Russian President Vladimir Putin has communicated that the global financial structure anchored by the U.S. dollar is in a state of gradual decay. He remarked, “The value of a currency is fundamentally an extension of the economic might of the issuing nation,” underscoring that “The U.S. economy’s proportion of the global GDP is on a downward trajectory.”
Conversely, Putin accentuated the ascending influence of the BRICS nations, especially in terms of purchasing power parity, when compared to the economies of the G7 countries.
Putin on the Waning Strength of U.S. Dollar-Based Financial System
During the 20th-anniversary gathering of the Valdai Discussion Club’s plenary session, Russian President Vladimir Putin expressed that the existing U.S. dollar-centric global financial system is undergoing a gradual decline.
“Experts in the West concur that the Bretton Woods system has become antiquated,” Putin noted, elucidating that the system, which was originally built on the U.S. dollar, is failing. “The currency essentially reflects the economic vitality of the nation that issues it,” he said.
Further stressing on statistics, he highlighted, “The U.S. economy’s contribution to global GDP is waning. This is an evident trend supported by empirical data.”
In a contrasting statement, Putin laid emphasis on the BRICS nations, stating, “The purchasing power parity of the BRICS countries, in comparison to the G7 countries, is on an upward trend, especially with the induction of new members into the consortium.” He clarified, “This distinction is not merely nominal but rather significant.”
BRICS—the economic coalition consisting of Brazil, Russia, India, China, and South Africa—recently expanded its membership to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE). At the conclusion of a recent BRICS summit in August, the leaders iterated “the necessity of promoting the utilization of local currencies in international commerce and financial dealings.”
Putin’s Remarks on the Prospect of a BRICS Common Currency
Discussing the possibility of a BRICS common currency, Putin suggested:
“Instead of rushing towards the formation of a unified currency for BRICS nations, it is imperative to establish a payment system, to develop financial logistics that will facilitate transactions among our nations, and transition to transactions in our respective national currencies.”
Putin elaborated further, stating, “Our experts discussed the potential for a unified BRICS currency just yesterday. Theoretically, it’s conceivable, but achieving this would necessitate a level of economic development parity among our nations, and this is a long-term endeavor.”
We invite your thoughts on Russian President Vladimir Putin’s remarks. Feel free to share them in the comments section below.
Frequently Asked Questions (FAQs) about U.S. Dollar-Based Global Financial System
What is the primary claim made by Russian President Vladimir Putin about the U.S. dollar-based global financial system?
Russian President Vladimir Putin claims that the global financial system, which is anchored by the U.S. dollar, is in a state of gradual decline. He emphasizes that the value of a currency is fundamentally an extension of the economic strength of the nation that issues it, and notes that the U.S. economy’s contribution to global GDP is waning.
What does Putin say about the Bretton Woods system?
Putin asserts that the Bretton Woods system, originally established on the basis of the U.S. dollar, is outdated. He mentions that this view is also shared by Western experts.
How does Putin contrast the economic influence of BRICS countries with that of the G7 countries?
Putin emphasizes that the BRICS countries are gaining influence, particularly in terms of purchasing power parity, in comparison to the economies of the G7 countries. He notes that this distinction is significant, especially with the recent induction of new members into the BRICS consortium.
What new countries have been admitted to the BRICS economic bloc?
The BRICS economic bloc has recently expanded its membership to include Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the United Arab Emirates (UAE).
What are Putin’s views on the possibility of a common currency for BRICS nations?
Putin suggests that instead of moving toward the establishment of a unified BRICS currency, it would be more pragmatic to create a payment system and financial logistics to facilitate transactions among the BRICS nations. He states that transitioning to transactions in national currencies should be the immediate focus.
What do the leaders of the BRICS countries say about the use of local currencies?
At the conclusion of a recent BRICS summit, the leaders underscored the necessity of promoting the use of local currencies in international commerce and financial transactions.
What does Putin mean by “economic development parity” among BRICS countries?
Putin means that for a unified BRICS currency to be feasible, there needs to be a certain level of equality in the economic development of the BRICS nations. He notes that this is a long-term endeavor.
More about U.S. Dollar-Based Global Financial System
- Valdai Discussion Club 20th-Anniversary Meeting
- Overview of the Bretton Woods System
- Statistics on Global GDP Distribution
- BRICS Summit 2023
- Comparison of BRICS and G7 Economies
- The Importance of Purchasing Power Parity
- New Members of the BRICS Economic Bloc
- Local Currencies in International Trade