BRICS Develops a Multipolar Economic Architecture

The Meeting in Kazan Will Respond to the West's Economic Suicide

The leaders of the BRICS countries are meeting in Kazan (Russia) in October to further develop the economic architecture for the multipolar world that is already here.

The end of the American-led international economic system

The international economic system established after the Second World War was organised around American hegemony, as the US was the world’s main creditor and factory of the world that dominated new technologies, international transportation corridors, and the access to vital resources. The US therefore asserted leadership over the new international development and the US dollar was made the world reserve currency. This unipolar international distribution of power is long gone, yet the economic architecture has not reformed. By organising the international economic architecture on the basis of US hegemony, it severely limits the ability to accommodate the emergence of multipolarity and facilitate the great economic changes of our time.

The US has even weaponised the entire unipolar international economic system under its administrative control to obstruct the rise of rivals. Global supply chains are dismantled in the futile effort to roll back the technological and economic rise of China, while theft has been legalised to steal hundreds of billions of dollars of Russian sovereign funds. Even countries friendly to the US, such as India, has no interest in needing permission from Washington to trade with other countries. Economic prosperity and political autonomy in a multipolar world requires economic diversification and a multivector foreign policy. The Europeans appear to be the only ones failing to adjust to multipolar realities by diversifying, and they are subsequently experiencing a decline in economic prosperity, political autonomy, and international relevance.

As the US and its allies retreat into bloc politics and weaponise all aspects of economic connectivity, a huge vacuum has emerged to meet the needs and demands of the wider world to deepen economic cooperation. BRICS is making big moves to fill this vacuum.

BRICS to facilitate multipolar economic connectivity

A key topic on the agenda in Kazan is surely the long line of states that want to become BRICS members, which includes NATO member Turkey. Another key topic will be the need to de-dollarise and decouple from US banks to ensure that international economic cooperation is not hostage to the whims of Washington. Besides increasing trade in national currencies, BRICS central banks are organising digital national currencies. BRICS countries can also create their own digital US dollars, based on the Tether model, that operates outside the control of the US banking system and the US government.

As all areas of economic connectivity are weaponised, there is great pressure to decouple and create entirely new global values chains ranging from technologies, natural resources, industries, transport, banking, payment systems, insurance systems etc. For example, Russia is eager to establish commodity exchanges, and also build on the success of the China-Russia grain corridor by extending it to other areas. BRICS organises international cooperation between new technological hubs, forming new supply chains between industries, physical connectivity by land and sea, reform the international financial system. The scope of possible areas of cooperation is immense. For example, BRICS may even facilitate cooperation in the Arctic as all the other Arctic states are NATO members that have cancelled mutually beneficial cooperation with Russia in the Arctic Council. Russia is therefore inviting other BRICS members to cooperate in the Arctic to develop an Arctic transportation corridor, extract the energy resources, and pursue environmental and scientific development.

Unlike the bloc politics of the hegemonic system that relies on dividing the world into dependent allies versus weakened adversaries, BRICS uses economic connectivity to mitigate and resolve political disputes. Thus, the members include China and India, Saudi Arabia and Iran, Egypt and Ethiopia. After the Second World War, the Europeans attempted to follow the same model of seeking security with other member by putting Germany and France in the same club. These days are long gone, as security is now security against non-members that has converted the European peace project into an aggressive peacetime alliance. When the US abandons the goal of defeating China, Russia and other adversaries, the BRICS club could also be used to accommodate Western powers into the multipolar international economic architecture.

A unipolar system permits economic coercion as the lack of alternatives implies that the targeted countries must either do as their are told or accept economic stagnation. A multipolar international economic system have mechanisms that punish economic coercion as the rest of the world decouples and learns to live without the belligerent power. The failure in the West to accept this new multipolar reality results in continued doubling down on failed policies as we render ourselves increasingly irrelevant in the world.

I discussed the upcoming BRICS meeting with Professor Jeffrey Sachs and Alexander Mercouris: