6th BRICS Summit: the seeds of a new financial architecture
On the day following the end of the World Cup in Brazil, the Sixth Summit of BRICS (Brazil, Russia, India, China and South Africa) will be held in Fortaleza and Brasilia, on the 14th, 15th and 16th of July, to establish a financial architecture under the slogan: “Inclusive growth and sustainable solutions”. In contrast to the initiatives of financial regionalization in Asia and South America, the BRICS countries, since they do not have a common geographical space, at a time when they are less exposed to simultaneous financial turbulence, can increase the effectiveness of their defensive instruments.
As a consequence of the growing economic slowdown on a world level, it has become more complicated for BRICS countries to reach growth rates above five per cent. The sustained fall in prices of commodities for industrial use, due to a lower demand from the Asian continent and the return of short-term capital flows to Wall Street have had a negative impact on foreign trade and exchange rates. With the exception of the yuan, BRICS currencies have lost from 8.80 % (rupee) to 16% (South African rand) between May of 2013 and June of this year. In this sense the BRICS CRA, with 100 billion dollars as of March 2013, with contributions from China of 41 billion dollars; Brazil, India and Russia, with 18 billion each; and South Africa with 5 billion dollars – once under way will substantially reduce the exchange volatility in trade relations and investment between members of the bloc. Sceptics claim that the CRA will have only secondary importance and will only exercise functions complementary to the IMF. They leave aside the fact that in contrast to the Chiang Mai Initiative, for example (with China, Japan, South Korea and ten economies of the Association of Southeast Asian Nations), the BRICS CRA will not need the support of the IMF to make loans, and thus will have greater political autonomy with respect to Washington. The currency war of the central economies against economies of the capitalist periphery demands the implementation of the CRA as soon as possible.
Meanwhile, the BRICS Bank has awakened great expectations. It will begin operations with a capital of 50 billion dollars (with contributions of 10 billion and guarantees of 40 billion from each of its members), and will be able to expand to 100 billion dollars within two years, and to 200 billion in five years; it will enjoy a capacity of financing up to 350 billion for projects of infrastructure, education, health, science and technology, environment, etc. However, for South America, its impact in the medium term presents a dual picture. Not everything is honey in every corner of credit markets. On the one hand, the BRICS Bank could contribute to reduce the costs of financing and strengthen the counter cyclical function of the Development Bank of Latin America (CAF) through increased credits in moments of crisis, and thus rule out loans from the World Bank and the Inter-American Development Bank (IADB). On the other hand, as a source of credit, the BRICS Bank will face competition from financial institutions of considerable weight in the region, such as the BNDES (Banco Nacional de Desarrollo Económico y Social, of Brazil), the CAF and the Chinese banks with a greater number of credits (China Development Bank and Exim Bank of China). It is unlikely that these financial institutions could manage their offers of credit in a complementary way without affecting their loan portfolios.
There are also some frictions within BRICS. The Chinese elites look to provide a majority contribution (contrary to the Russian proposal to establish proportional contributions) and to make Shanghai the seat of the organization (in place of New Delhi, Moscow or Johannesburg). If the loans of the BRICS Bank are denominated in yuans, the Chinese currency will advance in its internationalization and gradually establish its position as a multipolar means of payment and a reserve currency, to the detriment of others. Beyond the consolidation of a multipolar world, the CRA and the BRICS Bank represent the seeds of a financial architecture emerging in a period of crisis that is full of contradictions and characterized by cooperation and financial rivalry. Ariel Noyola Rodríguez
[sidebar: What a mess. Right Americans aren't correct and Left Americans aren't either. The left and right in the U.S.A. are exactly what the CRIMINALLY INSANE manufacture: No U.S. Constitutional EQ or IQ Muster.
EQ: EMOTIONAL QUOTIENT INTELLIGENCE. Let us begin with George W. Bush "Jr" as the U.S. President and then let us also include the current POTUS CRIMINAL FRAUD Barry Obama.
There is no EQ in the past FIVE (5) US PRESIDENTS and this is a well-documented fact, historical. There are not going to be stupids as stupid as the U.S.A. writing this reality in history ... SEE,
... Dr. Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: email@example.com
This brand of history, which is both script and prescript, is the sort so admirably shredded by Graham Greene in The Quiet American (1955), whose Alden Pyle meddles in Vietnamese affairs because of a belief in formulae and programs of institutional reform and “aid”. Bring concepts of modern economy and capitalism to Indochina, and communists are bound to melt away. The nationalists will come around. What Greene did so well to expose was the idea of such revolutions – or counter-revolutions – as managerial conceits. Zelikow falls into that easiest of traps, assuming that, “Many in the region, craving modern governance and fearing fundamentalist or sectarian rule by force, still look for leadership from the United States.”
This might have something to do with a curiously Hegelian view on the part of various American policy makers, something rife through neoconservatives and liberals before them. Identify the premise, the contradiction, and then resolve it. This is dialectical history, and it is one replete with dangers. Architects are deemed rational agents; wise decisions can be made.
This is almost never the case. While Zelikow does not go the full way with the neoconservative platform, cautioning against a full-scale American intervention in the manner of the Bush administration, he ignores what brought about the basis of any “quarantine” to begin with. In place, he is suggesting patches, band-aids and picking friends from foe.
Zelikow throws in W. B. Yeats for good measure, though a highly abbreviated version – “Mere anarchy is loosed” and then “the worst are full of passionate intensity”. But what is omitted is that vital sense about the centre that does not hold, a centre that took a sound battering when imperial viceroys decided to forge political entities in the name of a “ceremony of innocence” that well and truly drowned. Zelikow should have been true then to what he says now – the quarrel of Islam remains an “internal one”.
[sidebar CON'T: until the American gets the NEWS as the TRUTH, then there is only IGNORANCE!
Isn't BLISS: ignorance. What has been and WHAT IT IS, as the Buddha said too.
And, IT is very clear the AMERICAN = SCOTUS-POTUS-FLOTUS-COTUS- that's the system of no checks and no balances because IT can't pass the CONSTITUTIONAL MUSTER.
What China and Russia feared the most, they have had to bring into the CONSCIOUSNESS "IQ".
China and Russia were in on GLOBALIZATION, but of course. But, they double-crossed the liars that were going to double-cross them (Israel-EU-US-Saudi-Arabia-Japan-Et-Al).
IQ: INTELLIGENCE Quotient?!
The BRAIN OF HUMAN isn't Chinese or Russian or American.
Chinese Russians and America so called LEADERS aren't high in the EQ nor IQ, clearly the GLOBALIZATION wasn't a unilateral decision.
HUMAN BEING: EQ and IQ and not doing well, in planet earth. NO SEPARATION America, China, Russia, Et Al.
Time to remember a GREAT ENLIGHTENED leader, JESUS THE CHRIST:
Our Father which art in heaven, hallowed be thy name. Thy will be done, here in earth as in heaven. Give us this day, our daily bread. And, please forgive our trespasses as we forgive those that trespass against us. Leave us NOT in temptation, but deliver us from all evil. For thine is the kingdom, the glory and the power, forever and ever, Amen.
My understanding is the Greek Orthodox Bible is said to be the closet to the Dead Sea Scrolls.