On October 11, 2024, Russia, the current president of the BRICS group, urged its partners to create an alternative to the International Monetary Fund (IMF) to counter political pressure from Western nations. This appeal comes ahead of the BRICS summit scheduled for later this month.
BRICS, originally formed by Brazil, Russia, India, and China, now includes ten countries following the addition of South Africa and more recently Egypt, Ethiopia, Iran, the United Arab Emirates, and Saudi Arabia. A meeting of BRICS finance and central bank officials is currently taking place in Moscow.
Russian Finance Minister Anton Siluanov stated that the global financial system is dominated by Western countries, and the BRICS group, representing 37% of the global economy, should establish an alternative.
Siluanov emphasized, “The IMF and World Bank are not fulfilling their roles. They are not acting in the interests of BRICS countries.” He called for the creation of new institutions similar to the Bretton Woods institutions but within the BRICS framework.
Since the invasion of Ukraine in February 2022, Russia has faced severe sanctions from Western nations, which have frozen its dollar and euro assets held as foreign exchange reserves. This has isolated Russia from international capital markets.
As a result of these sanctions, Russia has experienced delays in international transactions with its BRICS partners, as banks in these countries are cautious due to fears of Western regulatory actions.
Elvira Nabiullina, the governor of Russia's central bank, previously mentioned the “BRICS Bridge” payment system, which aims to connect the financial systems of member countries, but progress has been limited.
The only financial institution established by BRICS so far is the New Development Bank, created in 2015 to fund infrastructure and sustainable development projects in BRICS members and other emerging economies.
Meanwhile, reports have emerged that Saudi Crown Prince Mohammed bin Salman will not attend the BRICS summit. The Kremlin announced that the country’s representation will be handled by the Saudi Foreign Minister.
Yuri Ushakov, foreign policy advisor to Russian President Vladimir Putin, confirmed that leaders from nine of the ten BRICS member countries will attend the summit, with Saudi Arabia represented by Foreign Minister Prince Faisal bin Farhan Al Saud.
Ushakov did not provide a reason for the Crown Prince's absence. Last month, Russia had invited Crown Prince Mohammed bin Salman to the summit.
In January, Reuters reported that Saudi Arabia was confused about its BRICS membership and was still considering joining. Officials indicated that no response had yet been given to the invitation for BRICS membership. Several countries, including Argentina, have shown hesitation in joining BRICS.
The growing ties between Saudi Arabia and China have raised concerns in the U.S., a long-time ally of Saudi Arabia, although their relationship has faced some strains in recent years.
Ushakov stated, “BRICS is a structure that cannot be ignored.” He claimed that Western nations are pressuring other countries not to join the organization.
He noted that the BRICS member countries represent 45% of the world's population, account for nearly 40% of global oil production, and hold approximately a quarter of the global goods export market.
The term 'BRICS' was coined by Goldman Sachs economist Jim O'Neill in 2003 to describe the emerging economies of Brazil, Russia, India, and China, which he predicted would challenge and surpass many major Western economies over the next half-century.
Over the past two decades, this group has evolved into a formal structure, although its economic weight largely rests on China, the world's second-largest economy. Critics argue that the objectives of the group's major members are often contradictory.