BRICS gains economic independence

BRICS gains economic independence

On Monday, September 4, during the summit in the Chinese city of Xiamen, BRICS countries adopted a joint declaration, in which they agreed to take a number of economic measures. In particular, heads of BRICS states decided to create a bond fund in national currencies.

"We agreed to support the development of local bond markets in national currencies of the BRICS countries, and also create the BRICS countries Bond Fund in national currencies through joint efforts," the document says.

The leaders of BRICS countries have also agreed to enhance and broaden trade and investment cooperation mechanisms and scope. 

"Stressing the role of enhanced trade and investment cooperation in unleashing the potential of BRICS economies, we agree to improve and broaden trade and investment cooperation mechanism and scope, with a view to enhancing BRICS economic complementarity and diversification in BRICS countries," the document said, TASS reports.

According to the declaration, the leaders welcomed the adoption of cooperative frameworks, roadmaps and outlines on trade and investment facilitation and connectivity and enhanced policy sharing, information exchange, capacity building, through enhanced joint efforts on trade and investment facilitation, trade in services, E-commerce, IPR (in synergy with the cooperation activities among BRICS IP authorities), economic and technical cooperation, SMEs and women economic empowerment.

Anatoly Aksakov, State Duma deputy, chairman of the Committee for Economic Policy, Innovative Development and Entrepreneurship, said in an interview with Vestnik Kavkaza that new Bond Fund will "sovereignize" financial operations between the BRICS countries and make them depend on the dollar much less.

"If we want to more sovereignity, if we want to be more independent, then we need to conduct financial operations in national currencies. It is important to agree on how we will regulate currenly market in order to understand the value of the currency better. The more transparent the system of exchange rates inside countries will be, the easier it will be to understand how will these currencies coexist," he said.

Advisor on macroeconomics to the CEO of the 'Opening-Broker' brokerage house, economist Sergey Hestanov, pointed out that the process that is currently underway is a strategic goal that was announced long ago.

"It is important to understand that the process of changing investor's preferences is very slow. Of course, this work is welcomed, but a huge work is necessary for bonds in national currencies to become a serious alternative to bonds in dollars and euros,. Experience shows that it may take decades to change the preferences of investors," he said.