Russian President Vladimir Putin didn’t miss the opportunity to fire verbal shots at his Western enemies in a 17-minute speech during the opening day of an economic summit in South Africa.
Notably, Putin had to address the summit via video link because attending in person would have led to his arrest.
The reason behind this restriction lies in South Africa’s support for the International Criminal Court (ICC).
Following Russia’s invasion of Ukraine, the ICC issued an arrest warrant for Putin, making it a legal obligation for South African officials to apprehend him if he set foot on their soil.
The conference itself brought together the BRICS nations—Brazil, Russia, India, China, and South Africa—for discussions on economic matters.
During his near-20 minute speech which appeared on TV screens on Tuesday night, Putin criticized Western sanctions which he claims are “illegitimate.”
The speech—which also saw Putin threaten to permanently cut off Ukraine’s grain exports—flew in the face of promises from South African officials, who said tensions between the East and West would not dominate the agenda, according to the Associated Press.
The Russian leader said the West’s actions of financial sanctions and freezing assets were tantamount to “trampling upon all the basic norms and rules of free trade,” according to a translation from AP.
But as well as railing against these perceived injustices, Putin also took aim at the American dollar and pushed to explore how members of the group could move away from the currency.
Putin added the objective of the group is to “cooperate on the principles of equality, partnership support, respect for each other’s interests, and this is the essence of the future-oriented strategic course of our association, a course that meets the aspirations of the main part of the world community, the so-called global majority.”
According to a translation from Reuters, Putin then segued into pushing the need for member countries to trade in their national currency as opposed to the dollar.
He said: “The objective, irreversible process of de-dollarization of our economic ties is gaining momentum.”
The remarks may be slightly premature.
According to data released by the IMF in June, the dollar continues to “dominate”, accounting for 79% of world trade between 1999 and 2019.
But Putin isn’t the only BRICS leader to voice a desire to move away from the U.S. currency.
In April, while on a trip to China, Brazilian President Luiz Inacio Lula da Silva asked: “Why should every country have to be tied to the dollar for trade?… Who decided the dollar would be the (world’s) currency?”
Lula da Silva continued: “Why can’t a bank like the BRICS bank have a currency to finance trade between Brazil and China, between Brazil and other BRICS countries?… Today, countries have to chase after dollars to export, when they could be exporting in their own currencies.”
The plan isn’t working for Russia—yet
So far Putin’s cause hasn’t particularly benefited from moving away from the dollar.
Last week the ruble fell to its lowest levels since early in the war—101 rubles to the dollar, a one-third decline since the beginning of the year—prompting Russia’s central bank to reportedly call an emergency meeting.
The push away from the dollar instead seems to be benefitting China—in the Russian market at least.
Since February, the monthly trading volumes on Moscow Exchange were predominantly conducted in yuan instead of dollars, Bloomberg reported, with the two nations also forming closer political ties.
However, on a global scale, China’s currency isn’t fairing fantastically well.
Late last week Reuters reported state-owned banks in China had been told to sell dollars and buy yuan in a bid to slow the nation’s currency decline.
The yuan has lost approximately 6% against the dollar since the start of this year.
The BRICS group has previously said it is considering creating its own currency in a bid to create trade systems independently of the West—though this would rely on old rivals India and China coming to an agreement.
And although some economists believe American currency will eventually be dethroned, the expert who coined the term ‘BRIC’ said the idea that a group currency will overtake the dollar is “ridiculous.”
Jim O’Neill, the veteran economist who coined the term BRIC (the group did not originally include South Africa) when he worked at Goldman Sachs in 2001, told the Financial Times this month: “They’re going to create a BRICS central bank? How would you do that? It’s embarrassing almost.”