issue ourselves. These leaders said this by themselves without a hint from our side.” Key topics on the agenda of Brics leaders were the need to reform the International Monetary Fund (IMF) and the development of joint financial institutions. In a statement after the summit, they expressed disappointment that scheduled IMF reforms had yet to be implemented, chief among them the failure of the US to ratify a decision to revise quotas by the end of the year. Quotas are a central feature of the IMF that determine a country’s voting power, access and maximum financial contribution to the international trade, monetary and exchange regulatory body. “The Brics meeting in Brisbane confirmed that within the G20 we have the G7 representing the West on the one hand, and the Brics five on the other,” said Vladimir Davydov, deputy chairman of the research council of the National Committee on Brics Research and director of the Institute of Latin America at the Russian Academy of Science. “The US is sabotaging a decision on new quotas at the IMF. The US tends to support a vision of a unipolar world, though it does it no favours,” he added. The tacit confrontation between Brics and the IMF is not new. At the G20 summit in St Petersburg in September 2013, heads of the fast-growing emerging economies expressed hopes that the IMF would complete its 15th quota revision by January 2014, which would mean boosting the share of capital from Brics countries in IMF funds, giving them a greater say in the way the organisation works. China is third in terms of quotas after the US and Japan, with India in eighth place and Brazil 10th. Reforms would reduce the US quota and weaken its influence in the body, which may explain why Congress has yet to ratify the changes. Delays in ratifying the reforms have been drawn out since G20 leaders adopted them as a joint commitment in 2009.
Tuesday, November 25, 2014
Challenge to the G7 Heads of the developing countries group are increasingly co-operating in ways that challenge the hegemony of the G7. Last July, at the sixth Brics summit in Brazil, they agreed to establish a New Development Bank and reserve currency pool that “brought co-operation within Brics to a fundamentally new level.” At the G20 meeting in Brisbane, the group announced the creation of a temporary board of directors for the bank, the head of which will be appointed prior to the organisation’s seventh summit, to be held under Russia’s chairmanship in the central Russian city of Ufa next July. Mr Putin told the group that Russia would prepare “draft strategies for economic partnership and a roadmap for investment co-operation” in time for the summit. Mr Davydov said the Brics countries were currently working on improving their collaboration and co-operation.“They have a number of practical projects, the New Development Bank and the reserve currency pool chief among them,” he said. “At $200bn, their combined financial capital is impressive. New opportunities for joint lending will make it possible to expand trade and investment ties within Brics. This is why both Russia and the other Brics members are interested in moving forward.” The group is increasing joint work in other areas, too. According to Mr Putin, Brics members are fast improving industrial and technological co-operation and creating new joint projects in energy, mineral extraction and refining, agriculture, and hi-tech. Members of the group have helped prepare a project to protect the Russian internet. The project is less concerned with cyber espionage than with fears that the Russian section of the internet could be closed down or subject to cyber attacks intended to disrupt it. The project has been given added impetus by proposals from British officials in August that sanctions could lead to Russia being disconnected from the international payments system, Swift. Sergei Katyrin, president of the Russian Chamber of Commerce and Industry, has high hopes for joint Brics rail projects in Africa. He said the chamber had been asked to represent the interests of Russian businesses at next year’s Brics summit in Ufa, for which Russia was planning to present more than 30 industrial projects of interest to partner countries.
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ension is mounting between the world’s top five emerging economies, known as Brics – Brazil, Russia, India, China and South Africa – and the wealthy nations of the G7, led by America, Britain, Germany, France and Japan, over the Ukrainian crisis and the way that global financial rules work. The world faces growing instability and the formation of new competing blocs of countries unless more is done to challenge a“unipolar”ap-
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proach to international relations, said Russian president Vladimir Putin before this month’s G20 summit in Brisbane. He believes that Russia’s role among emerging world economies is key to striking a new balance. The shifting landscape was evident in comments made on the summit sidelines by Kremlin foreign policy aide Yury Ushakov. Leaders of the Brics countries considered western sanctions against Russia over Ukraine a violation of international law, he said. “We were not raising this
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So far, there are a total of 23 forums for joint work within the Brics countries. These include regular ministerial level meetings, including the heads of diplomatic and financial departments, as well as the leaders of national security councils and ministries responsible for general economic development, industry, agriculture, health care and education. The annual Brics summit is preceded by an academic forum where members of think-tanks formulate priorities for the group, later presented to national leaders. There are councils representing commercial interests in Brics markets. A parliamentary forum may also be set up. Cooperation at political and commercial level is influencing cultural links, with a sister cities movement and youth and women’s organisations. There is a wide range of Brics initiatives, but the gulf between ideas and implementation is wide.“The Brics model is in flux and is still searching for stability,”Mr Davydov said.“It is clear the political will of the participating countries’ leadership has yet to converge. But something else is also clear – without institutionalisation, without acquiring a certain legal status, it will be hard for Brics to harmoniously establish constructive interaction with key international structures and other countries, let alone implement its own largescale plans successfully.”
Appeals to self-interest It would be naïve to think the G7 will not test the Brics’ strength, through appeals to self-interest and internal conflicts within the group. Still, as Igor Bunin, head of Russia’s Centre for Political Technologies noted, when Mr Putin was heading to Brisbane the Russian head of state understood that he was “flying into a cage with tigers, only a few of which – Brazil, India, China, and South Africa – would be kindly toward him.” In Brisbane, Mr Putin received many minor snubs – Australian Prime Minister Tony Abbott failed to meet him on landing in Brisbane, sending a couple of regional politicians instead.
BRICS build momentum to challenge G7