Russia calls on BRICS to ditch the IMF and make a better alternative

Russia has officially called on its BRICS partners to establish a financial alternative to the International Monetary Fund (IMF).

Hosting a major meeting of BRICS finance ministers and central bank officials in Moscow, Russian Finance Minister Anton Siluanov criticized the IMF and the World Bank for failing to serve the interests of BRICS.

He added that the current global financial system is under America’s control, and things have got to change.

Siluanov emphasized that 37% of the global economy is represented by BRICS, yet the group is still tied to outdated Western systems.

Moscow pushes for financial independence

BRICS, originally Brazil, Russia, India, China, and South Africa, has expanded. It now includes Saudi Arabia, the United Arab Emirates, Iran, Egypt, and Ethiopia.

Siluanov’s dissatisfaction with the IMF comes from Russia’s own experience. Since the invasion of Ukraine in 2022, Russia has faced sanctions, leading to its financial system being cut off from global capital markets.

Its foreign reserves in euros and dollars were frozen, and banks have struggled to process transactions with other BRICS nations, as fear of Western backlash continues to grip these countries. Siluanov said :

“The IMF and the World Bank are not performing their roles. They are not working in the interests of BRICS countries.”

According to Siluanov, it’s time to create something akin to the Bretton Woods institutions, but tailor-made for the BRICS. Though not all initiatives have progressed quickly.

Russia’s Central Bank Governor, Elvira Nabiullina, proposed the BRICS Bridge payments system to link member countries’ financial systems, but the project has faced so many delays.

Right now, the New Development Bank (NDB) is the only major financial institution created by BRICS. 

Founded in 2015, the NDB finances infrastructure and sustainable development projects for both BRICS nations and other emerging economies. Still, the group sees this as insufficient in light of the geopolitical challenges.

Kazan summit gathers world leaders

As the reigning president of the group now, Russia is hosting the annual BRICS summit in Kazan later this month, where the idea of building a new financial order is expected to take center stage.

A total of 24 countries will send leaders to attend, including UN Secretary-General Antonio Guterres, Chinese President Xi Jinping, and Iranian President Masoud Pezeshkian.

Pezeshkian will be making his first official visit to Russia since taking office earlier this year. The summit is set to start with informal meetings on October 22, followed by official talks on October 23 and 24.

Turkish President Recep Tayyip Erdogan is also expected to attend after expressing interest in joining the BRICS group.

This is one of the most important foreign policy events ever held in Russia, according to Yury Ushakov, an aide to President Vlad Putin.

Notably though, Saudi Crown Prince Mohammed bin Salman (MbS) will not be attending. Saudi Arabia, the world’s largest oil exporter, will be represented by its foreign minister, Prince Faisal bin Farhan Al Saud.

Putin had personally invited the crown prince to attend, and the reason for his absence remains unclear.

Two sources revealed earlier this year that Riyadh was seriously considering joining the group, but had yet to make a final decision.

Ushakov confirmed that 38 countries had been invited to Kazan, with nine sending senior officials instead of heads of state.

All the leaders from the Commonwealth of Independent States (CIS), a bloc of former Soviet republics, will also attend the summit.

Putin, who has a packed schedule, will hold about 20 bilateral meetings between October 21 and October 24, further solidifying ties with BRICS and other nations, as he’s been doing this whole year.

There’s also a business forum scheduled ahead of the summit on October 18 in Moscow, where Putin is expected to deliver a speech outlining Russia’s economic goals.

The group now accounts for 45% of the world’s population, 40% of global oil production, and nearly a quarter of global goods exports. As Ushakov puts it, “BRICS is a structure that cannot be ignored.”