XVI BRICS Summit: main outcomes and key challenges

On October 22-24, Kazan hosted the XVI BRICS Summit, which was attended by more than thirty delegations from different countries. Russia chaired BRICS for the fourth time and, as the host country, actively shaped its agenda. The motto of the summit «Strengthening Multilateralism for Equitable Global Development and Security» speaks of the aspiration of the Russian Federation and its BRICS partners to propose their own version of a new multipolar world order. CISS experts analyze the main results of the BRICS summit, the main topics discussed at the last event in Kazan and the problems the new association is facing now.

Maximum coverage

The BRICS summit in Kazan was a clear symbol of Russia’s successful efforts to break out of international isolation and assert its influence on the world stage. Russian presidential aide Yuri Ushakov said the day before that delegations from 36 countries and six international organizations, including 22 heads of state and the UN secretary general, had arrived at the summit. According to Vladimir Putin, the BRICS summit «has become the culmination of Russia’s chairmanship in the association and one of the notable events in the world political calendar». The first day of the summit, October 22, was devoted by the Russian president to bilateral meetings with the leaders of the unification countries in the Kazan Kremlin. On the second day – Putin chaired the BRICS summit meetings (first narrowly and then broadly), culminating in the Kazan Declaration. On the final, third day, outreach/BRICS Plus meetings were held. The leaders of the states interested in cooperation with the association – Armenia, Azerbaijan, Belarus, Bolivia, Venezuela, Vietnam, Kazakhstan, Kyrgyzstan, Laos, Mauritania, Palestine, Republic of Congo, Tajikistan, Turkey, Turkmenistan and Uzbekistan – as well as UN Secretary General António Guterres participated in this new format [1].

In the run-up to the summit, the Western media launched a massive campaign against the BRICS summit, with alarmist sentiments dominating the publications. British magazine The Economist wrote that the BRICS summit in Kazan will show Russian President Vladimir Putin’s leading role in the association. As the publication noted, the Russian leader «hopes to add weight to the bloc by building a new financial and payment system to deal a blow to U.S. dominance, as well as protect Russia and its allies from sanctions» [2]. The British news agency Reuters emphasized that «President Vladimir Putin seeks to turn BRICS into a powerful counterweight to the West in global politics and trade».

The media onslaught by Western countries was accompanied by coordinated diplomatic pressure and even special operations. E.g., Serbian President Aleksandar Vučić refused to travel to Russia fearing that his visit could complicate Belgrade’s relations with the European Union. Brazilian President Luiz Inacio Lula da Silva also did not attend the summit, citing a domestic injury. Indian Prime Minister Narendra Modi spent only one day in Kazan and then departed early to meet German Chancellor Olaf Scholz. Turkish President Recep Tayyip Erdogan was forced to cut short his visit due to a terrorist attack the previous day on a facility of Turkish aerospace company TUSAS in Ankara. In general, we can say that the countries of the collective West perceive the BRICS association as a serious threat to their global hegemony and prevent its formation and development in every possible way.

In contrast, Russian media publications were dominated by inflated expectations of the BRICS summit outcomes and excessive romantic assessments. For example, British politician and writer George Galloway said in a conversation with Izvestia that the summit in Kazan in the context of the geopolitical situation is the most important of all; it may even become a turning point in history [4]. Much has been said about the inevitable and significant expansion of the BRICS membership, and it was assumed that the focus of the Kazan summit would be a certain «plan to defeat the dollar», which would be presented by Putin personally [5]. Russian presidential spokesman Dmitry Peskov even had to publicly put down the overly heated propagandists. «Cooperation within the BRICS framework is not directed against anyone or anything – neither against the dollar nor against other currencies. It pursues the main goal – to ensure the interests of those countries that take part in this format», the Kremlin spokesman said, commenting on the shaft of publications about the «plan to defeat the dollar» [6]. Analysts note that the main goal of Russian diplomacy was to maximize coverage of the BRICS summit participants. In order to achieve this visible success, the most poignant and substantive topics had to be abandoned and a number of compromises had to be made in the agenda.

Final Declaration

In the text of the final declaration and during the multilateral meetings in Kazan, a wide variety of topics were touched upon: the need to reform the UN, the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO); the unacceptability of unilateral sanctions; the importance of implementing the Sustainable Development Goals (SDGs), combating climate change and countering terrorism. The leaders, for example, called for a peaceful settlement in Afghanistan and freedom of navigation in the Red Sea and the Bab-el-Mandeb Strait, hampered by increased attacks by the Houthis, and expressed concern about escalation in Sudan and unrest in Haiti. It should be noted that the most controversial issue on Ukraine is devoted to one small paragraph in the final document – the countries recalled their national positions on the situation in and around Ukraine, «outlined by the UN Security Council and the UN General Assembly» [7]. The Kazan declaration separately states that the participants of the association agreed to explore the possibility of creating an independent cross-border settlement and depository infrastructure BRICS Clear. The paper also includes a proposal to establish «an independent BRICS reinsurance capacity, including BRICS (Re) Insurance, with participation on a voluntary basis».

The BRICS Kazan Declaration is a voluminous document containing 134 paragraphs, some of which are quite long extended paragraphs. The compromise nature of the text of the Kazan Declaration is noticeable, emphasizing the importance of strengthening international peace and security and the need to reform the multilateral system of global relations. The declaration emphasizes the increasing role of developing countries, which should contribute to equitable global development. However, despite the ambitious goals voiced, the declaration remains at the level of general diplomatic promises without proposing concrete steps for their realization. For example, the discussion of the use of national currencies in settlements between BRICS countries as an alternative to the dollar has not received concrete details or implementation mechanisms. Overall, the emphatically peaceful declaration suggests that the BRICS is not an anti-Western alliance, and the group does not purposely seek to erode or destroy Western institutions. Experts note that the authors of the declaration chose their wording very carefully, avoiding any turns that could lead to the idea of the inevitability of a sharp confrontation between the collective West and the rest of the world [8].

BRICS challenges

On the eve of the BRICS summit, Jiang Shixue, a professor at the University of Macau, articulated in the pages of the South China Morning Post six challenges or questions that BRICS must answer «if it wants to remain an important and meaningful alliance». The first and most important of these issues concerns the economy. «Leaving the New Development Bank out of the picture, the BRICS has not yet made any serious attempts to improve economic cooperation within the union», the Chinese expert said. The second issue is whether BRICS will have its own administrative apparatus? Unlike many international organizations such as ASEAN or SCO, BRICS does not have its own office and permanent secretariat. The third issue is whether the union is creating an alternative to the dollar or at least launching a payment system based on national currencies? The fourth issue is what are the priorities of this association? BRICS wants to do everything – to establish a new world order, to resolve global economic issues, to fight terrorism, and to find a solution to global warming. But it’s impossible to do it all, one needs specifics. The fifth issue is whether the BRICS will be unified? How is it possible to reach consensus on decisions when there are even more participants? Finally, the sixth issue is the quality of expertise. A Chinese analyst bitterly notes: «Not a single great idea has come out of the BRICS research centers» [9].

This article by Prof. Jiang Shixue is also interesting because the same range of problems was identified by leading Russian experts interviewed before the BRICS summit. In fact, BRICS is based on the voluntary agreement of the parties, which has not yet been legally formalized and therefore is not legally binding. This paradoxical situation looks especially strange against the background of systematic development of cooperation between the BRICS countries. BRICS members are moving from inter-state cooperation to the adoption of such common financial and regulatory measures that will require changes in national legislation. All this makes it necessary to institutionalize BRICS as soon as possible, which is understood as the formation of an organizational structure with a system of autonomous bodies with certain powers. As the RIAC report notes, «BRICS may well continue to exist in the current format of a universal dialogue platform without even attempting to reach the level of institutionalization. But in the conditions of the process of fundamental restructuring of the international system, such functionality, despite its undoubted importance, may be insufficient» [10].

To date, BRICS has been qualified as an interstate cooperation structure or as a permanent consultative structure that does not even reach the level of an international intergovernmental organization. It was expected that the BRICS summit in Kazan would bring certainty to the issue of the association’s subjectivity, but it never happened. For example, the Russian president said during the final press conference that BRICS is now an organization, not just an association or a club of interests. According to Vladimir Putin, «this is an obvious fact». «It is now necessary to structure the work of this organization, and of course, my colleagues and I will think about it and are engaged in it», the Russian president added [11]. However, there was constant talk on the sidelines of the summit that BRICS should not be turned into a hierarchical structure, as BRICS is not seen by India, China or most other participants as a hardline anti-Western grouping. This important issue of subjectivity has been postponed until next year, 2025, when the BRICS presidency will pass to Brazil.

Pending issues

Russia competently used its presidency in BRICS and set a new strategic goal for the association – dedollarization [12]. Experts believe that the current US dollar-centered international monetary system is becoming dysfunctional. The growing multipolarity of the world in economic and political terms is no longer compatible with the preservation of a unipolar world monetary system. This does not mean that the U.S. dollar should be hastily replaced by another national currency, such as the Chinese yuan. An international system based on the yuan or any other national currency would suffer from the same structural problems as the monetary system of the collective West. In the future, we are talking about the creation of a BRICS base currency, which will be used for international transactions and as a reserve currency instead of the dollar and other reserve currencies of Western countries [13]. According to expert estimates, the issue under discussion has at least three dimensions: (a) establishment of a single BRICS base currency; b) development of an international payment and transaction system to replace SWIFT; c) increased use of national currencies in trade and financial transactions within BRICS and with countries outside the group. Today, the share of the dollar in the settlement structure of the BRICS countries is already less than a third, with the remaining transactions being conducted in national currencies.

The leaders of Russia, China, India, Iran, Brazil and South Africa at the BRICS summit publicly stressed the need to reform international financial systems and intensify the dedollarization of the global economy. At the events in Kazan, the Russian president even showed a demo «BRICS banknote»; it «symbolizes the common work that is being done within the BRICS framework». However, according to Vladimir Putin, the creation of a single currency is not yet under consideration, this issue is still «not mature» [14]. Right now, the BRICS countries have three options: use local currencies, adopt digital currencies, or rely on the Chinese yuan. However, local currencies are suffering from low liquidity; the example of Indian rupees being stuck for Russian oil supplies is familiar to everyone. China maintains tight control over its national currency and is in no hurry to share the Chinese equivalent of SWIFT, the Cross-border Interbank Payment System (CIPS). In such a situation, Russia offers BRICS partners the use of digital currencies for investment and cross-border payments. Russian Deputy Foreign Minister Sergei Ryabkov said in Kazan that Russia has formalized these ideas into agreements and «we are passing this topic to the Brazilians». [15] Thus, the topic of real de-dollarization has also been added to the postponed decisions box.

Finally, the previously discussed poll on the rapid expansion of BRICS membership has also been postponed. Bloomberg reported that India opposed the BRICS expansion allegedly because of the anti-American course that Russia and China would set in the association. Brazil, South Africa and the UAE, which have good relations with the West, also hold a similar view, according to this publication. India’s Foreign Ministry later denied reports that the country was opposed to the expansion of the BRICS group [16]. However, discussions at the Kazan summit adopted New Delhi’s moderate strategy of increasing the number of «BRICS partner countries» that have no voting rights in the association. Kazakhstan, Algeria, Belarus, Turkey, Bolivia, Cuba, Indonesia, Malaysia, Nigeria, Thailand, Uganda, Uzbekistan and Vietnam have become partner countries [17]. This choice for the BRICS might seem strange, but it is easily explained by China’s foreign economic interests. Thus, Algeria, Nigeria and Uganda are important suppliers of raw materials in Africa; Bolivia and Cuba are Beijing’s staunch partners in Latin America; Indonesia, Malaysia, Vietnam and Thailand are the production sites of Chinese companies in Asia; Belarus, Kazakhstan and Uzbekistan are stronghold countries for Chinese investments in the post-Soviet space. Turkey, after a successful visit to Beijing by Turkish Foreign Minister Hakan Fidan, has become a priority destination for China’s long-term investments, second only to the United States [18].

Prioritization

According to experts, the BRICS summit in Kazan became a «summit of postponed decisions», as the discussions revealed very different approaches to key topics within the association. For example, Russia and partly China are promoting the idea of accelerated dedollarization, but India and the UAE are against such a rush, as the dollar as a reserve currency suits them quite well. The second is the existence of trouble spots between the BRICS countries, especially between the founders and potential candidates. For example, there are serious differences between Ethiopia and South Africa, India and Pakistan, and so on. Another strong argument against enlargement that has been voiced in the Indian media is that BRICS should not be allowed to turn into an association of «acceptor countries». It is essential that the organization include donor countries that have some capacity and strengthen the organization, rather than becoming a burden on it.

Moreover, even «old members» of BRICS, such as Russia and China, have different understandings of the alliance’s strategic goals and priorities. The identical foreign policy rhetoric of Moscow and Beijing (on the need for a transition to a multipolar world, viewing Western policy through the prism of colonialism, articulating the new role of the Global South / world majority represented by BRICS+) diverges markedly in the economic plane. For example, the idea of technological sovereignty and economic resilience to sanctions in the BRICS integration framework is important for Russia. However, for China, this alliance is just a tool for a new stage of modernization and gaining technological leadership in new sectors (artificial intelligence, green energy and transport). As we can see, the anti-Western orientation of the alliance members was clearly not enough for true consolidation, as there are both economic disparities and mutual competition among the countries of the enlarged BRICS.

It has to be stated that the BRICS countries are still in the process of choosing the main goals and priorities of the alliance, the accuracy of which will determine the successful future of the organization. Here it is appropriate to draw an analogy with another informal interstate association, which was able to timely define its deep meanings, gain institutionalization and universal authority. This is the Shanghai Cooperation Organization (SCO), which has rapidly evolved from a modest commission on border delimitation in Central Asia into an influential international player. The success of the SCO is attributed to the exact hit in the political expectations of its participants – the creation of a new format of integration to replace the defunct Soviet one and ensuring regional security without the participation of external players, as well as the timely establishment of the relevant organizational structures – the SCO Secretariat and RATS [19]. Similarly, for the BRICS countries, these two relevant topics are: creating a constructive alternative to the «collective West» and consistent dedollarization of their monetary system. However, the road to a true alternative financial structure will be difficult and long, so the BRICS countries need to set themselves up for painstaking daily work.

Three scenarios

The Kazan Summit showed that BRICS today is one of the key international organizations, rapidly gaining momentum and influence. BRICS supporters say the new alliance is changing the world order by shifting power from the Global North to the Global South. Opponents argue that good intentions and policy statements alone are clearly insufficient for such a radical change. On the one hand, the rapid growth of the alliance testifies to the growing appeal of the BRICS brand itself, but on the other hand, there is the difficult question of how to ensure the effectiveness of the alliance in the face of expanding membership and uncertainty of objectives. As for the immediate future of this organization, experts’ opinions differ markedly and they see three basic scenarios.

The first scenario is the «umbrella brand». According to most analysts, today BRICS is a popular umbrella brand, under the aegis of which numerous events are organized, and in the broadest spectrum – from summits and international conferences to cultural events and sports games. One of the explanations for the attractiveness of the BRICS format for potential participants is that by joining this «privileged club», new members sacrifice virtually nothing and assume no onerous obligations. In its current state, BRICS looks like an amorphous «non-alignment movement with the West» without clear rules, goals and program. The principle of multipolarity underlying this alliance inherently implies weaker discipline and loose interaction within a largely ad hoc alliance. All this suggests that BRICS is likely to retain the vague format of an international club and a prestigious platform for discussions, but will not become a rigid hierarchical structure of anti-Westernism. Rather, it will be a mixture of an international event agency and a political tourism organization, regularly paid for by the participating countries, as well as through sanctions discounts on sales of Russian raw materials.

The second scenario is the «Chinese tool». Beijing has positioned itself as the most active or even the main participant in the BRICS alliance. For example, China shares the first to second place with India in terms of population (1.42 billion people), but is noticeably ahead of all BRICS countries in terms of GDP ($17.8 trillion, India – $3.5 trillion) and economic growth. Today, China views BRICS as a convenient platform for strengthening cooperation with member countries and expanding its economic influence, but it is always guided by its own national interests. Given the growth of settlements in national currencies between the PRC and the unification countries, the role of the Chinese yuan in regional trade has increased markedly in recent years. Experts believe that against the backdrop of Western sanctions, it is the yuan that has already become the de facto «single currency» in the unification. Whether Beijing is ready to become the unconditional leader of BRICS is still an open question, but not because of Chinese economic capabilities, but because of the political necessity of such a step. Beijing is cautious on monetary and financial issues and does not want a sharp deterioration in relations with key trading partners in the West. Today, the PRC is using the BRICS as a shield and preparing the ground to be among the winners of the new «Chinese-style globalization». This strengthening of China in the BRICS group carries obvious risks and is not in the interests of other member countries.

The third scenario is «one’s own game». The only option to prevent the «chinesization» of BRICS is to adhere to the consensus method of decision-making, advocacy by all member countries of their interests, creation of a clear organizational structure and, most importantly, implementation of all agreements reached. It should be noted that the Chinese leadership is good at managing networks and informal arrangements, which is evident in the implementation of the «One Belt, One Road» project, which may later be paired with the BRICS+ format. In such a situation, Russia must pass between the temptations of geopolitical leadership in BRICS and the real danger of becoming a pawn in the Chinese game. At the same time, Russia should not resemble a naive teenager in foreign policy – hold its arms out too enthusiastically and then take offense at the lack of understanding of the embraced one. This is the worst kind of «political romanticism», as Carl Schmitt wrote in his work of the same name. The Kazan summit clearly showed that Russia does not need to demand more from other BRICS members than they can actually give. It should focus on promoting its own national interests within the BRICS framework, and predominantly within bilateral formats. It is only then that BRICS will gain multicore sustainability and will have a chance to successfully modernize the system of international relations.

Russia’s optimal strategy should be to systematically build its own macro-region around the Caspian Sea, which includes, in addition to Russia itself, such important countries as Turkey, Azerbaijan, Iran and the five Central Asian republics. Each of the countries of the Caspian Sea region is now rapidly developing – carrying out new industrialization, striving to overcome dependence on imported products and sanctions restrictions of the West. All these countries are closely linked to Russia in the economic, trade and logistical spheres, and together we are able to ensure the collective security of a strategically important macro-region in the military and resource spheres. Speaking at an enlarged session of the BRICS summit, Russian President Vladimir Putin proposed a number of initiatives that would contribute to the formation of such a macro-region. These include the BRICS Investment Platform, the BRICS Grain Exchange, the Partnership on Carbon Markets and Precious Metals, as well as the BRICS Logistics Platform and the BRICS Electronic Communication Platform on Transportation [20]. The development of international transport corridors, including the North-South ITC, will allow the Caspian macro-region to enter the markets of India and the Persian Gulf countries, thereby reducing one-sided dependence on East-West connections. As a result, the creation of its own macro-region will allow Russia and its partners to significantly strengthen their geo-economic and political weight both in the BRICS format and in the new multipolar world as a whole.