Putin says that globalisation is obsolete and the future belongs to emerging markets

Russian President Vladimir Putin declared to BRICS leaders that "liberal globalisation" is obsolete, asserting that the future of global business activity lies with emerging markets and advocating for increased use of national currencies in trade. This statement, made to a bloc representing 45% of the world's population and over $28 trillion in GDP (with China as the dominant economic force), signals a strategic push towards a multipolar economic order and reduced reliance on Western-centric financial systems among key developing economies.

Analysis

Russian President Vladimir Putin's declaration to BRICS leaders that "liberal globalisation" is obsolete marks a significant rhetorical and strategic challenge to the post-Cold War economic order. This push to shift the "centre of business activity" is backed by a bloc representing 45% of the global population and, for its five core members, a nominal GDP exceeding $28 trillion. However, this economic weight is still considerably less than the G7's $51 trillion and is heavily skewed, with China alone accounting for over 60% of the BRICS members' combined economic clout. The specific calls to enhance the use of national currencies for trade and deepen cooperation in strategic areas like natural resources and logistics signal a clear intent to construct a parallel economic ecosystem, reducing dependence on the U.S. dollar and Western-led institutions. This statement, delivered amid geopolitical tensions underscored by Putin's ICC arrest warrant, solidifies the view of BRICS as a platform for building a multipolar world order.

Key Decisions for Investors

• Investors should monitor any increase in trade settlement between BRICS nations using local currencies, as this de-dollarization effort could create long-term headwinds for the U.S. dollar and impact currency markets.
• While the call to action elevates the investment case for emerging markets, portfolio allocation should be nuanced, recognizing China's disproportionate economic influence within the bloc and focusing on strategic sectors like natural resources and logistics.
• The heightened geopolitical framing of economic policy necessitates a re-evaluation of supply chain risks, potentially favoring companies with diversified or localized operations that are less vulnerable to global trade fragmentation.
• Consider the growing divergence between G7 and BRICS-aligned economies as a key macro factor, as capital flows, regulatory frameworks, and market access may become increasingly bifurcated.