“The IMF and the World Bank are not fulfilling their role,” said the Russian Finance Minister.
The BRICS want new organizations that are not controlled by the global financial system.
As part of the mechanisms that will distance them from the US dollar, the BRICS plan to create institutions similar to the International Monetary Fund (IMF) and the World Bank (WB) that specifically serve the countries that make up the bloc.
The idea has been raised this week by Russia, which this year chairs the BRICS group, and is possibly part of the debates that will take place at the summit scheduled for the end of this month. As Russian Finance Minister Anton Siluanov points out, these organizations would be an alternative to the global financial system “controlled by Western countries.”
Russia maintains that the group, which represents more than 40% of the world economy, must establish an alternative. “It is essential to create new conditions or even new institutions, similar to those of Bretton Woods, but in the context of our community, specifically within the BRICS,” the official added.
He referred to this the origins of the IMF and the WBcreated in July 1944 during an international conference held in the United States (Bretton Woods, New Hampshire). They are institutions that were created with the idea of supervising the international financial system, trying to maintain stability and prevent crises in the global monetary system, in addition to providing technical and economic assistance.
However, in the opinion of Russia, the IMF and the World Bank They are not fulfilling their function. “They are not working for the benefit of the BRICS countries,” Siluanov said. Therefore, the idea is to have their own organizations that help them counter political pressure from Western nationsadded the minister.
He thus recalled the economic pressure to which Russia is subjected. The country saw its foreign exchange reserves in dollars and euros frozen and its financial system has been hit hard by Western sanctions after it invaded Ukraine in February 2022. The country is isolated from international markets of capital.
Hence the push being given by the BRICS group to global de-dollarization as a mechanism to face sanctions, and not depend on the Western financial system.
BRICS heads towards an alternative financial system
BRICS plans go further beyond just creating a new payment system without dollarsbecause along with the idea of forming alternative multilateral organizations, it is also proposed to create a new warehouse infrastructure, BRICS Clear call. Its design seeks to integrate the exchange infrastructure of the countries of the association, in order to integrate the securities markets through bridges between deposits and increase the liquidity of their stock markets.
In the new infrastructure a BRICS reinsurance company would be includedwhich will reduce the influence of external political restrictions. According to inform the Tass news agency, with this company insurance services will be provided to protect the commercial relations of the member countries of the organization. “So that we have our own powerful insurance mechanism for cargo, goods and services, regardless of any political restrictions,” Minister Siluanov concluded.
The support and services that will be provided through new infrastructure and new multilateral organizations will be extended to the countries that are being inserted into the regional bloc, formed up to this moment for 10 countries: Brazil, Russia, India, China South Africa, Egypt, Ethiopia, Iran, the United Arab Emirates and Saudi Arabia. It is expected that at the next summit new members accepted.
Until now, the only financial institution that the BRICS countries have is the New Development Bankcreated in 2015 to finance infrastructure and sustainable development projects in the BRICS countries and other emerging economies.
As CriptoNoticias has reported, this organization also aims to promote the de-dollarization process. In fact, the president of this Bank, Dilma Rousseff, has not mentioned the word dollar even once in her recent speeches, insisting that the multilateral entity must mark distance with the US currency.
