Putin’s Speech At The BRICS Business Forum Was Fair & Balanced

President Putin’s approach to BRICS can be summarized as prioritizing logistics cooperation with the group’s RIC core, diversifying Russia’s commodities-driven role in Africa’s development, and supporting more de-dollarized South-South trade.

President Putin delivered a fair and balanced speech at the BRICS Business Forum on Tuesday that can be read in full at the official Kremlin website here. It defied the Mainstream Media’s expectations by only mildly criticizing the West but not haranguing it, while some multipolar supporters might have been dissatisfied with his moderate vision of the alternative economic-financial system that BRICS is building, which avoided the hype that many have pushed. The present piece will elaborate on this and more.

The Russian leader’s criticisms of the West concerned its irresponsible fiscal policies during the pandemic, illegal sanctions, and other unilateral violations of “norms and rules that not so long ago seemed immutable.” As for his observations about the emerging order, he focused mostly on BRICS’ growing use of national currencies in intra-organizational trade and investments, its role in facilitating the Global South’s development, and Russia’s two new logistics corridors across Eurasia.

Before going any further, some clarifications are in order regarding the impressive statistics about BRICS that President Putin shared in his speech, which are republished below for the reader’s convenience:

“The figures speak for themselves. Over the last decade, mutual investments among the BRICS countries have increased six-fold. Their overall investments in global economy have doubled, and their total exports have reached 20 percent of the world exports.

As for Russia, the trade volume with our BRICS partners has increased by 40.5 percent, reaching a record of over 230 billion US dollars. In the first half of this year, it grew by 35.6 percent compared with the same period in 2022 and constituted 134.7 billion US dollars.

I would also like to point out that the share of the BRICS countries, with their population totaling more than three billion people, now accounts for nearly 26 percent of the global GDP; our five countries are ahead of the G7 in terms of purchasing power parity (the forecast for 2023 is 31.5 percent against 30 percent).

The objective and irreversible process of the de-dollarization of our economic ties is gaining pace. We are working to fine-tune effective mechanisms for mutual settlements and monetary and financial control. As a result, the share of US dollar in export and import operations within BRICS is declining: last year it stood at only 28.7 percent.”

All of this is true, but left unsaid is that it’s largely attributable to China’s outsized economic-financial role in each of the other four BRICS economies.

The six-fold increase in mutual investments among the BRICS countries and their doubling of global investments isn’t due to Brazil, Russia, India, or South Africa. Rather, it’s the direct result of China’s Belt & Road Initiative (BRI) investments in BRICS (except India) and the rest of the world in the decade since this series of global megaprojects was unveiled in 2013. The same can be said about de-dollarization, which is mostly driven by the growing use of the yuan in bilateral trade with China.  

To be sure, the ruble is also being used more frequently nowadays in the 18 months since the start of Russia’s special operation and the West’s imposition of sanctions, as is the rupee when it comes to India’s unprecedented imports of its decades-long strategic partner’s newly discounted energy. Nevertheless, this recent trend alone doesn’t suffice for explaining the impressive de-dollarization statistic that President Putin referenced in his speech.

The reader should also bear in mind that BRICS’ 20% share of global exports, more than three billion people, 26% of global GDP, and high purchasing power parity is largely due to China and to a lesser extent India, which is now the world’s fifth-largest economy and the fast-growing major one worldwide. If China was removed from these calculations, not to mention India as well, then BRICS’ statistics would be a lot less impressive.

These clarifications aren’t to suggest that BRICS is dominated by China nor that it’s doomed to fail in its noble goal of gradually reforming the global financial system, but simply to point out the leading role that the People’s Republic has thus far played in leading the aforesaid process. The other members and the rest of the Global South are eager to do more since they have a shared interest in equally shaping the emerging Multipolar World Order at this unique historical moment.

Unipolarity has indisputably ended after the West failed to coerce the Global South into complying with its demands to sanction Russia and arm Ukraine, but multipolarity has yet to fully form. It’s in the midst of this global systemic transition that BRICS is holding its 15^th summit, hence why many have such high expectations about this event, some of which are unrealistic and were clarified by Russian officials here and here. President Putin’s speech shed more light on how Russia envisages everything unfolding.

From the Kremlin’s perspective, it’s imperative to expand logistics cooperation with China and India via the Northern Sea Route and the North-South Transport Corridor (NSTC) respectively since these three Great Powers’ RIC format serves as the de facto core of BRICS. The latter initiative is especially significant since President Putin also foresees it “providing opportunities to increase cargo transportation between Eurasian and African countries.”

On that topic, the Russian leader also reaffirmed that his country will remain a reliable provider of agricultural products, fertilizer, and energy to Africa, with this of course being facilitated by the NSTC and future logistics projects on that continent itself. Altogether, President Putin’s approach to BRICS can be summarized as prioritizing logistics cooperation with the group’s RIC core, diversifying Russia’s commodities-driven role in Africa’s development, and supporting more de-dollarized South-South trade.

The last part is where BRICS as a whole can help the most if its other members begin scaling their multidimensional engagement with the Global South (primarily Africa) in parallel with giving these same countries a greater say in the emerging financial system by formalizing the group’s relations with them. India and Russia are leading efforts to gently diversify from BRICS’ present Sino-centricity in all respects while Russian geo-economic guru Yaroslav Lissovolik’s BRICS+ concept satisfies the second objective.

All told, President Putin’s fair and balanced speech at the BRICS Business Forum went a long way towards correcting the slew of false perceptions that many have of this group and Russia’s vision of its future. He essentially conceptualizes it as RIC+ in the sense that Russia, India, and China are coordinating their efforts to accelerate financial multipolarity processes with a view towards creating an inclusive South-South integration platform. It’ll take time to complete, but everything’s moving in the right direction.