Will the Brics inherit the earth? America can't stop multipolarity

It’s particularly telling of the West’s tone-deaf approach to the rest of the world that, to the former’s surprise, so many countries expressed an interest in joining the Brics after the outbreak of the Russia-Ukraine war. Ironically, the West’s sanctions regime — and especially the freezing of $300 billion of Russia’s foreign-exchange reserves, an unprecedent act of economic warfare — is what motivated many countries to look for alternatives to the dollar-denominated Western financial infrastructure.

The expansion of the Brics, coupled with the growing interest from the Global South, underscores the geopolitical power shift underway — from the West to Rest. Indeed, the Brics bloc already wields considerable economic clout. The group’s combined GDP, when adjusted for purchasing power parity (PPP), accounts for 35.6% of the global economy, surpassing the G7’s share of just over 30%. In terms of population, the disparity is even more striking: Brics nations are home to 45% of the world’s population, while the G7 accounts for less than 10%. With India, China, and Russia’s GDP expected to grow by approximately 4% this year, compared with 2% for Western economies, and with more countries set to join, the Brics have the wind of history in their sails. No wonder this summit is being described as a “Bretton Woods for the Global South”.

Nonetheless, Western countries have often dismissed the institutional relevance of the Brics, pointing out that the bloc is little more than a loose association of countries with often diverging economic and geopolitical interests. Furthermore, it has failed to offer a concrete alternative to the Western systems. While it is true that the Brics have privileged economic and infrastructural mutual cooperation, and the wider concept of “connectivity”, over formalised governance structure, this might be about to change.

Russia has played a driving role in the Brics’ evolution, instrumental in the initial formation of the group, the hosting of its first summit, the admission of South Africa, and the subsequent push for expansion. Positioned as a mediator between China and India, Russia has managed to maintain a key role within the organisation, making it a vital player in any institutional leap forward.

Now Russia has set the bloc a new strategic goal: de-dollarisation. The sanctions against Russia and the freezing of its assets by Western powers have underscored the need for financial independence, making the de-dollarisation agenda not just aspirational but a necessity — not just for Russia but for other countries as well. The main response so far from the rest of the Brics has been to increasingly settle their international trade in national currencies rather than the dollar, with remarkable outcomes: the volume of trade settled in the currencies of member nations has already surpassed that of dollar-based transactions.

But aside from the creation of the New Development Bank (NDB), which operates as an alternative to Western financial institutions like the IMF and World Bank, little has been done so far in terms of creating a valid alternative to the Western international financial-monetary infrastructure — a new Bretton Woods, so to speak. Could Kazan mark the beginning of a new era in this respect? So far details have been sparse, but in recent months speculation has been rife about the Brics’ plan to launch, possibly during the summit, a full-blown new global monetary ecosystem.

This would include a much-touted “Brics currency” — a unit of account used to settle international transactions and manage balance-of-payment problems, not to be confused with an actual supranational currency à la euro — as well as a groundbreaking blockchain-based international payment system aimed at providing an alternative to existing global financial systems, such as Swift, and the dollar-based financial infrastructure. The system would use blockchain technology to enable secure, transparent and immutable payment transactions across Brics member countries. Blockchain’s decentralised nature would eliminate the need for a central intermediary, making cross-border payments more efficient and less susceptible to censorship or interference from external entities.

The proposed payment system would not only support the de-dollarisation agenda but also provide a much-needed financial safety net for countries facing Western sanctions. If successful, this initiative could become the cornerstone of a new, decentralised global financial order that relies on digital technologies to challenge the dominance of the dollar. As Oleg Barabanov, programme director of the Valdai Discussion Club, a Moscow-based think tank, explains, this “could be the first step towards truly strengthening de-dollarisation within the Brics and broader non-Western world”. At the same time, countries “will retain full sovereign control over the traditional currencies of the Brics countries”.

Of course, this programme presents political as well as technical challenges. It’s important to note that not all the member states are on the same page on this issue. While Russia and China (also) want to use the Brics as a means to challenge the global dominance of the US — hence Russia’s insistence on the need for the new payment system to be completely decoupled from the dollar — not all members agree with this adversarial approach. Countries such as India, Saudi Arabia or Turkey are arguably more interested in rearranging the seats around the global table rather than building a new dining room altogether. But at a time of growing power bloc rivalry — and as the West leans more and more towards an “either you’re with us or against us” zero-sum mentality — how long will they be able to keep a foot in both shoes?

The 2024 Brics summit in Kazan couldn’t come at a more pivotal time for global geopolitics and economics. With significant economic and demographic weight, the Brics have the potential to reshape global governance, especially if they succeed in creating an alternative global financial architecture. Challenges remain, as noted, particularly in terms of managing the group’s non-hierarchical structure and accommodating the various positions of existing and aspiring members, but the Kazan summit may very well lay the groundwork for a new era in global economic relations.

How should the West react to these momentous changes? Given there’s little it can do to stop the ineluctable shift towards multipolarity, threatening countries that move away from the dollar, as Trump recently did, will only achieve the opposite effect; indeed, Western countries, especially in Europe, are already paying a high price for the West-Rest decoupling. They could choose, instead, to engage with the rest of the world on an equal footing, in the knowledge that a smaller share of global GDP doesn’t necessarily mean a lower standard of living — a lesson the Americans could learn from many European countries.

But the current geopolitical confrontation is about much than just economics. It’s about the end of five centuries of Western global dominance. And if history is anything to go by, we know that established powers rarely, if ever, accommodate the rise of other powers. No wonder, then, that the current global clashes are increasingly framed in civilisational terms. As Russia, Iran and China gather in Kazan to posit their new world order, it is quite possible that rather than auguring a new era, the meeting will be remembered as just another step on the road to conflagration — something which, arguably, is already playing out on the European eastern front as much as across the Middle East.

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Thomas Fazi is an UnHerd columnist and translator. His latest book is The Covid Consensus, co-authored with Toby Green.

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