BRICS: News and Discussion

[Austin]

Wonder why we dont have a thread on BRICS , Mods can delete if they think we dont need one.

India, other BRICS countries to endorse joint reserves pool

Washington/Brasilia: Leaders from the world's major emerging economies are likely to endorse plans at a summit next week to create a joint foreign exchange reserves pool and an infrastructure bank for developing countries, senior emerging market officials said on Thursday.

Leaders from China, Russia, India, Brazil and South Africa, known as the BRICS, will gather in the coastal city of Durban, South Africa, on March 26 and 27.

The officials said the leaders will discuss reports prepared by working groups led by Brazil on the proposed reserves pool, and another by India and South Africa on the creation of a joint development bank, which would provide financing to emerging and developing economies for infrastructure projects.

The reports are expected to say the bank and the reserves fund are "viable and feasible" and recommend to leaders to give the go-ahead, according to the officials.

"There are still some differences among the countries, but we believe that the BRICS will give the green light to both projects," said a senior Brazilian government official, who asked not to be named because he was not authorized to speak about the matters publicly.

The proposals reflect frustration among emerging market nations at having to rely on the World Bank and International Monetary Fund, which they see as still reflecting the interests of the United States and other industrialized countries.

The official told Reuters the proposed contingency reserve arrangement would initially hold between $90 billion and $120 billion, although a figure was unlikely to be included in a final statement by the leaders.

The pool of central bank money would be available to emerging economies facing balance of payments difficulties or could be tapped to stabilize economies during periods of global financial crises, according to documents outlining the plan.

Officials have said that the reserve pool should be similar in size to the Chiang Mai Initiative of southeast Asian countries, which was doubled to $240 billion in May to boost their protection against external shocks.

One senior emerging market official said the reserve pool could eventually be larger than the Chiang Mai Initiative, which includes China and Japan. China has emphasized that the size of the BRICS contingency pool needs to be big enough to make an impression on financial markets.

Another senior emerging market official said BRICS countries were also considering injecting an initial $50 billion into the new infrastructure bank. Details on the scale, location and structure of the bank will be discussed, but not agreed at the summit, the official added.

The bank would support the ever-growing financing needs in emerging and developing nations for roads, modern-day port facilities, reliable power and rail services.

While the proposed $50 billion is small compared to the huge infrastructure needs of developing countries, it is larger than the $29.1 billion the World Bank committed in 2010 to infrastructure development in developing countries.

Countries like China have invested heavily in infrastructure, but poorer ones in South Asia and Africa have struggled to finance new infrastructure projects.

"As for a development bank, we are on the threshold of taking an official decision on this issue," Russian deputy foreign minister Sergei Ryabkov told reporters in Moscow on Thursday, adding, "There are only a few days left (until the summit), and complete clarity will be introduced."

The Africa Development Bank has estimated Africa can become a middle-income region if it spends about $90 billion a year on infrastructure. The World Bank has a slightly higher estimate.

[Austin]

Building BRICS

The 5th BRICS summit is to be held in Durban, South Africa next week. The leaders of China and India will meet again on the sidelines of the summit. It is undoubtedly a good opportunity for the two BRICS members to enhance mutual trust and promote cooperation through high-level interactions.

As the two biggest developing countries and emerging economies, relations between China and India have exceeded the bilateral spectrum and assumed global and strategic dimensions. The BRICS mechanism not only serves as a platform for the China-India relationship to raise its global impact, but also helps advance bilateral ties. The leaders of China and India have maintained close contact within the BRICS mechanism. Last March, Chinese President Hu Jintao and Indian Prime Minister Manmohan Singh met each other during the 4th BRICS summit. Meanwhile, senior representatives on security affairs, foreign ministers, finance ministers, governors of the central banks of the two countries also met and exchanged views on political, security, economic and trade cooperation under the BRICS framework. We have every reason to believe that closer personal connection will be forged through the meeting between the newly elected Chinese president and the Indian leader in Durban, which would significantly contribute to the mutual trust and bilateral relations between China and India.

Recent years have witnessed the ever-growing national strength of the BRICS countries. The BRICS countries increasingly speak with one voice on international affairs, enjoy higher international standing and make their presence felt in a larger way globally. Now, the five BRICS countries account for 42 per cent of the global population, make up more than 20 per cent of the world GDP and contribute more than half of the world's economic growth. It is also noteworthy that the larger share the BRICS have in the world economy, the more important cooperation among the BRICS members will become. Currently, the BRICS countries are the world's largest market. Each has its own competitive edge in different areas. Some are blessed with abundant natural resources, while others are taking leading roles in manufacturing, IT, biotechnology, telecommunications and aerospace. Among the five BRICS members, China and India are especially complementary in their economies. In this sense, the two should fully tap the huge potentials and deepen substantial cooperation in various fields so as to bring more tangible benefits to the two peoples.

The BRICS countries also play a positive role in addressing issues such as food and energy security, environmental protection and reforms in the global trade system and financial governance. The leaders of the BRICS countries exchange views on important topics relating to sustainable development and discuss possible cooperation areas. Working groups are established and action plans are made on future agricultural cooperation. They have also been working together to tackle climate change and other issues to safeguard the interests of the emerging economies and developing countries. Apart from seeking a larger say in the International Monetary Fund, World Bank and other international financial institutions, the BRICS countries are actively pushing for the establishment of new financial institutions of their own. In this regard, China, with the world's largest foreign exchange reserves and India, with a long history of financial services development, have plenty of opportunities for close cooperation and great accomplishment. We believe that closer cooperation within the BRICS in international finance will help put in place a more equitable and fair international economic and financial order. We believe that a strong manufacturing sector and large foreign-trade volumes still fall short of what we need. A greater say in international financial governance better serves our interests. To this end, deeper mutual trust and closer cooperation within the BRICS are needed.

China and India are faced with similar historical tasks and challenges to develop the economy and improve people's livelihood. Since last year, China and India have been conscientiously implementing the Delhi Declaration, which was agreed upon by the 4th BRICS Summit in India. As a result, we have yielded fruitful results in cooperation in economy, finance, trade, culture and people-to-people exchanges between the two countries. The meeting to be held between the newly elected Chinese President Xi Jinping and Indian PM Manmohan Singh in the coming BRICS summit would surely further strengthen political mutual trust and deepen the China-India strategic cooperative partnership.

Last but not least, I sincerely wish the 5th BRICS summit great success. China will join hands with India to safeguard the fundamental interests of developing countries, promote solidarity and cooperation among the BRICS countries, and make unremitting efforts for world peace and prosperity.

The writer is Chinese ambassador to India

[shyamd]

Good work Austin ji.


Trilateral helps India air opinion about Afghanistan’s future

NEW DELHI: Early this year, China reached out to India to start a dialogue on Afghanistan. This led to China, Russia and India meeting together for the first time in Moscow on February 20 to consult on Afghanistan's future. This is the second trilateral dialogue India has started on Afghanistan — the first being with the US and Afghanistan that met a day before the China-Russia-India trilateral.

When the Chinese leadership first approached India, New Delhi's reaction was "why now?" The Chinese response was that they had $3 billion in investments in Afghanistan. Indian investments are over $2 billion. China's approach to Afghanistan has largely been driven by its all-weather ally, Pakistan, thus far. But China has expressed growing alarm about the possible return of the Taliban in Afghanistan that appears to be part of Pakistan's design. Beijing is anxious about the export of extremism and terrorism into their restive Xinjiang province.

Besides, the uncertainty over the 2014 US drawdown of troops has spooked all stakeholders. This has led to the every body hedging every possible outcome. US diplomatic sources said America and China are locked in their own conversation on Afghanistan. India is engaging with Russia, China and Iran. In addition, India is ready to hold talks with Pakistan on Kabul's future, but there is no interest from the Pakistani side.

For Russia, the problem is more proximate. The prospect of Taliban and its ideology travelling into the central Asian states remains a matter of apprehension. Russia has been trying to befriend Pakistan for some time now, to incentivize Islamabad to use its influence to prevent Taliban ingress into these countries. Russian President Vladimir Putin even contemplated a maiden visit to Pakistan last year, which could have seriously affected the India-Russia relationship.

But in recent months, the renewed push by Western governments to accommodate the Taliban in "reconciliation" — a power-sharing arrangement in Kabul — has complicated matters for all three countries. India is deeply opposed to the reconciliation process because it believes Taliban's extremism would overwhelm all other shades of opinion, pushing Afghanistan back to the 1990s. But Russia and China are fearful of what they believe could become a US-Taliban "deal" that allows continued American presence in Afghanistan. This they reckoned to be "destabilizing" for their future.

But for India, the Chinese request was also interpreted to mean that they may also be hedging against a Pakistan-led approach to Afghanistan. Pakistan has not shown any move to divorce itself from the Taliban. Islamabad continues to harbour Afghan Taliban leaders in its territory, despite much pleading by the West to release them for talks with the Karzai government. A Taliban office has been in operation in Doha, Qatar, for some time, without the reconciliation process making much headway largely because of the lack of credible Taliban leaders to talk with.

There is talk of the US trying to directly reach out to Taliban leaders, an effort that is being replicated by UK, France and Germany. The upshot of all of this is that the Karzai government has been brought to the same level as the Taliban — it is being treated as just another faction instead of being a legitimate government in Kabul. To many countries, the legitimization of the Taliban is complete. Diplomatic sources observe that if in 2001, there were only three countries, which had recognized the Taliban, there are many more in 2013.

Afghan president Hamid Karzai is swinging wildly between trying to "accommodate" the Pakistani Army's version of the Taliban's return, to openly criticizing them. After the head of the Pakistan Ulema Council, Tahir Mehmood Ashrafi, was quoted as saying suicide attacks in Afghanistan were legitimate, Karzai said on Sunday, "Afghanistan wants a real struggle against terrorism and wants the Pakistani government to realize that both our nations are burning in the same fire. "The Pakistani government has an essential and important role in putting out this fire," he sad. "We see that practical steps are not being taken to fight terrorism," Karzai added.

[Austin]

Thanks shyamd

Transcript of Putin Interview on occasion of BRICS visit

BRICS key element of emerging multipolar world – Putin

ITAR-TASS: BRICS' relatively new phenomenon attracts increased global attention due to the optimistic predictions about its development, especially against the backdrop of global crisis developments in the world economy. What is BRICS' immediate and long-term significance for Russia? Is such a format practical for the development of relations among these countries?

Vladimir Putin: There are a number of long-term factors working on BRICS' success. For the last two decades the economies of Brazil, Russia, India, China and South Africa have been in the lead of global economic growth. Thus, in 2012, the average GDP growth rate in the group amounted to 4 per cent, while for the G7 this index was estimated at 0.7 per cent. In addition, GDP of the BRICS countries derived from the national currency purchasing power parity is currently over 27 per cent of the global GDP and its share continues to increase.

BRICS is a key element of the emerging multipolar world. The Group of Five has repeatedly affirmed its commitment to the fundamental principles of the international law and contributed to strengthening the United Nations central role. Our countries do not accept power politics or violation of other countries' sovereignty. We share approaches to the pressing international issues, including the Syrian crisis, the situation around Iran, and Middle East settlement.

The BRICS’ credibility and influence in the world is translated into its growing contribution to the efforts to stimulate global development. This important matter will be specifically addressed at the BRICS Leaders – Africa Dialogue Forum to be held on the sidelines of the Durban summit.

BRICS members advocate the creation of a more balanced and just system of global economic relations. The emerging markets are interested in long-term sustainable economic growth worldwide and reforms of the financial and economic architecture to make it more efficient. This is reflected in last year's joint decision to contribute $75 billion to the IMF lending program, thus increasing the participation of the fastest growing economies in the Fund's authorized capital.

Russia, as the initiator of the BRICS format and chair at its first summit in Yekaterinburg in 2009, sees the work within this group among its foreign policy priorities. This year, I have approved the Concept of the Russian Federation's Participation in the BRICS group, which sets forth strategic goals we seek to achieve through interaction with our partners from Brazil, China, India and South Africa.

Such cooperation in international affairs, trade, capital exchange and humanitarian sphere facilitates the creation of the most favourable environment for further growth of Russian economy, improvement of its investment climate, quality of life and well-being of our citizens. Our membership in this association helps foster privileged bilateral relations with the BRICS nations based on the principles of good neighbourliness and mutually beneficial cooperation. We believe it crucial to increase Russia's linguistic, cultural and information presence in the BRICS member nations, as well as expand educational exchanges and personal contact.

ITAR-TASS: What are the group’s short-term objectives and how do you see strategic directions for BRICS' economic development?

VP: BRICS identifies what is to be done based on action plans adopted at the group's annual summits. Last year's Delhi Action Plan outlined 17 areas of cooperation, including meetings of Foreign Ministers on the sidelines of the UN General Assembly session, joint meetings of Finance Ministers and Central Bank Governors on the sidelines of the G20, World Bank and International Monetary Fund meetings, as well as contacts between other agencies.

We are currently negotiating a new plan we will discuss at the meeting in Durban. I am confident that it will help us develop a closer partnership. We expect that we will be able to closer coordinate our approaches to key issues on the agenda of the forthcoming G20 summit in St Petersburg, increase our cooperation in the fight against drug trafficking and production, and our efforts to counter terrorist, criminal and military threats in cyberspace.

It is of great importance for Russia to increase its trade and investment cooperation with its BRICS partners and launch new multilateral business projects involving our nations’ business communities. In Durban we intend to announce the formal establishment of the BRICS Business Council designed to support that activity. The summit will be preceded by the BRICS Business Forum, which will bring together more than 900 business community representatives from our countries.

ITAR-TASS: The potential of the BRICS economies brings up not only the question of economic policy coordination but also that of close geopolitical interaction. What is BRICS' geopolitical role and mission in today's world? Does it go beyond the purely economic agenda and should the BRICS countries accept greater responsibility for geopolitical processes? What is their policy with regard to the rest of the world, including its major actors such as the United States, the European Union, Japan… What future do you see for this association in this regard?

VP: First and foremost, the BRICS countries seek to help the world economy achieve stable and self-sustaining growth and reform the international financial and economic architecture. Our major task is to find ways to accelerate global development, encourage flows of capital in real economy and increase employment. This is particularly important in the context of poor global economic growth rates and unacceptably high unemployment. Although this is mainly true of western countries, the BRICS states are also negatively affected; export markets are shrinking, global finance lacks stability, and our own economic growth is slowing down.

At the same time, we invite our partners to gradually transform BRICS from a dialogue forum that coordinates approaches to a limited number of issues into a full-scale strategic cooperation mechanism that will allow us to look for solutions to key issues of global politics together.

The BRICS countries traditionally voice similar approaches to the settlement of all international conflicts through political and diplomatic means. For the Durban summit, we are working on a joint declaration setting forth our fundamental approaches to pressing international issues, i.e. crisis in Syria, Afghanistan, Iran and the Middle East.

We do not view BRICS as a geopolitical competitor to western countries or their organisations — on the contrary, we are open to discussion with any country or organisation that is willing to do so within the framework of the common multipolar world order.

[Austin]

The BRICS dynamism and the musical chemistry for India

Guess when Mrs Gursharan Kaur, the graceful sari-clad wife of our Prime Minister, Manmohan Singh, emitting a characteristically Indian élan, meets the charming and highly popular singer, Mrs Peng Liyuan, wife of the newly elected President of China, Mr Xi Jinping, what musical chemistry may happen. Daily Telegraph of London reported on the new charm offensive Durban might witness: “Mrs Peng is one of China's most prominent singers, topping the bill on the country's gala military concert at Chinese New Year, for decades. But her emergence as a prominent consort for the country's top leader would break the mould in China.” So good luck, Mrs Kaur; we hope India and China both will gain with the charm offensive of the two ancient civilizations working for the good of all BRICS nations.

This charming meet may not be a standardized high brow diplomatic parley to be held at Durban on the sidelines of the BRICS summit, but it certainly symbolizes the deep urge in both the people and their governments to forge a bond that accommodates the Chinese dream and the grand Indian vision.

On 26th and 27th of this month, when the Indian society would be in a colourful mood of the Holi festival, a multicultural diplomatic flow of BRICS would be in its full swing at Durban. Dr Manmohan Singh’s two important meetings with the Russian and Chinese Presidents would steal headlines for the sheer weight they carry. This will be Manmohan Singh’s first meeting with the new Chinese President Xi Jinping, and it is already a matter of discussion in both the capitals. The India focused statement of President Xi has given rise to hopes that a new level of our ties can be seen in near future.

Though neither Singh nor Xi have any illusions of a miracle or finding quick solutions, they will not shy to discuss the boundary issue and also the matter of correcting trade imbalance that heavily favours China.

In a significant reflection on relations with India, the first after his inauguration, President Xi spoke about the five point formula, reminiscent of the old Nehruvian Panchsheel (five characteristics) thus-(India-China must take relations to new heights: Xi Jinping)-“59-year-old Xi, who took over as the head of Communist Party, President and Military Chief, completing a rare triad of power, sent clear signals of boosting bilateral relations with India and expressed his keenness to meet Prime Minister Manmohan Singh next week on the sidelines of the BRICS (Brazil, Russia, India, China, South Africa) in his first contact with top Indian leadership after his inauguration."

He said China sees its ties with India as “one of the most important bilateral relationships”.

1. “Pending the final settlement of the boundary question the two sides should work together and maintain peace and tranquility in the border areas and prevent the border question from affecting the overall development of bilateral relations,” Xi said in an interview. Xi said that first China and India should maintain strategic communication and keep the bilateral relations on the “right track”.

2. “Second, we should harness each other’s comparative strengths and expand win-win cooperation in infrastructure, mutual investment and other areas”.

3. India and China should strengthen cultural ties and constantly increase the mutually expanding friendship between the two countries.

4. The two countries should expand coordination and collaboration in multi-lateral fora to jointly safeguard the legitimate rights and interests of developing countries and tackle global challenges.

5. “We should accommodate each other’s core concerns and properly handle problems and differences existing between the two countries”.

Xi spoke of the traditional friendship between India and China, describing them as two largest developing countries of the world with a combined population of over 2.5 billion.

The significance of this statement, on the eve of BRICS summit must not be underestimated.

BRICS, if followed with the same passion and collectivity as we see today, can prove to be an Eastern magic for the emerging economies. This time its an out reach summit for South Africa hence named as BRICS-SA summit which aims to help SA economy, trade and via that the global governance regime.

Besides, the think tank organization is a significant factor providing the intellectual engine to the movement and the much discussed development bank is going to be a real milestone. The basics of the beginning may demand a cohesive attention to decide about its structure, loan pattern and how BRICS countries provide stability to it. Senior journalist MK Venu has suggested using the strength of symbolism and letting the central banks of BRICS economies subscribe to safe, risk-free bonds issued by the other BRICS governments. For example Reserve Bank of India, which keeps 60% of its reserves in US treasury bills can easily keep about 0.5 % of its reserves in the bonds issued by China, Brazil, Russia and SA. Similarly others can keep their 0.5% reserves in the bonds issued by India.

The other important issue before the BRICS countries is to increase the intra state trade. According to an analysis ‘indications show that countries in the group are giving increased focus to intra-group trade. This is reflected specifically by trade data for Brazil and South Africa. Intra-group trade for these two countries is around 20% of total trade. In the other BRICS countries, intra-group co-operation in trade is also improving.’

The emerging economies have long been facing the brunt of the subtle apartheid policies Bretton Woods’s institutions have been practicing in their dealings with the developing world. None in this part of the world will believe that the way IMF increased its fund corpus substantially from $ 500 billion to about $ 900 billion in order to help Europe come out of its crisis, the same gesture would ever be available to them in their hour of need.

BRICS is the most powerful symbol of the emerging economies coming out of the shadow of the western monopolies and hegemonies. The strength of the reserves of BRICS countries gives a powerful signal to the western economies with China having $ 3.2 trillion, India $ 300 billion, Brazil $ 540 billion, Russia $540 billion and SA $ 50 billion. Thus BRICS has become the largest economies lobby-group with a common interest aiming to reform global governance and financial institutions. Some of the basic facts about the BRICS are:

* BRICS accounts for 26 per cent of the world's landmass and 42 per cent of the global population, including India and China, two of the world's most populous countries.

* BRICS accounts for 40 percent of global GDP ($18.486 trillion) and its proportion is rapidly increasing. Goldman Sachs predicts that "BRIC can become collectively bigger than the G-7 (the top industrial powers) by 2035". BRICS countries have accounted for over 50 per cent global economic growth in the last decade.

* Intra-BRICS trade is growing at an average of 28 percent annually and currently stands at about $230 billion.

But what about the security aspect? The issue of security and combating terrorism is also on top of the BRICS agenda. And it’s this aspect of providing a pathway of peace and mutual understanding that the world is looking with awe and hope towards BRICS confabulations. India has been the biggest victim of terrorism on the earth and the Russian and the Chinese responses to terror can certainly help us. The best part of the India, Russia, China story is that the Russian strong man Putin is a highly adored and admired icon of friendship for us who can show his steel at any crisis time. (see my piece ‘India needs a Putin’ )

The chemistry between Russia and China has become another icon of the ‘sun rise’ side of the neo world order that refuses to accept the uni-polarity and voices the aspirations of emerging economies. Its no wonder that Putin chose China as his first destination to visit abroad after he was declared the presidential candidate last November and Beijing accorded him the same level of welcome befitting a head of the state. Similarly Xi Jinping is going to Moscow before he lands at Durban as his first visit abroad after becoming the President of China. The symbolism of such gesture cant be missed by the world.

It’s a positive sign for India that Delhi is not just a closest ally of Moscow and has been going steady with Putin as the most trusted friend but has been making right moves with the Chinese. Without getting noisy the India-Russia China conclaves have become a routine affair bringing new hopes of understanding and strategic partnership to the fore. Can Manmohan Singh match the fiery and youthful dynamism of Russia’s Putin and China’s Xi to forge the most formidable power centre on this earth that puts India in its rightful orbit? In spite of the pressures of the domestic politics and living on ‘a hurricane a day’ diet he has shown a remarkable resilience and an admirable farsightedness on the East Asia policy sector, that has become a hallmark of his external forays.

Durban will certainly be a test case for him no doubt. It can also turn a source of strength for India as Manmohan Singh’s meetings with Putin and Xi are going to be the high mark of the BRICS summit and if his aides play it well, India will stand to gain positively. After all, the world leaders deal with the Indian leadership and not with the party leaders and as Manmohan Singh represents the Tricolour nation, his success would translate into gains for India.

But like every other story, this too has a flip side. Despite positive declarations, both Russia and China have not explicitly endorsed their support for the aspirations of their fellow BRICS to be permanent members of the UNSC. In the same vein as the other permanent members of the UNSC, China and Russia will not support any initiative that limits their veto power or extends that power to other countries. In the UNSC vote on Libya in 2011, the BRICS membership, with the exception of South Africa, all abstained from the vote on Resolution 1973 on the no-fly zone. On the issue of Iran and Syria, however, the assumption being that the BRICS learnt from its experience with Libya, the group stood firm on its non-interventionist stance, preferring that the situation be resolved without military intervention by the UN. However, on the resolution in support of the Arab League’s plan for the removal of the Syrian president, Bashar al-Assad, India, Brazil and South Africa voted in support of the resolution while Russia and China voted against the resolution. The UNHRC resolution on Sri Lanka and the vexed boundary issue are other such hurdles that have to be tackled deftly to move ahead on BRICS comprehensive agenda.

[Austin]

Why BRICS is important to Brazil

Brazil has a prominent role to play in the global governance architecture. The country has sustained structural economic growth on the back of favourable demographic drivers, growing middle class consumption and broad scale socio-economic transformation. As a result, the business environment in the country has steadily improved; and the number of people living in extreme poverty have halved over the last decade. It is time for the country to place commensurate emphasis on consolidating its position as a regional leader; and as a key stakeholder on the global governance high table. BRICS provides the perfect platform to marry the dual imperatives.

Brazil boasts of one of the world’s largest domestic markets and a sophisticated business environment. It ranks 53rd on the World Economic Forum’s Global Competitiveness Index (2001-12), and is ahead of the rest of the BRICS nations in the availability of financial services among other key indicators of financial market penetration. Brazil’s upwardly mobile middle class and its elite have inexorably embraced the liberal globalisation framework, promoted by the developed world. Consequently, since the 1990’s they have shown a greater willingness to engage with the international system, and accept transnational regulations and norms.

As a willing signatory to international norms, ranging from those around mitigation of climate change to preventing nuclear proliferation, Brazil has often broken its own historical typecast of being defensive. What superficially seems to represent a systemic re-prioritisation - requires deeper investigation. According to the Economist’s Economic Intelligence Unit, domestic savings rates in the country are below 20 percent. Mid-sized industries still largely rely on external markets for raising money and channelling investments. By default, international perception about the Brazilian economy is an important component of national strategy. Concomitantly, the Latin American identity is one that successive governments have strived to shed.

Being part of the BRICS grouping has helped Brazil to leverage its ‘emerging market’ identity and de-hyphenate from its Latin American identity (which had its own convoluted dynamics in any case). This is evident both in the global economic and political spheres. BRICS has provided Brazil with a platform to engage with the international system more progressively. It can now navigate the international rules based architecture, with greater bargaining power and seek greater representation in institutions of global economic and political governance. Using the BRICS identity, Brazil no longer has to drive a wedge between its development and growth imperatives. It can shield its poor from international regulations, without fear of its ‘investment worthiness’ being diluted. It can participate at the global high table, while simultaneously catering to nuanced regional imperatives.

The recent death of Hugo Chavez was termed “an irreparable loss” by Brazilian President Dilma Rousseff. This serves as an example of the ideological flexibility, which the country employs to engage with a neighbourhood that is strictly divided on the Venezuelan President’s legacy. Indeed fine balancing tactics are not new to Brazilian foreign policy, also termed ‘a study in ambivalence’. The pluralistic construct of BRICS fits perfectly with Brazil’s strategic outlook on its neighbourhood and the world. Brazil has taken on more regional commitments over the same twenty year period during which it has enhanced its engagements with the international system. This is evidenced from increased participation in regional working group meetings, official summits and informal gatherings by the government.

There are numerous accounts of Brazil’s deployment of regional priorities as a bargain chip. Through MERCOSUR (Southern Common Market), Brazil has been able to successfully negotiate trade agreements in favour of its national interests. It is a pivotal founder member of the five-member trading bloc, which recently included Venezuela within its fold. In the on-going negotiations for a Free Trade Agreement with the European Union (EU), Brazil has pulled out all the stops, shielding its local industries from cheaper foreign made imports; with support from other members including Argentina. Similarly, common interests rather than common ideologies dictate the BRICS agenda. Brazil’s membership of the grouping is in complete consonance with its regional and global strategic imperatives.

Aside from the adaptive flexibility that the informal BRICS grouping offers, it allows Brazil great latitude in bringing specific agendas around innovation, intellectual property rights and green growth at its core. Brazil is home to nearly half of the world’s biodiversity; the overarching sustainable development agenda is not surprisingly a national priority. Similarly, Brazil has the opportunity to use mechanisms such as the BRICS Exchange Alliance for attracting investments. While the current framework enables investors to trade in cross-listed futures indices, if there is political will, the mechanism could eventually encompass various products with different underlying assets including equities. Another relevant sector specific example is commercial aerospace cooperation, where Brazil has unmatched expertise within the grouping.

There are in fact multiple opportunities for Brazil within BRICS, not limited to the economic sphere. In many ways, the grouping brings Brazil from the left corner of the world map to the centre, where the geopolitical theatre is most active; in Asia and the Indo - Pacific. However there are two oddities in the Brazilian agenda which would require circumnavigation if Brazil is to be brought to the heart of the geopolitical discourse. The first is to moderate its insistence on pursuing ‘euro-styled’ agendas such as interventionist doctrine ‘responsibility to protect’ (R2P), with an ambiguously defined alternative ‘responsibility while protecting’. Sovereignty matters to other BRICS and there is some time before supra-national initiatives would pass muster. And the second is to shed its reluctance on the agenda for creation of a BRICS led Development Bank. In this instance Brazil, with its considerable Development Bank experience, can help shape a credible institute that will empower billions south of the equator.

Vivan Sharan is Associate Fellow and Samir Saran is Vice President at the Observer Research Foundation (ORF), New Delhi.

[Shanmukh]

Apparently now, Egypt wants to join BRICS. Is there anything they can bring to the table? Would having them in BRiCS help us in any way?

http://english.alarabiya.net/en/busines ... BRICS.html

[VKumar]

The next member will be MEXICO. It is the 14th largest economy on basis of nominal GDP (India is 10th largest, falling down by 1 position to Russia, which has moved from 10 to 9 postion) ref:

http://en.wikipedia.org/wiki/List_of_co ... _(nominal)

China has retained 2nd position, Brazil has slipped from 6th spot to 7th, interchanging with UK.

Indonesia retains the 16th spot.

In fact on ppp terms it is #11 (India is # 3 on ppp terms).

[chanakyaa]

Egypt wants to join BRICS....

Wow, when did BRICS become a club, whose membership can be sought? BRIC, not BRICS, was a concept developed by a former Goldman Sachs economist of British origin. It was a methodical approach by the western countries to IDENTIFY countries which are set to undermine their own countries in terms of Gross Domestic Product and national growth. These are the countries, they thought, would be the future consumers of their, expensive, products and services. It is not a club, which others can try to get in. Who will tell this to puppet Morsi? May be he will learn one day when a real BRICK falls on his head in the Tahrir Square..

[SSridhar]

Apparently now, Egypt wants to join BRICS. Is there anything they can bring to the table? Would having them in BRiCS help us in any way?

http://english.alarabiya.net/en/busines ... BRICS.html

Egypt is in an economically (and politically too) desperate state. Morsi understands that if he cannot improve economy, his own Brotherhood would not tolerate him for too long. One of the aims of his recent visit to India was in that context, to do some groundwork in enlisting Egypt's membership in BRICS. To assuage Muslim sensibilities, he visited TSP before coming to New Delhi. But, Egypt is not in the same class as the members of BRICS. BRICS is in no hurry to add membership.

[Philip]

Morsi's Muslim BHood regime is in dire straits as Egypt appears to be contemplating going the Syrian way.There is simply no way that the BRICS nations are going to bring into the fold a nation run by fundoo Islamists,even if it was once a key founder member of the NAM.In fact,Indonesia,Venezuela and Vietnam are worthier members of BRICS than Egypt,as they have energy reserves and are far more stable.I envisage a collection of NAM members states gravitating towards the BRICS grouping,so that a BRICS-NAM JV might come about,where the major BRICS states set up their own economic entity to fund development in the developing world,mainly NAM states.BRICS is definitely a magnet for the "children of a lesser God",who are bullied and dominated by the western powers,now stuck in the economic morass of their over-ambitious neo-imperiialist wars in the developing world.

It is astonishing that in a poll yesterday on a BBC programme on Iraq-10 years on,by a small majority,the audience voted ,despite the lakhs killed in Iraq an elsewhere,and that the reason to go to war was based upon a huge lie by Tony Blair,that it was OK for Britain to interfere militarily in another state! By the same yardstick,any nation can go to war with Britain/Iraq without any UN sanction-as Hans Blix kept repeating,and we would have global anarchy thanks to the neo-imperialist mentality of a tiny island.

[Prem]

Partially BRICS
Roll Up, Roll Up! Startups From Brazil, India And Israel, Be A Part Of Disrupt NY 2013
( Seeds of innovation already planted and sprouting)

We’re fast approaching Disrupt NY, TechCrunch’s big conference in the Big Apple taking place April 29-May 1 at the Manhattan Center. This year’s event promises to be one of the most international yet, with the Startup Alley featuring three country pavilions, focusing on Brazil, India and Israel, and we’re on the lookout for exciting startups from these three countries and the rest of the world to be a part of the action.Brazil, India and Israel are without question three of the world’s most important tech hubs outside of Silicon Valley. With their supersized populations of digital consumers, Brazil and India typify some of the most exciting elements of emerging economy market growth. And while Israel is significantly smaller, it provides an anchor for what is happening in the wider Middle East/north African region.But it’s not just a simple numbers game: all three countries are also pushing the envelope on some of the coolest innovations in technology and engineering.This combination of these two currents is driving a lot of activity that is increasingly helping the three countries gain an international profile in terms of new business and investment.or the India pavilion, TechCrunch is teaming up with the Internet and Mobile Association of India (IAMAI); and Initial:Capital will be bringing startups from Israel and Brazil to the event. If you are a startup from one of these three places, less than two years old and with under $2.5 million in funding, the Pavilions at Disrupt NY are your chance to shine and show off how you are prime examples of why your countries are forces to be reckoned with in the tech world.

[Shanmukh]

Apparently now, Egypt wants to join BRICS. Is there anything they can bring to the table? Would having them in BRiCS help us in any way?

http://english.alarabiya.net/en/busines ... BRICS.html

Egypt is in an economically (and politically too) desperate state. Morsi understands that if he cannot improve economy, his own Brotherhood would not tolerate him for too long. One of the aims of his recent visit to India was in that context, to do some groundwork in enlisting Egypt's membership in BRICS. To assuage Muslim sensibilities, he visited TSP before coming to New Delhi. But, Egypt is not in the same class as the members of BRICS. BRICS is in no hurry to add membership.

Thanks, SS-ji.

They seem to be harping a lot on the JLN days - about the closeness between Nasser and JLN. What I don't understand is why they want to join the BRICS and why they think India would be interested in batting for Egypt. We are on very good terms with Israel, and given the predilections of the MB, it is clear they are going to go up against Israel, directly or indirectly, sooner or later. Is this an attempt to keep India from siding with Israel? Or is this an attempt to steer the BRICS to side with Egypt in any of their coming (mis)adventures? Either way, I see no reason to be involved too deeply with them.

[RamaY]

Watched the BBC India report last night (I wish those idiotic and british aping reporters die a peaceful death).

Highlights:
1. The BRICS story is changing. They are not the fast growing economies anymore. Brazil is looking at 3% growth, Russia 3.3%, India 5.5/6%, China a 6% and South Africa a 3% growth.

2. If they form a BRICS Bank it can be a competitor to IMF/WB

3. The I in BRICS has a new challenger, Indonesia. It has similar characteristics and strengths as India and is expected to grow at 6%.
This is the most idiotic thought I have heard. Indonesia has no comparison to India be it in GDP (nominal/PPP) or in Geopolitical influence.

[Shanmukh]

Bhadrakumar उवाच

http://www.rediff.com/news/column/india ... 130325.htm

There is not a lot of wisdom here, except that the author tries to awe us by recounting how Iran, China, Russia and Pakistan have all outsmarted us and boxed us in, while we are looking at the Americans for our salvation. While there is a nugget of truth to that comment, the article is not exactly a winner.

[SSridhar]

New BRICS Bank to Cater to Developing Nations - Sandeep Dikshit, The Hindu

South Africa has injected an atmosphere of greater vibrancy by roping in the entire African continent to the fifth top-level gathering of the world’s five major emerging powers that starts here on Wednesday,

The BRICS Summit (Brazil, Russia, India, China and South Africa), with about 12 African leaders and all the continent’s eight regional economic communities attending as interested parties, will announce the setting of an exclusive bank for themselves and the developing world. BRICS officials say the bank will start functioning in two years after details such as capitalization, location {I expect India} and holding percentages are worked out. The BRICS grouping, committed to multi-polarity and equity in managing world affairs, will also take forward the consensus it has achieved over the past two years in commenting on global political developments such as Syria and Iran and seeking a better deal from Bretton Woods institutions such as the World Bank and the International Monetary Fund (IMF). Their combined opinion on political issues, that began with the fourth summit in China and continued in Delhi last year, has reflected those of the developing world — and has not been in complete consonance with the US-Europe alliance’s scheme of things.

The Sherpas, or high officials nominated by the heads of government, were busy achieving a consensus on the political issues and how the announcement of a bank will be handled, till 2 a.m. on Sunday. They eventually finalised the Durban Declaration (eThekwini Declaration, the African name for Durban) just about the time the Prime Minister’s plane landed here this evening.

It emerges that the economic aspects will be given a firm push with the announcement of a stand-alone BRICS business council and two agreements that could serve as a precursor to the bank, pushed hard by China but looked at with reservations by the rest for fear that Beijing, having emerged as a bigger lender last year than the World Bank, would dominate the bank completely.

[Philip]

It is not "we" who have been looking for salvation to all our problems from the US of A,but ex-IMF babu Man Mohan (Quisling) Singh,lackey and lickspittle of Uncle Sam! He has abdicated India's economic,foreign and defence policy to the Americans,lock stock and barrel.

That we are in BRICS is a saving grace to our reputation as a key non-aligned nation,founder of NAM,where we have in the past earned much respect and goodwill.BRICS offers us an opportunity to break free from the vested interests of Uncle Sam and his crony capitalist MNCs who have had a free run on the Indian economy.synergy of the nations that comprise BRICS could hugely help reorient Indian policies worldwide,putting our interests first instead of that of the west.

[SSridhar]

BRICS and mortar for India's Global Role - Samir Saran & Daniel Rubin, The Hindu

India is at a unique geopolitical moment. On the one hand its neighbourhood and the larger Asian continent are being unpredictably redefined. The United States has declared, if somewhat ambiguously, its reorientation or “pivot” towards Asia, recognising the region’s economic force moving forward, or perhaps merely countering enhanced Chinese power. India and China are charting new geographies of contests, the Indian Ocean and South China Sea. The “Arab Spring” has exposed the fundamental inadequacies in Middle Eastern and North African governing structures but has also given rise to an uncertain political future in an important energy-producing region. Last, but certainly not least, China’s growing assertiveness in the Asia-Pacific region has led to increased, if sometimes seemingly unnecessary, conflict with neighbours in Southeast Asia and Japan.

On the other hand, the world is seeing a once-in-a-century churn. The global board of directors that sit on the high table and define rules for conduct of political and economic governance are now unrecognisable from the lot just after World War II. India must seize the moment to shape these revisions of rules devised by the Atlantic countries and defend its growth and development interests in areas such as trade, Intellectual Property Rights (IPR), space, climate, and energy policy, among others.

Regional order and global governance are both in flux and demanding India’s attention. This is not unique by itself. What is different this time around is that India has the capacity, increased capabilities and enhanced level of demonstrated intent to engage with this dual external relations challenge. In order to attain the global power status it desires, India must walk and chew gum at the same time. It must tend to its immediate and extended Asian neighbourhood while also engaging with the task of shaping a new rules-based political and economic order. BRICS represents a uniquely appropriate platform and flexible mechanism with which India can address this dual imperative.

Role for three

Engaging with China and Russia in an environment free of the sharp edges often wrought in bilateral negotiations will catalyse congruence over an array of mutually important issues. Any stable Asian order must have at its core, a certain level of accord among these three large continental powers. The past would need to be defrayed and the path for future integration would need to sidestep suspicion and history. Annual BRICS summit-level discussions on political and economic matters allow the three countries such an arena of tactical camaraderie. The current moment allows a unique opportunity for the three to shape a new construct for Asia amidst the regional flux. Perhaps at some stage it may be worthwhile having a summit level RIC meeting on the sidelines of BRICS to discuss this Asian project.

On resetting and reshaping economic and political governance, BRICS has the potential to be the new (and often criticised) game changer. The sheer size and rate of growth of intra-BRICS trade and economic exchange will allow each of these countries to exert their collective weight for their individual gains. Who gains more should not matter, as long as every member benefits from this dispensation and the order is visibly equitable.

There are a few benefits that India must seek through and with the BRICS. First, there are many multilateral organisations within which a “BRICS-bloc” can exert significant leverage. The U.N. and World Trade Organization are two such forums. While geopolitical and economic thinking among BRICS is not always in-sync, where there is consensus (and the areas are increasing rapidly) BRICS could be a compelling voice. Like they did on the debates on non-interference and “Responsibility to Protect.” Similarly, India’s views on climate change, financial norms, trade rules and so on could also benefit from BRICS’s aggregate voice. Of course the UNSC membership issue strikes a discordant note but it should not cannibalise the possible coming together on other matters.

Barrier against slowdown

Second, as economic powerhouses and regional hubs, intra-BRICS market integration can insulate these nations from western economic slowdown. The Organisation for Economic Co-operation and Development (OECD) stagnation is impacting BRICS growth, with multi-percentage point GDP dips in India and China. BRICS market integration could leverage the economic power of emerging world economies by sparking increased trade and foreign investment, especially if done in local currencies. Only China is part of India’s top 15 trading partners, making the BRICS forum an attractive stage from which India can promote economic ties with other dynamic economies. The BRICS development bank, option of holding each others’ currencies as reserves, stronger trade facilitation and eventually a comprehensive BRICS economic partnership agreement are all worthy possibilities.

For inclusive growth

Third, the BRICS are each experiencing rapid development with uniquely national characteristics. However, despite growing middle class populations, BRICS hold the lion’s share of the world’s impoverished population. These nations must take increased responsibility for a new global development agenda, incorporating inclusive growth, sustainable development and poverty alleviation. BRICS is a platform not only to learn from each other’s development experiences but also the instrument that can define new rules for health care, education and IPR for the billions at the bottom of the pyramid.

The collective BRICS experience around social policy could be beneficially shared with others as well. A forum (like the OECD) or clearing-house to disburse this information would prove a relatively low-cost measure producing substantial insight into development efforts, technology sharing, low-cost and sustainable energy generation, information technology and manufacturing.

By drawing on collective BRICS brainpower, local development efforts will be catalysed. For example, sharing China’s experience on infrastructure development or poverty reduction or Brazil’s in clean-fuel generation could be beneficial for India currently lacking the ability to take full advantage of its economic potential.

Is BRICS just a catchy acronym masking the haphazard, slapping together of five developing, yet ultimately incompatible, nations? India should respond with an emphatic no. At this unique moment, when India faces a multitude of challenges seeking its attention both towards the region and the global stage, BRICS provides a flexible platform to respond to both.

(Samir Saran is vice president and Daniel Rubin is Henry Luce Fellow at the Observer Research Foundation.)

[JohnTitor]

New BRICS Bank to Cater to Developing Nations - Sandeep Dikshit, The Hindu

South Africa has injected an atmosphere of greater vibrancy by roping in the entire African continent to the fifth top-level gathering of the world’s five major emerging powers that starts here on Wednesday,

The BRICS Summit (Brazil, Russia, India, China and South Africa), with about 12 African leaders and all the continent’s eight regional economic communities attending as interested parties, will announce the setting of an exclusive bank for themselves and the developing world. BRICS officials say the bank will start functioning in two years after details such as capitalization, location {I expect India} and holding percentages are worked out. The BRICS grouping, committed to multi-polarity and equity in managing world affairs, will also take forward the consensus it has achieved over the past two years in commenting on global political developments such as Syria and Iran and seeking a better deal from Bretton Woods institutions such as the World Bank and the International Monetary Fund (IMF). Their combined opinion on political issues, that began with the fourth summit in China and continued in Delhi last year, has reflected those of the developing world — and has not been in complete consonance with the US-Europe alliance’s scheme of things.

The Sherpas, or high officials nominated by the heads of government, were busy achieving a consensus on the political issues and how the announcement of a bank will be handled, till 2 a.m. on Sunday. They eventually finalised the Durban Declaration (eThekwini Declaration, the African name for Durban) just about the time the Prime Minister’s plane landed here this evening.

It emerges that the economic aspects will be given a firm push with the announcement of a stand-alone BRICS business council and two agreements that could serve as a precursor to the bank, pushed hard by China but looked at with reservations by the rest for fear that Beijing, having emerged as a bigger lender last year than the World Bank, would dominate the bank completely.

Why do you feel India? Its more likely to be SA or Brazil - both are more acceptable than India to China (they are the heavy weight here).

[Philip]

We are the elephant in the room!

[shyamd]

India and China are going to discuss counter terror and focus on AfPak and post 2014 in the next few weeks both sides are meeting on the subject. This is the first bilateral discussion and it's good news after the trilateral India Russia and China NSA level meeting in Moscow.

NSA Menon will be meeting his counterpart next month to discuss border issue.

[RajeshA]

Why do you feel India? Its more likely to be SA or Brazil - both are more acceptable than India to China (they are the heavy weight here).

If they decide to make India the location, basically it would be India borrowing some prestige courtesy China, because most of the money would still be theirs, they would be the ones making the most decisions. The developing countries would still turn to China for accommodation as China would have the biggest say. Just like if one wants something done in IMF one turns to USA and not to UK.

Basically China would be pooling the resources of others in addition to those of its own, in order to take on the Western financial institutions and becoming the leader of the developing world.

The location in India makes no difference.

I personally would favor Brasilia as the location. We don't want China getting even more influence in Africa, because that would be at our cost.

If the bank is in Brasilia, mostly it is to give a sign to the West that BRICS are challenging them in their own turf - in the Americas. That would push USA to get closer to India.

Let's not play this game for false prestige but rather for real power.

[abhijitm]

Will BRICS be any releavant without the C? Anyways BRICS strarting a bank is a welcome news. It would be interesting to see what would be India's share.

[Austin]

BRICS countries agree to create self-governing currency reserve of 100 billion dollars

DURBAN, South Africa, March 27 (Itar-Tass) – The BRICS countries have agreed to establish a self-governing currency reserve of 100 billion dollars to be used in emergency situations, the final declaration of the summit says.

The document notes that the BRICS finance ministers have arrived at the conclusion that the agreement on creating a self-governing currency reserve would have a positive effect as a precaution and help the BRICS countries prevent a shortage of short-term liquidity.

“We believe that creating a currency reserve in an initial amount 100 billion dollars to be used in emergencies is a possible and desirable on the condition there is an internal legal basis and proper guarantees,” the declaration says. “We are instructing our finance ministers and central bank governors to continue the work for the purpose of its creation.”

The BRICS leaders believe that the creation of such a mechanism would help reinforce the global financial safety net and also complement the existing international mechanisms with another safety resource.

Russia’s share in the 100-billion-dollar fund may constitute 18 billion dollars, Finance Minister Anton Siluanov told the media on Tuesday.

“We agreed to proceed with this theme. The shares of participants in the 100 billion are as follows: China – 41 billion, all other countries but for South Africa – 18 billion, and South Africa, 5 billion,” Siluanov said.

“The point at issue was a 100-billion-dollar fund that might be used by the participating countries to furnish support, should any country’s balance gets worse,” Siluanov said. He explained it was not budget money but funds of Central Banks to be reserved by analogy with the Currency Fund.

Each bank should reserve its own part of the gold and foreign exchange assets it would be able to send as a swap to support the balance of payments of this or that country.

The Finance Minister believes the lack of clarity is far greater than that with creating the BRICS development bank. Yet, the countries recognize this guideline as correct.

According to Siluanov, the BRICS countries will look into this matter in greater detail at a meeting of the G20 finance ministers in Washington in April.

[Austin]

'BRICS on the rise, but the dollar isn’t going anywhere’

The global economy was set up to reflect a bygone era, but even with the rise of BRICS, it will still be decades before the US dollar is dethroned as the dominant currency, Global Chief Economist Charles Robertson of Renaissance Capital told RT.

RT: The BRICS nations argue that the current global economic order should be changed because it is out of date or perhaps out of balance. What do you make of that?

Charles Robertson: To be totally fair, the architecture of international finance was set up in the 1940s to reflect the reality then, which was obviously American power, the UK’s power and Europe in general. So, there are changes happening to the IMF (International Monetary Fund) and World Bank, but still, the head of these organizations is an American and there’s a European even though there’s been a strong challenge. I think the BRICS are saying they can’t be bothered to wait any longer for the IMF and World Bank to change more dramatically. They’re going to start making changes on their own.

RT: Do you think members of BRICS nations can work to effectively counter the dominance of the US dollar and the euro?

CR: There are two aspects here. As a trading currency, it makes a lot of sense to have one single point of exchange – a currency of exchange that everyone uses. It makes life simple. So I think as a unit of exchange the dollar’s going to be dominant for a long time. It took decades for the US dollar to take over from the British pound and it’s going to take decades for the US dollar to lose its dominance in trade. But in terms of saving money in foreign exchange reserves, it makes an awful lot of sense not to use the dollar as your only store of value. I think there’s a lot to be argued in favor of buying into local currency debt in Russia, Brazil, China. These are currencies which may well hold their value better.

RT: So you’re talking about the diversification ultimately of investing in various currencies, not just the greenback. If I could ask, the BRICS nations are working to establish a new global development bank, possibly to rival the World Bank and the IMF. But how big of a challenge do you think such a new establishment could put towards the IMF or World Bank?

CR: I don’t think it can replace them; it’s not going to replace them for most countries most of the time. But there’s two aspects they’re talking about. One is a development bank, which will be like the World Bank itself, providing funding for long-term infrastructure for example – the sort of things the private sector won’t do anyways. That could challenge the World Bank. The other aspect of this is the idea of setting up a foreign exchange fund to be there to intervene at a time of FX crisis. And that, if it were run by the BRICS, led by the BRICS and funded by the BRICS, might reduce dependence for some countries who otherwise would have no choice but to go to the IMF.

RT: Some critics are saying that the West is not particularly happy about the rising power of the BRICS countries, and could actually act to undermine this growing influence. You had mentioned that there is a European and American leader at certain top levels of the international financial system. Can a difference be made?

CR: I personally think the feeling the West is against emerging markets is almost a 20th century Cold War view of the world. It’s just not true. The West is delighted that there is somewhere in the world that’s growing faster than Europe and in most cases faster than America. It’s great.

[ramana]

I think the new BRICS Bank reflects the rise of China with its 41% share. China has been successful in fooling/ulloo banaoing the US into enabling its rise since 1980s and now has latched on the the Russians and others to keep it going.
Its policy is like a bee that jumps on a flower and moves on after the nectar is gone! Typical tactics of rising star in US corporates who flit and flee projects during the growth phase. In end it will be same effect;crash and burn when a real crisis emerges

[abhijitm]

I am not sure how this fund will work unless BRICS have a common currency or they reserve fund in one currency.

[Austin]

China and Brazil sign $30bn currency swap deal

A $30 billion currency swap deal between Brazil and China is expected to smooth trade between the two countries despite changing global financial conditions and future crises.

The agreement was signed on the sidelines of the BRICS summit in South Africa. Plans for the currency swap were first announced last year at the Rio+20 environmental summit. The idea is that the central banks of the two trading partners are to swap local currency worth up to 190 billion yuan or 60 billion reais ($30 billion) in case turmoil hits the global financial system.

"If there were shocks to the global financial market, with credit running short, we'd have credit from our biggest international partner, so there would be no interruption of trade," said Guido Mantega, Brazil's Economy Minister as quoted by BBC.

Over the past few years trade between China and Brazil has boosted significantly reaching $75 billion in 2012. China, the world’s second-largest economy, demonstrated stronger interest in Brazil’s supplies of soya, iron ore and other exports, while Brazil has become China’s key market for manufactured goods.

“We will have $30 billion available which would represent eight months of exports from Brazil to China and 10 months of imports to Brazil from China,” the president of Brazil’s central bank Alexandre Tombini said at a news conference at the BRICS summit. “This is sufficiently large to guarantee normal trade operations,” he explained.

This move is believed to contribute to China’s effort to make the yuan a more international currency and even an alternative to the US dollar as a global reserve currency. China has already signed a number of similar currency swap deals with such countries as Australia and Argentina. It is also reported to be seeking agreements with the UK, Hong Kong, and Japan

“It’s important from a diplomatic point of view, a geopolitical point of view on how the BRICS try to tie themselves together and try to create something that’s material. However, in terms of the day to day impact, I think it’s negligible,” Nick Chamie of RBC Capital Markets commented on the agreement as quoted by Financial Times.

“BRICS is not a very balanced alliance. If we talk about trade, for instance, China alone makes up about three quarters of the trade amongst the BRICS countries,” Bala Ramasamy, Professor of Economics at China Europe International Business School told RT. “If you take trade between Brazil and India it would be small compared to that between Brazil and China. When we talk about equal partners we have to accept the fact that it is the RMB (yuan) that is the dominant feature here.”

[SwamyG]

http://www.globalresearch.ca/brics-go-o ... ll/5328662

Reports on the premature death of the BRICS (Brazil, Russia, India, China and South Africa) have been greatly exaggerated. Western corporate media is flooded with such nonsense, perpetrated in this particular case by the head of Morgan Stanley Investment Management.

Reality spells otherwise. The BRICS meet in Durban, South Africa, this Tuesday to, among other steps, create their own credit rating agency, sidelining the dictatorship – or at least “biased agendas”, in New Delhi’s diplomatic take – of the Moody’s/Standard & Poor’s variety. They will also further advance the idea of the BRICS Development Bank, with a seed capital of US$50 billion (only structural details need to be finalized), helping infrastructure and sustainable development projects.

Crucially, the US and the European Union won’t have stakes in this Bank of the South – a concrete alternative, pushed especially by India and Brazil, to the Western-dominated World Bank and the Bretton Woods system.

As former Indian finance minister Jaswant Singh has observed, such a development bank could, for instance, channel Beijing’s know-how to help finance India’s massive infrastructure needs.

[ramana]

“BRICS is not a very balanced alliance. If we talk about trade, for instance, China alone makes up about three quarters of the trade amongst the BRICS countries,” Bala Ramasamy, Professor of Economics at China Europe International Business School told RT. “If you take trade between Brazil and India it would be small compared to that between Brazil and China. When we talk about equal partners we have to accept the fact that it is the RMB (yuan) that is the dominant feature here.”

Can we map the BRICs partners inter-trade?

Brazil-Russia
Brazil-India
Brazil-China
Russia-China
Russia-India
India-China
to get a better understanding?

[ramana]

From Austin's post above

BRICS is the most powerful symbol of the emerging economies coming out of the shadow of the western monopolies and hegemonies. The strength of the reserves of BRICS countries gives a powerful signal to the western economies with China having $ 3.2 trillion, India $ 300 billion, Brazil $ 540 billion, Russia $540 billion and SA $ 50 billion. Thus BRICS has become the largest economies lobby-group with a common interest aiming to reform global governance and financial institutions. Some of the basic facts about the BRICS are:

* BRICS accounts for 26 per cent of the world's landmass and 42 per cent of the global population, including India and China, two of the world's most populous countries.

* BRICS accounts for 40 percent of global GDP ($18.486 trillion) and its proportion is rapidly increasing. Goldman Sachs predicts that "BRIC can become collectively bigger than the G-7 (the top industrial powers) by 2035". BRICS countries have accounted for over 50 per cent global economic growth in the last decade.

* Intra-BRICS trade is growing at an average of 28 percent annually and currently stands at about $230 billion.

and China-Brazil trade is now $75B

Over the past few years trade between China and Brazil has boosted significantly reaching $75 billion in 2012. China, the world’s second-largest economy, demonstrated stronger interest in Brazil’s supplies of soya, iron ore and other exports, while Brazil has become China’s key market for manufactured goods.

“We will have $30 billion available which would represent eight months of exports from Brazil to China and 10 months of imports to Brazil from China,” the president of Brazil’s central bank Alexandre Tombini said at a news conference at the BRICS summit. “This is sufficiently large to guarantee normal trade operations,” he explained.

[Austin]

Can we map the BRICs partners inter-trade?

to get a better understanding?

Brazil-Russia ~ $6 Billion
Brazil-India ~ $ 10.6 Billion
Brazil-China ~ $75 billion
Russia-China ~ $88bn
Russia-India ~ $10 billion
India-China ~ $ 66.4

[Austin]

Hmm where ever there is China Involved between trading partner the figure is in many 10 of billion dollar over $ 65 billion ....for the rest its in Single Digit or just reached double digit in $ value.

[RajeshA]

What India should be trying is to make ourselves the new manufacturing hub of the world, besides the knowledge hub .....

Without manufacturing coming to India, there is no way we can compete against China in trade. Also lets stop selling raw materials. This are the exact points that Modi made!

[RamaY]

^



IMHO

The mutual trade between BRICS countries is balanced by their trade equations with other countries.

By building strong trade relationships, they can ward-off external influence.

Assuming all BRICS nations are ==!

[Austin]

What India should be trying is to make ourselves the new manufacturing hub of the world, besides the knowledge hub .....

Knowledge hub is possible but manufactuing hub highly unlikely , if manufacturing in China becomes expensive over years then MNC would search for some economically backward country in Africa to do the work for them more cheaply then China does .....we are late for manufacturing hub.

Without manufacturing coming to India, there is no way we can compete against China in trade. Also lets stop selling raw materials. This are the exact points that Modi made!

Modi says a lot of things and so do most politicians but when they come to power they change , ABV said a lot of things but when it came to hard decision against Pakistan or POK-2 he freezed and so did our so called Iron Man and the man that never lies according to Mulayam , Advani also freezed.

We need to make sure we can make SARC in to effective trading partner rather than use it to score brownie points over pakistan and be happy , build bridges out there so that our intra-trade turn over increases drastically thats our best bet short and mid term. The best way to increase trade is to do it with your neighbour.

But as experience has shown if a trade with xyz country is high it takes an upward trajectory , so i suspect Inda China trade will multiply in near future

[ramana]

So a huge giant (PRC) was included in the group and is distorting the picture. Also to consider is PRC is a pass through economy which imports from some (BRICs) and exports to others (First Worlders). So the deltas or surplus goes to first world from China and part stays with China.

[Austin]

Its kind off unheard that in 80's we had more trade with SU/Russia then we have it now , i read the trade between two was around $30 billion , right now its 1/3 of that.

Something terribly wrong but with Russia joining WTO and India already part of it will help in improving the trade volume.

[RamaY]

India is China's competitor in many realms w.r.t trade...

Both need energy imports. Both want to be the manufacturing hubs of the world importing raw-materials and exporting finished goods. Both have large local populations.

India needs to move fast in establishing basic industrial infrastructure so it doesn't import nonsensical stuff like paper boards, plastic toys etc for internal use.

90% ($150b)of India's trade imbalance comes from two key areas - Energy imports ($100b) and Gold/Pearls/Jewelry ($50b). Theoji's contention was that India can live without Gold imports; as energy imports are a must have to increase industry production.

[ramana]

And what does India export?