China
Source: www.chinadaily.com.cn

SYDNEY - With the 9th annual BRICS summit less than two weeks away, a world-renowned global BRICS expert based in Australia said the member nations are primed to step into the leading position in worldwide leadership.

David Thomas, chief executive officer of Think Global, a Sydney-based consultant firm, spoke exclusively to Xinhua on Thursday that the BRICS nations are "stepping into the vacuum of global leadership" that has been created by the withdrawal of the countries, particularly those in the West, previously associated with worldwide leadership.

"The fact that the BRICS want to take over investments through the institutions that they are establishing, to take some of the decision-making away from the United States, and played the part that they can in building the next phase of globalisation -- the importance of governance that sits behind that, is very significant," Thomas said.

This year's summit will be hosted in the seaside city of Xiamen in southeast China's Fujian province, and with leaders from member countries and other nations around the globe set to attend. Thomas said the biggest achievement for the yearly summit since its inception is the way that has brought countries together.

"They are (BRICS) very different countries with very different historical backgrounds, and cultures, and histories -- so the fact that they actually meet as a group every year, not just the leaders, but many other parts of their leadership teams is very significant," Thomas said.

One of the key ways these nations will be able to further their cooperation, according to Thomas, is through the China-proposed Belt and Road Initiative, a grand plan to connect Asia with Europe and Africa along, and beyond, ancient trade routes by putting in place an unparalleled trade and infrastructure network.

Thomas believed that the Belt and Road Initiative is a "great example" of the kind of global undertaking that the BRICS nations can participate in, and benefit mutually from, and said that the feels that this initiative could be a common bond shared by the member countries to encourage global harmony.

"The BRICS can come together, and particularly Russia, India, and China -- as big players in the Belt and Road Initiative. Brazil can, of course, provide lots of resources and support, and I think that we will probably hear a lot about that."

However, that same harmony between countries is being tested by increasing conflict around the world, according to Thomas, and he hopes that what he sees as "angst" from Western countries about the BRICS nations can be solved through demonstrating the immense potential for "win-win" partnerships between the BRICS and other nations globally.

"It now comes down to the leadership, and if the BRICS leaders can step into that vacuum and show true leadership, and can develop harmony so that it doesn't become a zero sum game - if everybody can win together, it could contribute to global harmony."

Asides from the vast positive economic potential to come out of the upcoming BRICS summit, Thomas said that he believes the BRICS nations should also turn their attention to stepping up their role on the global security front - a role he feels they are uniquely placed to achieve success.

"There is no question that the world is not a safer place as it was 10 years ago," Thomas said.

"I think that in the last 10 years we have seen an increase in terrorism, we have seen the unraveling of the Middle East, and all the pressures but that's putting on Western countries. At a very fundamental level, the BRICS leaders need to step into the void and provide some leadership around global security."

Thomas said he sees this year's summit as a "tipping point", with the rise of protectionism taking hold in major markets like the United States, Britain, and parts of Europe, and hopes that as the BRICS leaders meet in Xiamen in September, that the message of free-market globalization can ring out around the world, and create opportunities for worldwide prosperity.

"The BRICS have to step into this vacuum, they have to give some clear direction about what they see is the future of globalisation," Thomas said.

"I think if they can get this message right, we could see this summer as being an important step in the future of the global economy."

China
Source: english.china.com

The BRICS bloc grouping Brazil, Russia, India, China and South Africa serves as "a testbed" for a "sharing governance" of global affairs, a leading U.S. expert said.

"BRICS makes that kind of contribution to the world governance by providing diversity," said Robert Lawrence Kuhn, chairman of the Kuhn Foundation, in a recent interview with Xinhua.

"I think it would be a mistake, given the nature of humanity, to have only one organization like the United Nations... " he said, adding that a diversity of structures seems to be what makes the most sense over time in global governance since there is no perfection.

"It engages them (BRICS nations) to be a sort of hubs for broader global interaction," Kuhn said, "So Brazil is in South America. South Africa is obviously in southern Africa. These become sort of vehicles to engage more of the world, so that's all positive."

The longtime China observer noted that a greater participation of the five major emerging economies with "very different characteristics" also strengthens momentum for a multipolar world, which is crucial for promoting international stability.

"I am all for the key countries that whether judged economically or through other mechanisms to have greater participation in (global) organizations," Kuhn said.

The BRICS New Development Bank (NDB), which is intended to focus on infrastructure and sustainable development projects, stands as a good example showing "what a new kind of world governance would look like," he said.

"Everybody has equal voting power. So that's a good sign," he added, referring to the NDB'S distinctive feature -- absolutely just distribution of votes between members, different from the quota system of other international financial institutions based on the role of a certain member.

Although with the overwhelmingly larger economy in BRICS, China "does not use that power in an aggressive way to take control" of the NDB, he noted, "I think that's a good signal. And China's doing it because it wants this greater participation in international affairs."

All BRICS countries should have "a greater say" in the international financial activity in the World Bank and the International Monetary Fund (IMF), he said.

In the World Bank, the BRICS countries, home to 42.6 percent of the global population and nearly half of the world's foreign exchange reserves, have a total of only 13 percent of voting rights, while the United States alone holds 15 percent.

The IMF agreed in 2010 to give emerging economies greater vote in decision-making, but the reform has been blocked by the United States, despite the fact that more than 140 countries have approved it.

"These should be adjusted... that's just not aligned with today's world in the same way," he said.

Since the first foreign ministers' meeting in 2006, BRICS countries have seen 10 years of rapid expansion in trade and economy. They currently account for nearly a quarter of the world economy and contributed more than half of global economic growth in 2016.

The 9th annual summit of the bloc, scheduled for Sept. 3-5 in Xiamen City of southeast China's Fujian Province, is expected to produce a declaration that lays out both the progress BRICS has made so far and its vision of future cooperation.

A "BRICS Plus" mode is expected to expand the bloc's partnership especially with developing countries, providing opportunities for other economies and injecting impetus into economic globalization. This will help make it a leading platform for South-South cooperation.

China
Source: en.cncnews.cn

With the 9th annual BRICS summit less than one week away, experts from Brazil said strengthening macro policy coordination among Brazil, Russia, India, China and South Africa will provide a "booster" to deepen ties among the bloc.

The ninth BRICS summit will be held in September in Xiamen, China. Experts said how its five members will chart the bloc's future course holds much importance.

SOUNDBITE (SPANISH): PAULO WROBEL, BRICS Policy Center of Brazil
"In my opinion, the most import role of the BRICS system is that it can enhance the understanding of the five countries from different levels. As long as this function works well between the five countries, the global governance can be proceed on. In the coming forum in China, we can observe such a process carefully."

SOUNDBITE (SPANISH): RUBENS PENHA CYSNE, Economy and Finance Department of FGV
"It is important to maintain the cooperation of BRICS countries. Brazil is now facing many difficulties, and the country is striving for walking out, however, due to issues concerning society, history and legislation, there has to be a more powerful strength to help the nation, by providing loans and high technologies, or from culture and education. This could ease the pain of Brazil in recovering from the economic recess."

This year marks the beginning of the next "golden decade" for the BRICS.

The bloc has a common orientation for cooperation as well as a stronger desire to dock its development strategies through coordinating the macro economic policy of each country

SOUNDBITE (SPANISH): PAULO WROBEL, BRICS Policy Center of Brazil
"In fact, the system of BRICS is still in the premium phase. The communication between these countries is not that smooth. Brazil, India and China are all emerging markets, while the developed countries we referred to are usually America and European countries. Now the place of China is changing, for example, China is playing a very important role in the commerce of Brazil. China put more investment in Brazil than any other country in the world, and the relationship of China and Brazil in economy, investment and commerce has been changing. Undoubtedly this is a positive change, which can largely be attributed to the system of BRICS."

Some experts have suggested the BRICS countries begin negotiations on free trade agreements to better open up their markets to each other.

Experts said Brazil, as the core country in China-Latin America cooperation, may share its experiences with China, while working together with China to advance the regional relationship.

SOUNDBITE (SPANISH): RUBENS PENHA CYSNE, Economy and Finance Department of FGV
"The territory and population of Brazil and China is similar, the production complementary of the two countries is obvious. Brazil is rich for its raw materials, such as iron ore and food, which is important to China. As to China, due to its scientific innovation, the high-tech products of China can be exported to Brazil."

Expert believe the BRICS nations should also turn their attention to stepping up their role on the global security.

SOUNDBITE (SPANISH): RUBENS PENHA CYSNE, Economy and Finance Department of FGV
"Fortunately, we can see that the countries of BRICS are helping each other, the harmony in them win the respect of the whole world. Rather than developed and highly industrialized countries, they are newly emerging ones.There are also many other roles the BRICS countries can play, such as the safeguard and coordinator of global security."

USA
Source: www.larouchepub.com

Aug. 24, 2017 (EIRNS)—In an interview with Xinhua on Aug. 22, Russian Deputy Foreign Minister Sergei Ryabkov said the BRICS mechanism under China's chairmanship this year has entered the second golden decade, following a decade of prosperity.

"We do not see a deceleration in BRICS development nor a fading interest of any partner in this format. We note with great satisfaction that BRICS continues to consolidate and be approved in the international arena and it has become an indispensable factor in influencing international affairs," he told Xinhua. Ryabkov's remarks pertain to the upcoming summit in China's southeastern coastal city of Xiamen on Sept 3-5 where leaders of the five BRICS countries—Brazil, Russia, India, China, and South Africa—will meet.

Similar views were expressed by David Thomas, chief executive officer of Think Global, a Sydney-based consultant firm, who spoke exclusively to Xinhua today saying the BRICS nations are "stepping into the vacuum of global leadership" that has been created by the withdrawal of the countries, particularly those in the West, previously associated with worldwide leadership. Another observer, David Gosset, founder of the Europe-China Forum and the New Silk Road Initiative, told Xinhua during an interview that

"within less than a decade, the BRICS Summit has evolved into an impactful forum whose importance is proportionate with the growing economic and political weight of its members."

He noted that the Xiamen Summit "will send a strong signal to the world of the growing significance of developing countries, and that globalizing forces have shifted from western countries to emerging economies," Xinhua reported today.

Meanwhile, reports from New Delhi indicate that a team has been sent to Xiamen to arrange meetings—on the sidelines of the BRICS summit—for the Indian premier Narendra Modi with leaders from across South East and Central Asia, Africa, and North America, who will be attending the summit. There had been some uncertainty as to whether or not Modi would participate in the BRICS summit, in light of unresolved tensions with host China, and Modi's decision earlier this year to boycott the Belt and Road Forum in Beijing.

China has invited leaders of Thailand, Indonesia, Kazakhstan, Egypt, Guinea (African Union chair) and Mexico as part of BRICS outreach. There are reports that leaders of Tajikistan and Philippines could also be part of this outreach exercise, The Economic Times reported.

China
Source: www.shanghaidaily.com

MORE than a decade after its establishment, BRICS, grouping five major developing countries from four continents, is recognized by international experts as an irreplaceable force in global governance.

Thanks to close cooperation and coordination between Brazil, Russia, India, China and South Africa, BRICS has achieved results that not only benefit the five member countries, but also contribute to safeguarding the interests of developing countries as a whole and improving the global governance system, according to experts.

BRICS countries have created a new paradigm for mutual benefit cooperation among emerging and developing economies since the mechanism was established in 2006.

BRICS has been hailed as an "accelerator" in the transformation of the global economic governance system. The member countries have managed to increase their say in major international financial institutions and have been steadily boosting the reform of those institutions.

One of the major achievements of the BRICS mechanism is that it has helped increase the representation and say of developing countries in the International Monetary Fund (IMF) and the World Bank in recent years, experts pointed out.

Evandro Carvalho, director of the Center for Chinese Studies at the Brazilian college Getulio Vargas Foundation, said BRICS countries have become a significant part in making global economic rules.

BRICS countries have demonstrated their vigor and vitality by championing an open and multilateral world order against a growing tide of protectionism from Western countries and the many challenges on the road of global economic recovery, he said.

Meanwhile, BRICS countries have established an all-dimensional cooperative dialogue mechanism covering various fields to coordinate their standings and voices on major global and regional affairs.

BRICS countries are heard speaking one voice on many global occasions. Liu Jieyi, China's permanent representative to the United Nations, spoke on behalf of all BRICS countries on April 18 at a high-level political forum on sustainable development, marking the first time the five members spoke one voice on major international affairs at a UN meeting.

It is also worth noticing that the establishment of the BRICS New Development Bank has not only boosted the common development of the five member countries, but has also injected fresh driving force into the mechanism's leading role in South-South Cooperation.

Referring to the establishment of the bank as a significant event in the development of BRICS, Carvalho said the bank has played a role in enlarging the influence of the five-member mechanism.

Experts agree that BRICS countries have been playing an ever bigger and more important role in global governance.

Varaprasad S. Dolla, a professor from Jawaharlal Nehru University of India, pointed out that developing countries, particularly BRICS members, are able to contribute more to global growth.

"BRICS has now emerged as a major block. Therefore, it is likely that they will have a lot more than they had before to contribute to economic governance," said Varaprasad.

Over the past decade, BRICS has grown into an engine driving global economic growth, with their contribution to the world economy rising from 12 percent to 23 percent. As of last year, BRICS countries accounted for nearly a quarter of the world economy and contributed more than half of global growth.

These numbers, experts said, testify to an ever enhancing and expanding role of BRICS countries in global governance.

It is widely expected that the upcoming BRICS summit, scheduled for September 3 to 5 in Xiamen, a coastal city in southeast China's Fujian Province, will usher in yet another golden decade of development for the mechanism.

According to Carvalho, the Brazilian expert, leaders from BRICS countries will compare notes on measures and plans for further cementing cooperation at the Xiamen summit.

China, currently holding the rotating presidency of BRICS, can play a leading role in deepening the cooperation among BRICS countries, he said.

Meanwhile, experts have been highlighting the modality of "BRICS Plus," which is aimed at building wider partnership through dialogue with developing countries and international organizations.

They said "BRICS Plus" is conducive to building the mechanism into the most influential platform for South-South Cooperation and increasing the representation and influence of the mechanism in an all-round way.

Forging a more extensive partnership between BRICS and other developing countries will make both bilateral and multilateral trade and mutual investment between the countries more effective, experts said.

Varaprasad, for his part, said if BRICS has to become truly representative and inclusive, then initiative like "BRICS Plus" is imperative. "Therefore inviting a number of countries from the south to the BRICS summit in Xiamen is to be welcomed by one and all."

"To me, 'BRICS Plus' is a kind of another phase in the evolution of BRICS — from BRIC to BRICS and now BRICS Plus. So it has evolved, becoming more inclusive, becoming more representative," he said.

India
Author: Abhijit Bhattacharyya
Source: www.deccanchronicle.com

"Modi may not attend Brics summit", gleefully screamed the now-notorious rabid anti-India Chinese daily on August 16. As is well known, Brics consists of five nations — Brazil, Russia, India, China and South Africa — which have a collective GDP of approximately $16 trillion (2013), with a population of around three billion. And, indisputably, India is one of the key players. Hence, to suggest that India's Prime Minister Narendra Modi "may not attend" such a gathering requires some probing into the "potential situational awareness" created by the Chinese media (at the behest of the powers that be). Understandably, though the world at large is by now used to the venom-spitting language of the state-controlled Chinese media — owing to its inability to fine-tune linguistic aesthetics and failure to master, and develop, a minimum command and control over the universally-accepted English language — what makes Beijing red hot with frustration is the prospect of the reality getting unmasked. Despite China's $10 trillion-plus GDP, its credibility is sinking at an alarming pace. And it's likely to hit Beijing further hard in future where it hurts most — in economics.

That is the primary reason for its rising bellicosity towards India. An India which "did not matter" and which in Beijing's scheme of things still "does not matter" has suddenly propped up in China's psyche, media, polity and military planning. This psyche appears clear. "India is no match to China", blares Beijing's 24x7 broadcasting outfit. If that's the case, then how did New Delhi have the audacity to "boycott" the BRI/CPEC/OBOR meet held in Beijing in May 2017? How dare they? This is an unpardonable humiliation for China by an upstart, and contemptuous India must be taught a lesson! If India could not accept the supremacy of China in BRI (CPEC/OBOR) in Beijing, it needn't come for Brics in September as a rival and competitor to Beijing! BRI is China's monopoly. Brics is the forum of five competing powers, apparent bonding thereof, on the lines of the EU or G-7. Even if the five-nation Brics becomes a four-nation Brics, so be it. China would be happy to see India out of Brics. It would be "good riddance" as China feels life may not be same again after BRI/CPEC/OBOR and the Doklam challenge of India. For China, thus, it is essential to see Narendra Modi out of the Brics summit. Therefore, it is quite possible China will do more than what it takes to ensure Mr Modi's "unavoidable absence" at Brics "owing to a developing situation at home".

Once that happens, it would be a walkover of/for the Chinese diplomatic, political and economic assault on India. The writing on the wall is clear. So desperate is China to see the Indian PM's back that an all-out media assault has been launched to create a situation. Anyone with the slightest of idea of China's attitude and action would vouch that Beijing is a world topper in castigating and calling names to demoralise and compel opponents into submission. In the past, till the beginning of the 20th century, all foreigners, in China's eyes, were barbarians. It was a Sino-centric world order (through Chinese eyes only). It still is. Hence, all foreigners, if admitted to the court in the emperor's presence, were expected to kowtow. That publicly demonstrated the barbarian foreigner's submission to the Chinese ruler of heaven. Needless to say, that psyche remains embedded in Beijing's body politic. There is no way it could be anything other than what it is even today.

This mentality of China poses a challenge for India. No Indian ruler can afford to do what China wants the world to do, as country after country is falling by the wayside of China's cunning, deceit, coercion, blackmail, bullying and morsel-like bribery of the ruling class of countries China considers as pigmies. India could be less prosperous than the Hans of China, but Indians are certainly no pigmies. Indians have been grotesquely painted as corrupt by India's Western masters of yesteryears, but they have not yet surpassed the likes of the corrupt Warren Hastings, Cornwallis, Dalhousie or the 21st century Chinese! There's no doubt that India faces corruption in its system, but corrupt Indians are pigmies in front of China's mega-corrupt men and their means to destroy any nation through money, and more money. One suspects the 21st century Chinese way was the one through which the mighty Soviet Union was destroyed once and for all — by the lure of dollars in the 1980s-1990s.

The moot point today, therefore, is stark. As Indian troops face the possibility of a prolonged standoff in the high hills of the Himalayas, and Beijing continues to make money through virtually one-way (Sino-Indian) bilateral trade, unhindered and unimpeded, there is little doubt that China will continue to try its best, through all means, fair or foul, to create and worsen situations on several fronts. It will result in an internal uproar, which might compel Prime Minister Narendra Modi to skip the September 2017 Brics summit in Xiamen, China. Mr Modi truly faces a daunting task. Nevertheless, come what may, even at the possibility of a real external challenge and fierce internal criticism, he must hold ground and make it a point to attend the Brics summit in China in September. In a fast-unfolding, deteriorating diplomatic and worsening security scenario, there is every need for the Indian PM to not only attend the summit, but also take centrestage on the home ground of his Han hosts. Else, it would amount to leaving a vital geo-strategic and geo-economic space to a reckless, irresponsible aspiring superpower called China. India, at this stage, certainly can't afford to be seen running away from the challenge thrown at the world in general, and India in particular, by the uncivilised and uncouth behaviour of a so-called ancient civilisation. Brics may be referred to as cooperation, but it also stands for competition. This is in direct contrast to BRI, which is a monopoly of the Chinese ruling class, headed by President Xi Jinping.

China
Author: Shan Jie
Source: www.globaltimes.cn

The upcoming BRICS Summit, which will open on September 2, in Xiamen, East China's Fujian Province, is expected to provide a pragmatic framework for the five members to overcome challenges in their economy, society and politics, Chinese analysts said.

The past decade has seen the growth of the BRICS cooperation platform into an influential international mechanism, and has helped bring changes to global economic governance structures. This includes greater voting rights for China and India in the International Monetary Fund and the World Bank, the Xinhua News Agency reported.

However, BRICS countries face different levels of development.

"Compared to the first summit, the five countries have developed at a different pace from each other," Lu Jing, a professor at the China Foreign Affairs University's Institute of International Relations, told the Global Times on Thursday.

"The economies of China and India have performed well, but Brazil and South Africa have suffered economic crises," Lu said.

"BRICS countries are undergoing a period of economic adjustment," Chen Fengying, former Director of the China Institutes of Contemporary International Relations' Institute of World Economy, told the Global Times on Thursday.

"Russia and Brazil, as resources countries, are recovering from an economic recession," she said.

"Social problems were hidden when BRICS countries enjoyed prosperity. The problems surfaced during the economic crises, which also affected their political stability," Chen said.

Reforms have also led to domestic turbulence, which has affected diplomacy, Chen noted.

"Meanwhile, the desire and need of developed countries to cooperate with emerging economies has ebbed because they feel threatened," Lu said.

US President Donald Trump's protectionist policy has also placed a greater burden on BRICS countries in a more complicated international environment.

"Internal frictions among BRICS countries have always existed," Lu noted.

The BRICS grouping of Brazil, Russia, India, China and South Africa has entered its second decade. Since 2009, BRICS summits have been held annually. Their foreign, finance and security ministers also meet regularly under the BRICS framework.

Trade between Fujian, the southeastern Chinese province that will host the upcoming BRICS summit in a few weeks, and BRICS countries soared 67.7 percent to 49.42 billion yuan ($7.42 billion) in the first half, Xinhua said.

Moving forward

"BRICS has made great strides in pragmatic cooperation, such as the BRICS New Development Bank and the Contingency Reserve Arrangement," Lu said.

"The summit in September will allow BRICS to be more effective and practical," Lu said.

"It will provide the direction of how the countries solve their problems and will lead to an agreement to build a firm partnership and the foundations for the future," Chen said.

"BRICS countries will also focus on global governance and will unite to enhance their global influence and confront pressure from Western countries," Chen said.

The highlight of this year's BRICS summit is to establish a new platform for south-south cooperation by exploring the "BRICS Plus" model involving more countries under BRICS.

"The new BRICS Plus could bring more openness and vitality to the mechanism. Adding members could also lead BRICS to its development goals," Chen added.

Aside from economic and trade cooperation, it also seeks to enhance cultural cooperation and people-to-people exchanges, Xinhua reported.

The summit will also present the concept of a community of common destiny to lead global governance, Lu added.

China's diplomatic agenda

As this year's BRICS president, China's diplomatic agenda of cooperation with other BRICS countries has always been a priority, Xinhua reported.

China has been a staunch supporter of and participant in the BRICS mechanism, and takes BRICS cooperation as one of its diplomatic priorities.

The ninth BRICS Summit would build a second "golden decade" for BRICS by taking the successful experience, strengthening internal cooperation and becoming more open, Lu said.

A Chinese Ministry of Commerce spokesperson said Thursday that India should follow WTO rules and avoid abusing trade remedy measures, Xinhua reported.

"As BRICS nations and large developing countries, China and India should work together to champion a free and open multilateral trade mechanism," Gao Feng said at a press conference.

China is willing to work with India to build a platform for industrial dialogue and negotiations to resolve trade frictions and achieve mutually beneficial results, Gao added.

"The BRICS Summit is multilateral and not bilateral. Therefore, even if China and India face differences, cooperation should be the focus of the summit, not turbulence," Chen said.

India
Author: M.D. Nalapat
Source: www.sundayguardianlive.com

That Europe as a continent gained mastery over the rest of the globe for close to six centuries is because of the confidence within its population that little was impossible. They obeyed the ancient Indian dictum to "aim for the stars even if you miss", rather than setting their sights low and then being satisfied with coming close to what at best would be a miserable result, the mindset of several elites in Asia. But times have changed, although India's colonial-style bureaucracy has survived the British Raj in order to enmesh the population in Red Tape Raj. Despite the diversity of the country, the effort of those entrusted with governance has been a constant effort at funnelling the different needs and systems in India through a single spout, on the way rubbing off individuality and excellence and creating an undifferentiated outcome distinguished only for its mediocrity. This has especially been the case in education, whether it be medical, the humanities or science. All-India examinations, all-India syllabi, all of these and more work towards creating mass-produced brainpower far from the cutting edge. Any sparks of excellence get driven out through neglect, if not outright condemnation for such effrontery. Whenever the colonial collection of policy straitjackets got loosened even by a smidgen, such as what took place in the Industries Ministry when it was handled by Prime Minister Narasimha Rao in the early1990s, the performance of domestic players improved disproportionately. Early on, vested interests that thrive on the stifling controls over individual initiative that are a dominant facet of the colonial construct (another being the squeezing out of revenue no matter what the health of the contributing sector) rallied against Narasimha Rao. They midwifed the efforts of 1994, which resulted soon after in splitting the Congress Party, leading to the emergence as a national alternative of the BJP. After what happened to Rao, succeeding Prime Ministers have been hesitant in enacting fundamental reform of economic policy, out of fear that only a Robin Hood stance (of taking from the rich and giving to the poor) would ensure victory during the elections. The problem is that it is the (relatively) rich that give employment to the poor, and while it is essential to stamp out abuse and illegality, the conduct of business and the accumulation of wealth should not be slowed down by 1950s-1970s-style measures that are confiscatory and obstructionist. Even such solemn covenants as that signed between the Princely States and the Union of India were torn up without a tremor, on the principle that wealth is evil in itself. While Deng Xiaoping sought to make every Chinese (or as many as possible) rich, in India, the effort of Nehruvian (colonial-era) policy was to make poor as many honest but prosperous individuals as possible. Small wonder that the average income of India remains among the lowest in the world, far below that of the other billion-plus country, China.

Just as millions voted for Rajiv Gandhi in 1984 on the promise of change, voters in 2014 chose the BJP led by Narendra Modi in the belief that he would ensure the substantive and systemic changes in governance and policy that had been elusive for too long. Confidence in Modi is still high, visible in the belief that he will soon begin to accelerate the process of change, now that he has settled in and mastered the processes of governance at the Central level. The expectation is that needed reforms, such as horizontal entry into the Central and state services at all levels from outside the government, will come about. That Modi is a visionary has been proved by the 8 November 2016 demonetisation of 86% of the country's paper currency, in order inter alia to force through a shift to digital modes of payment, such as what has taken place in China during the period since Xi Jinping was put in charge five years ago. That shift in behaviour came about as a result of expansion of indigenous digital platforms and improvement in bandwidth, not by rendering worthless China's paper currency. The Reserve Bank of India and NITI Aayog were wrong in assuming that a sharp fall in liquidity would change habits without seriously impacting employment and output, especially in the so-called "unorganised" sector. There is nothing unorganised about this sector. It even pays "taxes", in the form of bribes to officials and politicians, and much of it would be rendered uneconomic were regular taxes to be imposed over and above such "unofficial" imposts. Hence the importance of Prime Minister Modi's strenuous efforts at ensuring corruption-free procedures. Now, after so much has happened to the economy as a consequence of the DeMon measure the institution championed, the RBI seems to have accepted the need for liquidity and is no longer starving the economy of currency. A changeover to digital systems in place of cash needs a tax structure that has much lower rates than at present, as well as ways of ensuring compliance that are not reliant on regulations that empower (and subsequently enrich) officials beyond the limits that are normal in democracies. Overall, Modi can be expected to ensure by 2019 that present GST rates fall and compliance be made easier, given his genius for practicality.

In days, Prime Minister Modi is expected to head for Xiamen, for the 9th BRICS Summit. There, a consensus needs to get built that the five member-states will (a) renounce the use of force against each other; (b) abstain from any action that threatens the security of any other; (c) ensure visa-free entry within the BRICS bloc; (d) have Russia and China take up the case of India, Brazil and South Africa as Permanent Members of the UN Security Council; and (e) set up a BRICS headquarters that would serve as the coordinating agency for cooperation between the five, perhaps in Durban, South Africa. The time for a 21st century Panchsheel among the BRICS Five has arrived, and hopefully this will become a reality at Xiamen. The five leaders need to aim at the stars during the 3-5 September meeting and not again keep their sights low.

India
Author: Sanjay Kumar
Source: www.arabnews.com

All eyes are on the three-day BRICS Summit in China, starting Sept. 3, when a meeting between Indian Prime Minister Narendra Modi and China's President Xi Jinping is expected to take place.
The handshake between the two leaders might ease ongoing tension between the world's two most populous countries over the Doklam plateau.

India's Ministry of External Affairs refused to comment on the meeting when contacted by Arab News.
The plateau falls at the tri-junction of India, China and Bhutan. It has long been a point of dispute between New Delhi and Beijing. Recent tensions began on June 18, when India stopped Chinese workers from extending a road on the plateau southward near the Doka La pass on the Sino-Bhutanese territory.

India opposes the extension as it is close to its border. Bhutan says it is also against China building roads in the disputed area.

"Doklam is a disputed territory, and Bhutan has a written agreement with China that pending a final resolution of the boundary issue, peace and tranquility should be maintained in the area," said Vetsop Namgyel, the Bhutanese ambassador to India.

New Delhi says the road construction is close to the Siliguri corridor, which connects mainland India with its northeastern side, which shares 90 percent of its borders with neighboring countries.

"Such construction would represent a significant change of the status quo, with serious security implications for India," said the India's Ministry of External Affairs.

To counter the Indian move, Beijing sent reinforcements to the area in the third week of June, and described New Delhi's apprehensions as "ridiculous."

Hua Chunying, a spokesperson for China's Foreign Ministry, warned that if the intrusion were not stopped, it would lead to "utter chaos."

"A prerequisite basis for the settlement of the trespass is the unconditional withdrawal of personnel and equipment from the Indian side," he said after Indian Home Minister Rajnath Singh urged China to take a "positive step from its side."

Sudheendra Kulkarni, head of the Mumbai chapter of the Observer Research Foundation, told Arab News: "This problem would've been nipped in the bud had there been strategic trust between Modi and Xi."

Kulkarni said: "It's because of lack of trust that the issue has erupted in such a serious manner. Even at this stage, the issue should be resolved peacefully."

Indian Express columnist C. Raja Mohan wrote: "One of the unintended consequences for China from the Doklam crisis would be an India that is forced to think far more strategically about coping with China's power."

But Kulkarni thinks "the strategic shift in Indian foreign policy from a non-aligned nation to a strategic ally of the US is also an issue in this conflict."

He added: "China is our neighbor, and good neighborliness should be at the heart of any foreign policy."

Mohan warned that after the Doklam issue, "political goodwill in India toward China that was constructed over the last three decades will be increasingly difficult to sustain in the coming years."

India
Author: Sudheendra Kulkarni
Source: www.thequint.com

(This is part one of a two-part series on whether India should participate in the BRICS Summit due in September.)

In the run-up to the summit of leaders in Xiamen, the Chinese Academy of Governance and the China International Publishing Group organised the BRICS Seminar on governance in the enchanting city of Quanzhou, about 100 kms away from Xiamen, in Fujian province.

Emergence of BRICS-Plus

Apart from BRICS members, China invited participants from 16 other countries ─ including countries such as Chile, Guinea, Tajikistan, Kazakhstan, Ethiopia, Tanzania and Egypt that do not even figure in the Next Eleven.

Speakers from these countries supported the idea of expanding BRICS, and making it an effective platform for voicing the needs, demands and aspirations of both the developing as well as the underdeveloped nations in the world. BRICS-Plus, they affirmed, would enable the organisation to play a more decisive role in global governance.

More strikingly, all of them praised China's Belt and Road Initiative (BRI), saying it would usher in a new age of globalisation, more inclusive, more democratic and win-win for all.

Building 'Strategic Mutual Trust'

The seminar paid little attention to the ongoing India-China military stand-off. Obviously, the Chinese hosts did not want a divisive bilateral issue to get any kind of focus in the midst of deliberations at a BRICS seminar. However, I raised it explicitly by saying there is an urgent need to peacefully resolve current crisis between India and China at Doklam.

"I said the very credibility of BRICS would be called into question if our two countries allowed the dispute to be escalated into an armed conflict."

I stressed the crucial need for "an early and amicable resolution of this crisis because peace and friendship between India and China is very precious for our two countries, for all the neighbouring countries in Asia, and of course for the entire world".

I further said: "I hope and pray that the leaders of our two great nations, Prime Minister Narendra Modi and President Xi Jinping, choose to be guided by the Asian wisdom – the wisdom of our two ancient civilisations – and find a non-military solution to the current crisis."

To achieve this goal, I stated that the two strong-willed leaders should develop "strategic mutual trust" so that such crises never erupt again between the two countries.

I made two other points, reiterating what I had said at the Belt and Road Summit in Beijing. First, India should join China BRI as an equal partner ─ I underscored the caveat "as an equal partner".

Jointly with other participating nations, India and China should make BRI (also known as the One Belt One Road or OBOR initiative, a short hand for a massive infrastructure-economic-cultural connectivity project linking Asia, Africa, Europe and beyond) truly democratic, inclusive, consultative and participative with win-win benefits for all.

Second, as part of joining BRI, India should not only support the China-Pakistan Economic Corridor (CPEC) but suggest its extension to India, Afghanistan and Iran.

Moreover, India and China should cooperate in early implementation of the Bangladesh-China-India-Myanmar (BCIM) Corridor, and interlink it with the CPEC and thus create a grand South Asian Economic Corridor (SAEC).

It would be history's greatest project to economically integrate South Asia. "This will lift the largest number of poor people in the world out of poverty and underdevelopment," I said.

To my surprise, Chinese participants in the seminar warmly welcomed both the idea of a peaceful resolution of the Doklam crisis in light of the "Asian Wisdom" and also the proposal for India-China-Pakistan cooperation to change the destiny of South Asia.

As acronyms go, BRICS is both an apt and ominous name for the transcontinental five-nation platform comprising Brazil, Russia, India, China and South Africa.

Apt because BRICS, which rhymes with bricks, suggests the group can be the building block for a new influential structure of developing countries challenging the domination of the developed West in the post-World War II world order. Ominous because bricks, if weakly made, are vulnerable to breaking.

BRICS in its very name carries the possibility of its fragmentation. The possibility does exist because of the absence of strong internal cohesion within the group. Perhaps the most manifest source of brittleness of BRICS is the current deepening mistrust between India and China, which even carries the seeds of an armed conflict over the prolonged military stand-off at Doklam.

There is already intense speculation, both in India and China, over whether Prime Minister Narendra Modi will attend the ninth BRICS Summit, scheduled to be held in Xiamen, in China's Fujian province, from September 3-5.

It is being said he might skip the summit and send a junior representative. If the situation near the India-Bhutan-China trijunction, or elsewhere along the long India-China border, worsens in the coming days, there is even the likelihood of India boycotting the BRICS summit.

An Indian boycott, or low-level representation at the BRICS summit, will certainly annoy China, which is hosting it for the first time under the leadership of President Xi Jinping.

Xiamen, on south-eastern coast of China overlooking Taiwan, has a special significance for Xi since this is where he first made his mark as a super-effective leader, becoming the city's deputy mayor in 1985. Thereafter, until 2002, he spent seventeen years in Fujian in various positions in the Communist Party.

India's Absence Will Hit BRICS

India's boycott and open criticism of the ambitious Belt and Road global summit Xi had hosted in Beijing in May this year has already added considerable bitterness to India-China ties.

Modi's no-show at the BRICS meet in Xiamen would not only further embitter the Chinese leadership, but also place a question mark over the group's future itself.

Thus, BRICS faces an existential question as it approaches the second decade of its existence (it was established in 2009 as BRIC; South Africa became its fifth member in 2010). Will it survive, and how long will it survive, in its present form as an exclusive five-member group?

Why PM Modi Should Attend BRICS Summit

• Boycotting the BRICS summit or low-level representation will certainly annoy China which is hosting the meet for the first time.
• India's hostility towards BRICS stems from that fact that Pakistan could be an entrant into BRICS-Plus with the support of Russia, Brazil, and South Africa.
• Opposing China on BRICS-Plus policy doesn't bode well with India and Pakistan being inducted into SCO recently.
• By opposing BRICS-Plus in order to isolate Pakistan, India faces the danger of isolating itself from developing countries.
• Even Russia may not support India on the issue of boycotting BRICS.

Xi's Dream of BRICS Completing Golden Decade

Ironically, the likelihood of a Modi-minus BRICS summit has surfaced at a time when President Xi Jinping has been actively working on the idea of BRICS-Plus.

Addressing a meeting of the foreign ministers of the five member-nations in Beijing in June this year ─ significantly, India was represented not by Sushma Swaraj, minister of external affairs, but by her deputy VK Singh ─ Xi confidently said, "China is ready to shoulder the important mission of opening up of the second decade of BRICS cooperation. China is ready for discussion on BRICS-Plus cooperation pattern and forms."

His confidence was also evident when he refuted the critics' observation that the group's internal difficulties have "faded its colour" in the first ten years of its existence.
He asserted that BRICS is indeed headed for a "new golden decade".

China's Foreign Minister Wang Yi has also reiterated the idea of BRICS-Plus, saying China would "hold outreach dialogues with other major developing countries and establish extensive partnerships and widen our circle of friends to turn BRICS into the most impactful platform for South-South cooperation."

Apprehensions on Pakistan's Entry

India has rarely expressed such confidence about BRICS' future. If anything, India's leaders and influential strategic experts see BRICS increasingly as a China-centric and China-dominated platform.

Moreover, they are highly inimical to the idea of BRICS-Plus because Pakistan is one of the new countries China seeks to include in the group, with the support of Russia, Brazil and South Africa.

In addition to Pakistan, China would also like to see other major developing countries and emerging economies from different continents such as South Korea, Indonesia, Vietnam, Turkey, Iran, Bangladesh and the Philippines (from Asia), Nigeria and Egypt (from Africa) and Mexico (from Latin America).

One does not have to be partial to China to recognise that the entry of these potential new members into BRICS ─ which are collectively described as the Next Eleven, given the large size of their populations and their highly promising growth prospects ─ will make the organisation more representative of the aspirations of developing countries.

However, the mere fact that Pakistan could be one of the new entrants into BRICS-Plus is making the right-wingers in India see red. They also see several others in the Next Eleven to be pro-China.
All in all, they view BRICS-Plus as a way of decreasing India's standing in the organisation and, simultaneously, increasing China's position and clout in it.

PM Wrongly Advised on Belt and Road Summit

Prime Minister Modi was wrongly advised by his team of advisors into boycotting the Belt and Road summit in Beijing and criticising a super-ambitious Chinese project that is gaining growing support globally.

In the context of BRICS, I hope he is not once again wrongly advised into boycotting the upcoming Xiamen summit and opposing the concept of BRICS-Plus.

There is simply no basis for opposing China on BRICS-Plus because, just two months ago, the Shanghai Cooperation Organisation (SCO) became SCO-Plus by inducting, at its summit in Astana, both India and Pakistan as its newest members. It showed the hollowness of the Modi government's claim of "isolating Pakistan globally".

India and China are already together in both the New Development Bank (also known as the BRICS Development Bank, which is headed by KV Kamath, a renowned Indian banker) and the Asian Infrastructure Investment Bank (AIIB), in which India is the second-largest shareholder.

India, along with China, is also an influential member of G-20 ─ which itself is a creation of the expansion of G-7 (a group of seven western powers plus Japan). Here, Modi should know that just as G-20 has come to matter far more than G-7, similarly BRICS-Plus will also soon become far more influential than G-7, thus ending the global domination of the West and announcing the emergence of a truly multipolar world order.

India's Self-Isolation

By opposing BRICS-Plus in order to isolate Pakistan, India faces the danger of isolating itself from a large number of developing countries. Even Russia, India's longstanding friend, will surely not support the Modi government on this issue.

Of course, there are some differences among BRICS members and its potential new entrants over how to change the global order, how to reform the United Nations, UNSC World Bank and IMF, and how to reorient the global-regional trade and investment arrangements.

There are also legitimate differences over BRICS itself. But these differences cannot justify India's myopic self-isolation by moving away from the BRICS platform ─ or by trying to create a parallel such platform. Just as the Modi government's ill-advised idea of creating a SAARC minus Pakistan is a complete non-starter, any idea of creating a BRICS minus China would be silly.

China's rise is a reality India has to reckon with, just as India's progress is a reality China has to deal with. Our two great nations have to live together and work together. There is simply no alternative other than accepting this fundamental truth of our times. As a first step in accepting this truth, Modi and Xi Jinping should urgently find ways of resolving the Doklam crisis peacefully. But let's make no mistake: finding ways of achieving this goal will become far more difficult if Prime Minister Modi chooses not to attend the BRICS summit in Xiamen next month.

India
Author: Atmaja Gohain Baruah
Source: dailypioneer.com

Keeping in mind BRICS' history of overcoming geographical, social, political and institutional barriers for the benefit of its members, it is imperative for the member states to ensure that stand-offs do not spill into other avenues of cooperation, especially when the future looks foggy

The ninth BRICS Summit, to be held under theme "BRICS: Stronger Partnership for a Brighter Future" at Fujian, Xiamen, from September 3 to September 5, 2017, is coming at a rather interesting time. While China and India are engaged in a bitter border standoff, Russia is pitted against the US and Brazil is caught in its own political turmoil.

On a brighter note, majority of the five economies are growing rapidly, three of the five leaders are at their strongest selves and can easily take advantage of the geopolitical currents tilting to their side. Like the Chinese translation of BRICS goes "gold-bricks countries", these countries constitute over 23 per cent of the global economy, contributing to over half of last year's global growth.

However, with the demise of the Trans-Pacific Partnership (TPP), the withdrawal of the US from the Paris Agreement, and Brexit, the conditions look much favourable for the BRICS countries under China's command this year. In fact, the Chinese vision of global governance is very much at the forefront. It is seeking active participation in instituting a multi-polar world order by challenging previous global financial institutions and setting up new, more inclusive ones. The Silk Road Fund, the BRICS-led New Development Bank (NDB), and the Asian Infrastructure Investment Bank (AIIB) are good exemplars. Moreover, China in an attempt to make BRICS more inclusive has been toying with the idea of creating a "BRICS Plus" institutional mechanism. According to the Chinese Foreign Affairs Minister Wang Yi, it would be a network of congenial alliances which would not only represent major developing countries but also improve their footing in globalisation.

It is being assumed that China is leaving no stones unturned in exercising its presidency over BRICS. Recently it organised a range of meetings covering most of the aspects of global governance. Beginning from the BRICS Sherpa meeting held in Qingdao in June, to Trade Ministers meeting in Shanghai, a BRICS Seminar on Governance in Quanzhou, and a BRICS Security Meeting in Beijing, it is perseverantly facilitating a new era of governance. By actively supporting a multilateral trade system, strengthening collaborations in financial affairs, boosting national security, and shoring up all-inclusive development, it can be seen as ushering in a world order drastically different from what existed a couple of decades ago.

There can be several reasons behind China's tenaciousness. First, stemming from the grudge that the West has always neglected China, there is an inherent feeling among Chinese that now with their high economic rise, it is time the structure of global governance is reconfigured. So, their focus has shifted to advancing their international status in such a way that their previous glory of being a Middle Kingdom is rightfully reinstated. In this regard, Chinese President Xi Jinping has sent letters to all his BRICS counterparts stating four key ideas that should find a place in the upcoming BRICS Summit. Those include advancing cooperation for growth and prosperity, enhancing global financial governance, engaging in more social, cultural and people-to-people contact, and finally, investing more in infrastructural build-up. The countries have already taken a pledge to fortify their partnership so as to give a solid ground to their second "golden decade of cooperation". Although the previous BRICS meetings witnessed several new initiatives, the same have not succeeded in bringing about high inter-BRICS trade and investment as expected. This year their total trade constituted only about 4.9 per cent of their overall foreign trade. Therefore, setting up a more integrated system of global trade and investment will actually act like a beacon of mutual benefit and prosperity.

For the BRICS countries, their economic needs have always come first. Looking at the future, it can be safely argued that implementation of the BRICS Economic Partnership under the framework of BRICS Roadmap for Trade, Economic and Investment Cooperation by 2020 is going to be the main priority. Institutions like the Contact Group on Economic and Trade Issues, NDB, Business Council and inter-bank cooperation are enhancing exchanges in technology, e-commerce, industrial cooperation, and setting up of small and medium enterprises (MSMEs). Assessment of these ventures clearly indicates that despite prevailing risks, BRICS and other Emerging Markets and Developing Countries (EMDCs) are paving the way for a new era of globalisation.

Recently the brainchild of this association, the NDB formed a new African Regional Centre as part of its South-South Cooperation. Formed with the mind-set of being an alternative development model to the World Bank, the NDB finances infrastructure projects of developing countries and fuels their sustainable development projects. In fact, this year the bank has sanctioned around $3 billion loans for ten miscellaneous projects, and is going to invest $8 billion more for thirty-five more projects till 2018. All these ventures — like extending membership to a dozen other countries and forming Regional Centres — have a commonality: they all fit very conveniently into China's narrative of engaging in a peaceful and participatory rise, beneficial not just for Asia as a whole but the whole world community. Though the other members are exercising caution before espousing the new ideas, there are high chances that actually doing so might impair decision-making and dilute the statuses of the existing members.

Furthermore, there is a strong possibility that these matters are going to be overshadowed by certain issues rather sensitive to two of the biggest economies of the association, China and India. Currently, the tension between them is seen by many as a deterring factor in the success of the coming summit. While both are engaged in rhetorics to pull back their troops, the forthcoming 19th National Congress of the Communist Party of China is also putting a lot of strain on Jinping. Tensions are high and the only seemingly meaningful tactic in this regard is to compartmentalise the border issue and the functioning of BRICS.

Another important area of focus, mostly forwarded by India, is terrorism. Though all the countries have adopted a "comprehensive approach" in combating it, they have varying degrees of interest at the bilateral level. Yet again China has gone against India by extending its technical hold by three more months on the United Nations' proposal to decree Pakistan's Jaish-e-Mohammad chief Masood Azhar as a terrorist. The last hold was in February and if China had not objected this time, Azhar would have been directly labelled a terrorist. This move is pretty ironical, especially when Jinping had just applauded India for its counter-terror activities in the informal BRICS gathering in Germany this year. China can in this sense increase its standing through actions and not mere slogans.

So at the coming BRICS summit it will be imperative for all the leaders to arrive at a way to diffuse the tension and ensure that the effect of the border standoff does not spill into other avenues of cooperation. The diplomatic ties based on economic and security cooperation should be revisited to ensure full collaboration. BRICS has a history of overcoming geographical, social, political and institutional barriers by including and benefiting all those involved. The spirit of it should not be forgotten, especially when the future looks foggy. The win-win spirit should be kept alive for the rightly termed second "golden decade of cooperation".

(The writer is associated with the East Asia Centre of the Institute for Defence Studies and Analyses (IDSA), New Delhi)

China
Author: Wu Yiyao
Source: usa.chinadaily.com.cn

The Board of Governors of the New Development Bank, formed by the ministers of finance of the BRICS nations, intends to approve at least $32 billion in loans by 2021, according to the bank's general strategy for 2017-21.

Paulo Nogueira Batista, vice-president and chief risk officer of the NDB, said that the loans include a number of projects growing from 15 in 2017 to 50 in 2021.

"In a more ambitious scenario, the NDB may approve around $45 billion in this period, reaching 75 projects in 2021. This is an already significant volume for a bank that will have completed only six years at end of the period covered by the strategy of the bank," said Batista.

The NDB was founded by Brazil, Russia, India, China and South Africa - the BRICS countries - during the fifth BRICS Summit in Fortaleza, Brazil, in July 2014, and was launched in 2015.

The NDB issued a three-billion-yuan ($449.8 million) green financial bond last year. So far, it has approved seven projects in BRICS countries.

The central idea behind these plans is that the bank is in the process of creating a new multilateral institution, according to Batista.

"People may ask what is new about the New Development Bank. One of the most important aspects is the focus on sustainable infrastructure development," he said.

Around two-third of the loans the NDB will take to its board for approval in the period from 2017 to 2021 will be for sustainable infrastructure development. This is the key target of the bank's strategy.

According to the NDB, sustainable infrastructure incorporates sustainability criteria from design to operation, not only economic and financial, but also social and environmental.

Even in traditional infrastructure projects, the NDB will apply social and environmental requirements to control adverse negative effects on social groups and the environment.

In the case of sustainable infrastructure, however, the difference is that the projects supported by the NDB will go beyond mere mitigation of side effects.

The key objective of sustainable infrastructure will be to generate positive impacts in social and environmental terms, said Batista.

"For that purpose, the bank will concentrate its efforts in sectors such as renewable energy - for example, solar, wind and small hydro electrical plants - energy efficiency, clean transportation, urban mobility, sanitation, and water and waste management," he said.

The NDB intends to establish a new relationship of equality, mutual respect and trust between the bank and member countries. In addition, it intends to be fast, flexible and efficient by designing a more streamlined project review and implementation oversight without unnecessary bureaucracy.

"Our first issuance in the market was already a green bond, meaning that the resources thus raised must necessarily be allocated to projects considered green by international standards. NDB's strategy points out that the bank will continue to explore opportunities to mobilize funds through green bonds and other financing mechanisms linked to the protection of the environment," Batista added.

The NDB was established by BRICS countries to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.

The Africa Regional Centre of the New Development Bank was launched on Aug 17 in South Africa. According to South African President Jacob Zuma, the launch of the ARC of NDB is "a historic occasion as it marks the strengthening of the BRICS formation and also underlines the BRICS commitment to the development of the African continent and emerging markets".

NDB obtained a domestic AAA credit rating with a stable outlook in China from China Cheng Xin International Credit Rating Co Ltd, and Lianhe Credit Rating Co Ltd, two of the leading domestic rating agencies.

According to CCXI and Lianhe Credit Rating Co, the main credit strengths of the NDB include "strong support from its founding members given NDB's political and economic importance, a high level of paid-in capital and its timely infusion, great potential for future business growth in developing countries and emerging markets, and a sophisticated governance structure and risk management system".

China
Source: www.chinadaily.com.cn

PETROZAVODSK, Russia － The Republic of Karelia in Russia's northwest and Fujian province in East China plan to boost trade during the upcoming BRICS Summit.

"The preparation for the establishment of a friendly and cooperative partnership between the two sides has entered the final stage," said Artur Parfyonchikov, acting head of the Republic of Karelia.

"Hopefully, we will sign the agreement during the BRICS Summit and start to carry out joint projects as soon as possible," he added.

The BRICS Summit in Fujian's resort city of Xiamen will be held early next month. Plans for expanding cooperation between Karelia and Fujian are based on their multiple similarities, Parfyonchikov pointed out.

Economically, both regions boast rich resources in forestry, mining and other fields, and enjoy similar priorities in their respective country's national economic policy.

Joint projects in non-traditional industries, including automation machinery, information technology, culture and education, are also being explored by the two jurisdictions.

In addition, Parfyonchikov underlined why Karelia has a great advantage in attracting foreign investment and tourists.

He highlighted its railway, maritime and other transportation infrastructure, which efficiently connects the region to major cities such as Moscow, St Petersburg and Murmansk, as well as neighboring Finland.

At present, Karelia is in talks with Chinese authorities to develop tourism projects and routes, according to Parfyonchikov.

He also mentioned the 50 megawatt Beloporozhskaya hydropower plants in Karelia launched last year.

They were the first in Russia financed by the BRICS-led New Development Bank, a multilateral development bank headquartered in Shanghai, and set an example for pragmatic cooperation within the BRICS framework.

"Construction of the hydropower plants is of great benefit to the local economy, and helps to boost employment as the workers involved in the construction of the project are mainly from the local community," he said.

Parfyonchikov expressed confidence about the future for BRICS countries, saying the organization was an efficient platform for dialogue and consultation.

"Karelia's hydropower stations project is a manifestation of the outcome of the BRICS Summit," he said.

"I believe the ninth summit will enable us to take a further step ahead and open a new chapter in promoting cooperation among the BRICS countries," he added.

USA
Source: theinfographicsshow.com

Are we currently on the brink of seeing a shift towards new global superpowers? If we look at the power wielded by any nation right now, the United States could be said to be in a globally dominant position. Before it, Great Britain and its empire was the dominant global force, and prior to that there is a long line of countries that have at one time sat at the apex of the global economy, culture, science, and military strength. Great nations may also decline, a concept known as declinism, while simultaneously other nations are busy evolving into powerful states. For a number of years now, a handful of nations have been developing at a rapid pace, and today we'll compare them with the mighty USA, in this episode of the Infographics Show, the USA vs. BRICS.

BRICS is an acronym standing for the five countries it represents: Brazil, Russia, India, China and South Africa. The acronym at first was just BRIC, until South Africa made an appearance in the association in 2010. BRIC was formally started in 2006 when the first BRIC meeting was held, under the aegis of a mutual agreement to boost each member country's development. Not only developments relating to economy, business and trade, but also education, agriculture, health, technology, science and the arts.

Together BRICS is a powerful conglomerate, accounting for 42.58 percent of the world's population and according to the International Monetary Fund, about 22 percent of the world GDP. Compared to the United States, in terms of size alone, it's Goliath staring down at David. If we look at the numbers, BRICS has a combined population of about 3.6 billion people. The USA has a population of just 325 million people. The U.S. GDP is the biggest in the world at 18 trillion-plus dollars, although BRICS combined has a GDP of 37 trillion dollars. The U.S. is not expected to make any headway on BRICS any time soon regarding economic growth, with its estimated growth to be around 2 percent over the next few years. BRICS is expected to see growth of around 5 percent. In an article in the Atlantic published in 2012, Goldman Sachs projected that China's GDP alone would be equal to America's by 2027, and then leap past it. In regard to economy, BRICS nations are ascending quickly. This growth, it's believed, will lead to much stronger militaries, especially those of China and India.

Right now, the U.S. spends more on its military than any other nation, with a defense budget of 639 billion dollars for 2018. It's such a large budget, that even 5 emerging nations' defense budgets together don't exceed it. According to the Global Firepower index, Brazil's military budget is currently 24.5 billion dollars, Russia's is 44.6 billion, India's is 51 billion, China's is 161.7 billion and South Africa's is 4.6 billion. Combined, BRICS countries have a defense budget of 286.4 billion dollars. This is even more astonishing when you consider that China and India are both in the top countries for highest military expenditures.

In terms of feet on the ground, you probably already know the U.S. is severely outmanned. The U.S. has 1.3 million active military personnel, and a further 811,000 acting as reserve personnel. China alone has 4.6 million total personnel, India 3.4 million, Russia 3.2 million, Brazil 2.1 million, and South Africa 106,000. In total, that is almost 13.5 million people ready to fight.

Workforce aside, the USA still spends more than all these other countries. So where does the money go? In terms of land equipment, the USA has around 5,884 tanks, 41,000 armored fighting vehicles, 1,934 self-propelled guns, 1,299 towed artillery, and 1,331 multiple-launch rocket systems. Most of this equipment is the latest in military innovations, with the U.S. continually developing more advanced war machines such as its latest battle tank, the M1A2 SEP v4.

Russia and China, the two strongest of the BRICS militaries, alone make a formidable force on the ground. If the two nations were to form a military duo, they'd have over 24,000 main battles tanks, over 35,000 armored fighting vehicles, almost 8,000 self-propelled guns, over 12,000 towed artillery and over 5,000 multiple launch rocket systems. As well as having strong fleets of tanks, the two countries are currently developing two new tanks that are rated as highly as the new M1A2, in China's VT-4 and Russia's T-14 Armata.

India also has some modern land equipment, and is currently investing billions of its new money into thousands of pieces of new artillery. This will include a fleet of Arjun MK-II third-generation battle tanks. Brazil has modern weapons, much of which was bought from the USA, the world's biggest arms exporter. It's most extolled land weapon is its almost 400-strong fleet of German-made Leopard 1 tanks that it acquired in 2006.

If the USA can't compete on the ground, it certainly can in the air. The United States air force is by far the most advanced in the world. The number of modern aircraft alone in the U.S. air force can match a number of leading nations put together. This can be credited to the U.S. air force having a bigger budget than any other nation's entire military budget. From its 13,444 aircrafts, the U.S. can choose from a number of some of the world's most advanced machines. This includes almost a thousand F-16 Fighting Falcons, 195 F-22A Raptors, 257 F-15E Strike Eagles, a large fleet of McDonnell Douglas CF-18 Hornets and F/A-18E Super Hornets, as well as its new pride of the skies, a fleet of F-35A Lightning IIs.

As we said, no air force comes close to this, but Russia, India and China have highly rated equipment and are often part of lists containing what is said to be the world's best air forces. It's worth noting that the latter two countries are investing heavily in aerial military developments. Russia's most advanced aircraft is it's highly rated Sukhoi Su-35, followed by its Sukhoi Su-27s and MiG-31 interceptors, all of which are part of a fleet of 3,000 aircraft. That's why Russia usually follows the U.S. on the most powerful list.

India also has a considerable cache of aircraft, including Russian-made Sukhoi Su-30MKIs and Mikoyan MiG-29s, as well as the respected French-built multi-role fighter, the Dassault Mirage 2000. China is perhaps playing catch-up, but it's doing a good job. Its fleet consists of Russia's Su-35s and Su-27s but the country is also looking to match America's F-35 with its own Chengdu J-20 stealth fighter. Brazil's most modern aircraft, the Saab JAS 39 Gripen multirole fighter, is another top ten aerial fighting machine. Currently the South African air force has nothing that compares to its BRICS partners.

As we take to the seas, again the United States spends as much on its navy – about 170 billion dollars – as other countries could only hope to spend on all military branches. Much of this money goes on infrastructure, operations and maintenance, personnel, research and development, as well as acquiring new ships. The USA currently leads the world in terms of aircraft carriers, owning 11 of them. It's currently developing the Gerald R. Ford class super-carrier, which should help bolster the navy's position as a global leader. These ships are of great importance as they are in effect floating militaries. The U.S. also has 22 cruisers, 67 destroyers, 8 frigates, 75 submarines, 0 corvettes, 9 amphibious assault ships, 11 mine warfare ships and 55 patrol ships.

According to National Interest, the USA and the UK will be followed by three countries as the most powerful navies in the near future. You guessed it, those countries are China, India and Russia. While Russia is to be expected, both India and China have been pouring money into their respective navies. Pundits believe that by 2030, India will have the second largest navy in the world, and will also have its own supercarrier. It currently has one aircraft carrier, 0 cruisers, 11 destroyers, 14 frigates, 15 submarines, 23 corvettes, 0 amphibious assault ships, 7 mine warfare ships and 72 patrol ships. China is on track to have the largest fleet come 2030, and is close to finishing its secret supercarrier, the CV-18. Russia's greatest threat is its large fleet of 60 submarines, some carrying devastating ballistic missiles. Again, both Brazil and South Africa are not regarded as having strong navies in terms of global power, but together the former triumvirate of BRICS navies would be dominant if they were all on the same side.

As we come to the end of this episode we must mention nuclear capabilities. The U.S. and Russia own around half of all the nuclear weapons in the world, with China's small arsenal of around 260 non-deployed weapons being a matter of speculation in terms of numbers. India is said to have around 120 warheads, and is believed to be working on increasing its nuclear arsenal. Brazil and South Africa have no nuclear weapons.

So, do you think the US would stand a chance against BRICS, or would it be a total wipeout? Let us know in the comments!

China
Source: www.chinadaily.com.cn

BEIJING - China's foreign trade is likely to swing back to full-year growth in 2017 on back of strong first-half momentum and strengthened cooperation with trade partners.

Analysts believe a recovery in global demand and the upcoming BRICS summit will inject a boost to trade growth for the rest of the year.

China's foreign trade in the first seven months totaled 15.46 trillion yuan, up 18.5 percent year on year. The economy saw a 7 percent dip in foreign trade volume in 2015 and a 0.9 percent decline in 2016, due to sluggish overseas demand.

In the first seven months, exports increased 14.4 percent year on year, while imports rose 24 percent, resulting in a 14.5 percent decline in the trade surplus.

"As most of the world's major economies started to recover this year, clearly trade demand is improving," said Lian Ping, chief economist with the Bank of Communications.

In its flagship Global Economic Prospects report in June, the World Bank said it expected a recovery in global trade growth to 4 percent in 2017 after a post-crisis low of 2.5 percent last year.

Trade activities with its BRICS partners have particularly supported China's trade growth this year, as cooperation between the five developing countries are expanding at a strong pace.

Leaders of the five economies (Brazil, Russia, India, China and South Africa), which contributed more than half of global growth in 2016, will meet in China early next month for the 9th BRICS Summit.

Bai Guangyu, an expert with the Ministry of Commerce on foreign trade, said China's ongoing economic structural improvement had provided room for further trade and investment cooperation between BRICS members.

From January to July this year, China's trade volume with Brazil, Russia, India and South Africa jumped more than 20 percent year on year.

In Fujian, the southeastern Chinese province that will host the upcoming BRICS summit in a few weeks, trade with BRICS countries soared 67.7 percent to 49.42 billion yuan ($7.42 billion) in the first half.

At a meeting in Shanghai earlier this month, BRICS trade ministers reached agreement on a number of issues, including e-commerce cooperation, service trade plans, the need for policy transparency and improved efficiency.

South African Minister of Trade and Industry Rob Davies said he was impressed by the decision to enhance e-commerce cooperation and hoped that Chinese consumers could enjoy more special products from his country, such as grapefruit and red wine.

Thanks to ever-growing e-commerce cooperation and imports expansion, products from BRICS countries, such as Brazilian pine nuts, Russian candy and Indian handcrafts, are now only one click away for Chinese consumers.

BRICS trade officials also expressed interest in the China International Import Expo, an event that will start 2018 and increase foreign imports to China.

Looking ahead, despite uncertainties such as the growing protectionism that could pare trade growth for the rest of this year, economists are confident in the full-year picture.

With extensive trade cooperation with BRICS members and stable global economic growth, the recovering trend in China's foreign trade is likely to continue into the second half, and performance for the entire-year will be in much better condition than the previous two years, according to Bai.

United Kingdom
Author: John Ross
Source: themarketmogul.com

It is frequently underestimated just how dependent world economic growth is on only a few countries. Strikingly, on the IMF's latest projections, the majority of world economic growth in the next five years will come from only three countries – China, the US and India. Collectively these will account for 54% of world growth at current exchange rates and 52% measured in purchasing power parities (PPPs).

This reflects the reality of the extreme concentration of the world economy in only a few states.

• In 2016, at current exchange rates, a mere five economies accounted for 54% of world GDP and 20 economies for over 80% of world GDP.
• Measured in PPPs the concentration of the world economy is only fractionally less – the top five economies accounted for 48% of world GDP and 20 economies for 76%.

Therefore, even extremely rapid growth in a country outside the small group of largest economies, while it will produce desirable increases in living standards for that country's inhabitants, it will not substantially affect global growth.

Given the domination of global development by a small number of large economies the members of two economic groupings which meet at summit level, the G7 and BRICS, will dominate world growth in the next five years.

• BRICS (the original Brazil, Russia, India, China grouping has now has invited South Africa to join) – which is the most important grouping of developing economies.

• The G7 is the most important grouping of advanced economies.

China Remains the Biggest Growth Locomotive

Even within this framework, China will continue to be the single most decisive factor in world growth – while contrary to some assertions that the BRICS concept is no longer relevant BRICS will be a larger factor in world growth than the G7. To show this reality Table 1 sets out the percentages of world growth over the next five years that can be calculated from the IMF's projections.

No matter how measured China will continue to be the largest source of world growth. Measured in PPPs its lead over the US will be huge – China accounting for 27% of world growth compared to the US 11%.

The data also shows that the role of the BRICS economies is more important for world growth than the G7.

• Measured at current exchange rates, IMF projections show BRICS economies will account for 38% of world growth during 2016-2011 – compared to 30% for the G7.
• In PPPs, the BRICS economies will account for 45% of world growth compared to the G7's 20%.

Therefore, no matter how measured, the BRICS economies are a more powerful locomotive of world growth than the G7.

Misunderstandings on BRICS

Given the dominance of world growth by BRICS, above all China and India, why has the false idea arisen in some media that BRICS was no longer relevant? It was due to a misunderstanding – an assumption the BRICS economies were important because they were rapidly growing, whereas their true importance was that they were extremely large.

Various commentators, wrongly believing that the global impact of Jim O'Neill's term BRICS was merely an example of skill in coining a good name, made attempts to popularize other groups of economies. For example, Fidelity Investment promoted MINT (Mexico, Indonesia, Nigeria, and Turkey). But no other proposed grouping achieved major recognition, for reasons which become clear when the real significance of the BRICS is understood.

Whether other developing economies grow rapidly or not, and whether or not they represent good opportunities to secure financial returns, the reality is they are too small to decisively affect the course of the global economy. For example, in the next five years, even measured in PPPs, the MINT economies on IMF projections will account for only 6.4% of world growth compared to 44.5% for BRICS. Only one economy outside either the G7 or BRICS, Indonesia, will account for more than two percent of world growth.

Size not Speed

That it is size of the BRICS economies which is decisive is even clearer if it is noted that, with the exception of China and India, neither BRICS nor the G7 includes the world's most rapidly growing economies – see Table 2. Of the 192 countries for which the IMF makes growth projections then, leaving aside China and India, the other G7 and BRICS countries rank between 143rd and 182nd of the world's most rapidly growing economies. But nevertheless, due to their size, the decisive role of the BRICS & G7 combined within the global economy may be seen by their combined accounting for nearly two-thirds of world growth measured in PPPs.

Conclusion

In summary, it's vital not to confuse money making opportunities in small countries with their role in the world economy: size matters. In the next five years global economic growth will continue to be solidly dominated by the G7 and BRICS – above all China.

China
Author: Swaran Singh
Source: europe.chinadaily.com.cn

Recent uncertainties and relative deceleration of growth in BRICS states may have cast a doubt on the group's potential to transform the global governance structure. Yet experts agree that it is still the most powerful locomotive for strengthening South-South cooperation.

Questions have also been raised about whether rapidly growing economies such as China and India and their expanding foreign investments, especially the China-proposed Belt and Road Initiative, would undermine the puritan dictum of South-South cooperation that propagates "de-linking" less-developed economies from the exploitative global North. Even the expanding foreign aid from China and India has been questioned, as many fear it might compromise democratic and human rights in developing countries, because the aid comes with no strings attached.

Since China and India are also investing in advanced industrialized countries, will their actions dilute BRICS' commitment to South-South cooperation?

If anything, BRICS states are widely recognized today for their inflecting economic reforms and restructuring, which have resulted in policy innovations guiding their inclusive development and poverty eradication initiatives, and providing inspiring examples for developing and less-developed countries.

The South-South cooperation paradigm evolved in the late 1960s. Recognizing the subservient nature of their relations with the advanced economies, many scholars suggested that less-developed countries "de-link" from the North as a way to forge stronger economic ties among developing countries.

BRICS today presents a success story of that original paradigm. In purchasing power parity terms, BRICS accounts for more than 30 percent of the global GDP and accounts for more than half of global growth, which have given the group power to influence global trends and trajectories. Grounded in the South-South cooperation paradigm, intra-BRICS trade, as percentage of their total foreign trade, doubled from 6 percent to 12 percent between 2001 and 2015. And BRICS states have taken a common stance at various international forums on trade, services, investment and e-commerce, as well as at rule-making world bodies.

The outlook on BRICS states' further integration remains promising given the establishment of the New Development Bank and the BRICS Contingent Reserve Arrangement, which have already started financing projects in various developing countries. Symbolizing BRICS macro-policy coordination, they have enhanced BRICS' leading role in South-South cooperation. Besides, the NDB and the Asian Infrastructure Investment Bank have already prompted the Bretton Woods financial institutions to implement reforms, in order to give developing countries greater say. And BRICS states' mini-summits on the sidelines of G20 gatherings have offered new ways to democratize the global governance structure and process.

Indeed, enterprises based in BRICS states have established a unique culture of investment, technology sharing and market management, which is totally different from the patron-client model of the multinationals from the industrialized North. At the BRICS seminar on governance in Quanzhou, East China's Fujian province, last week, which I attended, China International Publishing Group signed a series of cooperation agreements with various publishers from the other four BRICS states, and its vice-president Wang Gangyi urged all sides to make concerted efforts to engage in substantial research and advice "to promote BRICS to become a new leading platform for South-South cooperation".

BRICS has especially benefited from the economic buoyancy of China and India, as well as the continued sluggishness in the economies of the global North. China and India have emerged as major investors in infrastructure construction, information and communications technologies and energy. Here, BRICS provides them a with unique forum to coordinate their perspectives to maximize benefits.

BRICS represents a strong source of empowerment and inspiration for most developing countries. Given this fact, the idea of inviting several developing countries to the upcoming BRICS Summit in Xiamen, Fujian province, and forging new partnerships under the "BRICS Plus" arrangement holds the promise of making BRICS a stronger platform for South-South cooperation.

China
Author: Enrique Dussel
Source: en.people.cn

A decade has passed since Foreign Ministers from China, Russia, India and Brazil held their first meeting during the UN General Assembly in September 2006. The event is of symbolic significance for the BRICS cooperation mechanism.

The whole world expects further cooperation among BRICS members. Developing countries, including Mexico in particular, have hailed the China-proposed modality known as "BRICS plus," in hopes that it could turn into a new platform for South-South cooperation.

BRICS members such as Brazil and Russia have recently encountered economic and social challenges, given sluggish global economic growth and other difficulties. But China stood out with a satisfactory growth.

Under China's guidance, the BRICS mechanism has already set an example for South-South cooperation.

Economic, social and cultural differences among developing countries pose as a major challenge to South-South cooperation, leading to a diversity of development paths.

BRICS cooperation, 10 years after its establishment, has presented a satisfactory report card. The economic aggregate of BRICS countries now accounts for 23% of the world's total, up from 12% ten years ago. They also contribute 50% to world economic growth.

As leaders of developing nations, BRICS members enjoy huge development potentials. Faced with the rising tide of isolationism and protectionism in the developed world, BRICS countries shoulder greater responsibilities.

Against such a backdrop, it is more urgent and important to find a way of injecting new impetus to world economic growth, how to make sustainable and long-term plans, how to reinforce international cooperation and how to further promote economic globalization.

Under China guidance, BRICS cooperation has expanded to multiple sectors, including economy, trade, finance, energy, health care, technology, culture, agriculture and education. The Belt and Road initiative put forward by China has taken hold.

Financial institutions such as the Asian Infrastructure Investment Bank and New Development Bank have all driven regional and international economic cooperation.

China's proposals have been widely recognized and accepted at a number of major international conferences, including the G20 summits, APEC Economic Leaders' Meetings, Belt and Road Forum for International Cooperation and BRICS Leaders' Informal Meetings. China's plans have become global solutions.

China has not only shown willingness to share its advanced technologies and experiences with other countries, but has also made detailed plans on its short, medium and long-term agenda. It suggests China's influence and leadership in global governance.

The BRICS cooperation mechanism is the best way for developing countries to collectively contribute to world economic governance, and as a major component of multilateral cooperation. It has significantly gained a voice for emerging markets and developing countries in global governance, breaking the monopoly of the developed countries.

China's "BRICS plus" strategy provides an alternative to expanding and deepening cooperation among developing countries, which most developing countries are anticipating, including Mexico.

Its remarkable economic performance has heightened the world's expectations on its leadership role as well. I expect fruitful results from the upcoming BRICS Summit in Xiamen. I also hope BRICS countries could enhance cooperation on poverty relief, connectivity and global economic stability.

(The author is the director of Institute for China-Mexico Studies under National Autonomous University of Mexico and the director of the Academic Network for Latin America and the Caribbean on China.)

Canada
Author: Prof Michel Chossudovsky
Source: www.globalresearch.ca

Next week in early September 2017, the member states of BRICS, will be meeting in Xiamen, Fujian Province, China.

This article was first published by Global Research in April 2015.

* * *

The financial media as well as segments of the alternative media are pointing to a possible weakening of the US dollar as a global trading currency resulting from the BRICS (Brazil, Russia, India, China, South Africa) initiative.

One of the central arguments in this debate on competing World currencies hinges on the BRICS initiative to create a development bank which, according to analysts, challenges the hegemony of Wall Street and the Washington based Bretton Woods institutions.

The BRICS New Development Bank (NDB) was set up to challenge two major Western-led giants – the World Bank and the International Monetary Fund. NDB's key role will be to serve as a pool of currency for infrastructure projects within a group of five countries with major emerging national economies – Russia, Brazil, India, China and South Africa. (RT, October 9, 2015, emphasis added)

More recently, emphasis has been placed on the role of China's new Asia Infrastructure Investment Bank (AIIB), which, according to media reports, threatens to "transfer global financial control from Wall Street and City of London to the new development banks and funds of Beijing and Shanghai".

There has been a lot of media hype regarding BRICS.
While the creation of BRICS has significant geopolitical implications, both the AIIB as well as the proposed BRICS Development Bank (NDB) and its Contingency Reserve Arrangement (CRA) are dollar denominated entities. Unless they are coupled with a multi-currency system of trade and credit, they do not threaten dollar hegemony. Quite the opposite, they tend to sustain and extend dollar denominated lending. Moreover, they replicate several features the Bretton Woods framework.

Towards a Multi-Currency Arrangement?

What is significant, however, from a geopolitical standpoint is that China and Russia are developing a ruble-yuan swap, negotiated between the Russian Central Bank, and the People's Bank of China,

The situation of the other three BRICS member states (Brazil, India, South Africa) with regard to the implementation of (real, rand rupiah) currency swaps is markedly different. These three highly indebted countries are in the straightjacket of IMF-World Bank conditionalities. They do not decide on fundamental issues of monetary policy and macro-economic reform without the green light from the Washington based international financial institutions.

Currency swaps between the BRICS central banks was put forth by Russia to:

"facilitate trade financing while completely bypassing the dollar. "At the same time, the new system will also act as a de facto replacement of the IMF, because it will allow the members of the alliance to direct resources to finance the weaker countries." (Voice of Russia)

While Russia has formally raised the issue of a multi-currency arrangement, the Development Bank's structure does not currently "officially" acknowledge such a framework:

"We are discussing with China and our BRICS parters the establishment of a system of multilateral swaps that will allow to transfer resources to one or another country, if needed. A part of the currency reserves can be directed to [the new system]" (Governor of the Russian Central Bank, June 2014, Prime news agency)

India, South Africa and Brazil have decided not to go along with a multiple currency arrangement, which would have allowed for the development of bilateral trade and investment activities between BRICs countries, operating outside the realm of dollar denominated credit. In fact they did not have the choice of making this decision in view of the strict loan conditionalities imposed by the IMF.


Heavily indebted under the brunt of their external creditors, all three countries are faithful pupils of the IMF-World Bank. The central bank of these countries is controlled by Wall Street and the IMF. For them to enter into a "non-dollar" or an "anti-dollar" development banking arrangement with multiple currencies, would have required prior approval of the IMF.

The Contingency Reserve Arrangement

The CRA is defined as a "framework for provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures." (Russia India Report April 7, 2015). In this context, the CRA fund does not constitute a "safety net" for BRICS countries, it accepts the hegemony of the US dollar which is sustained by large scale speculative operations in the currency and commodity markets.

In essence the CRA operates in a similar fashion to an IMF precautionary loan arrangement (e.g. Brazil November 1998) with a view to enabling highly indebted countries to maintain the parity of their exchange rate to the US dollar, by replenishing central bank reserves through borrowed money.

The CRA excludes the policy option of foreign exchange controls by BRICS member states. In the case of India, Brazil and South Africa, this option is largely foreclosed as a result of their agreements with the IMF.

The dollar denominated $100 billion CRA fund is a "silver platter" for Western "institutional speculators" including JP Morgan Chase, Deutsche Bank, HSBC, Goldman Sachs et al, which are involved in short selling operations on the Forex market. Ultimately the CRA fund will finance the speculative onslaught in the currency market.

Neoliberalism firmly entrenched

An arrangement using national currencies instead of the US dollar requires sovereignty in central bank monetary policy. In many regards, India, Brazil and South Africa are (from the monetary standpoint) US proxy states, firmly aligned with IMF-World Bank-WTO economic diktats.

It is worth recalling that since 1991, India's macroeconomic policy was under under the control of the Bretton Woods institutions, with a former World Bank official, Dr. Manmohan Singh, serving first as Finance Minister and subsequently as Prime Minister.

Moreover, while India is an ally of China and Russia under BRICS, it has entered into a new defense cooperation deal with the Pentagon which is (unofficially) directed against Russia and China. It is also cooperating with the US in aerospace technology. India constitutes the largest market (after Saudi Arabia) for the sale of US weapons systems. And all these transactions are in US dollars.

Similarly, Brazil signed a far-reaching Defense agreement with the US in 2010 under the government of Luis Ignacio da Silva, who in the words of the IMF's former managing director Heinrich Koeller, "Is Our Best President", "… I am enthusiastic [with Lula's administration]; but it is better to say I am deeply impressed by President Lula, indeed, and in particular because I do think he has the credibility" (IMF Managing Director Heinrich Koeller, Press conference, 10 April 2003 ).

In Brazil, the Bretton Woods institutions and Wall Street have dominated macro-economic reform since the outset of the government of Luis Ignacio da Silva in 2003. Under Lula, a Wall Street executive was appointed to head the Central Bank, the Banco do Brazil was in the hands of a former CitiGroup executive. While there are divisions within the ruling PT party, neoliberalism prevails. Economic and social in Brazil is in large part dictated by the country's external creditors including JPMorgan Chase, Bank America and Citigroup.

Central Bank Reserves and The External Debt

India and Brazil (together with Mexico) are among the World's most indebted developing countries. The foreign exchange reserves are fragile. India's external debt in 2013 was of the order of more than $427 Billion, that of Brazil was a staggering $482 billion, South Africa's external debt was of the order of $140 Billion. (World Bank, External Debt Stock, 2013).

External Debt Stock (2013)

Brazil $482 billion

India $427 billion

South Africa $140 billion

All three countries have central banks reserves (including gold and forex holdings) which are lower than their external debt (see table below).

Central Bank Reserves (2013)

Brazil $359 billion

India: $298 billion

South Africa $50 billion

The situation of South Africa is particularly precarious with an external debt which is almost three times its central bank reserves.

What this means is that these three BRICS member states are under the brunt of their Western creditors. Their central bank reserves are sustained by borrowed money. Their central bank operations (e.g. with a view to supporting domestic investments and development programs) will require borrowing in US dollars. Their central banks are essentially "currency board" arrangements, their national currencies are dollarized.

The BRICs Development Bank (NDB)

On 15 July 2014, the group of five countries signed an agreement to create the US$100 billion BRICS Development Bank together with a US dollar denominated " reserve currency pool" of US$100 billion. These commitments were subsequently revised.

Each of the five-member countries "is expected to allocate an equal share of the $50 billion startup capital that will be expanded to $100 billion. Russia has agreed to provide $2 billion from the federal budget for the bank over the next seven years." (RT, March 9, 2015).

In turn, the commitments to the Contingency Reserve Arrangement are as follows;

Brazil, $18 billion

Russia $18 billion

India $18 billion

China $41 billion

South Africa $5 billion

Total $100 billion

As mentioned earlier, India, Brazil and South Africa, are heavily indebted countries with central bank reserves substantially below the level of their external debt. Their contribution to the two BRICs financial entities can only be financed:

• by running down their dollar denominated central bank reserves and/or
• by financing their contributions to the Development Bank and CRA, by borrowing the money, namely by "running up" their dollar denominated external debt.

In both cases, dollar hegemony prevails. In other words, the Western creditors of these three countries will be required to "contribute" directly or indirectly to the financing of the dollar denominated contributions of Brazil, India and South Africa to the BRICS development bank (NDB) and the CRA.

In the case of South Africa with Central Bank reserves of the order of 50 billion dollars, the contribution to the BRICS NDB will inevitably be financed by an increase in the country's (US dollar denominated) external debt.

Moreover, with regard to India, Brazil and South Africa, their membership in the BRICS Development Bank was no doubt the object of behind closed doors negotiations with the IMF as well as guarantees that they would not depart from the "Washington Consensus" on macro-economic reform.

Under a scheme whereby these countries were to be in be in full control of their Central Bank monetary policy, the contributions to the Development Bank (NDB) would be allocated in national currency rather than US dollars under a multi-currency arrangement. Needless to say under a multi-currency system the contingency CRA fund would not be required.

The geopolitics behind the BRICS initiative are crucial. While the BRICS initiative from the very outset has accepted the dollar system, this does not exclude the introduction, at a later stage of a multiple currency arrangement, which challenges dollar hegemony.

South Africa
Author: Kimeng Hilton Ndukong
Source: www.focac.org

Beijing — The move is part of efforts by the economic bloc to strengthen south-south cooperation.

Development projects in Africa and Latin America will henceforth receive greater attention from the Brazil, Russia, India, China and South Africa, BRICS economic bloc financial institutions such as the New Development Bank, NDB and the Asian Infrastructure Investment Bank, AIIB.

Prof. Chen Fengying, former Director of the Institute of World Economy, made the comment on August 21, 2017, in the Chinese capital, Beijing, at a press organized by the All-China Journalists' Association. "There are many development banks in the world today, the largest being the World Bank. But the New Development Bank owned by BRICS is the only one with developing countries as its backbone," Prof. Fengying noted.

She said the aim was for the New Development Bank, Asian Infrastructure Investment Bank and BRICS Economic Institute to serve as substitute to the World Bank. It is for this reason that reinforcement of south-south, and south-north cooperation will be addressed at the BRICS leaders' summit in the Chinese coastal city of Xiamen from September 3-5, she explained.

"BRICS development has since gone beyond the member States. New Development Bank is up and running, moving from abstract to more concrete issues. As an open platform, BRICS Plus concerns Africa and Latin America; thus the influence of BRICS will soon become more comprehensive," Chen Fengying stated. She added that in order to broaden the scope of their activities and be sustainable in the long run, NDB and AIIB will extend their services to Africa and Latin America to finance development projects. Meanwhile, Kenya and Thailand have been invited to next month's BRICS summit.

On plans by BRICS to create a rating agency, Prof. Fengying said the chances of its success were slim because current macro international finance is still dominated by the US dollar, while today's rating system is monopolized by three American institutions. She recalled that China, Europe and Japan have in the past made similar attempts at creating rating agencies, without much success. Asked if the current border misunderstanding between China and India will be raised at next month's BRICS summit, Chen Fengying ruled out the possibility, saying leaders will not be distracted by "small issues."