At a BRICS summit, Lula defends the advancement of dollar-free payment mechanisms

(Reuters) – President Luiz Inácio Lula da Silva defended, at a summit meeting of the BRICS countries, that the bloc of emerging countries move forward in creating alternative means of payment among themselves, avoiding the need to use the dollar.

“Now is the time to move forward in creating alternative payment methods for transactions between our countries. It’s not about replacing our currencies. But we need to work so that the multipolar order we desire is reflected in the international financial system. This discussion needs to be faced with seriousness, caution and technical solidity, but it cannot be postponed any longer”, said Lula in a videoconference speech at the summit.

The development of a payment clearing mechanism in local currencies is one of Brazil’s priorities in the BRICS, which wants to see the bloc less dependent on the use of the dollar in its internal transactions.

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Brazil assumes the presidency of the bloc from now on and over the next year, and intends to accelerate this proposal and also expand the activities of the New Development Bank, the BRICS bank, currently chaired by former president Dilma Rousseff.

Interbank cooperation

In his speech, Lula also defended the advancement of the interbank cooperation mechanism of BRICS member countries, to establish credit lines in local currencies, aimed mainly at small and medium-sized companies.

Lula also stated that the NDB (acronym in English for the BRICS bank) breaks with the logic of traditional financial institutions, such as the World Bank and the International Monetary Fund (IMF).

“BRICS was responsible for a significant portion of world economic growth in recent decades. Together, we are more than 3.6 billion people, who are part of dynamic markets with high social mobility. We represent 36% of global GDP by purchasing power parity. We have 72% of the planet’s rare earths, 75% of the manganese and 50% of the graphite”, recalled Lula.

“However, financial flows continue to go to rich nations. It is a Marshall Plan in reverse, in which emerging and developing economies finance the developed world. BRICS initiatives and institutions break with this logic.”

The president also stated that the motto of the Brazilian presidency of the BRICS will be “Strengthening Cooperation in the Global South for a More Inclusive and Sustainable Governance”, in line with the reform of global institutions already defended by the country during the G20 presidency this year.

Lula also used his speech to once again criticize the wars currently underway.

“As (Turkish) President Erdogan said at the UN General Assembly, Gaza has become ‘the largest cemetery for children and women in the world.’ This foolishness is now spreading to the West Bank and Lebanon. Avoiding escalation and initiating peace negotiations is also crucial in the conflict between Ukraine and Russia”, he argued.

“As we face two wars with the potential to become global, it is essential to restore our ability to work together towards common goals.”

The president had to cancel his in-person participation in the event held in the Russian city of Kazan after suffering a domestic accident on Saturday, in which he hit his head. Due to medical orders, due to having had a small bleed in the brain, Lula cannot travel by plane and remains under observation in Brasília, but has maintained a work schedule.