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THE BRICS NATIONS CHALLENGE THE WEST?

THE BRICS NATIONS CHALLENGE THE WEST?

The fourth BRICS summit getting together Brazil, Russia, India, China and South Africa was held on March 28-29 in New Delhi. No matter it didn’t last long one can say with confidence it has resulted in substantial achievements. In any case it’s obvious the leaders of the member countries had no intention to confine themselves to purely symbolic resolutions, so the outcome of event looks quite telling.

The conclusion of the Master Agreement on Extending Credit Facility in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement. was the main achievement. All members agreed to launch a financial settlement scheme between BRICS in national currencies that would allow to exclude the US or European currencies as «go-betweens» that has been a non — alternating factor until now. India put forward an idea to create a BRICS new development bank called «BRICS-led South-South development bank.» The BRICS Ministries of Finance agreed to tackle the issue without delay.

Besides all five members expressed belief the time was ripe for an IMF structural reform, especially aimed at getting rid of actual US control. As the BRICS members see it the IMF management structure should match the existing geopolitical reality, take into account the apparent redistribution of resources and growing influence of developing countries, as well as prospects for strengthening this trend. The BRICS nations stand for an increase in the IMF reserves, meaning their own financial contributions at first place. China put a special emphasis on enhancing representation of emerging nations. It’s easy to see the emphasis is directly intertwined with the China’s intent to include the yuan in the currency basket of the International Monetary Fund.

The BRICS also called on the West to evade cosmetic reforms «to cure» the financial crisis by simply giving priority to emission of money and other actions of the same character that lead to excess liquidity in the world financial system. It’s easy to see the BRICS decisions are related to the most fundamental issues of today. It’s the monopoly of the only global currency and the carefully preserved status-quo of one universal pole of force that regularly uses the absence of competition to its advantage. Do the BRICS decisions pose a threat to existing world order? No doubt they do. Even only one of them — the coordinated desire to enhance its representation and influence — can evoke serious concern among those who has used the Fund to their own advantage until now.

Of course the BRICS have been gradually pushing the leading financial actors from their previous positions. Their IMF quota has already been increased from 43,97% to 47,19%, in the World Bank and from 39,5% to 42,29% in the IMF. As one can see the moment is not far when the virtual «controlling interest» — and that means political clout as well — will shift into the hands of the BRICS. All the prerequisites for major transformation are already in force. The member countries suffered less than others in the times of economic crisis, they boast stable economic growth that looks pretty robust in comparison with Europe and the USA, even if lower than in the previous year.

The final resolution calls for intensification of international financial funds management reform. Those who have sufficient resources should be given more rights to facilitate the world economy restoration. Even under the most pessimistic forecast the BRICS will become a world economic leader by 2050. Besides the major part of the world’s natural and human resources is concentrated on the territory of the member countries.

The BRICS clout within the G20 is to grow. The next stage after the use of national currencies for trading with and issuing loans to each other, will be making this «platform» serve the purpose of economic and financial stability — the use of the currencies will provide the organization members with protection in case the EU and the USA impose sanctions against them. It can hardly be viewed as overcautiousness — two of the BRICS members, China and India, come under this kind of threat for buying energy resources from Iran, the country fallen out of favor with the West. The very fact the BRICS members decided to coordinate their actions while preparing for the coming G20 summit in June may be perceived as the next indicative signal to raise serious alarm for «the gold billion».

To support the South African initiative the BRICS announced its decision to support African large scale infrastructure projects aimed at stable development of the continent, including health and food security. The member countries expressed their support for the proposal that «the heads of IMF and World Bank be selected through an open and merit-based process.» The BRICS stressed a need for «strengthening global economic governance» and a possibility to influence the WTO decision making process on trade disputes. The joint statement on Syria stresses unanimous support for UN envoy Kofi Annan’ mission and his efforts to reach a peaceful settlement of the conflict.

The New Delhi summit literally includes the range of burning issues on the contemporary agenda. At that the decisions taken and common views expressed are in stark contrast with the ones that have been considered to be indisputable up to now. Naturally it cannot do without negative reaction on the part of those who feel comfortable with the current state of affairs.

That’s why the BRICS should listen to the recommendation of Chinese President Hu Jintao — to strengthen and deepen political mutual trust.

 

 

 

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THE BRICS NATIONS CHALLENGE THE WEST?
The fourth BRICS summit getting together Brazil, Russia, India, China and South Africa was held on March 28-29 in New Delhi. No matter it didn’t last long one can say with confidence it has resulted in substantial achievements. In any case it’s obvious the leaders of the member countries had no intention to confine themselves to purely symbolic resolutions, so the outcome of event looks quite telling.

 

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