Putin confirms Brics' independent payment system in the pipeline

Source: St Petersburg International Economic Forum. Russia's President Vladimir Putin.

Addressing a crowd of 12,000 attendees from more than 100 countries of the world at the 27th annual St Petersburg International Economic Forum (SPIEF), Putin said such a transaction system would be "unmoved by political pressure, abuse and external sanctions".

The news came on the back of the president's announcement that Russia has overtaken Japan to become the fourth largest economy in the world.

He noted Russia's economy has benefited from changes in the sectoral structure, driven by an active supply-side economic policy implemented over the past year, and that Russia is increasingly meeting its domestic needs for products from its manufacturing-, agriculture-, and service industries.

Putin cited the agro-industrial complex, highlighting the expansion of Russia's meat industry as an illustrative example. He said the capacity of the industry has almost doubled in 15 years. He emphasised that last year, Russia achieved complete self-sufficiency in its own product supply, with meat consumption exceeding 80kg per capita.

"Today, Russia ranks fourth in the world in meat production and is increasing the supply of these products to foreign markets."

Currently, the mean average meat consumption in the world stands at 42 to 43kg per person.

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Putin stressed that Russia is enhancing the quality of its labour market, standardising investments, and refining its tax system. He estimated that Russia's national labour-efficiency project will encompass at least 40% of large and mid-sized enterprises by 2030.

Putin's vision for Russian sovereignty

The proposed new Brics payment system stands to form the backbone of cross-border payments that will strengthen the financial, technological and personal sovereignty of Russia, increase its production capacity and increase the competitiveness of Russian products both in foreign markets and in its own domestic market.

A game-changer for Russia's import and export trade, Putin stressed Russia's goal to significantly cut its import share to 17% of GDP by 2030, down from 19% in 2023.

"Despite all the obstacles and illegitimate sanctions, Russia remains one of the key participants in world trade," he said. "The share of the ruble in export/import transactions is growing. Last year, the proportion of payments for Russian exports made in the so-called "taxi currencies" of unfriendly states was halved, while the share of the ruble in export-import transactions increased."

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"It is no secret, of course, that the reliability of, and trust in Western payment systems has been thoroughly undermined, and by the Western countries themselves. Together with foreign partners, we will increase the use of national currencies in foreign-trade settlements, and increase the safety and efficiency of such operations through the Brics line."

To achieve this, not only is Russia working out the formation of an independent payment system, but is planning to construct and upgrade transcontinental transport routes heading eastward.

It invites interested countries to participate in the development of the North-South international transport corridor.

Strengthening global impact

Putin underscored the importance of Saudi Arabia, Iran, the United Arab Emirates, and Egypt having recently joined Brics, and emphasised how this has increased the group's contribution to global GDP to 36%, and which now represents 46% of the world's population.

"Brics has significant potential to welcome new members, and there is strong interest from partners across various continents to develop these connections. We, of course, welcome, support, and will continue to develop relations within the framework of Brics, not only in the fields of economics, finance, and security, but also in other areas where humanitarian co-operation is paramount," Putin said.

"We will act, taking into account global challenges and objective trends, emphasising the growing opportunities of national economies."