As the basic methodology for this research, I have utilized two Russian theories: the theory of technological and world economic modes shifts, and the Noo-sphere theory by Dr. Gubanov, which provides prospects for the future of the world monetary and financial system. It is not useful to analyze the financial system as a distinct object; we need to see the whole picture of history to understand its construction. Dr. Glazyev has built such a picture, and his theory shows that we are now in a very dangerous period of shifting modes: from the fifth technological mode to the sixth, and from the old world economic mode to the new integral one. There is also a shift in the countries leading capital accumulation cycles, with the Asian cycle emerging as the new one. This indicates several problems in the current financial system, which was constructed by the core countries according to their interests. The present-day world monetary and financial system was constructed by the USA, leading to distinct issues such as de-dollarization, the weaponization of currency, and financialization, which causes a range of bubbles and financial and economic crises.
The conclusion from this theory is that we are in a period of very severe changes, and developing countries have started to become the engine of reforms. The Noo-sphere theory gives us a sense of the future, connected with Marx's ideas of the development of production. It suggests that production will become increasingly knowledge-intensive, necessitating reforms of the financial system in line with social development. These positive reforms will align with the interests of developing countries. The concept of global noo-transition shows how the world financial system can be reoriented towards goals of social development, with the main factors being a new type of integration and the sharing of values as a precondition for these reforms.
In the case of BRICS (Brazil, Russia, India, China, and South Africa), several stages of this noo-integration are very similar to the group's development, and we can judge it as a noo-integral group. Within this group, there is an initiative to build a common monetary and financial area, which can be the start of reforms for the global monetary and financial system.
Regarding the case of Russia, we are trying to understand why sanctions were imposed on a country so different from those previously sanctioned, in terms of territory, number of trading partners, and integration into world markets. We concluded that this severe period was due to the effects of the reforms of the 1990s, and the sanctions were an external shock intended to be turned into an internal one to disturb the Russian economy. Although there were several announcements that the Russian economy was absolutely destroyed by sanctions, subsequent research has shown a medium-sized effect. It is sometimes hard to get an exact view of the sanctions' impact. In the early sanction period, Dr. Glazyev and I took some indicators and, through correlation analysis, found only a slight sanction effect during that time, which has a reducing dynamic. For instance, our estimations of the exchange rate captured the most active sanction effect in 2015, at about 10% to 15%, with a much slighter effect of less than 4% in 2014 and 2016. There has been no major problem in employment. We see the sanctions as a stimulus for our economy towards reindustrialization. In that case, de-integration and the transformation of the world financial system are very significant for us, and Russia is among the supporters of this integration.
My colleague mentioned the report of a Russian team that proposed key principles, such as using digital mechanisms to transform the world monetary system. In line with our proposals of noo-integration and building a common monetary and financial area, this can be rather workable. To conclude, this is the biggest opportunity for developing countries and for BRICS countries to create a new world and a new world order, and to reconstruct the world financial system according to their understanding and principles. The main thing is that we need to first believe in the workability of this initiative, in this new kind of integration and cooperation, and then start working on definite mechanisms. This includes improving the New Development Bank so as not to rely on the IMF (International Monetary Fund). I would like to remind you of the wonderful fairy tale, The Wizard of Oz, where the heroes traveled the road paved with yellow bricks to realize their dreams. I really believe that our golden BRICS will follow us to a better future.
(Transcribed from recording and edited.)