Deluded Putin’s new world order won’t work, but his currency plans might

Russian President Vladimir Putin has tried to portray himself as the leader of a “new world order” as he hosted a summit with China’s Xi Jinping and other heads of state, but he is “deluding himself,” experts say.

Analysts told i Russia is “not in charge” as other countries at the Brics meeting of emerging economies have more power and their own agendas, especially China.

However, economists said the emergence of a new payments system that would allow Moscow to bypass US sanctions was increasingly likely as it would advance the financial interests of China, India and others that trade with Russia.

Putin greeted more than twenty heads of state at the summit in the Russian city of Kazan, including Indian Prime Minister Narendra Modi and Iranian President Masoud Pezeshkian.

United Nations Secretary-General António Guterres also attended, marking his first visit to Russia in more than two years despite condemning Ukraine’s invasion of Ukraine.

Leaders of the Brics grouping reaffirmed their commitment to joint projects ranging from a grain exchange to a cross-border payment system, while Putin said his “leading role in the global economy will only become stronger.”

The summit’s joint communiqué, called the Kazan Declaration, condemned unilateral sanctions imposed on some members of the group, including Russia and Iran, saying they harm the poorest people in the targeted states.

Putin said more than 30 countries have now expressed a desire to join the bloc, which South African President Cyril Ramaphosa said has a crucial role to play in shaping a new multipolar world order.

The alliance initially included Brazil, Russia, India, China and South Africa and has expanded to include Iran, Egypt, Ethiopia, the United Arab Emirates and Saudi Arabia.

Turkey, Azerbaijan and Malaysia have formally applied to become members, representing 45 percent of the world’s population and 35 percent of the global economy.

Mark Galeotti, a senior associate fellow at the Royal United Services Institute, said Putin was trying to “sell BRICS as some kind of rival structure to a Western-dominated world order” and wanted to show the Russian people that they were not globally isolated.

He told it i: “We are seeing this rise of what Putin calls multipolarity – in other words, the days of Western dominance of the global system are waning.

“The big difference is that what, frankly, is simply a natural process of the emergence of new economies, is, according to Putin himself, much more a political resistance against the West. There is a degree to which Putin is fooling himself.”

Mr Galeotti, also director of the consultancy firm Mayak Intelligence, said the presence of so many world leaders showed they were unwilling to rule out Russia and reluctant to take sides in the conflict with Ukraine.

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“You simply have the images of Putin shaking hands with all these powerful leaders, or sitting down at the table with them – in the short term this is certainly a bonus for Putin, without a doubt,” he said. “However, in terms of a grand long-term strategy, Brics is not doing what Putin wants to pretend. When push comes to shove, Russia is not in charge. Ultimately, China can veto everything.”

He said China and India have no intention of launching a “global crusade” against the West and only see the summit as an opportunity for more trade.

Putin’s attempts to present his actions in Ukraine as an “anti-colonial” war were undermined by Mr Modi publicly telling Mr Putin he wanted peace in Ukraine, he added.

But Tatiana Orlova, chief emerging economies economist at Oxford Economics, said Russia could make gains in its ambitions for an alternative to the US dollar for global payments, allowing the country to sidestep Western sanctions.

Russia has pushed for the development of an alternative to the Swift global financial system, which was reaffirmed by other leaders in the Kazan Declaration, but no timeline or details were specified.

Ms Orlova said the details of what Mr Putin and Mr Xinping discussed behind closed doors are unknown, but likely included trade barriers imposed by Western sanctions on Russia.

Trade between Russia and China has boomed since the start of the war and Russian energy exports have risen very sharply, but there have been problems with payments, especially in recent months, she said.

“This is currently the main obstacle to trade between Russia and China, and this is what Russia desperately wants to solve,” she said i.

She said there was a “clear incentive” for China to help set up an alternative payment system as the country would benefit from increased trade with Russia, especially in the context of a “deteriorating” relationship with the US, which continues could worsen if Donald Trump wins. the American elections.

For India, which imports Russian oil, the system would make it easier to buy cheap energy without fear of secondary sanctions, she added.