by James Hall
November 19, 2014
Global trade relationships and
agreements are moving in very different directions.
The public relations press releases hide
the undercurrents that are driving the formations of alternative
economic alliances. While the G 20, markets its all inclusive
umbrella policy forums, the mere formation of
a BRICS counterweight
forecasts deep and fundamental differences.
So what is really behind the creation of
a different approach to the post WWII dominate U.S. lead model? A
clue can be found in an attempt to modify the operations and
direction of IMF functions.
Announced in the Russian press,
BRICS to propose IMF reform at G20 summit, is a pressure attempt
to move the center of power away from current synergism.
"At the G20 summit in the Australian
city of Brisbane on November 15-16, Russia and other BRICS
countries (Brazil, India, China and South Africa) will propose
alternative solutions concerning the reform of
Monetary Fund, involving, in particular, gradual implementation
of reforms, Russian G20 Sherpa Svetlana Lukash told reporters.
"The most important thing for us is
the still unresolved G20 problem of the IMF reform," Lukash
She recalled the U.S. Congress has yet
to ratify the 2010 resolution.
"Not only does it thwart the process
of renewing the IMF in accordance with the current reality where
we see a big rise in the role of emerging economies. It also
prevents the decisions to double the IMF capital from coming
into force," she said.
The appearance of maintaining a working
relationship among opposing interests may present an assuring PR
message, but who really believes that the path to a new cold war is
paved with mutual cooperation?
Impetus for a parallel financial system
is certainly based more on political objective than commerce or
The Washington Post describes
What the new bank of BRICS is all about in this manner.
"Heads of state from Brazil, Russia,
India, China, and South Africa (the so-called BRICS countries)
agreed to establish a New Development Bank (NDB) at their
They will have a president (an
Indian for the first six years), a Board of Governors Chair (a
Russian), a Board of Directors Chair (a Brazilian), and a
headquarters (in Shanghai).
What is the purpose of this
Why have these countries
created it now?
And, what implications does
it have for the global development-finance landscape?
The 'what' is relatively
The NDB has been given $50 billion
in initial capital. As with similar initiatives in other regions
(see below), the BRICS bank appears to work on an equal-share
voting basis, with each of the five signatories contributing $10
The capital base is to be used to
finance infrastructure and "sustainable development" projects in
the BRICS countries initially, but other low and middle-income
countries will be able buy in and apply for funding.
BRICS countries have also created a
$100 billion Contingency Reserve Arrangement (CRA), meant to
provide additional liquidity protection to member countries
during balance of payments problems.
The CRA - unlike the pool of
contributed capital to the BRICS bank, which is equally shared -
is being funded 41 percent by China, 18 percent from Brazil,
India, and Russia, and 5 percent from South Africa."
China's motivation to participate in
BRICS banking is most interesting and revealing.
Since it is not absolutely essential for
China to be a member of BRICS, Gudrun Wacker, from the German
Institute for International and Security Affairs presents this
finding in a report,
China's role in G20 / BRICS and Implications, may shed an
insight on their reasoning.
"The future of BRICS depends on the
future performance of the G7/8 and G20: If the G20 develops into
a real coordination mechanism, there might be less Chinese
interest in BRICS.
The future prospects of BRICS were
presented as less promising than those of the G20, since BRICS
will not be able to solve global problems. It is not yet clear
whether the main deliverable of BRICS will be directed at
cooperation among its members or at third countries.
While the idea of BRIC as a group
was originally picked up by Russia (the invitation to the first
summit, as a move toward "extension" of the strategic triangle
Russia, China. India?), its members are now all active in
For China, it is also an important
effort to emerge from its isolation (Copenhagen climate summit).
Another factor shaping the future of
BRICS might be the development of US-China relations: While all
interview partners agreed that BRICS does not aim at creating a
new, anti-Western world order, it can be seen as a response to
the US-led world order."
The methodology of Mr. Wacker's research
relied upon comments from interviews.
Relying on sentiments that BRICS goal is
not bent on developing a counterbalance to Western banking hegemony
is poppycock. Geopolitical dimensions in international affairs have
Russia as the latest bogyman. Any economic analysis that ignores
power brokers desperate attempt to shift the causes of a failing
world economy onto the backs of enemy nations is flawed.
Also, the notion that major economic
transnational corporatists operate with altruism for third world
countries is sheer lunacy. All these trade organizations are
attempts to position vying interests to settle for a subservient
role to a subordinate structure under a global debt creation banking
Attempts to scare the populist into
that Global Warming inaction raises
war over climate change are absurd.
"At the G20 summit, other nations
overrode host Australia's attempts to keep climate change off
the agenda and agreed to call for strong action with the aim of
adopting a binding protocol at the Paris conference."
Such initiatives are pure political "PC"
orthodoxy and actually diminish prosperity.
The great schism in trade among nations
is that some countries are not willing to lie down with diseased
parasites. This should not be construed to favor the emergence of
the BRICS union as a shining future.
However, what it does purport is that
the road to the
NWO modeling for globalism by entrenched financial
elites has produced opposition.
Conflict is the normal human condition,
and especially when money is used as a medium of world control and
domination is the goal. The G20 is useless. Breaking the
monopoly that fosters endless terror and war is the universal
objective for the inhabitants of this planet.
Another unsavory photo op for world
leaders just produces more nausea.