At Russia meet, BRICS leaders tout grain exchange, alternative payment for trade to US dollar dominance

KAZAN (Russia), Oct 24 — Leaders of the nations in the BRICS grouping, which accounts for 37% of global economic output, predicted its influence would grow as they met in Russia on Tuesday, outlining common projects ranging from a grain exchange to a cross-border payments system.

Russia’s President Vladimir Putin, who has sought support from BRICS leaders amid his standoff with the West over the war in Ukraine, said that BRICS’ average economic growth in 2024/25 would be 3.8%, compared to global growth of 3.2-3.3%.

“The trend for the BRICS’ leading role in the global economy will only strengthen,” Putin said, citing population growth, urbanization, capital accumulation, and productivity growth as key factors.

The joint communique of the summit, called the Kazan Declaration, attacked unilateral sanctions imposed on some of the group’s members, including Russia and Iran, saying that they harm the poorest people in targeted states.

“Therefore, we call for their elimination,” the Kazan Declaration said.

Russia, the world’s biggest wheat exporter, proposed the creation of a BRICS grain exchange which could later be expanded to trade other major commodities such as oil, gas and metals. The Kazan Declaration welcomed the initiative.

“BRICS countries are among the world’s largest producers of grains, legumes, and oilseeds. In this regard, we proposed opening a BRICS grain exchange,” Putin told the leaders.

Cross border payments

He added that the exchange “will contribute to the formation of fair and predictable price indicators for products and raw materials, considering its special role in ensuring food security”.

“The implementation of this initiative will help protect national markets from negative external interference, speculation, and attempts to create an artificial food shortage,” Putin said.

Kremlin spokesman Dmitry Peskov, asked why the declaration paid relatively little attention to the Ukraine conflict, told Russian radio that Ukraine was not the central issue for BRICS.

“This is an important question for Russia’s agenda but it is far from being the central issue for BRICS. And to the extent that it should figure on the BRICS agenda, this was reflected.”

Ukraine’s Foreign Ministry said the declaration showed Russia had been unable to impose on other participants its view of the war in Ukraine.

Other leaders backed the creation of a common cross-border payments system, which would help BRICS countries trade with each other, bypassing the dollar-dominated global financial system.

Brazilian President Luiz Inacio Lula da Silva, who took part in the BRICS summit via video conference after a head injury over the weekend, said that it is time for the BRICS nations to create alternative payment methods.

He added that the group’s New Development Bank (NDB) was designed as an alternative to what he called failing Bretton Woods institutions such as the International Monetary Fund (IMF).

Local currencies

India’s Prime Minister Narendra Modi said that he welcomed the steps for financial integration of BRICS countries while China’s President Xi Jinping urged BRICS countries to deepen financial and economic cooperation.

The Kazan Declaration called for a feasibility study on the other Russian initiatives, a BRICS Clear depositary and securities trade settlement system and a common reinsurance company.

In his speech, Putin also called for the creation of a BRICS investment platform, which will facilitate mutual investment between BRICS countries and could also be used for investment in other countries in the Global South.

Contrary to earlier statements from senior Russian officials on the need to find an alternative to the International Monetary Fund (IMF), the Kazan Declaration enhanced the role of the IMF, stressing the need for further reforms.

The declaration did not mention global dollar dominance, an issue that was often raised during the Russian presidency, nor a BRICS single currency and the use of cryptocurrencies, mentioned by Russia as a way to protect trade from Western sanctions.

“We welcome the use of local currencies in financial transactions between BRICS countries and their trading partners,” the Kazan Declaration said. — Reuters