A New International Payments System Discussed at St. Petersburg Forum
The Saint Petersburg International Economic Forum (SPIEF) brought together leading actors in the economic and political sectors from many countries in the world to discuss not only trade and investment opportunites, but also fundamental questions related to international relations and to the reorganization of the international financial system to promote cooperation. As Russia currently holds the rotating chairmanship of the BRICS (and BRICS Plus), the prospects and plans of this group were center stage.
Russian President Putin gave the opening speech at the plenary session on June 7, focussing on the economy, both nationally (cf. below) and internationally, including the changes he considers necessary in international financial arrangements. “It is no secret, of course, that reliability and trust in Western payment systems have been thoroughly undermined, and by the Western countries themselves”, he remarked. Concerning Russia, he noted that trade in rubles had increased by 40% between 2020 and 2023. And in 2023, the share of payments for Russian exports in the “toxic currencies” of “unfriendly states” (i.e.,the dollar and the euro) had been cut in half.
“Together with foreign partners, we will increase the use of national currencies in foreign trade settlements, (and) improve the security and efficiency of such operations”, the Russian President stated. “In particular, the BRICS is working on the formation of an independent payment system that is not subject to political pressure, abuse and external sanctions.”
During the long question and answer session following the plenary session, Putin further elaborated on the problem. Given the shrinking of the American economy, and its unsound fundamentals, he pointed out that the BRICS have reacted by creating the New Development Bank and “our own currency instruments…. A significant portion of the participants in international economic activity – are switching to settlements in national currencies. For example, we have 90% of our trade with China, as I have already said, regulated in yuan and rubles. In the post-Soviet space, the share of the ruble is also approaching 70%, that is, our role here is significant. But we must do it together, it will be more thorough.”
Vladimir Putin went on to reference a very important discussion that had taken place with special guest President Emmerson Dambudzo Mnangagwa of Zimbabwe regarding investment in African nations. Of course, investments can be increased in Africa, in South Asia and Asia in general, and other rapidly developing countries, he said.
“But we need instruments that would guarantee these investments and the return (on investment). What can this be based on if not on gold? On the quality of the proposed investment projects. If we ensure the quality – the quality and stability of political regimes – and we will have to do this together, then we can develop such a system of settlements, which will be practically devoid of volatility, will not be volatile, will not be subject to inflation. All this can be done. We discussed this with my friend and colleague, President Xi Jinping during my trip [May 16-17]; we will talk about this with other leaders of the BRICS countries. This is a very important area of joint work.”
As Lyndon LaRouche pointed out in all his writings on a currency and trade system, the key to the successful growth of the physical economy is indeed the type and quality of investments that are made and of the credit system that facilitates them.
