THE WISDOM FUND: News & Views
July 15, 2014
Asia Times

BRICS Against Washington Consensus

by Pepe Escobar

The headline news is that this Tuesday in Fortaleza, northeast Brazil, the BRICS group of emerging powers (Brazil, Russia, India, China, South Africa) fights the (Neoliberal) World (Dis)Order via a new development bank and a reserve fund set up to offset financial crises.

The devil, of course, is in the details of how they'll do it.

It's been a long and winding road since Yekaterinburg in 2009, at their first summit, up to the BRICS's long-awaited counterpunch against the Bretton Woods consensus - the IMF and the World Bank - as well as the Japan-dominated (but largely responding to US priorities) Asian Development Bank (ADB).

The BRICS Development Bank - with an initial US$50 billion in capital - will be not only BRICS-oriented, but invest in infrastructure projects and sustainable development on a global scale. The model is the Brazilian BNDES, which supports Brazilian companies investing across Latin America. In a few years, it will reach a financing capacity of up to $350 billion. With extra funding especially from Beijing and Moscow, the new institution could leave the World Bank in the dust. Compare access to real capital savings to US government's printed green paper with no collateral.

And then there's the agreement establishing a $100 billion pool of reserve currencies - the Contingent Reserve Arrangement (CRA), described by Russian Finance Minister Anton Siluanov as "a kind of mini-IMF". That's a non-Washington consensus mechanism to counterpunch capital flight. For the pool, China will contribute with $41 billion, Brazil, India and Russia with $18 billion each, and South Africa with $5 billion. . . .

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Shanghai, China 1990 Shanghai, China 1990

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[ . . . estimated to be worth over $400bn.--"Russia signs 30-year gas deal with China," bbc.com, May 21, 2014]

Jack Farchy and Kathrin Hille, "Russian companies prepare to pay for trade in renminbi," ft.com, June 8, 2014

[China has a larger high-speed rail network than the entire European Union or the United States, . . . The train network is set to double by 2020--"China's high-speed rail revolution," bbc.com, July 15, 2014]

[Goodbye visions of an SDR-world currency. As for the USD...--Tyler Durden, "BRICS Announce $100 Billion Reserve To Bypass Fed, Developed World Central Banks," zerohedge.com, July 15, 2014]

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[The message is clear: India is unavailable as a 'counterweight' against China or as a silent partner to 'isolate' Russia.--Melkulangara Bhadrakumar, "Modi Rewrites India's Tryst with Destiny," strategic-culture.org, August 8, 2014]

[There has been a breakdown of faith in the Western economic and political models.--M K Bhadrakumar, "What draws Modi to China," strategic-culture.org, September 16, 2014]

[Since mid-July, nearly every night in the US the price of gold remains steady or drifts higher. This is when the eastern hemisphere markets are open and the market players are busy buying physical gold for which delivery is mandatory. But as regular as clockwork, following the close of the Asian markets, the London and New York paper gold markets open, and the price of gold is immediately taken lower as paper gold contracts flood into the market setting a negative tone for the day's trading.--Paul Craig Roberts and Dave Kranzler, "Rigged Gold Price Distorts Perception of Economic Reality," paulcraigroberts.org, September 22, 2014]

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[Our Western partners promote respect for the rule of law, democracy and minority opinion within countries, while failing to stand up for the same values in international affairs. This leaves Russia as a pioneer in promoting democracy, justice and rule of international law. A new world order can only be polycentric and should reflect the diversity of cultures and civilisations in today's world.--"Remarks by Foreign Minister Sergey Lavrov at the XXII Assembly of the Council on Foreign and Defence Policy," mid.ru, November 22, 2014]

[Putin is selling Russian oil and gas only for physical gold.--Dmitry Kalinichenko, "Grandmaster Putin's Golden Trap," gold-eagle.com, November 23, 2014]

[Since 2002, after the US unilaterally pulled out of the ABM Treaty, which was absolutely a cornerstone of international security, a strategic balance of forces and stability, the US has been working relentlessly to create a global missile defence system, including in Europe. This poses a threat not only to Russia, but to the world as a whole - precisely due to the possible disruption of this strategic balance of forces. . . .

No one will ever attain military superiority over Russia. . . .

The Eurasian Economic Union will start working in full on January 1, 2015. . . . its fundamental principles . . . are equality, pragmatism and mutual respect, as well as the preservation of national identity and state sovereignty of its member countries.--"Presidential Address to the Federal Assembly," kremlin.ru, December 4, 2014]

[Welcome to the new trans-Eurasia choo-choo train. At over 13,000 kilometers, it will regularly traverse the longest freight train route in the world, 40% farther than the legendary Trans-Siberian Railway. Its cargo will cross China from East to West, then Kazakhstan, Russia, Belarus, Poland, Germany, France, and finally Spain.--Pepe Escobar, "Go west, young Han," atimes.com, December 17, 2014]

[China's political mindset about international politics is at a turning point and it could mark the beginning of a new role of China in global affairs.--Francesco Sisci, "Beijing chums up to Washington," atimes.com, January 5, 2015]

[According to a new report by the McKinsey Global Institute (MGI), China's debt has quadrupled from $7 trillion in 2007 to $28 trillion as of mid-2014, reaching 282 percent of gross domestic product (GDP) and higher than the level of the United States. Continuing its current pace of growth would see China's debt reach 400 percent of GDP by 2018, the equivalent of Spain.--"China's Great Wall Of Debt," thediplomat.com, March 4, 2015]

[ . . . protecting the dollar's status is a major reason for US imperial wars.--Michele Brand and Remy Herrera, "Dollar Imperialism, 2015 Edition," counterpunch.org, March 6, 2015]

Tania Branigan, "Support for China-led development bank grows despite US opposition," theguardian.com, March 13, 2015

AUDIO: "An Imminent Collapse of The US Economy?," moneymappress.com, March 15, 2015

AUDIO (Jeff Brown interview): "While the West Conducts War, The East Conducts Business," thedailycoin.org, March 23, 2015

[In the past, China had a unifying infrastructure enterprise like the Great Wall. In the future it will have a major project of unifying Eurasia via high-speed rail.--Pepe Escobar, "Westward Ho On China's Eurasia BRIC Road," counterpunch.org, March 24, 2015]

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