Thursday, April 2, 2015

Russia will Lead BRICS and Change the Face of the Global Financial Architecture

Russia will Lead BRICS and Change the Face of the Global Financial Architecture 

Russia on April 1, officially led the alliance of the five BRICS emerging countries (Brazil, Russia, India, China and South Africa). 


The main official event of the presidency will be a summit in Ufa, which will be determined by the main agenda and addressed the main issues of further existence and development of the BRICS alliance. The main objective of Russia sees early start New Development Bank and increase trust between the partners in the group. 

The result of the previous BRICS Summit, which took place in the Brazilian city Forteleza, decided to establish the Development Bank and the pooling of foreign exchange reserves. The main activities of the bank loans will be different global infrastructure projects in the BRICS countries. 

One of these mega projects is the revival of the "Great Silk Road", which will become a trade link, which will connect the East and West. Moreover own bank - is the foundation of financial independence, which is so necessary in today's world of constant crises and financial disasters. 

" Great Silk Road" Click to Enlarge

The forthcoming BRICS summit, to be held July 8-9, should become a platform for strategic issues on the formation of the energy, financial and trade security (read: independence). To address the issue of energy security Russia has proposed the creation of the Association of Energy and the Reserve Bank of fuel. Will also address issues of cooperation in areas such as mining, information and communication technologies, as well as issues of international security and stability.

For the future of leadership in the BRICS have a number of fundamental reasons:First. The advantage of the Bank's development is that it is independent from Western financial institutions and will be able to issue their own loans to member countries of the BRICS group, while not making any political conditions to borrowers. 

Thus, the bank will form not only financial independence BRICS alliance, but will also contribute to the preservation and even multiplying economic and political sovereignty of its participants. Second. To date, the BRICS - is 42% of the population, 32% of the territory and about 27% of world GDP. 

It should also be noted that the GDP growth rate is almost an order of magnitude higher than those in the so-called "civilized" Western countries. The creation of such a single financial institution as Development Bank will not only significantly improve the financial and economic independence of the participating countries, but also make the BRICS regional alliance that can set the tone in the world processes and propose its agenda. 

Third.The economy of developed Western countries mostly virtual, based on sales of services and often not even real goods, derivative financial products, which ultimately leads to inflate financial bubbles. In turn, the GDP of the BRICS countries for the most part formed from the actual production (ie the real economy) and supported by huge reserves of natural resources as needed. 

Hence, the creation of their own financial institutions (Bank for Development, the rating agency, etc.) will allow to fully realize this advantage, minimize the impact of the crisis of the western economy and to consolidate the BRICS group of countries as full lead locomotive of global development. Fourth. Not only increases the overall value of the total GDP of the BRICS countries, but also internal trade. 

Over the past five years, he has doubled, and the rate of future growth is expected at 5-10% per year. That is, countries actively interact with each other and increase the depth of cooperation. By the way, the quality and uniqueness of this cooperation is also stunning. Let us remember the gas contracts between Russia and China for 30 years in the amount of $ 400 billion and the revival of the already mentioned "Silk Road." Such dynamics indicates an increase in internal cohesion and ability to independently (without the help of Western financial institutions) to develop their economies. 

The implementation of all these benefits will depend on the degree of interaction, implementation of major projects of BRICS (Development Bank, the rating agency, its own infrastructure, unlocking the reform of the IMF) and skilful presidency of Russia. 

Russian President Vladimir Putin said in his address at the official website dedicated to the upcoming BRICS Ufa forum:"For a very short time, this format of interaction proved its relevance and effectiveness. Brazil, Russia, India, China and South Africa, more and more closely coordinate approaches on key issues on the international agenda, taking an active part in the formation of a multipolar world order, in the development of the modern model of the global financial and trading system. " 

Thus, Russia is becoming almost "at the helm "processes of global development, the main trend which is a departure from the total domination of the West (USA) and the formation of several independent centers of power. This is the replacement model for the unipolar model of a multipolar world order. Unipolar US-led globalism is gradually eroding. Requires new models and new paradigms for the future world order. These are the models and paradigms are ready to offer Russia.

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