BRICS against Dollar Dominance or the US as evil Stronghold
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BRICS against Dollar Dominance or the US as Global Stronghold of Evil
Nil NIKANDROV | 18.07.2014 | 00:00
The process of bloody globalization going on a rampage is slowly becoming a thing of the past as raw awakening is gradually stepping in. The US blitzkrieg aimed at achieving global dominance controlled by Washington under the slogan of «unipolar democracy» is seen as a failure by the rest of the world. But the administration of Obama is not ready to concede defeat and continues to be seeking pretexts to start wars using provocations and black propaganda to create the images of enemies.
Brazil, Russia, India, China and South Africa – the countries which make up the group of BRICS drastically change the contemporary world. One of the trends is doing away with the financial system that emerged after the Second World War. BRICS wants to put an end to the dollar dominance or the use of green funny money to buy everything that has material value accompanied by constant cheating on the part of the United States.
Speaking at the VI BRICS summit in Brasilia (July 15-16), President Vladimir Putin said the reform of international financial-currency system has become ripe since a long time ago because it was putting the group at disadvantage and hindering the progress of new world economies, «In the BRICS case we see a whole set of coinciding strategic interests. First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank's decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this». There is an urgent need to include BRICS as an equal partner into the decision making process of the International Monetary Fund and the World Bank.
In Fortaleza BRICS signed the Declaration and Joint Plan of Action. The declaration reflects the common vision of contemporary political and economic situation in the world and defines the plans of further cooperation. The plan sets the missions to carry out till the next summit to take place in Russia in 2015. All global media outlets reported about the setup of the New Development Bank (NDB) with the headquarters in Shanghai and the $100 billion BRICS contingency reserve arrangement (CRA) will be raised from the member countries’ central bank reserves while capital for the group’s development bank will come from national budgets. According to President Putin, «BRICS Bank will be one of the major multilateral development finance institutions in this world.» «In terms of escalating international competition the task of activating the trade and investment cooperation between BRICS member states becomes important,» the Russian leader said.
Bringing emerging economies closer has become vital at a time when the world is guttered by the financial crisis and BRICS countries can’t remain above international problems, said Brazil's President Dilma Rousseff. She cautioned the world not to see BRICS deals as a desire to dominate. «We want justice and equal rights,» she said. «The IMF should urgently revise distribution of voting rights to reflect the importance of emerging economies globally,» Rousseff said. According to the Brazilian President, the group has to great extent mitigated the negative impact of the global crisis on world finances and the economic growth. The creation of the new development Bank and the BRICS contingency reserve arrangement (CRA) shows that no matter cultural, ethnic and linguistic differences exist, the group is ready to create a sound and positive strategic alliance to counter instability on international arena. Dilma Rousseff emphasizes that the group has emerged not to get together against anyone but to serve its own interests. She believes BRICS facilitates the prosperity of the planet.
The five BRICS countries represent almost 3 billion people with a combined nominal GDP of US$16.039 trillion and an estimated US$4 trillion in combined foreign reserves. As of 2014, the BRICS nations represented 21 percent of the world economy. The BRICS countries now account for 11% of global capital investment, and trade turnover almost doubled in the last 5 years. The trade turnover inside the group has doubled in recent years and it’s just a start. The Russian experts have prepared the BRICS Strategy for Economic Cooperation. Its implementation will let he group gain the leading positions in the world economy.
A BRICS-UNASUR (the Union of South American Nations) summit also took place. Anti-BRICS propaganda had predicted the participation of only «populist leaders» – Venezuelan President Nicolas Maduro, Ecuadoran leader Rafael Correa, the President of Bolivia Evo Morales and, perhaps, «eccentric» sometime President of Uruguay Jose Mujica. Instead, all South American leaders came to Brazil to personally see the BRICS heads of states and get the information about the group’s activities firsthand. Trade and economy topped the agenda. South America wants to get the most from its contacts with the «Big Five».
President Maduro said the summit was to protect the multipolar world. In Venezuela the concept is reflected in the state policy set forth in Venezuela's Second Socialist Plan of the Nation 2013-2019, or Homeland Plan. The goal is to ensure the influx of petrodollars required for the country's socioeconomic development without compromising the maximum oil recovery in the long term. The document has been approved by the National Assembly. The Venezuelan leader believes his country needs a new economic order to be created by Latin Americans on their own continent. He said the meeting was of historic importance getting together the South Americans to choose their own way of development and the five most fast-growing nations in the world.
There were bilateral meetings with South American counterparts. Vladimir Putin held fruitful talks with the presidents of Bolivia, Uruguay and Venezuela.
Washington used the issue of Ukraine to intensify the propaganda campaign against Russia against the background of BRICS-UNASUR summit. Earlier on July 15 Obama urged EU envoys to impose tougher measures against Russia. In case the EU leaders refuse to adopt new sanctions, the White House would act unilaterally. The ambassadors of the European Union were invited to the White House. The US exerted hard pressure to make European countries adopt tough measures against Russia to «punish it for the aggression». The new sanctions, the first so-called «sectoral sanctions» used by the U.S. against Russia, hit a number of banks, like, for instance: OAO Gazprombank and VEB and some Russian energy firms, like OAO Novatek, Rosneft, Kalashnikov limiting their access to the United States’ capital markets. Some high standing officials are also on the list. Even before the announcement of the sanctions Foreign Affairs Sergey Lavrov commented on July 15, «It is sad that the president of the great power approaches such issues from such a position,» he told reporters. «I’d like to mention as well that all the BRICS leaders stressed that by condemning unilateral actions in the global politics they do not seek confrontation, but on the contrary advocate joint efforts with the participation of all the great powers that would try to find a mutually acceptable solution to various problems,» the Russian diplomat added. In this connection Sergey Lavrov referred to the words of President Vladimir Putin who was speaking about the positive experience of the cooperation on the Syrian issue during the meeting with the BRICS leaders earlier on July 14. «That is why we should, probably, take a philosophical approach to every problem, but we oppose unilateral actions and emotions with the reason and pragmatism», the Minister said.
BRICS and the majority of UNASUR members are critical towards the US sanctions. The media reports and bloggers’ posts say Washington pursues just one goal – to aggravate the situation at the Russia-Ukraine border and pour fuel on the fire of the conflict with the help of the US-controlled government of Poroshenko. Obama stresses the US has a special role to play in finding solutions to such conflicts.
Has any such problem been solved by the United States during, say, the recent 25 years? Devastated countries, thousands dead, hundreds of assassinated politicians and military leaders who have not met the standards of the US-style democracy which is the only one that is genuine, is it not the egregious irresponsibility? Normal people are scared by the US strong desire to create Pax Americana on the ruins of other, more ancient and in a way, more perfect civilizations? It is rejected even by the closest allies of the empire. Reasonable leaders watch with concern the irrevocable of the United States turning into the global center of evil.
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How the IMF Props Up the Bankrupt Dollar System
http://www.serendipity.li/hr/imf_and_dollar_system.htm
Confessions of an Economic Hit Man: How the U.S. Uses Globalization to Cheat Poor Countries Out of Trillions
http://www.democracynow.org/2004/11/9/confessions_of_an_economic_hit_man
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Well played,Chinese and Russians
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BRICS’ new financial institutions could undermine US-EU global dominance
The IMF and the World Bank could have real competition for the first time
July 18, 2014 9:00AM ETbyDuring the 1997–98 Asian financial crisis, when middle-income countries were hard hit by big capital outflows, there was an effort by China, Japan, Taiwan and other countries to put together an Asian Monetary Fund to offer balance of payments support. Washington vetoed the idea, insisting that all assistance had to go through the International Monetary Fund. The result was a mess, including an unnecessarily deep regional recession, as the IMF failed to act as a lender of last resort and then attached all kinds of harmful and unnecessary conditions to its lending.
But the world has changed a lot in the past 15 years. Last week the BRICS countries (Brazil, Russia, India, China and South Africa) decided to form the Contingent Reserve Arrangement (CRA) and the New Development Bank (NDB), and the United States will not have a veto this time. These new institutions could mark a turning point for the international financial system.
Western media coverage of these developments has been mostly dismissive, but that primarily reflects the concerns of Washington and its allies. They have had unchallenged sway over the decision-making institutions of global financial governance for 70 years, and the last thing they want to see is competition. But competition is exactly what the world needs here.
The IMF and the World Bank were created in 1944, when the United States was pretty much the only standing industrial power in the world. The institutions mirrored that unipolar reality. Today Washington still controls both institutions, with the subordinate partnership of a handful of rich allies; the same is true for the G-7, G-8 and G-20. In recent years, as the eurozone has become the recipient of most IMF lending, the European directors have, of course, been given the predominant voice on policies in this region, but it’s still the same group of countries in charge. And even in the World Trade Organization, which was formed in 1995 and has a different consensual process, the founding rules were written by the rich countries — and in this case, especially their corporations.
For decades there have been efforts to give the majority of the world’s nations a voice at the IMF and the World Bank, but progress has been glacial at best. The BRICS countries have more than 40 percent of the world’s population, and China is now the world’s largest economy, but they have almost no voice at either institution. To say that an alternative has been long overdue is an understatement.
The BRICS NDB has gotten the most attention, but the $100 billion currency reserve fund could prove a much bigger breakthrough. For most countries, one of the biggest constraints and sources of potential instability is the balance of payments. They must have enough dollars or other hard currency to finance imports and enough international reserves to insure against a panicked flight from their currency. Otherwise, their economies can fall into a crisis, a recession or other devastating economic imbalance. Most of the damage from the Asian financial crisis might have been prevented with timely balance of payments support.
But the harmful macroeconomic conditions attached to IMF lending have continued. Just look at Ukraine, where the economy is shrinking by 5 percent this year and the IMF is imposing austerity that will prolong and possibly deepen the recession. An examination of IMF policies during the global recession of 2009 showed that 31 of 41 countries with IMF agreements were subjected to pro-cyclical macroeconomic policies — that is, policies that could be expected to worsen an economic downturn or impede recovery. And although the IMF is only the junior partner in the troika, with the European Central Bank and European Commission, together they have dragged Europe through years of unnecessary recession and the collective punishment of mass unemployment, and that has hurt most of the global economy — including the BRICS and other developing countries.
The BRICS’ defection is part of a process that has been taking place over the past 15 years, in which middle-income countries have accumulated sufficient reserves to vote with their feet and break out of the IMF’s orbit. Although most economists and most of the major media have ignored it, the IMF’s loss of influence over economic policy in most middle-income countries is one of the most important developments in the international financial system in the past half-century. It has almost certainly contributed to the rebound of economic growth in most developing countries over the past decade. It is also, not coincidentally, a huge loss of influence for the U.S. government, which has traditionally used the IMF’s creditors’ cartel for its own imperial purposes.
The BRICS’ new CRA has the potential to break the pattern not only of U.S.-EU global dominance but also of the harmful conditions typically attached to balance of payments support. It could prove very important in the next few years: A lot of money has poured into emerging market government bonds since the Fed set short-term interest rates at zero more than five years ago. A lot of it could up and leave when the Fed decides to raise interest rates here. Such rate hikes were a major cause of the Mexican peso crisis in 1995 and hit other countries such as Brazil and Argentina a few years later. The BRICS countries have indicated that they are open to having other countries join. China has about $4 trillion in reserves, so it has the potential to contribute vastly more and probably still come out ahead, as most of its reserves will likely be losing money in U.S. Treasury bonds. There’s no telling how soon this new fund will be up and running or how big or inclusive it will grow to be. But the upside potential for the world economy is very big.
The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.
http://america.aljazeera.com/opinions/2014/7/brics-developmentbankimffinance.html
BRICS Posing Serious Eastern Challenge To Western Hegemony
By Dr. Sawraj Singh
The 6th BRICS Summit in Fortaleza, Brazil just concluded. Dilma Rousseff, President of Brazil; Vladimir Putin, President of Russia; Narendra Modi, Prime Minister of India; Xi Jinping, President of China; Jacob Zuma, President of South Africa; attended. Cristina Fernandez de Kirchner, President of Argentina was the invited leader. The main agenda was to set up a BRICS development bank. The group signed a document to create a $100 billion BRICS development bank and a revenue currency pool worth over $100 billion. The bank will be located in Shanghai and an Indian will be the first President of the bank.
The BRICS countries together form about 46% of the world’s population and about 20% of the world’s economy. Their share of the world economy is rapidly increasing. The investment banking firm Goldman Sachs Group has projected that by 2030, the Chinese economy is going to supersede the American economy, and by 2050, the Chinese economy will be double the size of the American economy.
The same projection shows that after 2050, India’s economy will also supersede the American economy. It is obvious that the BRICS countries will play an ever-increasing role in the world economy and world affairs. Many other countries have shown interest to join BRICS. Argentina is almost sure to join. South Korea, Mexico, Turkey, and Indonesia have shown strong interest in joining the organization. Not only the area and population base of the organization will represent more than 50% of the world, but eventually, the organization will also represent more than 50% of the world’s economy.
After World War II, the present global economic institutions, the International Monetary Fund (IMF) and the World Bank, came into existence. They openly promoted western monopoly and hegemony. It is not an exaggeration to say that these institutions were based upon inequality and injustice. Their constitutions did not let them give a fair representation. The western countries were given more voting rights and control.
As the share of the West in world economy and world trade continued to decline, and that of the East continued to rise, there were repeated attempts by eastern countries to change these institutions so that they reflected more the changing equations and shifts in world power. However, the western powers refused to bring any meaningful changes. This led the eastern countries to develop parallel institutions. BRICS is one of such institutions which are challenging western hegemony.
The summit brought the three major eastern countries, Russia, China, and India, together. Prime Minister Modi of India had a very lengthy meeting with President Xi Jinping of China. It was scheduled for 40 minutes, but the meeting lasted 80 minutes. The two countries want to promote mutual understanding and cooperation, particularly in the economic field.
The Chinese President will visit India and the Indian Prime Minister is expected to visit China later this year. China will help to develop infrastructure in India. China will also try to narrow the trade gap between the two countries. China and India will try to develop their economies in a mutually complementary fashion.
India and Russia also got a chance to revive their traditional and time-tested friendship. Prime Minister Modi told Putin that the Indian people have always considered Russia as their most trusted friend who has always stood by them. Putin also thanked India for taking stands different than the western countries, and that these Indian stands have helped Russia to fight western efforts to isolate Russia.
It became clear in the Summit that Russia, China, and India have a lot more in common than differences among them. All three countries have realized that they are not going to get an equal, fair, or respectable status in the present western-dominated world order. Therefore, they have to work together to change the present unipolar world order to a multipolar world.
The western domination of the last two centuries and American hegemony of the last half century are not going to last much longer. The 6th BRICS Summit and the interest shown by other countries, particularly the Latin American countries, to join and work with BRICS shows that there is very broad support in opposing western domination and hegemony. The BRICS Bank will challenge the World Bank and IMF, eventually forcing these institutions to either fundamentally change their attitude or become irrelevant and marginalized.
The rise of BRICS represents the rise of the East. The rise of the East does not mean that western domination and hegemony will be replaced by Eastern domination and hegemony.
The overwhelming response BRICS is getting in Latin America shows that as opposed to the western narrow-minded approach, the eastern approach is universal. Eastern philosophy has always been universal. Sri Guru Granth Sahib, which I believe represents the highest evolution of Eastern philosophy and the zenith of Eastern spirituality, is truly universal and has a true global perspective. The world needs such philosophy which is truly universal and can impart a true global perspective, which the present globalization lacks.
BRICS Bank will create competition for the World Bank, IMF, and other similar regional funds. BRCIS nations have criticized the World Bank and the IMF for not giving developing nations enough voting rights.
One of the goals of the Bank is to increase the amount of money loaned to developing countries to help with infrastructure and those programs which help majority of people by improving the quality of their lives. Healthcare and education are some such fields.
As John Perkins pointed in his book Confessions of an Economic Hit Man, the U.S. and the World Bank forced the developing countries to abandon such programs and instead adopt those programs which would increase gap between the rich and the poor. Concentration of wealth created a comprador wealthy class which could be easily controlled by the U.S. The BRICS Bank will hopefully try to reverse such practices.
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No surprised even their US citizens are coming up way to 'beat' their system : http://www.everythingcounts.com/how-to-beat-the-system-when-everything-is-rigged
USA Protest : http://www.stanleycolors.com/2013/07/usa-protests