In a paradigm-shifting move, Russia is discussing the use of national currencies in trade settlements with 10 Southeast Asian nations, as revealed by Russian Foreign Minister Sergey Lavrov. These nations are members of the Association of Southeast Asian Nations (ASEAN), comprising Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.
The discussions come amidst a global push to “de-dollarize” economies and reduce dependence on the US dollar, particularly among nations looking to assert greater autonomy in the global financial landscape. The shift aligns with Russia’s goal of promoting a multipolar world order, a stance the country maintains despite western pushback.
Lavrov shared this pivotal development in an interview with the Indonesian national newspaper, Kompas.
The Russian Foreign Minister made it clear that the move does not signify the onset of a “new cold war.” Instead, he asserted that the move is a response to the West’s pursuit of maintaining its dominance, often at the expense of other nations. “Their goal is not to strengthen global security and engage in mutual development, but only to maintain their hegemony in world affairs and further carry out neo-colonial agendas,” Lavrov stated.
Lavrov underscored the risks of storing tangible assets in Western jurisdictions, highlighted by the recent confiscation of Russia’s foreign reserves in the U.S. and Europe. This incident has spurred many nations to consider de-dollarization and alternative payment systems, not just Russia.
“There is a growing understanding in the global community that no one is immune from the confiscation of tangible assets stored in Western jurisdiction,” Lavrov detailed. The move towards national currencies in trade settlements represents a step towards greater economic sovereignty for these nations.
Increasingly, interstate associations outside the purview of Western countries have gained prominence. Lavrov pointed to the BRICS (Brazil, Russia, India, China, and South Africa) and the Shanghai Cooperation Organization (SCO) as prime examples of successful such alliances.
The Russian diplomat highlighted Russia’s ongoing collaboration with ASEAN nations on various urgent international matters via platforms such as the UN. This collaboration has been particularly noteworthy with Indonesia, which currently holds the chair of ASEAN.
ASEAN member states have also made concerted strides towards de-dollarization. In May, they agreed to promote the use of local currencies for economic and financial transactions among member states. Following the BRICS’ lead, Indonesia has moved away from the US dollar. In a strategic maneuver to circumvent potential geopolitical consequences and promote de-dollarization, the country recently unveiled a new national payment system.
The proposed move to use national currencies in trade settlements, therefore, underscores a shift in the global financial order. As nations in the Global South and East become more assertive, the US dollar’s dominant role may be increasingly challenged, potentially heralding a new era of multi-currency global trade.