BRICS: News and Discussion

RamaY · Post by **RamaY** » 28 Mar 2013 01:21

Indian Export Products with +ve Trade Balance

http://www.trademap.org/tradestat/Produ ... ry_TS.aspx

Articles of apparel, accessories, not knit or crochet: $7.771034B
Cotton: $7.325737B
Pharmaceutical products: $6.78246B
Articles of apparel, accessories, knit or crochet: $5.687882B
Cereals: $5.358501B
Vehicles other than railway, tramway: $5.231616B
Ships, boats and other floating structures: $3.695366B
Other made textile articles, sets, worn clothing etc: $3.507756B
Fish, crustaceans, molluscs, aquatic invertebrates nes: $3.099322B
Meat and edible meat offal: $2.685237B
Coffee, tea, mate and spices: $2.549213B
Residues, wastes of food industry, animal fodder: $2.534239B
Commodities not elsewhere specified: $2.178334B
Lac, gums, resins, vegetable saps and extracts nes: $2.151691B
Articles of iron or steel: $2.042606B

ashi · Post by **ashi** » 28 Mar 2013 09:04

China Doesn't Belong in the BRICS

But the brute fact is that China has continued growing more than twice as fast as other members of this club. Indeed, in every year since 2001, the gap between China's GDP and that of each of the others has widened. In the decade ahead, the gap is likely to become even more pronounced. Given this divergence, it is more appropriate to consider China separately from Russia, India, Brazil and South Africa, which, if an acronym is called for, can be called: "RIBS."

In 2001, China's GDP was equal to the GDP of all the RIBS combined. In the five years since the global financial crisis, just the increment of growth in China's economy is larger than the entire economies of Russia and India combined. Indeed, in the half decade since the financial crisis, 40 percent of all growth in the global economy has occurred in China.

Last year, the economy of China expanded by $1 trillion; Russia and India grew by $100 billion; Brazil and South Africa shrank.

svinayak · Post by **svinayak** » 28 Mar 2013 09:15

Lot of false information

svinayak · Post by **svinayak** » 28 Mar 2013 10:25

FUD on BRICS

Tensions remain about BRICS development bank
GEOFFREY YORK
DURBAN, SOUTH AFRICA — The Globe and Mail
Published Wednesday, Mar. 27 2013, 9:51 AM EDT
http://www.theglobeandmail.com/report-o ... e10425492/

Despite a year of negotiations, the BRICS bloc of countries is still bickering over key details of a planned development bank to compete with the World Bank.

At their summit in the South African resort city of Durban, the leaders of the five BRICS members – Brazil, Russia, India, China and South Africa – gave final approval to the new development bank. They agreed that it was “feasible and viable” and should have “substantial and sufficient” capital.

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But they were unable to settle the location or structure of the new bank, and they refused to say whether a long-mooted, $50-billion (U.S.) seed-capital plan would be approved.

While falling short of a detailed accord on the bank, they did reach agreement on a $100-billion currency reserve fund to protect themselves from currency crises.

“The establishment of a self-managed contingent reserve arrangement would have a positive precautionary effect, help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability,” the leaders said in their final communiqué.

“It would also contribute to strengthening the global financial safety net and complement existing international arrangements as an additional line of defence. We are of the view that the establishment of the CRA [reserve fund] with an initial size of $100-billion is feasible and desirable, subject to internal legal frameworks and appropriate safeguards.”

China could provide the bulk of the financing for the foreign-currency pool, Russian Finance Minister Anton Siluanov told Bloomberg News. Negotiators are considering proposals for China to contribute $41-billion; Brazil, Russia and India to provide $18-billion each; and South Africa $5-billion, he said.

The development bank, meanwhile, has been under discussion by the BRICS countries for the past year, after they proposed it at their summit in New Delhi last year. But there are tensions about key questions such as the location: China, India and South Africa all want to host its headquarters.

India is understood to be worried that China will exercise too much control over the bank, and it wants all BRICS members to contribute an equal $10-billion in seed capital. But South Africa, by far the smallest of the BRICS countries, might be unable to afford the full $10-billion, and India is concerned that China might end up providing a greater share of the funds and winning control of the bank.

The new bank, seen as a competitor to the World Bank, would be focused on infrastructure projects, especially in places such as Africa where they are badly needed. It could allow African countries to avoid the loan conditions that are often imposed by the Western-dominated World Bank.

One of Africa’s richest entrepreneurs, South African mining tycoon Patrice Motsepe, said the new bank is “extremely welcome” in Africa. Mr. Motsepe, the head of a new BRICS business council, said the bank would be “a very exciting opportunity.”

Analysts say the new bank will also have a political purpose: to put pressure on the West to allow reforms in the World Bank and the International Monetary Fund, loosening the Western grip on both institutions and allowing countries like China to have greater influence.

Traditionally the two institutions are headed by an American or European. Their new BRICS-led competitor could be useful “leverage” to bring about reforms in the multilateral institutions, according to Catherine Grant-Makokera, an analyst at the South African Institute of International Affairs.

In their final communiqué, the BRICS leaders said they were “concerned with the slow pace of reform” at the IMF. “We call for the reform of International Financial Institutions to make them more representative and to reflect the growing weight of BRICS and other developing countries,” they said.

Austin · Post by **Austin** » 28 Mar 2013 12:12

BRICS bank, $100 billion contingency fund get nod

Later, finance minister P Chidambaram said China will be the largest contributor with $41 billion while India, Russia and Brazil will pledge $18 billion each. South Africa will pledge $5billion.

However, these amounts will just remain as a commitment and will be required only if there is a crisis. "This is just a precautionary measure as we don't expect a crisis in any of these countries," said Chidambaram.

India, which had mooted the idea first, was willing to keep it between $50 billion and $100 billion but the larger view was to have a more detailed discussion. So, the finance ministers have been asked to resolve these issues over capitalisation, governance and distribution by next year, Chidambaram said.

SUMMIT HIGHLIGHTS

* The summit declaration signed by the five heads of government states that the establishment of a new development bank is feasible and viable

* The CRA would serve as a cushion for the BRICS countries in the event of an economic crisis

* The amounts pledged towards the CRA would remain as a commitment and would be required only in the event of a crisis

* The BRICS leaders could not reach an understanding on the capitalisation of the new bank, due to the issue of voting rights

* The summit also approved the creation of a joint business council with five representatives from each country's industry

A few facts about the grouping

* The BRICS countries make up 21 per cent of global GDP. Their share of global GDP has risen threefold in the past 15 years.

* The BRICS are home to 43 per cent of the world's population.

* The BRICS countries have combined foreign reserves of an estimated $4.4 trillion.

* Intra-BRICS trade flows reached $282 billion in 2012 and are estimated to reach $500 billion by 2015. In 2002, it was $27.3 billion.

* IMF estimates of GDP er member in 2012, China $8.25 trillion, Brazil $2.43 trillion, Russia and India at $1.95 trillion each, South Africa $390.9 billion.

* Per capita GDP for 2012 was estimated at, China $6,094, Brazil $12,340, Russia $13,765, India $1,592, South Africa $7,636

* Jim O'Neill, chairman of Goldman Sachs Asset Management, coined the BRIC concept in 2001.

* South Africa was admitted by the other BRIC leaders in December 2010, adding the "S" to the original grouping.

Austin · Post by **Austin** » 28 Mar 2013 12:15

Indias GDP is by and large comparable to Russia and Brazil while China is on the top end of the pyramid and South Afria at the bottom.

What is worrisome for India is its very low per capita its $1592 , it closest next is China with almost ~ 4 x times our per capita.

Suraj · Post by **Suraj** » 28 Mar 2013 12:20

A lot of exchange rate dynamics at play here. Both Brazil and Russia have commodity export driven economies and their currencies have trended towards strengthening against USD. Further, they are both energy rich. China is also resource and energy rich, and the CNY has appreciated in a controlled manner against USD as their current account surplus continues to grow. India on the other hand is energy poor and has a weakening currency due to high domestic inflation. As a result, our nominal per capita income will grow slower in dollar terms than in rupee terms.

Austin · Post by **Austin** » 28 Mar 2013 12:38

I am not sure of China is energy rich , they have surpassed even US in energy imports this year , so they are major importer of energy source.

Any ways that should not change the fact that our per capita is very low ...what ever be the issue we need to get that up for our own good.

SSridhar · Post by **SSridhar** » 28 Mar 2013 12:51

Suraj wrote:China is also resource and energy rich, . . .

Suraj, PRC seems resource and energy rich because of the access to these resources it has established worldwide due to its other economic activities.

Austin · Post by **Austin** » 28 Mar 2013 12:54

Another Data Point for BRICS Nations Government Debt as % of GDP ( 2013 figures via Moody )

Brazil 52.7 %
Russia 13 %
India 70 %
China 28.5%
South Africa 40 %

Again India seems to have high government debt but the good point is according to Moody "The government debt was about 70 per cent of GDP, it said. “Lowering of this ratio from even higher levels over the past few years has been largely due to high inflation, rather than fiscal consolidation,” it said." link

Suraj · Post by **Suraj** » 28 Mar 2013 12:59

China has substantial reserves of coal, and has shown greater willingness to deal with the pollution, ecological and human impact associated with digging it out by any means. It also has substantial oil reserves beginning with the Daqing field find in the late 1950s. Daqing is ~16bbl, which makes it rather bigger than a big US field like Prudhoe Bay. This is in addition to multiple other fields that exceed Bombay High in size. Of course, they also have substantial resource import networks now.

Chronic high indebtedness of the Indian government is also an issue, since GoI doesn't have the proceeds from resource exports to pad its revenues. This leads to high government borrowing, which in turn crowds out the private borrowers and keeps interest rates chronically high, ensuring capital is costlier.

Exchange rate fluctations do have a substantial bearing on our dollar GDP - the Rupee has ranged between Rs.39/$ to Rs.54 or so right now. It it were to appreciate again to the low 40s/$, that would re-value our GDP at $2.6-2.7 trillion, just from the currency exchange rate development...

Austin · Post by **Austin** » 28 Mar 2013 13:07

Chinas known oil reserves does not fall even under top 10 known reserves but China is energy hungry which makes it the top importer of Oil no matter what it reserves are.

The High Debt of GOI is due to years of economic mismanagement that our Debt has risen to that level , blaming it on lack of resource is IMO a poor excuse ... we were always poor in certain resource unless the earth formed yesterday it was a known fact .. how to reduce debt by proper fiscal consolidation and management is something GOI has been very lazy about year after year , ofcourse the growth and inflation figures does not help either.

Suraj · Post by **Suraj** » 28 Mar 2013 13:13

But China is the world's fifth largest oil producer - their annual output is ~40% of Saudi Arabia's. Our annual output is 20% of China's, putting us at #25 or so. The fact is, for a long time between the 1950s and 1990s, they did not need to import oil and thus didn't face a foreign exchange drain from it. They started doing so when their domestic demand overtook supply. And by then they already had an export driven economy in place generating a current account surplus that enabled them to pay for the hydrocarbon imports.

Call it a policy failure or whatever you'd like; specifics of the matter are really better off argued in the economy thread. I'm just stating some facts here.

Austin · Post by **Austin** » 28 Mar 2013 16:31

I would still put China as net importer of Oil , the fact that they have some reserves is perhaps a saving grace reducing their import bill ...if China was indeed a Energy rich nation then they would be exporting energy not importing them. The trend will only go North for China as their energy import bill will keep rising.

What is the down side of we printing USD secretly , US has known to print 2-3 trillion dollar excess thats in circulation , suppose we end up printing 10-20 billion USD anually and pump it in the market is there a down side to it ?

Philip · Post by **Philip** » 28 Mar 2013 19:07

The latest agreement with Russia to buy Russian petro products,is a very significant move by China.It cements a growing eco and mil. relationship with Russia,the sum of which can challenge the US?EU/NATO on global issues.Add to this the other BRICS member like India and you have a triumvirate and powerhouse.The synergy of these three nations alone will be a global powerhouse to rival any western combination.30 years ago a Russian diplomat expressed to me the desire for such an alignment.That was during the Cold War era.I expressed some scepticism about China cooperating with India then.However,in the 21st century,China no longer feels greatly threatened by India as its strategy is paying off all across Asia.It has effectively constrained India from exercising a greater global role by creating problems for India with its immediate neighbours and is the global economic engine of growth today. It also has a far greater military budget and has made rapid strides towards indigenisation.

If through BRICS India and China work out a relatively level playing field,just as what happened with the ECM might happen with BRICS.An economic forum like the Common Market turned into the EU .BRICS can also learn from the EU's mistakes and NOT have a
common currency,as in any case the members are far apart geographically.If BRICS gets going apace,then I predict that in a short time,the ASEAN bloc will gravitate towards BRICs,esp. because Asia's two giants India and China are members .They will in time distance themselves from the US if the Chinese get mellower regarding territorial disputes.That policy is in the hands of China's new ruling elite ,the new "Gin" cocktail!

Austin · Post by **Austin** » 28 Mar 2013 22:52

China and BRICS: mechanism of creating a "non-American world"

The V summit of BRICS under the motto «Partnership for development, integration and industrialization» took place in the city of Durban (South Africa) on March 26-27, 2013. Basing on its results, the leaders of the five states signed the eThekwini Declaration, which stressed the community of their positions on key international problems. What is China’s perception of this project, and what global sense does it put in it? Is it possible to say that for the PRC BRICS is one of the mechanisms of building a new, «non-American world»?

Chinese vision of BRICS. «A golden brick» or «an aspen stake» for imperialism?

In the Chinese version, BRICS is a «golden brick», which the Celestial Empire, apparently, wants to lay in the foundation of a new world order, both in terms of financial and international political architecture. For the sake of justice, we should note that other participants do not oppose this construction. The question is: What is the share and interests of every participant? Given the Chinese influence and its tendency to «come out of the shadows» in the sphere of international politics, China has the highest interest in expansion and strengthening of BRICS, although it does not openly declare this.

It is very likely that other participants see a more applied meaning in the project. South Africa and Brazil, for example, would like to more actively develop agriculture and biotechnology, India - pharmaceuticals, Russia - space and energy, and so on. Not denying specialization, China makes emphasis on general things - the necessity of developing a new, «non-American world», and BRICS should become its core. Chinese experts emphasize that it should not be G-8 or G-20, but exactly the «golden brick» that includes large developing countries, which are on the rise but were deprived by the global elite. Meanwhile, the Chinese do not deny cooperation with these structures.

In fact, BRICS allows China to formally change the traditional approach to the «third world» without changing its essence, i. e. always to be the leader of the developing countries. In the second half of the XX century, China used more revolutionary, ideological methods. At the present time, the BRICS format allows to officially defend the interests of the large developing countries and oppose the “financial domination of the West” and its structures (the WB and the IMF). Parallel to that, some of the important long-term tasks, which are reflected in the recent publications of the Chinese media, are being solved: preparation to the break-off with the dollar-based system, «insurance against financial crises» and others.

By the way, despite the outward attractiveness of the project, according to the calculations of some Chinese experts, the PRC needs about 25-30 years for the evolution of the format and its transformation from the «golden brick» in an «aspen stake» for the world dollar system.

A waiting list for an entry. Is an Islamic expansion of BRICS possible?

The growing desire of a number of states to somehow join BRICS speaks in favor of the scenario of its further expansion. Such a desire is especially obvious in a group of Islamic countries. The first in the waiting list is the President of Egypt M. Mursi. In his interviews with international media, he regularly expresses hope that «one day BRICS will turn into E-BRICS, where the letter «E» will mean Egypt».

By the way, China was one of the first countries, which accepted and supported the new (Islamic) President, and signed with him a number of important investment and financial and economic documents in Beijing in 2012, including credits from China. In the framework of the summit, the Russian President also met with the Egyptian leader, and discussed with him a wide range of bilateral and regional issues.

Two other candidates are far away from each other geographically, but religiously they belong to the «Islamic zone»; this is Turkey and Indonesia. One more candidate for entering the organization is Mexico, which represents Latin America together with the «old-timer» of the project - Brazil.

In other words, in the long term BRICS represents a «slice» of our contradictory and diverse world, which includes strong and weak partners, large and small religions, different ways of life and civilizations.

Summing up the facts, which were voiced at the summit, one can assume that for China BRICS becomes a real mechanism of creating a «non-American world». But so far, in Beijing (and also in Moscow and other capitals of the countries-participants) they do not know exactly, what «driving belts» and «levers» will make it work effectively, and what the final version of this mechanism will look like. In any case, the importance of the project will grow for all the participants, but especially for China, which more and more loses touch with its partners.

Austin · Post by **Austin** » 28 Mar 2013 22:54

BRICS: post-Durban strategy

The leaders of the five BRICS countries - Brazil, Russia, India, China and South Africa - have reached a number of agreements at this week’s summit in South Africa that will underlie the BRICS development strategy together with previously reached deals.

Firstly, the summit yielded the Etekvin declaration named after a district in Durban that hosted the summit. The document comprises new cooperation areas between BRICS members, such as information security, joint counternarcotic efforts, public diplomacy, youth policy, education and much more.

The five leaders also adopted a declaration on creating a BRICS business council and a consortium of BRICS think tanks.

They also signed a multilateral agreement on co-funding green economy and African infrastructure projects.

The results of the summit are quite aspiring as they signal the countries’ readiness to develop their relations, says Alexander Apokin, expert at the Center for Macroeconomic Analysis and Short-Term Forecasting. Even though the leaders failed to formalize the creation of a joint development bank, it’s not a tragedy, the expert told the VoR.

"A full-fledged development bank is a very complex structure that takes years to be formed. The BRICS leaders have agreed on creating the institution so its structure and layout may be decided in 2-3 years."

The BRICS leaders also agreed on a pool of $100 billion reserves to shield against future economic crises.

The emerging economies will really have to make their union formal soon looking at recent global trends.

Thus, the US and the EU will launch Transatlantic Free Trade Area talks this June while last year the US pushed the Trans-Pacific Strategic Economic Partnership project.

Though the BRICS countries have different economic and political interests they managed to act as a single bloc with a common strategy to avoid pressure from the US, the EU and Japan.

Suraj · Post by **Suraj** » 28 Mar 2013 22:58

Austin wrote:I would still put China as net importer of Oil , the fact that they have some reserves is perhaps a saving grace reducing their import bill ...if China was indeed a Energy rich nation then they would be exporting energy not importing them. The trend will only go North for China as their energy import bill will keep rising.

We're debating different things here. I categorized Russia and Brazil as commodity export driven economies in my first post. I also classified China as comparatively energy rich, compared to us. I'm not comparing them to Kuwait or Iran, nor did I characterize them as a hydrocarbon export-based economy, even though China were indeed an oil exporter for more than three decades, until they became a net importer in the 1990s. Energy is also comparatively cheap there, because they are willing to dig out everything as quickly as possible without regard to consequences. Of course the costs will be borne later.

pentaiah · Post by **pentaiah** » 29 Mar 2013 00:33

Suraj is on dot till early eighties and late eighties
PRC was hydrocarbon fuel exporter along with Mexico
That was when Japan sourced most of its energy fro PRC for proximity

Austin · Post by **Austin** » 29 Mar 2013 12:09

Shall we bank on BRICS, a coalition of unequals?

Rajesh Rajagopalan

The BRICS (Brazil, Russia, India, China and South Africa) coalition is attempting to move from being a talk-shop of wannabe great powers into something more substantial by creating a BRICS Bank.

Speaking at the BRICS summit in Durban, PM Manmohan Singh said that global institutions should reflect "contemporary realities", singling out in particular the IMF and the UN Security Council.

It is understandable that the rising powers of the BRICS want to change global institutions to reflect their new status. But in complaining about the current US dominated global structure, some of the key BRICS countries forget that "contemporary realities" are not necessarily in their favour. BRICS is not a coalition of equals: China dominates it.

The disparity between China and other BRICS countries is startling. China's GDP, at more than $7 trillion, is greater than the rest of BRICS put together. This has consequences. The balance of wealth between countries determines the shape and fate of international institutions. Strong states create such institutions in order to serve their interests and these institutions rise and fall in step with the fate of their creators.

For example, as the US took on a global role after 1945, it created a host of institutions. This included the UN system for management of general international order, the Bretton Woods system for the management of global economy and the nuclear non-proliferation order for the management of a particularly dangerous security threat. Not surprisingly, as the US declines slowly, these institutions are all in trouble.

Beijing's Big Account

The consequences should be clear. Any BRICS bank, or financial or political institution that BRICS builds will be dominated by China. Reports suggest that there are disagreements in the group about the corpus fund for the bank and the Contingent Reserve Arrangement to deal with liquidity crises. China appears to be willing to contribute the bulk of the funds, but is facing objections from India and Russia which are worried about what this might mean for decision-making within these new institutions. They are right to be worried: if China ends up paying a disproportionate amount of the capital for these institutions they will expect a bigger say in how these institutions are run.

Disparity of Power

Such Chinese efforts are likely to lead to dissension within BRICS. For Beijing, BRICS represents the latest attempt at creating institutions to promote its interests. But while China's growth has been dramatic, it does not yet come close to the dominance that the US enjoyed. China's GDP is still only half that of the US. And while it enjoys great advantage within BRICS, Beijing cannot afford to throw its weight around because its partners still have other choices. BRICS was successful so far because they limited themselves to complaining about the global order. As aspiring great powers, all of them had reasons to be aggrieved about being "denied their place in the sun", as the Germans used to characterise it in the late 19th century when they chafed under British dominance.

As long as they focused outward, BRICS did not have to worry about the disparity of power between China and the others. India shares with BRICS countries an antipathy towards a global order that does not give India the importance it thinks it deserves. But alternative world orders and institutions are equally likely to be dominated by the powerful, this time China. If BRICS countries want to build an alternative order, they have to face up to the consequence of the disparity of power within BRICS.
(The writer is professor, JNU, Delhi)

Austin · Post by **Austin** » 29 Mar 2013 15:05

India’s belated ‘BRICS awakening’

Austin · Post by **Austin** » 30 Mar 2013 10:01

Video: BRICS by brick

http://rt.com/shows/crosstalk/brics-by-brick-046/

archan · Post by **archan** » 30 Mar 2013 17:47

The importance of being Indian: Despite its warts, India’s democracy has fired global imagination for over six decades

Corruption, assaults and poli-tical conspiracies happen worldwide, but when they strike India they excite the mind like nothing else. For example, South Africa is a serious centre of gang rapes, or "jack rolling" in the local lingo, but that does not cause an international stir. Yet the news of the December rape and murder in Delhi ricocheted within minutes across the world.
Corruption in China is monumental. It periodically fells bridges and schools, killing hundreds. Brazil has a homicide rate three times higher than India's and political violence in Russia is just too bad to be true. The world may condemn all of this, and it does. However, it is only when India goes wrong that tongues wag the mind just about everywhere.

Austin · Post by **Austin** » 01 Apr 2013 13:48

What made India’s prime minister happy

Was it the BRICS summit? Or, was it the successful first meeting he had with China’s new leader Xi Jinping?

The Indian Prime Minister Manmohan Singh’s journey home from visits abroad always provides a moveable feast. Those are rare occasions when the notoriously taciturn prime minister opens up to the media persons accompanying him – with ample time in his hands, willing to share thoughts, shedding his innate reserve for an hour. The journey back home from Durban, South Africa, on Thursday was of a piece, no doubt.

What made the prime minister so relaxed? He was a harrowed man when he left India’s shores. Italian Marines, Sri Lankan Tamil problem, rowdyish coalition partners, faltering economy, dysfunctional parliament – crisis situations were galore.

Was it the BRICS summit? Or, was it the successful first meeting he had on Wednesday in Durban with China’s new leader Xi Jinping? But the BRICS development bank or the India-China relations are after all work in progress. There must be a third reason – and it concerns the domestic political scene in India.

After a prolonged period of political uncertainty buffeting the Manmohan Singh government, the ruling Congress Party is finally getting its act together. By deft manoeuvring, the party has all but ensured that in a huge swathe of the north Indian plains – comprising the states of Uttar Pradesh, Bihar and West Bengal – the main opposition Bharatiya Janata Party [BJP] is going to be virtually deprived of an electoral ally in the 2014 parliamentary poll and may come to bite dust.

The Congress Party’s success has been so encouraging that it is all but pushing away the main regional party from Uttar Pradesh, Samajwadi Party [SP], estimating that it pays instead to align with the Bahujana Samaj Party [BSP], which is a rival to the SP, taking into account the prevailing political climate in Uttar Pradesh. The Congress rightly estimates that it can pick and choose, since the SP has nowhere to go anyway but isolation, because it depends on Muslim voters’ support and aligning with the Hindu nationalist BJP would be suicidal politically.

In Bihar, on the other hand, Congress is on the brink of virtually nabbing the Janata Dal (U), another regional party, which used to be the BJP’s key ally and steady partner in the government ruling the state up until recently. The BJP might get stranded without an ally in Bihar and it cannot give a credible performance in the poll without JD (U) backing. Similarly, in West Bengal, a new proximity is developing with Trinamool Congress, the ruling party in the state, which used to be Congress Party’s ally until recently. Again, Trinamool, like the SP in Uttar Pradesh, also has to keep its Muslim vote bank appeased, which means keeping the BJP at bay.

Now, these three states alone account for one third of the 540-member Indian parliament. To add to BJP’s woes, in the southern state of Karnataka, where it has been in power for the past 5 years, it is almost certain that Congress will defeat it in the forthcoming assembly elections due shortly. Which means that in something like 125 seats from the four southern states – Andhra Pradesh, Karnataka, Tamil Nadu and Kerala – put together, BJP will be lucky if it manages to garner a dozen seats at the most.

Clearly, this being the state of affairs all in all in the seven states that return around 300 lawmakers to the 540-member Indian parliament, BJP’s prospects of coming to power in Delhi in 2014 seem rather dismal as things stand today.

The big question is when the parliamentary elections are going to be held. The due date comes a year hence, but, as things stand, Congress may feel tempted to go for early poll, especially if it trounces the BJP convincingly in the May elections in Karnataka. The temptation will always be there to deny the BJP the time to regain its poise after a shattering defeat, settle its internal disarray and unify solidly behind a single leader.

Meanwhile, although the prime minister keeps talking about ‘reforms’, the high likelihood is that the government will resort to populist measures aimed at projecting the Congress Party as a caring, benevolent party that safeguards the interests of the hundreds of millions of poor people who form the majority of India’s population. Congress Party is already pressing the pedal on welfare measures with the eye on the forthcoming election.

Manmohan Singh told the media on Thursday with supreme confidence that the coalition government he leads is no more in any trouble. His confidence in being in control is such that although 80 years old, Manmohan Singh insists he still keeps an open mind as regards his own political career when the current term as prime minister ends. Indeed, you don’t wrap up all things for all time in politics, but you can most things for some time. This is one such moment when things look good, and it makes the prime minister happy.

Austin · Post by **Austin** » 01 Apr 2013 18:09

BRICS dumping euro amid simmering EU banking crisis

Brussels has been forced to eat a generous slice of humble pie: A massive sell-off of the euro is underway in the wake of a persistent financial crisis, as holdings in the European currency by emerging economies were slashed by almost 8 percent last year.

Emerging economies – including Brazil, Russia, India, China and South Africa (BRICS) – are dumping the euro, having sold €45 billion of the currency in 2012, according to data gathered by the International Monetary Fund.

The euro represents just 24 percent of their reserves, the lowest level since 2002 – the year when euro coins and banknotes first entered circulation – and down from a peak of 31 percent in 2009. At the same time, the euro's share of total global reserves has also fallen. This change of fortune for the euro is blamed on several factors, including sovereign debt crises and rapid growth by BRICS nations.

Last week, China and Brazil agreed to a $30-billion swap deal that would give each the ability to borrow the other's currency in the event of future turbulence in the global financial system. The move undercuts the need to use the dollar as a reserve currency; given China’s increasing economic might, Beijing appears to be steadily promoting its national currency, the renminbi.

The US dollar, which has been designated the world’s reserve currency since the Bretton Woods agreement in 1944, continues to hold ground at about 60 percent of emerging markets’ reserves.

This ‘euro flight’ is disturbing news for Brussels and the eurozone: The euro's challenge to the international status of the US dollar has been “set back a generation,” as new data show developing countries dumping the European currency from their official reserves, FT reported, citing IMF data.

This retreat of the European currency, once heralded as a serious rival to the ubiquitous dollar, offers a shocking glimpse at the severity of Europe's sovereign debt crisis, which recently saw Cyprus take the unprecedented step of penalizing wealthy bank depositors in order to avoid bankruptcy.

"It'll be the number-two international currency, but I wouldn't say there are any prospects of it challenging the dollar," Jeffrey Frankel, professor of economics at Harvard's Kennedy School of Government told FT.

However, the sheer size of the eurozone – 17 EU member-states that have officially accepted the euro as their common currency – continues to make the euro competitive as a reserve currency, Frankel emphasized.

At the same time, investors are becoming nervous about whether the euro will remain attractive over the long haul, haunted as they are by the ghosts of the Spain, Italy, Greece and Cyprus disruptions.

The euro may regain its shine if Europe moves towards “fiscal union and a single sovereign bond market,” FT noted. However, the EU may have missed its chance to act as “big shifts in the global economy boost new emerging market currencies,” such as China’s renminbi, presenting a bold challenge to both the euro and the dollar.

"The dollar is holding its own for now, and we are moving towards a multicurrency system," Edwin Truman, senior fellow at the Peterson Institute think-tank in Washington told the UK business paper.

Currently, the euro is used daily by some 332 million Europeans.

Philip · Post by **Philip** » 01 Apr 2013 21:09

DEVALUE! If the EU does not devalue the Zero....oops! Sorry,the Euro,the asinine attempt to prop it up when pygmy states like Cyprus threaten to bring down the entire house of Euro like a stack of dominoes. failing economies,bankrupt banks,states close to bankruptcy-or as in the case of Iceland already bankrupt;the EU resembles that famous statue seen in a vision by the prophet Daniel of a mighty figure with "feet of (iron and) clay".Sunny Spain we are told is next on the list of defaulters,and if the nation with the largest tourist income in the world is going the Cyprus way,we could see an economic Pompeii in the near future that will bury the EU in mountains of ash (of worthless euros).

Austin · Post by **Austin** » 02 Apr 2013 09:29

Meanwhile Russian debt rising

Russia’s external debt added record 22% in 2012

Every Russian citizen owes the equivalent of $4,200 after the country’s total external debt skyrocketed to $624 billion during the last year, according to official data.

It appears that Russia is good at amassing not only its gold reserves, but also debt.The country’s total foreign debt reached a new height of $614 billion in 2012, or 10.5% of country’s GDP, Russia’s Audits Chamber’s report says. This is 16.1% more than the country’s gold and foreign currency reserves. Debt servicing in 2012 amounted to over $1 billion.

This amount is equal to what Russia spends on housing and public utilities, culture and filmmaking combined, according to the Audits Chamber’s Chairman Sergey Stepashin.

The Audits Chamber is concerned about the country’s corporate debt, which also grew significantly. In 2013 eleven companies with state participation will be subjected to a check on the effectiveness of their debt policies, according to an auditor at the Audits Chamber Nikolay Beskhmelnitsyn, Novaya Gazeta daily reports.

But things are not as bad as they sound according to expert estimations.

"The share of the corporate sector accounts for about 90% of the total external debt of the Russian Federation,” CEO of the company" 2K Audit – Business Consulting / Morison International Tamara Kasyanov told Nezavisimaya Gazeta.

Thus, the average burden on each Russian comes to just over $400. Certainly, average Russian is not responsible for Gazprom's huge debts for the South Stream gas pipeline project to southern Europe, or the billions of dollars Rosneft has to pay to BP for buying its share of TNK-BP.

Some experts believe the new corporate debt figures are not something to be afraid of.

“We could start to worry if the cumulative credit volume gets more than 80-100% of Russia’s GDP. But the current volume is 30%, it’s not much by international standards,” head of investment division at Solid company, Mikhail Korolyuk, told Nezavisimaya Gazeta.

The debt of $624 billion is insignificant for the scale of Russian economy, it’s less than 20% of GDP, believes analyst from Aforex Narek Avakyan.

“To compare, government foreign debt of Germany is around 65% of its GDP. China, which has over $3.5 trillion in gold and foreign currency reserves, has the debt of 22% of its GDP. In France this figure is more than 100%, and this is without corporate debts,” Avakyan told Nezavisimaya Gazeta.

The world’s leaders by external debt (the total public and private debt) are the European Union and the United States with over $16 trillion debt each. Particularly, the US National Debt has ballooned to over $16.5 trillion. With the US population of around 300 million, that comes to $55,000 per person.

Austin · Post by **Austin** » 02 Apr 2013 09:32

What will it take for Chinese currency to be declared as Reserve Currency , Considering Euro is down the hill and we need besides $ and Euro some other reserve currency.

There are also talks about Canada and Australian Dollar as the next world reserve currency.

With Rouble as distant reserve currency for CIS nations.

Can Indian Rupees be used as trading or reserve currency for SARC nation ?

Austin · Post by **Austin** » 04 Apr 2013 22:34

will india be part of customs union in the future ?

Chairman of the Eurasian Economic Commission (EEC) Viktor Khristenko outlined prospects for expanding the Customs Union and for further talks on its cooperation with India, Vietnam and New Zealand.

New prospects for Customs Union in Asia

Agnimitra · Post by **Agnimitra** » 05 Apr 2013 05:18

Pakistan proposes new multilateral body PRICS to reshape world order
Slow day.

SSridhar · Post by **SSridhar** » 07 Apr 2013 05:46

I won't be surprised if Pakistan had indeed mooted a similar proposal in the just concluded Pakistan-China-Russia meet on Afghanistan. This is the bargain time yet again for Pakistan and it has to make the best use of it.

krisna · Post by **krisna** » 07 Apr 2013 07:02

Carl wrote:Pakistan proposes new multilateral body PRICS to reshape world order
Slow day.

nice one. nearly fell for it considering pukis hate anything good for India.

Prem · Post by **Prem** » 07 Apr 2013 09:51

Carl wrote:Pakistan proposes new multilateral body PRICS to reshape world order
Slow day.

Paki Rear In Course S..x?

Prem · Post by **Prem** » 12 Apr 2013 01:30

What the BRICS could do
http://rodrik.typepad.com/dani_rodriks_ ... ld-do.html

y newest Project Syndicate column is on the BRICS. These countries – Brazil, Russia, India, China, and South Africa – have little in common. Most prognostications suggested they would agree on very little. Yet they have surprised the world by proposing a New Development Bank to focus on infrastructure finance.This is a beginning, but is it a useful one? I suggest not.What the world needs from the BRICS is not another development bank, but greater leadership on today’s great global issues. The BRICS countries are home to around half of the world’s population and the bulk of unexploited economic potential. If the international community fails to confront its most serious challenges – from the need for a sound global economic architecture to addressing climate change – they are the ones that will pay the highest price.Yet these countries have so far played a rather unimaginative and timid role in international forums such as the G-20 or the World Trade Organization. When they have asserted themselves, it has been largely in pursuit of narrow national interests. Do they really have nothing new to offer?The global economy has operated so far under a set of ideas and institutions emanating from the advanced countries of the West. The United States gave the world the doctrine of liberal, rule-based multilateralism – a regime whose many blemishes highlight the lofty principles according to which the system has generally functioned. Europe brought democratic values, social solidarity, and, for all its current problems, the century’s most impressive feat of institutional engineering, the European Union.But these old powers have neither the legitimacy nor the power to sustain the global order into the future, while the new rising powers have yet to demonstrate which values they will articulate and promote. They have to develop their vision of a new global economy, beyond complaints about its asymmetric power structure. Unfortunately, it is not yet clear whether they have the inclination to rise above their immediate interests in order to address the world’s common challenges.Their own development experience makes countries like China, India, and Brazil resistant to market fundamentalism and natural advocates for institutional diversity and pragmatic experimentation. They can build on this experience to articulate a new global narrative that emphasizes the real economy over finance, policy diversity over harmonization, national policy space over external constraints, and social inclusion over technocratic elitism.

Austin · Post by **Austin** » 14 May 2013 21:46

The selection of Roberto Azevedo as Director General of the WTO last week has set the stage for the BRICS to increase their influence in shaping global economic affairs.

BRICS profile continues to rise

Austin · Post by **Austin** » 23 Jun 2013 20:54

BRICS development bank can be ready by 2015 - Russian deputy PM

The BRICS development bank could be set up by 2015, Russian Deputy Finance Minister Sergei Storchak told the St. Petersburg forum. Moving away from the dollar and the euro in mutual trade is the key aim of the initiative.

"I think a guideline for the work [of the BRICS development bank] to start is 2015 - that is entirely sensible," Storchak said when asked how realistic it was for the bank to be set up by the previously announced term.

By now the initiative has seen modest progress, with just a political decision having been taken. "…we are at the stage where each country needs to put together national delegations and these delegations will hold full-scale talks on all aspects of the establishment of the new bank," Storchak said.

Taking the final decision on financing the bank’s capitalization would be the most challenging task. That’s because in the current condition of weak growth funds would be diverted from other projects, Storchak said.

"I think that by that time [2015] we can agree on the size of capital and on the size of paid in capital and most importantly carry out inter-governmental procedures on the payment of this capital."

Proposed paid in capital was $10 billion with $2 billion from each of the five countries.

Earlier in April Storchak said there would be two phases to the bank's creation. In the first, the delegations would agree on key issues regarding the operating activities of the bank. "The main results of this stage should be presented in St. Petersburg when a BRICS meeting is due during the G20 summit [September 5-6]," he said.

Other BRICS representatives taking part in discussions as part of the St. Petersburg Economic Forum were also optimistic about the future of the bank.

Indian Commerce and Industry Minister Anand Sharma also said 2015 was a realistic term for the bank. He said we should count on the "wisdom of the experts in the BRICS’ central banks that are working on this."

China Investment Corporation President Gao Xiqing also mentioned that wisdom was a key factor for the project. "If we can make it work I think the BRICS bank will be productive. Wisdom is required from the participating countries, we need the knowledge and experience of the participating countries. (…) I consider the future to be optimistic," he said.

The G20 leaders agreed on the creation of a BRICS development bank at a summit in South Africa in March 2012. The development bank is set to become a vehicle to promote joint investment initiatives and local currencies of Brazil, Russia, India, China and South Africa.

Austin · Post by **Austin** » 25 Jun 2013 16:24

India-Russia Business Dialogue held in St Petersburg

Anand Sharma sees significant potential for cooperation in areas such as infrastructure development, aviation, power generation, energy and information technology.

The fourth India-Russia Business Dialogue was held within the framework of the St Petersburg International Economic Forum (SPIEF 2013) on June 21.

The dialogue was co-chaired by Anand Sharma, India’s Minister of Commerce & Industry and Denis Manturov, Russia’s Minister of Industry & Trade and attended by many prominent Indian as well as Russian companies, the Indian Embassy of Moscow said. “Both ministers expressed satisfaction in the progress of our bilateral trade and economic relations,” an embassy said in a press note.

A presentation on Delhi Mumbai Industrial Corridor was made, highlighting the opportunities available for Russian companies in the infrastructure sector. Stress was also placed on Russian companies availing of the vast opportunities available in infrastructure as well as in other identified areas, the Indian embassy said.

Sharma in his address said there was significant potential for cooperation in areas such as infrastructure development, aviation, power generation, energy, information technology, bio and nano technologies, fertilizer, pharmaceuticals and chemicals.

The Indian commerce minister also addressed the India-Russia CEOs Council and stressed to the co-chairs of the council and to the captains of the Indian and Russian industries to take advantage of the potentials available in India as well as in the Russian market. A 25-member CEOs’ delegation led by Kris Gopalakrishnan, President CII and Vice Executive Chairman of Infosys Ltd, accompanied Sharma for the forum. The CII delegation was represented by companies such as Infosys, Welspun, Dr Reddys, Ranbaxy, Mahindra & Mahindra, ICICI Bank, HAL and Tata Motors

Sharma also participated in a panel discussion, in the framework of SPIEF 2013, “BRICS Partnership – The Potential and Limitations in Global Stewardship”.

Talks on a CECA with the Customs Union

On the sidelines of SPIEF 2013, Sharma also met Viktor Khristenko, Chairman, Eurasian Economic Commission, and discussed the issue of a Comprehensive Economic Cooperation Agreement (CECA) between India and the Customs Union of Belarus, Kazakhstan and the Russian Federation.

In April, Khristenko initiated talks with India on a CECA. “We are moving towards creating a platform for discussing which specific document, for instance a free trade agreement, could be conducive to the prospect of further developing relations between India and the Customs Union,” Khristenko said after the talks in Delhi.

Ever since the idea of a CECA between India and the Customs Union first came into being in December 2011 after summit-level talks between then President Dmitry Medvedev and Prime Minister Manmohan Singh in Moscow, the negotiations over it have been moving at a slow pace.

India and Russia have a strategic target of pushing their annual trade turnover to $20 billion by 2015. Bilateral trade in 2012 stood at around $11 billion.

Austin · Post by **Austin** » 14 May 2014 07:57

India, Brazil and S Africa support Argentina's desire to join BRICS

Three of the five BRICS countries (Brazil, Russia, India, China and South Africa) support Argentina's plans to join BRICS, Indian ambassador in Buenos Aires Amarenda Khatua said on Monday.

India, Brazil and South Africa are interested in having Argentina join the BRICS group of emerging economies, the ambassador said in an interview with Clarin.

Argentina may have difficulty joining the group as it has sovereign debt problems which the BRICS countries don’t have, Clarin points out.

Despite those problems "there is a growing consensus to have Argentina" join in, the diplomat said.

He said he was working to arrange a visit to Argentina for India’s next Prime Minister after the BRICS summit in Fortaleza, Brazil, scheduled for July 15.

vijaykarthik · Post by **vijaykarthik** » 14 May 2014 17:06

Argentina?

that will make this already shaky motley bunch into a "hollow block". Will they plan to rename the group too once that's accepted?

Naah. I think they are perhaps doing it just for posturing.

Uttam · Post by **Uttam** » 14 May 2014 20:29

Austin wrote:India, Brazil and S Africa support Argentina's desire to join BRICS

BRICAS