BRICS Members Preparing World Bank Revolution

[Sabrina]

http://english.ruvr.ru/2012_02_28/67076816/

BRICS member-states are preparing a world banking revolution. They are planning to nominate an alternative candidate for the post of the Chairman of the World Bank for the first time in history. BRICS also demands redistribution of quotas in the International Monetary Fund in the near future and intends to study India’s initiative on creating a South-South Bank.

Representatives of Brazil, Russia, India, China and South Africa proposed a reform of the world financial system at their meeting in Mexico City which took place during the conference of G20 finance ministers and heads of central banks.

BRICS financiers are annoyed with the private rule that the head of the World Bank is always a representative of the US. They believe that candidates should be assessed based on their merits and not citizenship. BRICS member-states are convinced that it is essential to create competition for the US candidate, either from a BRICS country or from Europe. It has been decided to prepare a declaration on a coordinated position on this subject in the next two weeks. Candidates for the post of the head of the World Bank should be determined by the 23rd of March.

On the 29th of March BRICS leaders are expected to launch the mechanism of coordinating opinions on India’s proposal to create a South-South Bank. It is to become a support institution for countries with developing markets. BRICS member-states will be playing the main role in it, according to the quotas of votes. In this context they will have to assume serious financial responsibilities. The project looks promising but needs detailed studying, President of the Russian Financial Corporation Andrey Nechayev says.

"There are a lot of unanswered questions at the moment. Who is going to provide capitals for this bank? Who will be able to get money from it? There may be a lot more of those who want to take a loan than those willing to give loans. The new institution meets the requirements of world development. BRICS member-states need investments and not only cash but new technologies, methods of corporate management and innovations. At present it is not quite clear how this bank, if it ever opens, will help to solve this problem.”

In any case, India’s initiative on creating a South-South Bank is an attempt by BRICS member-states to offer their mite to the establishment of a new world financial system. They are planning to take a place in it according to their global weight. The rate of the Brazilian, Russian, Indian, Chinese and South African growing economies in world production exceeds 21% and these countries’ currency reserves exceed $4trln.

The latter fact gives these countries grounds to dispute the financial tradition set by the west. BRICS member-states intend to upgrade their role in the IMF. They are ready to discuss the strengthening of the Fund’s resource base, in particular, for helping the EU to get out of the debt crisis. At the same time, they demand redistribution of the Fund’s quotas, which means both the realignment of world financial flows and the rearrangement of votes when the IMF makes decisions. At present, almost half of the votes belong to the EU and the US, while BRICS member-states have about 10%. In 2010 BRICS raised its quota a little but its potential is still underrated. The West will keep trying to hamper the IMF reform, so as to prevent countries with growing markets from strengthening their positions. Meanwhile, the need for replenishing the IMF resource base will apparently make the management of the Fund respond to the BRICS initiative.

[DeBron]

Sounds good to me.

[Sabrina]

http://www.businessweek.com/news/201...cial-says.html


BRICS Bank to Be Discussed at March Summit, Russia Official Says

Feb. 27 (Bloomberg) -- Leaders from the world’s biggest emerging markets will ask their finance ministers to study a proposal for a bank funded exclusively by their nations at a summit in March, a Russian official said.

India has proposed setting up a multilateral bank that would be exclusively funded by developing nations and finance projects in those countries. The plan comes as leaders from Brazil, Russia, India, China and South Africa seek a bigger say in running the International Monetary Fund and other multilateral bodies to match their rising economic heft.

The creation of the bank “could mean some serious contributions of capital, so everything needs to be calculated and analyzed,” Andrey Bokarev, the head of international financial relations at Russia’s finance ministry, said in an interview yesterday from Mexico City, at the end of the Group of 20 summit.

Leaders from the so-called BRICS group will meet in New Dehli March 29, their fourth-ever summit. The proposal for a BRICS bank builds on a pledge leaders from the five nations made at their last meeting in April 2011 in China, when they promised in a statement to “strengthen financial cooperation among the BRICS Development Banks.”

The IMF projects 2012 economic growth at 3 percent in Brazil; 3.3 percent in Russia; 7 percent in India; 8.2 percent in China; and 2.5 percent in South Africa. The U.S. growth this year will be 1.8 percent while the 17-nation euro area will shrink by 0.5 percent, according to the IMF estimates released last month.

--With assistance from Kartik Goyal and Unni Krishnan in New Delhi, Arnaldo Galvao in Mexico City and Sunil Jagtiani in Singapore. Editors: Joshua Goodman

[cellardoor]

BRICS financiers are annoyed with the private rule that the head of the World Bank is always a representative of the US. They believe that candidates should be assessed based on their merits and not citizenship.

Meritocracy rules!!!

[Sabrina]

8 March
http://americankabuki.blogspot.com/2...-to-brics.html
via RT.com business

China to export yuan to BRICS

China is reportedly to begin extending loans in yuan to BRICS countries in another step towards internationalizing the national currency and diversifying from the US dollar.

The Chinese Development Bank wants to sign a memorandum of understanding with the country's partners from BRICS group of developing countries on increasing yuan-denominated loans, while partners increase loans in their national currencies, The Financial Times reports, citing people familiar with the talks.

The move aims to increase trade volumes between the five nations and diversify from using the US dollar.

Brazil and South Africa were quick to react to the proposal, saying they expect the lending pledge to be included into a master agreement to be signed in New Delhi on March 29.

“We will discuss the creation of structures and mechanisms for lending in local currencies in order to maximize economic and financial transactions between the countries that are members of the accord,” Brazil’s development bank BNDES said.

China, with 54 per cent of its foreign reserves in US dollars, has been trying to diversify from the currency it believes will weaken soon and for a protracted period.

China agreed to use national currencies with Russia, Belarus and Japan for bilateral trade. The country also decreased its foreign reserves in dollars recently in favor of the Australian and Canadian currencies.