The 16th BRICS Summit, held in Kazan, Russia, from October 22-24, 2024, marked a massive moment in the evolution of the BRICS (Brazil, Russia, India, China, and South Africa) alliance. The summit, themed “Strengthening Multilateralism for Just Global Development and Security,” focused on enhancing cooperation among member countries and expanding the group’s influence.

Key outcomes of the Kazan Summit included:

1. Expansion of BRICS: The inclusion of new members such as Egypt, Ethiopia, Iran, and the United Arab Emirates, reflecting the group’s growing geopolitical and economic influence.
2. Kazan Declaration: A commitment to multilateralism, reforming global governance structures, and promoting a more equitable international order.
3. Economic Cooperation: Emphasis on enhancing trade, investment, and financial cooperation among member states, with a focus on reducing reliance on the US dollar.

Introduction of BRICS Pay: A Threat to USD & SWIFT Payment Mechanism:

BRICS Pay is a proposed digital payment platform designed to facilitate cross-border transactions among BRICS member countries. It aims to provide an alternative to the dominant SWIFT system, reducing reliance on the US dollar for international payments. BRICS member countries aim to reduce their reliance on Western financial bodies and ensure a more decentralized and strong BRICS member friendly global financial mechanism.

BRICS Pay still has its own challenges like legal hurdles, inter-operability, Fraud preventions, but these challenges are technical in nature and will be streamlined within a few years and will benefit the members of BRICS.

 

 

Key features of BRICS Pay include:

1. Decentralized Payment System: Utilizing blockchain technology to ensure secure and efficient transactions.
2. Integration with Existing Systems: Leveraging existing payment infrastructures like Russia’s Mir network and India’s Unified Payments Interface (UPI).
3. Financial Sovereignty: Enabling member countries to conduct transactions in their local currencies, promoting financial independence.

Implications for the US Dollar

The developments at the BRICS Kazan Summit and the introduction of BRICS Pay have significant implications for the US dollar’s dominance in global finance:

1. De-dollarization: The push for transactions in local currencies among BRICS nations is a step towards de-dollarization. This reduces the global demand for the US dollar, potentially weakening its position as the world’s primary reserve currency.
2. Alternative Payment Systems: BRICS Pay offers a viable alternative to SWIFT, which could diminish the US’s ability to exert financial influence through sanctions and other economic measures.
3. Geopolitical Shifts: The expansion of BRICS and the emphasis on multilateralism signal a shift towards a more multipolar world order. This could lead to a redistribution of economic power, challenging the US’s financial hegemony.
4. Impact on US Economy: A reduced role for the US dollar in global trade and finance could lead to higher borrowing costs and inflation in the US, as well as decreased foreign investment.

Significance & Criticism of UN-Chief’s Presence in BRICS Meet at Kazan:

UN Secretary-General António Guterres attended the BRICS Summit in Kazan to engage with the member countries on several critical global issues. His participation underscored the importance of multilateralism and international cooperation, which are central to the UN’s mission. Key reasons for his attendance included promoting peace in Ukraine, global co-operation & engaging with the emerging powers.

His Presence at the summit triggered controversy, especially regarding his interaction with Russian President Vladimir Putin, given his enforced war on Ukraine, with an intention to grab land, and causing pressure on western nations to support Ukraine financially & facilitating with weapon aids.

The BRICS Kazan Summit and the introduction of BRICS Pay represent significant steps towards reshaping the global financial landscape. While the full impact on the US dollar will unfold over time, these developments underscore the ongoing shift towards a more diversified and multipolar economic order and of course, a direct challenge to western supremacy in world affairs.