BRICS Summit Special
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subscribeasdf aklsd jflksdj to the flksdjnewsletter flsdkj flksdj df f d f d fd fdfsssflsdjfldsjf lkdsj(click flksdj fklsdjhere) flksdj Issue #20 - July 2014 flkdsjf lksdjf lksdfj BRICS SUMMIT READER SPECIAL E-NEWSLETTER The Club in the G20 Club Knowledge Box on Contingency Reserve Arrangement by Kavaljit Singh; Insights on the BRICS by Vijay Prashad,Trinity Collegue, US, Page Patrick Bond, University of Kwala Zulu, South Africa and s 6 | 10 14 25 Kavaljit Singh, Public Interest Research Centre, India); 2012 2013 Must Read A long-term 2014vision for BRICS, by the Observer Research Foundation, India; Oliver Stuenkel, Getulio Vargas License by istockphoto Foundation (Brazil). News from the BRICS countries In “BRICS Bank: In “The BRICS: The In “The Global In “China’s role in In “Club In his article, “High New bottle, how’s Struggle for Global Economic Chessboard G20/BRICS and Governance: Ambitions: the the wine?” Sameer Hegemony in a and the Role of the implications,” Gudrun Prospects for civil Programme for Dossani of Action Multi-Polar World”, BRICS: Brazil, Wacker, Senior fellow society engagement”, Infrastructure Aid International Graciela Rodriguez Russia, India, China, German Institute for Vitaliy Kartamyshev Development in Africa explores questions of Instituto EQUIT and South Africa”, International and of GCAP-Russia, (PIDA),” Mzukisi about the Bank and and member of Professor Jayati Security Affairs, discusses the Qobo, Centre for the the increasing role of REBRIP describes Ghosh of Jawaharlal describes why BRICS evolution and roles of Study of Governance Southern countries as BRICS’s potential to Nehru University may have less the BRICS, Innovation, agents of supplant the orthodox describes the existential importance particularly in University of Pretoria develop- neoliberal model challenges of the for China than G20 and international describes how PIDA ment. with a state-led BRICS, including regional “clubs”, how development. has a blueprint for the economic system. ways it can deal with China is launching the financing of Southern countries Asian Infrastructure megaprojects by the without repeating the Investment Bank. BRICS Bank, among mistakes of the North. others Pages 3-5 Pages 7-9 Pages 11-14 Pages 15-18 Pages 18-20 Pages 22-25 a Introduction READER Which Development Paradigm Will the BRICS Follow? Introduction Nancy Alexander, Heinrich Böll Foundation - North America Civil society organizations (CSOs) –“Will there be mechanisms to deliver Ghosh of Jawaharlal Nehru are asking important questions about messages to the Leaders and their University describes the need for the future of collaboration by the new institutions? Since, reportedly, BRICS to enhance diversification in BRICS, such as: the BRICS Bank will be based in exports and bilateral currency trade; BRICS SUMMIT –“Are the current Leaders of the Shanghai, China (probably with offices address income and asset inequality; BRICS – Rousseff (Brazil), Putin in other countries), how will this affect integrate the views of developing (Russia), Modi (India), Xi Jinping the capacity of CSOs to relate to the countries; and avoid replicating the (China) and Zuma (South Africa) – NDB? patterns of North-South interaction capable of bringing a progressive (for instance, where the North keeps vision to their collaborative This “BRICS Summit Reader” the monopoly of high-value-added endeavors? Modi, elected as Prime includes reflection on these and production). Minister in May 2014, will make his other important questions. In debut at the BRICS Summit. “BRICS Bank: New bottle, how’s In “China’s role in G20/BRICS and Writing in The Guardian, Jayati the wine? Sameer Dossani of implications,” Gudrun Wacker, Ghosh says that Modi’s election is a Action Aid International explores Senior Fellow, German Institute commanding win for Hindu questions about the bank and the for International and Security nationalism, corporate India, and increasing role of Southern countries Affairs, describes why BRICS may crony capitalism. As Chief Minister as agents of development. Dossani have less existential importance for of his state of Gujarat, Modi doesn’t see the bank moving away China than its regional “clubs” and delivered economic growth without from the development model focused the G20 and the limited role for civil commensurate human development on urbanization, infrastructure society in Chinese-led “clubs” and or tolerance of dissent. development, and market expansion. institutions. Importantly, China is And, he is not optimistic its joining in the launch of the BRICS –“What messages might CSOs deliver sensitivity to environmental and Bank, while also launching the Asian to BRICS Leaders, especially about social questions. But, he expects Infrastructure Investment Bank their two initiatives, which establish a that the BRICS will promote (AIIB) with the same initial BRICS New Development Bank (NDB) industrial transformation, which is capitalization as the BRICS Bank and a Contingency Reserve something that “the World Bank and and the same basic goal of tackling Arrangement (CRA)?” (See Box, IMF…have opposed and blocked.” the deficit in infrastructure below.) CSOs have cogent analyses investment. of how the NDB should adopt In “The BRICS: The Struggle for policies related to, transparency and Global Hegemony in a Multi-Polar Each geographical region is social, and environmental norms. World”, Graciela Rodriguez, developing blueprints for mega- But, CSO analyses of the Coordinator of Instituto EQUIT projects – usually without input from “development paradigm” and Member of REBRIP (Brazilian civil society. In his article, “High (increasingly neoliberal with a state- Network for the Integration of the Ambitions: the Programme for led “twist”) are rarer. The People), describes BRICS’s Infrastructure Development in Africa international financial institutions no potential to supplant the orthodox (PIDA),” Mzukisi Qobo, Senior longer need to enforce some neoliberal model with a state-led Lecturer and Deputy Director, neoliberal policies (e.g., budget economic system. Rodriguez Centre for the Study austerity, public-private partnerships suggests that the creation of the of Governance Innovation, (PPPs) and foreign direct BRICS Bank, the Contingency University of Pretoria describes investment (FDI)), because sadly, Reserve Arrangement, and the how PIDA is developing blueprints most national capitals now consider conduct of trade among BRICS in for African infrastructure, especially such policies as “conventional national currencies have potential to in energy, transport, and water wisdom.” Whereas a growing protect against the cyclical crises of sectors estimated at US$360 billion number of trade and investment transnational and financial capital up to 2040. These mega-projects agreements enforce neoliberal and promote a new development provide a destination for rising policies and handcuff the state, few model. infrastructure finance from external mechanisms exist to monitor or actors, including the new BRICS enforce normative (human rights or In “The Global Economic Bank and the Asian Infrastructure environmental/climate) standards. Chessboard and the Role of the Investment Bank. Qobo concludes BRICS: Brazil, Russia, India, China, that PIDA could become a “bane for and South Africa”, Professor Jayati the continent,” if it fails to create 1 and nurture the governance “Coalition Against Poverty”, “Must Reads” cover reflections by READER mechanisms to ensure that discusses how years of global India’s Observer Research infrastructure projects are economic expansion only deepened Foundation; Oliver Stuenkel, Introduction undertaken with greater sensitivity levels of inequality. He analyzes the Getulio Vargas Foundation (Brazil); to the environment and social geopolitical importance of BRICS, Vijay Prashad, Trinity College inclusivity.” their role in fostering results- (US); Patrick Bond, University of oriented policies, and the KwaZulu-Natal (SA); and Kavaljit In “Club Governance: Prospects for opportunities for and challenges to Singh, Public Interest Research civil society engagement”, Vitaliy civil-society engagement in BRICS’ Centre (India). BRICS SUMMIT Kartamyshev, Co-Chair of GCAP decisions. Russia and President, Foundation Launch of New Infrastructure Facilities The BRICS Bank will start up in 2016 with $10 headed by Jin Liqun, chairman of China billion in cash and $40 billion in guarantees, which International Capital Corp., one of the country’s will be used to raise capital on international leading investment banks. markets. Each country will contribute equally. (Source: Reuters articles) --Any country can join the bank with a $100,000 share. Global Infrastructure Facility (GIF), World --In five years the bank's capital should double to Bank. The World Bank is expected to launch the $100 billion through capitalization from funding GIF in 2014. It has a grand name, but an initial members, debt emissions or contributions from capitalization of only about $200 million. The GIF new members. The BRICS will hold a minimum of will demonstrate a new model of investment 55 percent of the bank's shares. finance that combines a project preparation facility --Location: Shanghai, with one or more regional with an investment platform. The pilot facility’s offices. big idea is to create a new infrastructure asset (Sources: Articles in Reuter’s and Folha articles) class, which would enable the financing of infrastructure by global capital markets. There Asian Infrastructure Investment Bank. Whereas are more