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. . . .


Mohsin Ali, "Confronting the Quiet Rise of China, India," The Pilot, April 6, 2008

Shanghai, China 1990 Shanghai, China 1990

Shanghai, China 2010 Shanghai, China 2010

Vincent Fernando, "15 Facts About China That Will Blow Your Mind," Business Insider, February. 23, 2010

Chris Giles, "China poised to pass US as world's leading economic power this year,", April 30, 2014

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

Jack Farchy and Kathrin Hille, "Russian companies prepare to pay for trade in renminbi,", 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,", 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,", July 15, 2014]

Flynt Leverett and Hillary Mann Leverett, "The Rise of the Petroyuan and the Slow Erosion of Dollar Hegemony,", July 28, 2014

Tyler Durden, "India Slams US Global Hegemony By Scuttling Global Trade Deal, Puts Future Of WTO In Doubt,", August 1, 2014

[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,", August 8, 2014]

back button