Two dozen leaders from emerging economies are gathering in the southwestern Russian city of Kazan next week to discuss political, economic and security cooperation. In the first of a two-part series, Dewey Sim examines Moscow’s desire for a substitute for the Western-led financial system.

As Russia plays host to the Brics summit next week, it will seek to show the world that it still has “many friends” and lobby for an alternative financial system to buoy its heavily sanctioned economy.

Increasingly isolated from the West since its invasion of Ukraine, Russia is billing the gathering of emerging economies as its biggest foreign policy event ever, but observers say any substantive agreement from the summit will not come easily.

Jiang Tianjiao, associate director of the Centre for Brics Studies at Fudan University, said much global attention was on the upcoming summit particularly with Russia – chair of the group this year – in the middle of a heightened geopolitical environment.

“[The world] wants to know … if they can find consensus and make cooperative achievements,” Jiang said.

“With the Brics expansion, [the group now has] more members, bigger markets, and a huge population. All of these will bring great benefits and opportunities for trade and investment ... That’s why [countries] have very high expectations.”

He said Brics offered an “alternative narrative” that might appeal to countries in Asia, Africa and Latin America looking to distance themselves from Western countries.

“Russia in particular will use the occasion to showcase its international partnerships and to challenge the Western view that Moscow is isolated because of the Ukraine war,” he said.

Jiang suggested that Russia needed the international exposure that the Brics summit offered to send a message to the world that it was “still doing quite well even under sanctions and even with military fighting on the ground”.

Or as Stewart Patrick, a senior fellow at the Carnegie Endowment for International Peace, put it: “For [Russian President Vladimir] Putin, the Kazan summit is essentially symbolic – it is his effort to show the world that despite Western efforts to isolate Russia … Russia still has many friends in the world.”

While each Brics economy has its own goals at the summit, Patrick said one thing that united them was the belief that the structures that governed international order and global economy today were “unfairly weighted” towards the Western world.

“Brics is an effort to challenge this embedded hierarchy, including the entrenched role of the US dollar and the weight that Western nations continue to enjoy in major international institutions, from the Bretton Woods institutions to the UN Security Council,” he said.

“For China, as for Russia, the hope is that Brics plus will be a vehicle to challenge the Western-dominated international order and particularly the dominance of the United States,” he added, referring to the expanded groupping.

With its expansion, Brics covers over 40 per cent of the world population and accounts for over a quarter of global GDP.

Vasily Kashin, senior research fellow at the Centre for Comprehensive European and International Studies think tank in Moscow, suggested that Brics was not an anti-Western institution, pointing out that some member states including Egypt and the United Arab Emirates were close allies of the United States.

Brics was more of a “club of countries that have a set of common interests related to economic development and global governance”, he said.

“That includes, for example, increased representation of non-Western countries in international institutions and limiting US ability to abuse its role in the international financial system to achieve short-term political and economic goals,” he said.

Since Russia’s invasion in 2022, the US has imposed a series of sanctions targeting the Russian economy and financial system.

Together with other Western nations, the US banned several Russian banks from the Society for Worldwide Interbank Financial Telecommunication (Swift) international payment messaging system, which effectively denied them access to international markets.

Faced with a barrage of Western sanctions, analysts said Russia would hope to make some ground in Kazan to push for an alternative payments system.

According to Reuters, Russia planned to pitch the development of a network of national commercial banks linked to each other through the Brics central banks, removing the need to exchange local currencies through the US dollar.

Among other things, Moscow also has plans to set up a Brics reinsurance company to allow uninterrupted shipment of goods and key commodities between member countries if Western reinsurance firms refuse to offer their services.

Kashin said Russia and Iran – most acutely affected by Western financial sanctions – would be most interested in establishing an infrastructure alternative to the Western one.

While Brics has long pushed for de-dollarisation efforts, he suggested that it was more of a longer-term goal as member countries had different economies and monetary systems.

Instead, Russia’s proposals this time would be to create a system alternative to Swift, with Kashin saying the process would be “gradual”.

“The current goals are much more modest. We just need to reduce the danger of secondary sanctions. Other Brics countries are interested in this kind of effort even if they are on good terms with the US,” he added.

Jiang Shixue, director at the Centre for Latin American Studies at Shanghai University, said the creation of a Brics financial payments system “might be possible”, adding that such a system could help the grouping reduce their dependence on the US dollar.

While there was urgency, especially on Russia’s part, to build up a separate financial payments system, he suggested that other members were also keen on such a system.

Jiang from Fudan University said it was reasonable for other member states including China to think about “protecting their own interests”.

“Because the US can do this to Russia today, [and] it can do this to Iran today, maybe tomorrow it can use the same sanctions and the same tools against [the other countries],” he said.

Patrick from the Carnegie Endowment for International Peace noted there had been growing frustration not only with the dominance of the dollar but also Washington’s “weaponisation of economic interdependence to punish adversaries”.

Brics countries, he said, worried they might be on the receiving end of such treatment and would seek to reduce their exposure – even with “no obvious alternative to the dollar”.

Still, Patrick said Russia would likely press members to diversify their reserves and expand mechanisms that ease trade and investment in local currencies.

But Moscow faces a tall order. Patrick said that reaching consensus within the group would not be easy as countries have different political systems, seek to advance divergent geopolitical interests, and are in very different stages of economic development.

Amitav Acharya, distinguished professor at American University’s school of international service, was sharp in his assessment: “There will be no substantive progress.”

He said the summit was mainly of “symbolic and psychological significance”, and while there would be promises of collective action, whether they would be implemented was another story.

“The main problem with Brics is that its two most important members are eyeball to eyeball in territorial confrontation,” he said.

“How can you be credible to the rest of the world if you cannot manage your intra-Brics relationship peacefully or constructively? Russia is mired in a war and is not capable of leading the group.”

The analysts pointed to tensions within the group: China and India are geopolitical rivals locked in territorial disputes, Egypt and Ethiopia share a long-standing rivalry, and Saudi Arabia – if it joins the group – will enter alongside arch rival Iran.

“Brics is a part of the changing world order … where neither the West nor Brics can lead or monopolise leadership because there are many other consequential actors like Singapore or Japan who are not part of Brics,” he said.

“And expanding the group also means diluting its cohesion. Having more members will exacerbate that problem.”