against gold.

As a matter of fact, in the middle of the BRICS summit, US officials issued a barrage of threats against the BRICS countries. These primarily targeted Russia and North Korea, accusing North Korea of sending troops to Russia to fight in Ukraine; but this has also increased tensions in the Asia-Pacific, also targeting China.

“We are seeing evidence that North Korean troops are going to Russia,” US Defense Secretary Lloyd Austin told reporters at a press conference in Rome. He continued: “If they are fighting jointly, if their intention is to join this war on behalf of Russia, this is a very, very serious issue.” The US Department of Defense commented, “The effects of such a move will be felt not only in Europe but also in the Indo-Pacific region.”

US White House Homeland Security spokesman John Kirby said North Korean troops in Ukraine would be “fair game” and could be targeted by US-led forces in Ukraine.

This points to the fundamental weakness of the BRICS summit. This is a coalition of capitalist governments that hope to develop a “multipolar” world order so that they can coexist more or less peacefully with the NATO imperialist powers, just as the Stalinist bureaucracy tried to do before liquidating the Soviet Union. Imperialist powers seeking compromise with imperialism are extremely reckless and ruthless in pursuing their own interests through genocide and war. They are not looking for multipolarity, but world hegemony.

Bourgeois regimes in the BRICS countries are also painfully aware of the enormous growth of the billion-strong working class in their countries in recent years. The presence in Kazan of the bloody Egyptian dictator Al-Sisi, who is famous for drowning the revolutionary struggle of Egyptian workers in blood in the 2013 coup, is only an indicator of their hostility towards workers. The summit declaration also called for an “sufficiently resourced IMF” fund to impose austerity policies on workers in BRICS candidate states such as Pakistan and Sri Lanka.

At the press conference he held before the summit, Putin argued that BRICS brings countries together on the basis of common capitalism and traditional beliefs. “All of our so-called traditional values, such as Chinese culture, Christian culture, Islamic culture, are actually the same if read and translated from one language to another.”

There is common opposition and anger among workers in BRICS countries, as in NATO countries, against NATO’s threats to invade Ukraine to fight Russia or NATO’s support for Israel’s genocide in Gaza. However, this does not make the perspective of building a “multipolar” capitalist world a valid perspective for opposing imperialism.

BRICS is a coalition of different regimes that share little more than awareness of the mortal threat posed by US imperialism and the dominant role of the dollar. There are explosive tensions between them. BRICS member or candidate states, including India and Pakistan or Iran and Saudi Arabia, have repeatedly fought or threatened to go to war with each other.

The only valid perspective for dealing with the brutal escalation of war by imperialist powers is to build a revolutionary, socialist anti-war movement within the international working class against imperialist war and capitalism.