Episode Transcript
[00:00:00] Speaker A: Time's up then. Leaders in Delhi today have to answer whether a genuinely new international order is emerging or whether we're just simply watching the old one collapse. Eleven members, including the uae, where this program is coming to you from a guest list running past two dozen countries and prices for hotel rooms in the Indian capital rocketing. Twenty years ago, the block was four letters on a slide deck. This week, it's the hottest ticket in the world. I'm Afshin Ratansi. Welcome to a new season of New Order.
This is a very different BRICS from the one the world was talking about a decade ago. India is hosting its first summit since the bloc's expansion in 2024, and they're meeting at a moment when questions about war, trade sanctions and the dollar are all colliding. Days ago, India, China, Russia and Iran were together at the Shanghai Cooperation Organization summit along with Azerbaijan, Armenia, EG and Turkey in the Bishkek Declaration. The SCO unequivocally backed Iran as NATO nations continued their war in this region that is set to push billions into poverty. The time has come to choose a side as Western European economies collapse as their boomerang sanctions and war on Russia through Ukraine fails. The USA has been flailing around politically. Trump, held hostage by Israel, already declared war on brics. He said BRICS is dead the minute I mentioned that if they mess with the dollar, they'll get 100 tariffs. And there is another arguably impotent stage also opening up at almost exactly the same time. The UN General assembly has just begun, with world leaders heading to New York later this month to debate a world where the UN Security Council framework is looking increasingly absurd. How can India not be a permanent member? So in Delhi, the central question is who actually gets to write the rules of the next international order? At the end of the show, we'll be joined by New Order Zahra Khan to answer viewers questions asked on our social media. Today on New Order, I'm joined by Paolo Nogueira Batista Jr. Former vice president of the BRICS Bank, New Development bank, and one of the key Brazilian figures behind the creation of the BRICS financial architecture. He's also served as Brazil's Executive Director at the imf. Paolo Batista, thanks so much for coming on New Order. I suppose I'll ask you first of all, what one thing does brics have to do in Delhi to finally make the world realize it means business, not just vague rubbish, as it were.
[00:02:32] Speaker B: It's important for the BRICS to make clear that it's not only A talk show talk shop, but that it actually produces practical results.
It has started to do so in the creation, with the creation of the new Development bank headquartered in Shanghai, with other initiatives, including initiatives related to payment systems and possibly to alternative financial infrastructure, alternative to the Western dominated system. But this needs to be done clearly and in steps, I think. To be honest, I think the brics are rather slow in acting in this respect. In this practical respect.
[00:03:18] Speaker A: Yeah, we'll get to some of those practical ideas in a moment. I mean, it's clear that the shadows of the wars on Russia through Ukraine. Ukraine, the war here in West Asia, hanging over the hall of Bricks. How important do you think it was that the Shanghai Cooperation Organization back this Bishkek declaration backing Iran in the war? Iran, one of the newest members along with the uae.
[00:03:44] Speaker B: Very important because Iran is not only a member of the sco, as you said, but also the brics, one of the recently new members of the brics.
So we have, in the brics we have three countries that are loggerheads with the West, Russia and Iran militarily, and also China economically and politically.
So the BRICS are one of the reasons why the BRICs attract so much attention is the present in the group of countries of very large size and in conflict with the West.
I mean, the three I've just mentioned, Iran, Russia and China, but also India, a very large country, also Brazil, another very large country.
So the giants of the global south, all of them present Indonesia, also a recent member, they're all there as members of this group. So this increases the potential political importance of the group enormously, as everyone.
That's why you can say, as you said, that it's a hard ticket when the BRICS leaders meet. It's exactly because of the structure of the group since the beginning, more recently with the entry of countries like Iran and Indonesia.
[00:05:00] Speaker A: There's a tragic irony though, isn't there, that of course there's genocide in Gaza, there is this terrible war on Iran, there's a terrible war in Europe, which all ironically may speed up the process of brics. But in your hemisphere, it has to be said. Lula, who I have interviewed, rumored to have vetoed the Venezuelan entry into brics. And we saw what happened in Venezuela, the kidnapping of Maduro and Celia Flores, in a sense showing the power of brics. If Lula hadn't done that, maybe Venezuela wouldn't be a colony of the United States today.
[00:05:44] Speaker B: You know, what you're referring to is the 2024 incident during the Russian chairmanship.
Venezuela with the support of Russia and others, was, was, was trying to be accepted as a partner country, not as a full member. And Brazil objected at the time Russia made it public. So this created a lot of unpleasantness between Brazil and Venezuela.
[00:06:10] Speaker A: Is it true, Lulan?
[00:06:13] Speaker B: It's true, it's true, fundamentally true. But what is not where I think is debatable is the idea that if Venezuela had joined as a partner country, it would have escaped the American interference.
I don't think so. Because what is the American interference in Venezuela showing? That when push comes to shove, militarily speaking, Russia and China are not there.
So countries like Brazil have to depend on their own national defense capabilities.
In the current circumstances they can cooperate militarily, of course, with countries like China, Russia, Iran, Turkey, but ultimately we need to be able to defend ourselves. Venezuela was not, Venezuela was not prepared for the challenge.
[00:06:58] Speaker A: But doesn't this show that. Of course the economics are incredibly important. I mean, without which. And the currency situation, these things are a hugely important dimension. But they need some sort of military defense packed element to this that the IMF and World bank arguably have, without which the economics doesn't follow.
[00:07:25] Speaker B: But you know, the BRICs are a group that cannot be characterized as a political alliance, much less than military alliance. So you can find China and Russia cooperating intensively with Iran. Iran is closer to their spheres of interest. But in the case of Latin America there's this non written perception, unfortunately, that China and Russia will only go so far there to deter US imperialism.
So again, I think we need to take the lessons out of what happened.
Trump, by the way, took the wrong lesson. He thought he would have such an easy victory over Iran as he previously had in Venezuela. And that did not prove to be the case, as we know.
[00:08:14] Speaker A: Perhaps because Iran's in brics. No, obviously there's a lot more riding on that.
So doesn't that mean that they don't really understand in Delhi that economics is political?
Because you yourself seem to separate it.
Economics is political.
[00:08:37] Speaker B: When leaders of countries meet, it's always political.
But what I mean to say is that the BRICS can be compared to the G7 or the G20. It's the same sort of grouping, but it's not a military alliance like NATO.
[00:08:54] Speaker A: Well, the G7 is. The G7 is a military alliance.
[00:09:00] Speaker B: Right.
So I think what we need to understand is that brics has the very much heavy weight in the world economy, but it's not necessarily yet ready to move towards the stage alliance.
SCO is closer to that than the BRICS I believe, you know, but clearly
[00:09:24] Speaker A: the host of the BRICS summit, India doesn't care anymore about threats from Washington over tariffs.
If we get away from the kinetic warfare to the economic warfare, it doesn't matter what the United States says.
India will keep buying Russian energy and financing the proxy war in Ukraine even though Jaichenko is in Ukraine. What do you make of that? That India just doesn't seem to be that bothered?
[00:09:58] Speaker B: I guess India was very disappointed by the behavior of the United States under Trump because in the years leading up to 2025, India was convinced that it had a special relationship with the United States and it was relying on that special relationship. When the US Trump administration started applying iterates, threatening repeatedly Indians in more known way, the Indians suddenly realized that the name had changed. So now they're looking to other international relations.
They're close to Russia as always.
There's an effort on the part of the Chinese and the Indians to come closer together.
It's very significant that President Xi Jinping is in Delhi for the summit.
So we have these two giants, China and India, coming together and nobody underestimates that because it's very crucial not only for the brics, but for the global south and for the world as a whole to have India and China come closer together. They have differences, historical, that will be overcome only gradually. But fundamentally the reason the direction is important to take to pacify completely this relation.
[00:11:20] Speaker A: Yeah. At the time of this recording, Xi Jinping not completely confirmed, perhaps this is security concerns, false flags, who knows what else.
There isn't though arguably going to be definitely a new transnational currency that I know you've been writing about with the Valdai Club.
That's not going to be confirmed in Delhi. It's too early for that.
[00:11:46] Speaker B: No, no, that's not on the table at all. It's a long term project that may arise out of the current initiatives that the BRICS countries as countries or as a group are taking.
At the stage we are in the question, main question that area is the interlinkages between payment systems of India, Russia, China, Brazil and other countries, Iran, because all these countries have their own domestic fast payment systems, digital payment systems. And the challenge is to see if we can integrate these systems, make them operate together and they will then become what is very important for us, an alternative to the Western controlled system, which is Swift and other mechanisms linked to Swift.
So we need to bypass that because as you know, SWIFT has become a political weapon, have been weaponized by the United States and the Europeans. So we can no longer trust you see, you must say, well, that's right. That's true for Russia and for China, but not so much for a country like Brazil, but it also is for Brazil because Brazil has been subject that subjected the so called secondary sanctions when Brazilian firms transact with firms of sanctioned countries, you see. So it's become relevant also for countries that are not directly sanctioned by the United States.
[00:13:15] Speaker A: Yeah. So many different payment systems since I last talked to you. Even Paolo Nogueira Batista Jr. We'll continue after the break. Keep watching New Order.
[00:13:31] Speaker B: Foreign.
[00:13:36] Speaker A: You're watching New Order. Paolo Nagayira Batista Jr. We were talking in part one about all these exciting new payment systems and how you're helping arguably to create some sort of framework where we can combine, I don't know, the UAE's Enbridge with Russia's.
Russia's SPRF. There's so many acronyms. I don't know how even when scholars such as yourself are putting together, you get them all through SPFs is Russia, India's UPI, China's CIPS and Enbridge, which the UAE has.
Having said that, as we started the interview, you did seem a little unhappy about the speed of the National Development bank, the ndb. Sorry, The New Development bank, which you were former vice president of.
Why is its capitalization still so low compared to the.
Well, you served at the IMF as well. The CIA cut out the IMF. How is it that NDB loans are about $20 billion? 20.5. I'm looking at some figures. IMF, of course, at the moment, $170 billion of blood money loans. Why is it still. Why are the orders of magnitude so different?
[00:14:52] Speaker B: Well, the back is still. We're still struggling to become an effective global lender.
I suppose there are a number of reasons. One of them is that we've had difficulties in expanding the number of members.
This constrains our capital and our lending opportunities.
The other reason is that for some mysterious reasons, I don't think the countries that founded the bank have attached great importance to the bank. Always. Sometimes, yes. For example, my own country, Brazil, attaches so much importance to the bank.
[00:15:31] Speaker A: Might be a reason for that, given a former president is head of the new Development Bank.
[00:15:35] Speaker B: Yeah.
The idea that Brazil would offer a former president as president of a bank is also an indication of the importance that Brazil attaches to the bank. But you know, when I was there, I already felt the difficulties that we would feel over the next years.
One was that the bridge had this tendency, which is really problematic to Try to solve issues by consensus.
That hampers everything because one single country has veto power. If you take that to the extreme and knowing that when we designed the bank, we explicitly disallowed any decision to require consensus in the sense of unanimity.
Even so, even so, with that legal structure, when I was there, there was this effort to build unanimity in every single issue. We very rarely depart, very, very rarely departed from unanimity as a decision move. Now this tends to paralyze the bank. It tends to paralyze the BRICS group as well.
[00:16:41] Speaker A: I mean, you probably didn't know it at the time, I hope you didn't. That the IMF is a CIA cutout, but when the IMF is loaning money, they have a paramilitary organization, the CIA, to aid it as regards its regulatory frameworks. I mean, you're almost saying you need a paramilitary set of people within the NDB to promote the interests of the NDB within brics and around the world. Because clearly there's no way that John Radcliffe of the CIA is going to be thinking to himself as the NDB is involved in this country or that country. Oh yeah, we don't mind the NDB being involved in an infrastructure project in a global south country.
[00:17:28] Speaker B: We did when we first set out to make a spam, consciously wanted to avoid the interference, the conditionalities, the political actions taken by the World bank and the imf. That was on our minds from the very the beginning to be a bank respectful of the national plans and priorities of the countries that come to us for financial support.
Now the imf, you know, you write it, people don't always realize that the IMF is the technical institution, good technical institution with a competent staff. But it is also, and perhaps mainly a political instrument.
Of whom? Of the United States and Europe. Fundamentally, especially of the United States. That applies to the World bank, applies to the IMF as well.
So I can tell you from my experience there, I spent eight years in the board of the fund in dc. I can tell you it's quite clear those countries that are politically aligned to the west, they get support on good terms, lenience, oversight. But if the country departs from that script, is seen as non cooperative, then it's completely different. It may not even get a loan when it wants one. If it does, it gets harsh conditions. There's no even handedness in the way the IMF and the World bank treat countries. Just to give you another example. You know, it's amazing to see that the entire loan book of the World bank to Ukraine is larger than for the whole continent of Africa.
Why? Of course, because Ukraine is a political ally, military ally.
If you look at Latin America, who gets the landing? It's Argentina under Nele, the largest Boron. Also Ukraine is a very large Boron in the imf.
So it's important to understand that the west has a structure, financial structure, monetary structure.
[00:19:39] Speaker A: Although I suppose that World bank money, the World bank money is mainly going to Monaco. Really? Then as many people have as even European powers are beginning to suspect how much IMF and World bank money might actually be in Monte Carlo.
I mean, tragically then is it another war? I mean, if, if it is the war in Iran and the war in Europe that have galvanized the new payment options and the new payment streams, do we need another war to really kickstart the new development bank to make countries understand, understand.
Because it tends to be wars, it seems that have sped up the BRICS project.
Cuba, of course, is a partner country of brics and will be represented in Delhi. And there are great fears that a military attack on Cuba from the Trump administration may be coming as Cuba seems
[00:20:41] Speaker B: to be the next victim.
I don't believe though that first that they will do anything before the November elections, the midterm elections in our states, and second, explaining the first point, it looks like Cuba will put up a fight different from the Venezuelan case, which was an easy ride.
So Cuba, the blood of American soldiers, may need to be spilled to topple the regime.
So it's unfortunate. But you know, the really decisive thing for the brics to move in the direction of de dollarization was something that happened in 2022, which was the freezing of something like $300 billion equivalent of in terms of Russian reserves. When we saw that if that can happen, anything can happen in the world. So since then de dollarization has been going on as a protective measure, as a way of defending our resources. For example, countries, all the brics countries are buying gold on a large scale to protect themselves against the riskiness of dollar assets, of Euro assets.
China is reducing drastically over time its, its holdings of US Treasuries.
China and Russia move to exclusively transacting in national currencies, bypassing the dollar. And so the world is changing. And the reason is not that it's important to realize that the brics were not hostile to the West. I can tell you I was in the process from the very beginning. The brics were always a reformist group, not in the business of confronting the West.
Very moderate rhetoric.
What the problem is the west does not understand that the west feel threatened by the BRICs, especially by China and Russia and now Iran.
So the west has this fear, this phobia of rivals that would spoil its civilizational dominance. And this is, again, it's accelerating the process. It goes against the interests of Americans and Europeans because instead of resisting an inevitable multipolar world, they should be finding ways of living with that. But they've proven to be incapable, especially the United States, incapable of, you know, coexisting with other countries that are sovereign, that are not colonies. They want to go back to colonial times. As you, as you just mentioned, Venezuela,
[00:23:28] Speaker A: I mean, just very, very fine. Just, just finally, I mean, if you can't remove that mindset, you worked at the imf, and if those people don't remove that mindset, what are they going to be thinking of events in Delhi this week? I mean, what will they be looking at it and laughing at the pictures coming out of Delhi, thinking these brics countries have no idea what's coming next for them because they see it, as you say wrongly, as a threat to them.
[00:23:57] Speaker B: Well, you see, the west is declining, but it's still very powerful and dangerous, can, it can wreck, it can do a lot of damage, as we know.
But I don't think the west is laughing because they realize now that China is a formidable force, that Russia is a formidable force, that Iran is a formidable force, that the BRICS, 10 countries together are a formidable force. And they need to, they, they know, they're not stupid. They know that they need to take that into account.
And of course, we need to be careful because they would try all the best, the best efforts to undermine our cohesion, to undermine our internal power.
So, for example, we're less than, less than one month of Brazilian elections. This is crucial for the brics, because depending on the way the election goes, Brazil will be closer or perhaps outside the BRICs. You see, and you can imagine who the Trump administration is rooting for. Not for Lula's reelection, rooting and acting, but for the election of someone who can behave as, let me put a strong word here, as a vassal like Milei is, like the new Colombian president offers to be. You see, that's the sort of situation we faced in brics.
Some countries don't have that problem. China, India, Russia, Iran are very much more solid than countries like South Africa and Brazil, politically speaking.
But even in those countries, we have influence of Western circles that hamper the international policies of the countries.
[00:25:40] Speaker A: Paolo Negara Batista Jr. Thank you.
[00:25:44] Speaker B: It's A pleasure.
[00:25:51] Speaker A: Social media time now with Zahra Khan. You're back. Season premiere questions two weeks too long.
[00:25:58] Speaker C: We've got a backlog of questions to work through. Varun Views has asked is BRICS really about curbing Western powers or is it about trade, connectivity and economic opportunity?
[00:26:06] Speaker A: Paolo Nagara Batista Jr. Was talking all about that, wasn't he? What's it about? Well, BRICS keeps on saying it's not against the United States. It wants a peaceful world. The point is, of course, that as your questioner said, Varan views trade, connectivity, economic opportunity. The United States doesn't want that for Global south countries without them being run by other countries. If 38 million people were killed by sanctions on the Global south between 1970 and 2021, according to a Lancet study, sanctions on trade, connectivity and economic opportunity, that clearly means that BRICS needs to curb Western power as he has it, otherwise they're not going to get any of those.
[00:26:48] Speaker C: And Rahul Aggarwal has said that all the BRICS nations are surplus producers. They can't absorb each other's surpluses and still be in surplus. They need a deficit nation. And who could play that role?
[00:26:57] Speaker A: Has he been reading Foreign Policy magazine? India is not a surplus nation. It's a deficit nation. So actually we can see a world where China supplies manufacturing goods to India, India supplies services pharma to brics plus Brazil food and commodities. That way Russia supplies energy to China to India.
China can't even satisfy its own domestic demand in some commodities and soon perhaps in manufacturing goods. But there is a syncretic ability of all these BRICs plus nations to work together. So that's not exactly true. But you will read in Western propaganda documents in academia, in scholarly institutions, in NATO anti Brics countries that, yeah, it won't work. You need the American market, you need the European market. The European and American markets aren't required for the BRICS project.
[00:27:52] Speaker C: Thank you for those answers, Afshin. One more week. I'll be back with more questions for you.
[00:27:55] Speaker A: Zahan, thank you. And remember to follow us on xewaudertv to ask your questions. It could be yours that gets answered. Next Sunday we'll be back with another look at the people, countries and ideas shaping what comes next for India and its partners. See you next week.
