Presidents of the group of major emerging economies — Brazil, Russia, India, China, and South Africa or BRICS vows to undertake their due obligations in championing and practicing multilateralism - Photo: BRICS Summit Web

JAKARTA (TheInsiderStories) – Presidents of the group of major emerging economies — Brazil, Russia, India, China, and South Africa or BRICS vows to undertake their due obligations in championing and practicing multilateralism. The bloc also committed to finalizing its common payment system to decrease dependence on the United States (US) dollar.

The leaders pointed out that a new round of technological revolution and industrial transformation is in the ascendant, and the unstoppable rise of emerging markets and developing countries has injected strong impetus to the reform of the global economic governance system.

Nevertheless, there are also causes for concern, they said, referring to rising protectionism and unilateralism; greater deficit of governance, development, and trust; and growing uncertainties and destabilizing factors in the world economy.

“We reiterate the fundamental importance of a rules-based, transparent, non-discriminatory, open, free and inclusive international trade,” it said in their final declaration of the 11th annual BRICS Summit in 2019, held in Brazil on Thursday (11/14).

“We remain committed to preserving and strengthening the multilateral trading system, with the World Trade Organization (WTO) at its center. It is critical that all WTO members avoid unilateral and protectionist measures, which run counter to the spirit and rules of the WTO,” it adds.

The Brasilia declaration makes a strong defense of multilateralism and calls for joint efforts to promote international peace and development. To reach its goals, they also agree on the need for structural reforms of international institutions, like the United Nations and its security council and the WTO.

Chinese president Xi Jinping was particularly critical of the global rise of protectionism, in part reflected in the China-US trade conflict. “We have seen the rise of emerging countries, developed countries, which were already within the system of global governance, but there are also causes for concern, for example, increased protectionism and unilateralism,” Xi said.

Russian President Vladimir Putin also criticized the raising of trade barriers. A consequence of this global recession is that we have witnessed the extensive use of unfair competition, unilateral sanctions and protectionism is thriving. In such conditions the BRICS countries have to undertake very serious efforts in order to ensure the development of our economies,” Putin said.

Together, BRICS nations represent about 42 percent of the world population, 23 percent of global GDP and 30 percent of the territory, the group’s official website says. They have been looking for ways to decrease their dependence on the US dollar and have advocated using their national currencies in mutual trade.

“We note the progress achieved in establishing a BRICS Local Currency Bond Fund and look forward to its operation. We support the on-going collaboration to develop our local bond markets. We will continue to communicate on other possible areas of currency cooperation, consistent with each central bank’s mandate,” they said.

“We acknowledge the importance of the BRICS Survey on International Payments System,” they add.

Kirill Dmitriev, the head of the Russian Direct Investment Fund (RDIF), said: “increasing non-market risks of the global payment infrastructure” was behind the plan to integrate the group’s national payment systems.

“An efficient BRICS payment system can encourage payments in national currencies and ensure sustainable payments and investments among our countries, which make up over 20 percent of the global inflow of foreign direct investment,” Dmitriev, a member of the BRICS Business Council, told reporters.

He did not give details about the payment system envisaged, but Russia began developing a national payment system as an alternative to the Belgium-based SWIFT financial messaging service in 2014 after Western sanctions were imposed on Moscow.

Dmitriev said the five BRICS nations had also discussed creating a common cryptocurrency for mutual payments as the grouping was reducing the share of payments in the US dollar. The share of the dollar in Russian foreign trade payments has fallen to 50 percent from 92 percent over the past few years, while the rouble’s share has risen to 14 percent from 3 percent, he said.

Dmitriev did not say whether Russia supported the idea of the common BRICS cryptocurrency. Previously, Russian officials spoke against any cryptocurrencies, warning that they could be used in money laundering or financing terrorism. The BRICS Business Council has also supported the Russian-backed initiative to create coordination centers for mutual investments within the BRICS bloc, Dmitriev said.

Written by Lexy Nantu, Email: lexy@theinisiderstories.com