BRIC Thread

Discussion in 'International Politics' started by Singh, Jun 22, 2009.

  1. Singh

    Singh Phat Cat Administrator

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    Brazil, Russia, India and China form bloc to challenge US dominance​


    With public hugs and backslaps among its leaders, a new political bloc was formed yesterday to challenge the global dominance of the United States.

    The first summit of heads of state of the BRIC countries — Brazil, Russia, India and China — ended with a declaration calling for a “multipolar world order”, diplomatic code for a rejection of America’s position as the sole global superpower.

    President Medvedev of Russia went further in a statement with his fellow leaders after the summit, saying that the BRIC countries wanted to “create the conditions for a fairer world order”. He described the meeting with President Lula da Silva of Brazil, the Indian Prime Minister, Manmohan Singh, and the Chinese President, Hu Jintao, as “an historic event”.

    The BRIC bloc brings together four of the world’s largest emerging economies, representing 40 per cent of the world’s population and 15 per cent of global GDP. The leaders set out plans to co-operate on policies for tackling the global economic crisis at the next G20 summit in the US in September.

    “We are committed to advance the reform of international financial institutions so as to reflect changes in the world economy. The emerging and developing economies must have a greater voice,” they said.

    The BRIC states also pledged to work together on political and economic issues such as energy and food security. Co-operation in science and education would promote “fundamental research and the development of advanced techologies”.

    The declaration also satisfied a key Kremlin demand by calling for a “more diversified international monetary system”. President Medvedev is seeking to break the dominance of the US dollar in financial markets as the world’s leading reserve currency.

    He favours the establishment of more regional reserve currencies, including the Russian rouble and the Chinese yuan, to prevent economic shocks. Mr Medvedev said: “The existing set of reserve currencies, including the US dollar, have failed to perform their functions.”

    The declaration made no specific mention of the dollar, an indication of China’s reservations about the Russian idea. Beijing holds almost $2 trillion in foreign currency reserves and a large portion of US debt.

    The BRIC summit coincided with a two-day meeting of the Shanghai Co-operation Organisation (SCO) in Yekaterinburg, which further underlined the determination of Moscow and Beijing to assert themselves against the West.

    The SCO comprises Russia, China and the Central Asian states of Kazakhstan, Uzbekistan, Tajikistan and Kyrgyzstan. Iran, Pakistan, India and Mongolia have observer status and President Karzai of Afghanistan attended the summit as a guest.

    Iran’s embattled President, Mahmoud Amadinejad, defied protests at home to attend the conference, where he hit out at the US and declared that the “international capitalist order is retreating”. But he beat a swift retreat from the summit just hours after arriving, cancelling a planned press conference to return to the crisis in his country.

    China pledged $10 billion in loans to Central Asian countries struggling in the economic crisis, adding financial muscle to its leading role in the SCO. Russia and China regard the organisation as a means to restrict US influence in their Central Asian “back yard”.

    Mr Medvedev held separate meetings about the situation in Afganistan with President Karzai and President Zardari of Pakistan, a clear signal to President Obama not to ignore Russian interests as he presses US policy in the region in the fight against the Taleban.

    http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6514737.ece
     
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  3. Singh

    Singh Phat Cat Administrator

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    Emerging markets: time for a re-think​


    This month brings two very important milestones in the history of investment in emerging markets. At the beginning of June Templeton Emerging Markets, the first specialist investment trust in the sector, celebrated its twentieth birthday. The second key occasion came this week with the inaugural summit at Yekaterinburg, in Russia, of the leaders of the so-called BRICs nations: Brazil, Russia, India and China.

    Both events, in different ways, point to the growing importance of emerging markets in the world’s economy. Twenty years ago a gathering of Brazil, Russia, India and China would have been seen as a slightly quirky affair, of only modest economic significance. Today all four nations are major economies in their own right and growing in significance all the time. By 2050 the four BRICs economies will be among the half dozen biggest in the world while China will have overtaken the US to become the most powerful economy on earth.

    What does this mean for UK investors? It means many of us need to have a serious re-think about our geographical spread of investments and put more money into funds like Templeton Emerging Markets. Traditionally many people have been advised to hold no more than 5 per cent of their equity portfolio in emerging markets. But this approach is now looking very outdated. Emerging markets already make up more than 10 per cent of the combined value of the world’s stock markets and this figure is set to rise steadily in the coming years, given that emerging markets already make up 80 per cent of the world’s population and 50 per cent of world GDP.

    Seasoned commentators such as Mark Dampier, at Hargreaves Lansdown, and BrianDennehy, of Dennehy Weller & Co, are saying many investors, especially those still some way from retirement, should be putting 20 per cent or more of their money into emerging markets.

    The rewards for doing so can be seen in the returns that Templeton Emerging Markets has notched up. Since its launch in 1989 it has multiplied investors’ money by more than twelve times. In the past 10 years, while UK equity funds have, on average, barely made any money at all emerging markets funds have produced a return of 140 per cent.

    Clearly an investment in emerging markets involves quite a high level of risk and, as the past 12 months has shown, it can be a bit of a bare-knuckle ride. But while investing in them certainly involves risk, not investing in them could prove an even bigger risk in the long run.

    Emerging markets: time for a re-think
     
  4. Singh

    Singh Phat Cat Administrator

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    Emerging Economies Meet in Russia


    YEKATERINBURG, Russia — Leaders of the four largest emerging market economies discussed ways to reduce their reliance on the United States at their first formal summit meeting on Tuesday. But they concluded with only a cautious statement suggesting a move away from the dollar’s role in global commerce and a call for greater representation of developing countries in global financial institutions.

    By some predictions, the four nations, Brazil, Russia, India and China, a group referred to as the BRIC group, will surpass the current leading economies by the middle of this century, a tectonic shift that by this reckoning will eventually nudge the United States and Western Europe away from the center of world productivity and power.

    Russia’s president, Dmitri A. Medvedev, said the main point of the meeting was to show that “the BRIC should create conditions for a more just world order.”

    The four countries produce about 15 percent of the world’s gross domestic product and hold about 40 percent of the gold and hard currency reserves, but they are not a unified bloc and do not do enough business among themselves to justify a trade alliance.

    Russia and Brazil export natural resources, China exports manufactured goods and India bases its growth primarily on domestic demand. As such, India is not as concerned with the status of the dollar and is by no means as intent on scoring ideological points against the United States as is Russia.

    The acronym BRIC was coined by a Goldman Sachs economist in 2001 to describe the four countries that were expected to surpass today’s largest economies by 2050, owing to their faster growth rate.

    A communiqué issued after the meeting highlighted the common goals of a “greater voice” in international financial institutions and a “more diversified” global monetary system. They agreed to meet again in 2010, in Brazil.

    The gathering was the second of back-to-back summit meetings sponsored by Russia in this city in the Ural Mountains on the divide between Europe and Asia.

    The Shanghai Cooperation Organization, a regional security alliance intended loosely as a counterweight to NATO, met in an expanded format with many Eurasian nations holding observer status. It even included a brief appearance by the president of Iran, Mahmoud Ahmadinejad, whose disputed re-election last week has touched off street demonstrations in Tehran.

    In a sign of regional economic integration, China’s president, Hu Jintao, pledged $10 billion in aid to Central Asian nations in the group, which consists of China, Russia and four former Soviet states: Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

    Mr. Hu and Mr. Medvedev then met separately with India’s prime minister, Manmohan Singh, and the Brazilian president, Luiz Inácio Lula da Silva.

    Mr. Medvedev encouraged China, the world’s largest holder of dollar reserves, and other nations to put their money in some other currency or financial mechanism. He also urged members of the Shanghai Cooperation Organization to use their national currencies in conducting bilateral trade.

    “There can be no successful currency system, and particularly a global system, if the financial instruments that are used are denominated in only one currency,” Mr. Medvedev said. “Today, this is the case and the currency is the dollar.”

    A top economic policy aide to Mr. Medvedev, Arkady Dvorkovich, said Russia would like to diversify its currency reserves away from dollars by buying bonds from Brazil, China and India, but only if they bought Russian rubles as a reserve.

    The dollar fell slightly against the euro and other currencies on Tuesday, though some traders quoted by Bloomberg News cited a more workaday cause: good results on new American housing starts were encouraging investors to move out of Treasury bonds and into equities.

    http://www.nytimes.com/2009/06/17/world/europe/17bric.html?scp=41&sq=india&st=nyt
     
  5. Singh

    Singh Phat Cat Administrator

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    Emerging Powers Prepare to Meet in Russia


    MOSCOW — Leaders of some of the world’s most powerful economies are gathering on Tuesday to plot how they can exert more control over the global financial system as it takes its first wobbly steps toward recovery.

    Yet not an American or Western European will be in the bunch.

    The first summit meeting of the so-called BRIC group — Brazil, Russia, India and China — is intended to underscore the rising economic clout of these four major developing countries and their demand for a greater voice in the world. And Russia, the group’s host and ideological provocateur, is especially interested in using the summit to fire a shot across Washington’s bow.

    All four countries have expressed varying degrees of discomfort with Washington’s financial stewardship, and are particularly concerned about the value of the dollar at a time of rapidly mounting indebtedness in the United States. At the same time, most economists say the BRIC countries can do little to change the current architecture of the global financial system, and that the outcome of this meeting will be largely symbolic.

    The BRIC countries comprise about 15 percent of the world economy and, perhaps more important, have about 40 percent of global currency reserves. Brazil, India and China have also weathered the financial crisis better than the world as a whole.

    While they are far from a monolithic group, they are generally united in their frustration with the dollar’s status as the world’s reserve currency, which enables Washington to run budget deficits without fears of facing the kind of budgetary day of reckoning that other countries risk.

    The excess dollars fill up in foreign central banks, leaving those countries with a difficult choice: reinvesting the dollars in United States securities or holding them and facing an increase in the value of their own currencies, making their products less competitive in world markets.

    While there have been periodic complaints about the dollar through the years, the criticisms from the BRIC countries have become more frequent and more acerbic lately, and have included calls for a supranational currency to replace the dollar.

    In March, the prime minister of China, Wen Jiabao, expressed concerns about United States budget deficits, suggesting they might lead to inflation, a weaker dollar and rising yields on Treasuries, any one of which would hurt China’s $1 trillion investment in American government debt. Later that month, the head of the Chinese central bank called for a new international currency to replace the dollar.

    For the Kremlin, undermining the dollar as the prevailing medium of exchange reflects a broader Russian belief that the United States exercises a dominance in global affairs that exceeds its diminishing power.

    “What we need are financial institutions of a completely new type, where particular political issues and motives, and particular countries, will not dominate,” Russia’s president, Dmitri A. Medvedev, said this month.

    Senior officials in most of the BRIC governments — India, which does not depend as much on trade, is something of an exception — assert that while the United States has acted irresponsibly over the last 30 years by amassing too much debt, they will be the ones who suffer.

    “The world economy should not remain entangled, so directly and unnecessarily, in the vicissitudes of a single great world power,” said Roberto Mangabeira Unger, Brazil’s minister for strategic affairs. “The developing countries should not have to see painfully accumulated hard-currency reserves fall under the shadow of major devaluations.”

    China, Brazil and Russia have said recently that they will purchase notes from the International Monetary Fund to begin diversifying their reserves.

    Still, the reality is that even many forceful critics of the dollar see no immediate alternative to it as the vehicle for international trade. No other markets in the world have the depth and liquidity of those in the United States, experts say.

    And the four BRIC countries, while newly emboldened, have starkly different economies and relationships with the United States, complicating their attempts to unite. Each of the four also has a currency that either has been historically unstable or is not easily convertible.

    “Between the BRIC countries, there is really little in common,” said Yevgeny G. Yasin, head of research at the Higher School of Economics in Moscow. “Each of them has its own destiny, its own special character, and it will be much more difficult for them to agree among themselves than separately with Western countries.”

    China, whose economy dwarfs those of the other three, depends on the export of manufactured goods to the United States and Europe. Russia sells oil, natural gas and other natural resources abroad. Brazil focuses on agricultural exports, while India’s growth has been largely based on its domestic market.

    The four countries do not necessarily do much business with one another. Only two percent of China’s trade last year was with Russia, though the countries are neighbors, according to official statistics.

    At the same time, Brazil announced this year that China had surpassed the United States as its largest trading partner, and said last month that they would look for ways to finance their trade without the dollar.

    The very notion of the BRIC nations was conceived in 2001 by an economist for Goldman Sachs, and only then embraced by the countries themselves. Their leaders have conducted informal discussions before, but the event on Tuesday in the central Russian city of Yekaterinburg will mark their first formal gathering, officials said.

    Russia has sent somewhat mixed signals recently regarding how determined it is to confront the dollar. Last week, it announced that it would purchase bonds from the International Monetary Fund, but then the finance minister, Aleksei L. Kudrin, acknowledged that the world was not yet ready for another reserve currency.

    Vladimir A. Mau, rector of the Academy of National Economy, a government advisory organization in Moscow, said Russia and the other BRIC countries had legitimate worries that the United States was piling up too much debt. But Mr. Mau said that at this point, he doubted that the Kremlin had any recourse.

    Mr. Unger, the Brazilian minister, agreed, saying that the BRIC countries do not see replacing the dollar with “heavy-handed, bureaucratic machinery,” such as a global, European-style Central Bank.

    In China, popular sympathies are with Russian and Brazilian demands for a robust challenge to American control, analysts said.

    Yet there has been no consensus on what a new financial system should look like, and China’s dependence on exports and enormous holdings of dollar-denominated assets give it a vested interest in the status quo, leaving China’s leaders reluctant to pursue far-reaching changes.

    While China’s official news media often give sizable attention to coming international gatherings, they have offered little coverage of the BRIC summit meeting.

    Xu Xiaonian, an economist at the China Europe International Business School in Shanghai, said the silence reflected a desire not to raise hopes for the meeting. “What can they agree on? So little,” Mr. Xu said. “This meeting is more symbolic than of real effect.”
     
  6. ppgj

    ppgj Senior Member Senior Member

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    can't say where it will lead.there are too many contradictions among the BRIC countries.india and china have problems.india is getting closer to USA while still keeping russia happy.china trying to match USA while having problems with russia on cloning mil tech,brazil is far too distant for any use in terms in mil scenarios,all are growing at healthy rates can't antagonise any.may be if it is only for commerce then ok.
     
  7. ajay_ijn

    ajay_ijn Regular Member

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    i dunno about russia but emerging countries can stay united and deal with problems in WTO negotiations with western countries, Climate change treaties R&D on green technologies, energy reforms of global financial organisations like IMF, world bank. India is calling for UNSC reforms. China is proposing reserve currency other than dollar and India has backed that proposal.
     
  8. Martian

    Martian Respected Member Senior Member

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    Like ppgj and ajay_ijn, I think the BRIC looks more like an economic bloc or a "political bloc" working towards common economic interests than a true political bloc in advancing common political interests such as increasing Nato membership or building democratic countries in the Middle East.
     
  9. amoy

    amoy Senior Member Senior Member

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    Personally I feel BRIC is just a term coined by the West since B R I C actually have little in common in substantial ways, economy, politics or military, unless somedays leaders of BRIC make up their minds to join hands in unison, like to build up an economic bloc.
     
  10. Armand2REP

    Armand2REP CHINI EXPERT Veteran Member

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    BRIC is a term coined by the West, western investors trying to market growth opportunities. The governments of the BRIC nations like the term and have played along with it. Now they attempt to see if there is really anything there to work on. I too doubt if anything will come of it, except maybe killing the US dollar as the global currency.
     
  11. badguy2000

    badguy2000 Respected Member Senior Member

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    Bric is just a mirage speculated by west medias.
    it doesn't exist at all.
    in fact, Chinese hardly buy it.
     
  12. ajtr

    ajtr Veteran Member Veteran Member

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    The BRIC post-Washington consensus

    By Pepe Escobar

    The BRIC countries (Brazil, Russia, India and China) got together in the Brazilian capital, Brasilia, on Thursday with a bang. After meeting Chinese President Hu Jintao, and once again condemning an "asymmetric, dysfunctional globalization", Brazilian President Luiz Inacio Lula da Silva was at his ebullient best: "A new global economic geography has been born." Well, not quite. Not yet.

    Anyone across the world fed up with Somali pirates in Zegna suits disrupting global trade is interested in what the BRICs are (potentially) up to. The world's largest developing countries, bound to be the engine of the global economy for the next four decades, are essentially up to what then Russian president Vladimir Putin




    outlined in his famous speech in Munich in 2007; forming a new global consensus. Call it the rise of the periphery (the "Second" and "Third" worlds). Call it the dawn of the post-Washington consensus.

    It's nothing short of ironic that major players in the current global financial architecture are being forced to acknowledge that the global "economic and political tectonic plates are shifting". No, that was not Lula, but the George W Bush-appointed head of the World Bank, Robert Zoellick. Zoellick even felt compelled to deliver the coup de grace to the patronizing concept of "Third World".

    Is the World Bank finally waking up to the real world(s)? The BRICs met in Brazil roughly one week before the World Bank and International Monetary Fund annual love fest in Washington. The old order may resent it, but the BRIC voice is and will continue to be ever more insistent. No wonder; they are shelling more funds to the IMF, thus they should have more say on where the money is going. They want an antithesis of Wall Street: transparency. The 2008 financial crisis - which by no means is over - was unleashed by a Wall Street-biased financial casino.

    Strategic and transparent
    The BRICs officially met for the first time in Yekaterinburg, Russia, in June 2009. At the time they delved deep into discussing the global financial crisis and advanced the possibility of dumping the US dollar as the world's reserve currency.

    Now their common strategy is much more subtle. The leaders in these four countries know it's still too early to think about a common currency; first they need a potent unifying ideal. The inevitable outcome will be a common market, and then a common currency. The euro took 50 years to be born.

    So no wonder, at the moment, as China's Foreign Ministry would put it, the mood is still kind of mellow, with plenty of rhetoric about "South-South cooperation", "strategic partnerships", "common development" and "common understanding". But the call for "more transparency" is very substantial; it will be hammered over and over again at the Americans and Europeans during the next Group of 20 (G-20) meeting in Canada in June.

    Unlike the US, the BRICs' health is sound; no lingering financial crisis, decent growth rates. All of these countries are regional leaders. Unlike the US - and the rest of the world has noticed it - they have all preserved a very privileged role for public investment in their development model.

    The BRICs may represent 42% of the world's population, roughly 15% of the world's gross domestic product, and almost 30% of world trade. But they're not even constituted as a commercial bloc such as the European Union or Mercosur trade blocs. At least not yet.

    So the road will be long. BRICs are starting by getting their commercial act together - like setting up closer cooperation between development banks in Brazil, India and China for an array of partnership projects.

    In Brasilia, experts for example discussed the Brazil-Argentina experience of trading in local currencies, the real and the peso - and not in US dollars. The next stage, as Russian President Dmitry Medvedev has enthusiastically pointed out, includes multiple cooperation deals on agricultural technology, nuclear energy, aircraft engineering, space exploration and nanotechnology.

    The new world order
    BRIC is rife in internal contradictions. China and India are on a collision course in terms of Asian preeminence. China is not exactly fond of India trying to get a seat at the UN Security Council. China and India fiercely compete to get as much oil and gas from Central Asia as possible. Russia is acutely aware of Chinese expansion in Siberia. India is not exactly fond of Brazil - one of the world's top food exporters - wanting to slash tariffs on agricultural products. Brazilian Finance Minister Guido Mantega sounds like a US Treasury official when he calls for the yuan to be revalued; cheap imports are killing Brazilian manufacturers as much as it killed America's.

    But these internal contradictions pale compared to the BRICs' common agenda of being very careful not to antagonize Washington. As much as they know that the new multipolar world cannot have a center - which at the moment is in a Washington that, with the exception of military hegemony, is largely impotent - China, for instance, has built an economy battling with Japan to become the world's second-largest economy by profiting from the current US-centered system.

    The BRICs may complement each other in many aspects (Brazil and China are the best example; China has toppled the US as Brazil's largest trading partner). But a key problem is that they cannot speak for the rest of the developing and undeveloped world - as much as China will keep successfully exporting its "model" of soft power, belief in multi-polarity, non-political interference, integrated development and technology transfer.

    The world anyway will never become "flat" - this is a silly neo-liberal, simplistic fantasy. A new global political consensus would have to be formulated by the United Nations - but not a UN dominated by the US; ideally this should be under a reformed UN, with an expanded and fully representative UN Security Council. One thing is certain; entrenched elites in both the US and Europe (which for all practical purposes is now a midget in the global arena) will fight the dilution of their power tooth and nail.

    BRICs anyway will keep insisting on remaking the global financial architecture - and that starts with profound reforms at the Bretton Woods institutions. They will be increasingly more powerful inside the G-20 - and that has already reduced the Group of Eight to irrelevancy. It's very enlightening to see how they have evolved their common position on burning issues such as the Iranian nuclear dossier: once again they have stressed in Brasilia they want dialogue, not confrontation, sanctions and threats.

    So the BRIC name of the game may be evolution - not revolution. But the game itself is clear; full speed ahead towards the post-Washington consensus.
     
  13. ajtr

    ajtr Veteran Member Veteran Member

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    BRIC declares 2010 deadline for World Bank, IMF reform

    “The global financial crisis has created a new relevance for BRIC”

    Make U.N. more effective and representative: declaration

    Brasilia: The declaration issued by the BRIC nations at a summit meeting here — their second since 2009 — shows a collective assertiveness in world economic matters that is bound to make leaders and bankers in the West sit up and take notice. With a confidence borne of their successful role as a caucus at G-20 meetings over the past year, the leaders of Brazil, Russia, India and China on Thursday demanded the commitment to reform the Bretton Woods financial institutions that the advanced economies made at Pittsburgh during the G-20 summit be completed by this year itself.

    “The IMF and the World Bank urgently need to address their legitimacy deficits,” the BRIC summit declaration says. “We call for the voting power reform of the World Bank to be fulfilled in the upcoming Spring Meetings, and expect the quota reform of the IMF to be concluded by the G-20 Summit in November this year.”

    Selection method

    And in an attack on the “jobs for the boys” approach of the West to the two international financial institutions, the BRIC document calls for an open and merit-based selection method, irrespective of nationality, for the heading positions of the IMF and the World Bank. “Moreover, staff of these institutions need to better reflect the diversity of their membership. There is a special need to increase participation of developing countries.”

    Addressing reporters at the end of the summit — hurriedly held to allow the Chinese President to leave for home in the wake of Wednesday's devastating earthquake in Qinghai — Prime Minister Manmohan Singh said BRIC — the name was coined by Goldman Sachs in 2003 — was not borne out of a crisis but was an act of long-term faith in our people and in our economies. “However, the global economic and financial crisis has created a new relevance for BRIC.”

    The Brasilia summit was evidence that he and President Lula da Silva of Brazil, Dmitri Medvedev of Russia and Hu Jintao of China are clearly enjoying their newfound relevance. Their declaration ranged from advocating the need for restructuring the global economy, to evolving common positions on climate change, energy, trade, terrorism, agriculture and reform of the United Nations.

    On U.N. reform, Russia and China — both permanent members of the Security Council — baulked at endorsing the specific demand India and Brazil have made for permanent seats. But the declaration reaffirmed the need to make the world body more effective and representative. “We reiterate the importance we attach to the status of India and Brazil in international affairs, and understand and support their aspirations to play a greater role in the United Nations,” they said.

    The four rising powers also took on board a suggestion Mr. Medvedev made in the run-up to the summit, declaring that in order to facilitate trade and investment, “we will study feasibilities of monetary cooperation, including local currency trade settlement arrangement between our countries.” Recognising that such talk might weaken the position of the dollar and adversely affect their own holdings, the leaders also underlined the importance of maintaining relative stability of major reserve currencies.

    While expressing satisfaction at the emergence of the G-20 as the “premier forum” for international economic coordination and their own “significant contribution” to that group, the four leaders said much more remains to be done to create a reformed and more stable financial architecture for the world. Their declaration also made a pitch for “a more stable, predictable and diversified international monetary system.”

    Climate change

    On climate change, the BRIC leaders said the upcoming negotiations in Mexico should be more inclusive and transparent. The Cancun talks should produce an outcome that is fair and effective, “while reflecting the principles of the U.N. Framework Convention,” especially the principle of equity and common but differentiated responsibilities.
     
  14. ajtr

    ajtr Veteran Member Veteran Member

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    From IBSA to CHIBSA? BRIC to BRICS? Not yet


    Some in Brazil have quietly been suggesting China's inclusion in IBSA

    Like IBSA, the expansion of BRIC

    is problematic

    Brasilia: In international politics, there is no room for the Groucho Marx theory of association — ‘I won't join a club that will admit me as a member.' Instead, show a large or even mid-sized nation a grouping, no matter how irrelevant or relevant, and the chances are that it will want to sign up.

    At this week's summits of IBSA and BRIC nations, India and Brazil were the lucky two who had overlapping membership in both forums. But South Africa, which is only part of the former, would very much like BRIC to become BRICS, while China, which is part of the latter — as well as of the climate change ginger group of BASIC with India, Brazil and South Africa — would not be averse to IBSA becoming CHIBSA.

    Equation reversed

    Last year, when the Russian hosts at Ekaterinburg held back-to-back summits of BRIC and the Shanghai Cooperation Organisation, the equation was reversed. Russia and China belong to both groupings, while India, which has mere observer status in the SCO, agreed to have Prime Minister Manmohan Singh attend that summit only after receiving assurances that he would have full speaking rights and would not have to leave the room when the real members met.

    On the sidelines of the April 15 IBSA and BRIC meets in Brasilia, Chinese President Hu Jintao held a bilateral meeting with his Brazilian counterpart, Lula da Silva, and the two countries signed a large number of agreements. One of these was an ‘action plan,' and buried deep within it was this proposal: “The two sides will discuss conducting long-term research on the potential for furthering the development of trade relations between IBSA and China.”

    Not enthusiastic

    Some in Brazil have quietly been suggesting Beijing's inclusion in IBSA — China is, after all, its largest trading partner — but India and, to a lesser extent, South Africa, which sees IBSA as a great vehicle for itself on the world stage — are not enthusiastic. “Well, IBSA has a character of its own — three large democracies coming together,” Dr. Singh told reporters who managed to throw a question to him on China joining the trilateral forum. He was standing with his delegation in the lobby of Itamaraty Palace, home to the Brazilian foreign ministry, on Thursday evening, waiting for his motorcade in between the IBSA and BRIC summits. “I think IBSA has now come into its own.”

    The reference to democracies was not accidental. It was there in Dr. Singh's speech to the IBSA plenary and the final summit communiqué spoke of shared democratic traditions. For Indian officials, this is what provides additional glue to a grouping that joins India with the most important powers of Africa and South America. It helps, of course, that as a criterion for club membership, China would not qualify.

    Problematic

    Asked about the expansion of BRIC, the Prime Minister said this was an idea of Goldman Sachs. “We are now trying to give it some shape, flesh it out. Let us see.” Like IBSA, the expansion of BRIC is problematic because the majority of its members fear the dilution of the forum's core competence: fast rising economies with a growing footprint in the global economy and system. BRIC today accounts for a little under a quarter of world output. The South African economy is not yet in that league.

    Other countries that have expressed an interest in joining BRIC are Mexico, Indonesia and Turkey. The Turks are also apparently interested in IBSA.

    “What makes BRIC a good fit today is that the four countries have complementary factor endowments and national skills,” a senior Indian official told The Hindu. If China has solid manufacturing and huge financial clout, Russia has energy and advanced technology in certain fields. Brazil is an agricultural superpower with strong manufacturing and India has a comparative advantage in IT, pharmaceuticals as well as agriculture.

    In an article written on the eve of the BRIC summit, Russian President Dmitri Medvedev spoke of the four countries collaborating with each other in nuclear and space technologies, aircraft manufacturing, nanotechnology and other fields. But some in the Indian establishment remain sceptical of doing too much with BRIC, fearing a backlash from the U.S.
     

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