At the BRICS summit in October, Vladimir Putin branded the West’s attempts to isolate Moscow over its invasion of Ukraine a failure, while portraying Russia as the architect of a new multipolar world order in which the US dollar would no longer be dominant. But in his efforts to position the bloc as an anti-Western club, he risks alienating key founding members.
The past year has seen the BRICS bloc double in size – a growth that coincides with founding member Russia’s intensifying attempts to pit the West against the Global South. At the recent Kazan summit, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates – all of whom have joined in the past year – were present along with recent applicants Malaysia, Türkiye, and Azerbaijan. Several other countries seeking membership also attended.
It was an opportunity for Russian President Vladimir Putin to reassert his argument that punitive Western measures imposed on Moscow following its full-scale invasion of Ukraine have not worked. And with BRICS now representing around 45% of the global population and 35% of worldwide economic output, the summit provided him with an occasion to take centre stage and portray Russia as a leading driver behind a new multi-polar world order.
However, in terms of concrete outcomes, there is little to show other than statements of intent. Putin’s goal of creating an alternative to the Western-led international order and upending the dominance of the US dollar remains far from being achieved. Furthermore, Russia’s efforts to position the bloc as an anti-Western club risk alienating key members such as India, Brazil, and South Africa.
Obsessed with de-dollarization
Putin has accused the West of trying to stem the growing power of the Global South, including via illegal unilateral sanctions, blatant protectionism, and currency manipulation. Russia faces far-reaching sanctions due to its full-scale invasion of Ukraine and has been cut off from the US-dollar-dominated global financial system, including the crucial SWIFT financial messaging system. This has strained the Russian economy despite its war-driven growth model. It has also made dollar-based payments and transactions very challenging (including with China, where banks are wary of US secondary sanctions), leading Putin to accuse Washington and other Western powers of “weaponising the dollar.”
However, appetite among BRICS members for establishing a completely new payment system or phasing out the dollar remains limited. A common BRICS currency would require unlikely political convergence in the form of a banking and fiscal union. On the other hand, while the Chinese yuan – which has replaced the dollar and the euro in the Moscow Exchange – is a plausible choice, positioning it as a global reserve could be a burden on the Chinese economy. It would require China to ease its strict capital controls, allowing free flows and full convertibility – a path at odds with its deep-seated preoccupation with monetary stability.
Moreover, China’s trade surplus remains tightly linked to the US trade deficit, with profits largely reinvested in US debt, equities, and dollar-denominated assets (which continue to be regarded as reliable stores of value). Breaking this cycle in favour of de-dollarisation would require China to pivot to domestic demand – likely to continue declining under demographic and income constraints – and the US to drastically increase domestic production. The latter is an unlikely scenario even under a protectionist Trump 2.0 administration.
There is momentum for reducing the use of the dollar in some cases, particularly cross-border transactions. Through initiatives like the Cross-Border Payments Initiative (BCBPI), the Interbank Cooperation Mechanism, and the proposed BRICS Clear, the bloc is enhancing banking networks to support local currency settlements – a priority endorsed in the summit’s declaration.
In the long term, centralised digital currencies like China’s digital yuan and Russia’s digital ruble may also accelerate a decoupling from Western financial intermediaries. Nevertheless, the entrenched role of the US dollar in global financial networks and exchange reserves is unlikely to wane. Rather than establish a separate financial order, BRICS may fragment the existing one, increasing the pressure for an EU built on the principles of openness and multilateralism to adapt to a new reality.
No shared vision for BRICS
The final day of the summit was billed as “outreach” to countries in the Global South, a strategic priority amid the Kremlin’s war in Ukraine. With its recent expansion giving BRICS a much greater global footprint positioning itself as a potential alternative in an increasingly multipolar world. Shared priorities within BRICS include food security and institutional reform for the Global South, aiming to boost agricultural productivity. The bloc also advocates for reforms to institutions like the IMF and World Bank to amplify the representation of emerging economies.
However, BRICS is not a cohesive bloc; its members differ in political systems, and geopolitical and economic interests, along with varied approaches to global issues, including Russia’s war in Ukraine and Israel’s war in Gaza. These differences will act as a handbrake on Putin’s ambitions.
Countries like India and Brazil may endorse BRICS as a vehicle for shaping a multipolar world in response to decreasing Western influence but are reluctant to support an anti-Western alliance. For India, BRICS offers trade opportunities and a forum for multipolar engagement, but also an opening to counterbalance outsized Chinese influence. Despite the apparent Modi-Xi rapprochement brokered on the margins of the summit, India’s concern with strategic autonomy and its abundant trade with the EU and the US make full alignment with Russia’s vision for BRICS unlikely.
Moreover, while BRICS’ Global South commitments have led to the expansion of its New Development Bank (NDB) and the establishment of a Grain Exchange to bolster food security, the potential reach and impact of these efforts remain uncertain. The NDB’s investment capacity is modest compared to that of established multilateral lenders, such as the IMF and the World Bank. Similarly, the Grain Exchange seeks to stabilise food security through a BRICS-centred blueprint but will inevitably rely on a global trade environment that involves actors beyond BRICS.
With the US and the EU still crucial partners in economic and technological growth for several BRICS members, Putin’s search for an anti-West coalition is likely to play second fiddle to pragmatic individual interests and opportunities for expanding trade and cooperation.
Mixed Messages on Russia’s War in Ukraine
While some BRICS members, including India and China, have benefited from cheap oil and gas, due to Western sanctions on Russia, none of them are openly endorsing Russia’s war on Ukraine. Hence the numerous calls during the summit to end the war.
UN Secretary-General, Antonio Guterres, also attended the summit, much to the angst of Kyiv. This is not just because he failed to participate in Ukraine’s Peace Summit earlier this year, but also because Putin was indicted by the International Criminal Court (ICC) for the war crime of abducting and transferring Ukrainian children to Russia. According to the guidance of the UN General Assembly, “contacts between UN officials and persons who are the subject of warrants of arrest issued by the ICC should be limited to those which are strictly required for carrying out essential UN mandated activities.”
Still, in an address to the summit, Guterres urged an immediate end to the fighting. He highlighted the need for a just peace in line with the UN Charter, international law, and UN General Assembly resolutions, something that many of the BRICS members agree with. This approach also conforms to Ukraine’s Peace Formula, which has significant international support, and which is, for Kyiv, the only way to achieve a comprehensive, just, and sustainable peace. However, many BRICS members have been reluctant to fully endorse the Peace Formula, call for Putin to withdraw from Ukraine’s territory, attend the June 2024 Peace Summit at a senior level, or sign the summit's final declaration. All this despite their commitment to Ukraine’s territorial integrity and the UN Charter.
This approach reflects not only individual ties and dependencies on Russia but also concerns that a major Ukrainian victory would significantly weaken Russia, potentially further empowering the US, and making reform of the multilateral system less likely.
China continues to be a significant challenge for Kyiv. President Xi Jinping has failed to support the Peace Formula, instead devising his own plan, which Brazil has bought into. Despite Ukraine’s opposition, the two countries recently hosted a 17-member meeting on the sidelines of the UN General Assembly to rally support for it.
Furthermore, Beijing has been a decisive enabler of Russia’s war in Ukraine by providing dual-use technologies. These reportedly include machine tools, drone and turbojet engines, and technology for cruise missiles.
The West should be more strategic
While the summit may not have yielded major outcomes for Russia, the EU must stop dismissing BRICS as irrelevant. This is not the case. At a time when the world’s major multilateral institutions – particularly the UN – are in disarray, cooperation between BRICS members is strengthening. Furthermore, regular meetings aimed at deepening relations on trade, investment, and diplomacy have proved to produce concrete results.
Against this backdrop, the EU needs to double down diplomatic and trade relations with selected BRICS members, as well as bring some of their concerns, such as food security, to the fore of multilateral discussions. More broadly, Western countries should take steps to remedy mounting grievances over the balance of representation in the multilateral system, including by opening leadership roles – such as in the IMF – to a wider array of countries. These small changes can have a big impact and create more flexibility on issues that are important to the West.
Amanda Paul is a Senior Policy Analyst and Deputy Head of the Europe in the World Programme at the EPC.
Raúl Villegas is a Junior Policy Analyst in the Europe in the World Programme at the EPC.
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