17th BRICS Summit, Rio de Janeiro
July 6-7
Presentation on Reform of International
Financial Relations Russian Foreign Minister Posted below is the speech by Russian Foreign Minister Sergey
Lavrov at the 17th BRICS Summit plenary session "Peace and Security and
Global Governance Reform" on July 6.
Thank you, esteemed President L. Lula da Silva,
Esteemed heads of delegations,
Ladies and gentlemen,
Strengthening the multilateral world order while the international
system goes through fundamental transformations is one of the crucial
tasks for BRICS and for the entire international community.
Multipolarity is not a choice but rather an objective reality which
succeeds the outdated neo-liberal
model that actually builds on neo-colonial practices. The traditional
paradigm of globalization where the predominant role is played by the
so-called developed states of the West is becoming a relic.
Economic crises of recent decades have been the first signs of this
model's malfunctions. The COVID-19 pandemic has exposed countless
disadvantages of the global trade and finance system and accelerated
its fragmentation. The erosion of the global economic world order has
exacerbated as a result
of illegitimate unilateral sanctions and use of the dollar as a means of "punishment." The trust in the American currency as a
formerly reliable payment instrument was undermined.
Another negative factor is the rapidly growing debt burden. Since
2011 the number of highly indebted states rose from 22 to 59. Today
developing countries are spending on debt service more than they invest
into their development. The situation is going out of control even in
developed states -- the U.S. has seen a record level of sovereign
debt which has reached $37 trillion and it continues to grow.
Therefore, it is not surprising that the global majority is
interested in creating development mechanisms independent from the
West. Countries of the Global South and East are becoming a main
driving force of the global economic growth. Regional organizations
such as the African Union, CELAC
[Community of Latin American and Caribbean States], ASEAN [Association
of Southeast Asian Nations], SCO [Shanghai Cooperation Organization] and
EAEU [Eurasian Economic Union] are playing an increased role. In this
context conceptual and practical approaches are being developed to
establish a new
architecture of world economy based on the principles of equality,
multilateralism and non-discrimination in trade, financial settlements,
technology, logistics. In the face of the challenges of digitization
and AI a special attention is given to human investment.
Nowadays BRICS stands as an engine of such transformation, which
seeks to create a more stable global economic architecture based on the
principles of universality, transparency, non-discrimination and equal
access to available opportunities and instruments. BRICS countries
account for more than
40 per cent of the global gross domestic product based on purchasing
power parity, and together with partner countries this figure is at 45
per cent or $93 trillion. Today BRICS represents more than 20 per cent
of global trade and almost a half of world population.
As a follow-up to the agreements made at the BRICS Summit in Kazan
in 2024, we have been working on projects to create a Cross-Border
Payment Initiative, independent settlement and depositary
infrastructure, to develop reinsurance capacity, to increase the
effectiveness of special economic zones. The mechanism of the
Contingent Reserve Arrangement, including the use of currencies
alternative to the dollar, is being improved. The share of BRICS
countries in trade with Russia is constantly growing and in 2014 it
exceeded 48 per cent, with 90 per cent of mutual settlements made in
national currencies.
To deliver on these goals it is of significant importance to pursue
the reform and depolarization of the Bretton-Woods institutions which
should reflect a real state of affairs in the world economy. The
continued use of the IMF [International Monetary Fund] and WB [World Bank] with a view to preserve neocolonial
practices is
unacceptable.
The similar situation is unfolding in the WTO [World Trade Organization] as well. Years-long
blocking of the WTO dispute-settlement body and introduction of new
discriminatory measures against developing countries such as the
notorious EU Transborder Carbon Adjustment Mechanism inflict a serious
damage to the global trade.
In 2024 an informal BRICS mechanism of consultations on WTO was
launched which is developing successfully under the Brazilian
Chairship. We look forward to an early harmonization of common
positions and start of their practical implementation.
The issues of development financing are becoming more and more
pressing. According to the UN, its deficit is estimated at $4.2
trillion per year. If the current trends prevail, more than 600 million
people will live in extreme poverty by 2030. Without sufficient funds
and being unable to take out
credits on acceptable conditions, countries of the Global South have to
rely on official development assistance. Given the Western double
standards, its provision depends on political considerations. For
example, in 2023 the IMF approved an unprecedented credit for Ukraine
worth $15.6 billion (577
per cent of Ukraine's country quota). It makes up more than a third of
annual volume of all IMF programs. Since the beginning of 2022 the
World Bank has pledged to allocate nearly $54 billion for Ukraine. In
total these sums allocated to Ukraine are twice as much as annual
volumes of assignations
allocated by the Bretton Woods structures to all countries of Africa.
The increasingly aggressive attempts by the West to introduce
ideological ultimatums into the dialogue as what are virtually the main
criteria -- based on Western interpretations of human rights and
democracy -- are having an extremely negative impact on the delivery of
the UN sustainable
development goals.
To address imbalances and to mobilize resources for development
Russia introduced an initiative to create within BRICS a New Investment
Platform with the participation of the New Development Bank (NDB). We
thank colleagues for showing their interest to the promising
initiative. Its implementation
will be facilitated by our joint efforts to turn the NDB into an
innovative development institution that is oriented towards the needs
of its own stakeholders and that is not subject to the influence of
external conjuncture. Increasing the number of stakeholders will
strengthen the potential of this
mechanism and contribute to the expansion of its geography of
operations. We highly appreciate the efforts of NDB President D.
Rousseff in this direction.
Artificial intelligence is becoming a critical technology. Experts
estimate that AI contribution to the global domestic product will be at
$20 trillion by 2030.
We will need to address issues related to ensuring universal access
to advance developments in this field. Secret initiatives put forward
by a number of countries and with restricted participation with a view
to promote non-consensus approaches are fraught with the most serious
consequences. The
attempts to artificially isolate sovereign States from global processes
are extremely dangerous and doomed to failure. A response to such
attempts was the harmonization of the BRICS Joint Statement on Global
Governance in the field of Artificial Intelligence which reflects our
common position
regarding the central role of the UN in developing universally
recognized regulation mechanisms in this field.
The challenges associated with the development of digital
technologies are transnational in nature and require collective
response. The prime example is the adoption of the UN Convention
against Cybercrime in 2024 which will be opened for signing in October
in Hanoi.
I am convinced that BRICS states together with like-minded countries
will continue to lead in promoting a just multipolar world order that
will provide favourable conditions for sustainable development of all
States without exception. In this work we receive assistance from BRICS
Business Council
and BRICS Civil Council, Women's Business Alliance, to which I would
like to express my appreciation and wish them every success.
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