Moscow (AsiaNews) – At a time when tensions are at their highest since the end of the Cold War, Moscow is hosting two summits to show that despite US and EU sanctions, the country is not isolated internationally and has access to alternatives to Western financial and military institutions.
Russia will host two summits on 8-10 July, one for the members of the BRICS group (Brazil, Russia, India, China and South Africa) and one for the Shanghai Cooperation Organisation (SCO), a security-oriented group that includes Russia and China, as well as Kyrgyzstan, Kazakhstan, Tajikistan and Uzbekistan. India and Pakistan, both nuclear powers, are set to become permanent SCO members. Iran remains for now an observer.
The dual summit will be held in Ufa, the capital of the Republic of Bashkortostan, in the Volga region. Founded by Ivan the Terrible, the city is at the centre of a region that has great potential because of its oil fields.
Economy and security are the main issues
In a statement, the Kremlin noted that the BRICS summit will address important international issues like the Ukrainian crisis, Syria and the Middle East, Iran’s nuclear programme, the Eurozone and situation in Greece, after the victory of the No victory in the referendum.
The economy will play centre stage, and will include IMF reform to give emerging economies greater weight, and a new BRICS Development Bank with a 100-billion contingency currency reserves pool.
By pursuing the two initiatives, the “Five” nations, as the Russian media refers to the five BRICKS members, want to redesign the global financial system, currently dominated by Western institutions.
"At this meeting we will make operational our two biggest institutions, which is key for us to advance as a group and learn more from each other," said a Brazilian official involved in the preparations for the meeting. ""Nobody thought that was going to be possible a year ago when we ratified the proposals."
The aim is to boost bilateral financial cooperation to counter the dollar. Which is what China and Russia are already doing as they trade in each other currencies. In fact, Moscow’s stock exchange is trading already in rouble-yuan futures and Russia has become one of three top player in the Asian Infrastructure Investment Bank (AIIb) along with China and India.
For Putin, whose agenda has shifted eastward after he was suspended from the G8 for annexing Crimea last year, the Ufa summits are also an opportunity to show that his country can do without its former Western partners.
Indeed, the BRICS group accounts for a fifth of the world's economic output and 40 per cent of its population.
By organising the BRICS and SCO summits, Russia is sending a strong signal to NATO and the US at a time of tensions with the West.
"The BRICS, in addition to their economic and pragmatic agenda, have become an influential factor in world politics," Russian Foreign Minister Sergei Lavrov said last week.
However, he denied the five countries' efforts to join forces were aimed against anyone else and praised their "important stabilising role" in international affairs.
For Chinese Deputy Foreign Minister Cheng Guoping, the SCO summit is important because it will address security issues and ISIS, which also threatens Central Asia and Afghanistan, where Beijing has growing interests.
On this occasion, South Asian rivals India and Pakistan are expected to join SCO when the group meets this Friday. They are first new members since Uzbekistan was admitted in 2001.
Limits and rivalry
Yet, all is not rosy. For several independent political analysts, despite the show of unity, the BRICS nations are far from achieving their main objectives.
Indeed, although Russia has become China’s main oil supplier, the relationship between Beijing and Moscow is less idyllic than imagined.
For one, progress on the New Development Bank, first proposed in 2012, has been slow.
At last year's BRICS summit in Brazil, the parties agreed the headquarters would be in Shanghai but China ratified the bank plan only last week and no one expects it to be operational until next year.
The capital for the new financial institution has also yet to be rated to issue debt.
China and Russia are also competing for influence in Central Asia where the Kremlin’s eastern strategy is overlapping with Beijing’s new Silk Road.
In Ufa, Putin and Xi Jinping will meet for the eighth time since the latter became president of China.
Putin is also expected to hold talks with Iranian President Hassan Rouhani and Indian Prime Minister Narendra Modi.