BRICS change the world: doing development differently

A prospective new financial architecture promises to reform and improve development finance for the world.

Brics countries

FIVE countries came together during the week to grab international headlines over how they might, as a group, change the world: Brazil, Russia, India, China and South Africa (Brics).

And they would do so in the most tried-and-tested way imaginable: financially, as a single economic entity. As a bloc Brics may effect change on a global scale, but the grouping would still do so in the traditional way of flexing economic muscle.

The annual Brics summit held during the week in Durban, South Africa, focused on what that muscle can do – challenge the World Bank and the International Monetary Fund in the way development finance is conducted, as well as the Western dominance that has prevailed in both Bretton Woods institutions.

Those institutions were never meant to be that way, of course, as a reading of their founding texts would show. But any initial magnanimity soon gave way to self-interest: US and European dominance of the World Bank and the IMF respectively was to be a Western “consensus” imposed on the world like a global neo-colonial regime.

Interestingly, the original Bric as both a term and a grouping originated not in any of the initial four countries or the developing world, but in the US itself.

None other than Goldman Sachs’ Asset Management Chairman Jim O’Neill coined the term in 2001 for those countries he believed would outpace the US in total GDP by 2020.

At the turn of the century Brazil, Russia, India and China were merely regarded by some as emerging economies developing under their own steam.

After O’Neill’s coinage they held their first summit in 2009 and invited South Africa to join them a year later, and Brics was born.

Since then, Brics as both concept and entity has had vigorous growth and a vibrant youth. It compares favourably with the IMF and the World Bank, both pushing 70 years and weighed down by limiting conditionalities and outmoded economic ideology.

Both institutions typically adopt a cold, mechanistic approach to development that prioritises market interests over human needs. Their Western bias is also a throwback in a 21st-century world of shared global interests and aspirations, and a world in which Western economies themselves are in trouble.

In contrast, Brics as a bloc of emerging economies serves as a bridge between the developing Third World and the developed First World. It seeks to narrow that yawning chasm by focusing on reviving global growth and ensuring macroeconomic stability.

Those virtues that had once been the preserve of the West have become its elusive goals. The “developed” and the “emerging” (mostly, once “developing”) economies have traded places.

The new global bank that Brics wants to establish is expected to emphasise infrastructure development and trade. The first represents solid investment in development for the future, and the second works as an economic multiplier for further growth.

On paper, Brics countries account for almost half the world’s population and just over a quarter of world trade. But more important than these bare figures is how Brics economies have been driving global growth for years, as acknowledged by the World Bank itself.

The idea for a new global bank arose only last year. So how the measured progress at the Durban summit is perceived depends at least as much on the observer: is the glass half-full or half-empty?

Some of the most difficult decisions, such as financing modes, remain unresolved. Its primary purposes like the operation of funds in project financing and a contingency fund as crisis buffer will take more time to work out.

Pessimists may cite how the absence of agreement on even the quantum of fund contribution from each country bodes ill for Brics. Basing the contribution on economic capacity makes sense, but concerns were expressed over how that would inevitably make a hulking China dominant.

A standard sum of US$10bil (RM31bil) from each country as seed capital was then considered, following a Russian proposal, but the final decision was left until later.

Optimists would say that far from weak indecision, this showed an openness about not wanting any country to dominate, with agreement on equality with a fair and manageable quantum for all.

However, realists may say that in such financial matters China would still eventually dominate. To that, it can be said that dominance by a single country was never a problem before, given the prominent US role and influence in the World Bank and the IMF.

At this point some may say it was precisely because of single-power dominance that had compromised the work of the Bretton Woods institutions. It might then be observed that a new global bank dominated by China would only balance the World Bank (and the IMF), which it would complement rather than replace.

Some observers may see crippling incompatibility in the different political systems within BRICS.

But such diversity need not be an obstacle, particularly when all countries now work within a global capitalist system.

President Vladimir Putin, often cited in Western circles as a modern incarnation of the Soviet bear, even insisted that a new global bank “must work on market principles only.” And “communist” China is not only a major and enthusiastic player in global markets, but – to former British foreign minister David Miliband – has even acted as a saviour of Western capitalism.

What worries fans of the IMF and World Bank is not how a new global bank as competitor will “steal their business,” but how it may force both to be more democratic and more sympathetic to the developing world. Who else but those currently dominating them in Washington and Brussels would object?

Japan as an emerging economy itself decades ago had its chance to forge a new alternative in international finance with the Asian Development Bank, but blew it.

The former coloniser in Asia seeking to make good in its post-war period, with US partnership, soon settled into establishment mode alongside its Bretton Woods equivalents. A new global bank established by BRICS will be a welcome addition to the existing financial institutions.

Its continental and political diversity would also make a slide into betraying its noble purpose more difficult.

Late last year, Brazil suggested that the proposed bank should be modelled on Asean’s Chiang Mai initiative.

This is a time for a sharing of experiences when each can learn from the rest, not of jealous exclusion and unfounded fears of rivalry.

In time, perhaps even the World Bank and the IMF can find it in themselves to accommodate and welcome new financial institutions operating on their “turf”.

At least that would help them return to their initial noble calling.

Behind the Headlines

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Pussy Riot and Malaysian foreign-funded NGOs

Bizarre as it seems, two prominent Malaysian NGOs have something in common with Pussy Riot – the support of the US National Endowment for Democracy.

WHO loves Pussy Riot? Paul McCartney, Red Hot Chili Peppers and Sting are in the long list of celebrities supporting the so-called Russian feminist punk rock outfit.

But Madonna appears to have made the biggest impact with her brazen display of endorsement.

Midway through her 1984 hit Like a Virgin during a concert in Moscow last month, she stripped to exhibit the words “Pussy Riot” written across her back.

Her show did little to prevent three members of the group – Maria Alyokhina, Nadezhda Tolokonnikova and Yekaterina Samutsevich – from being jailed for two years.

They were found guilty of hooliganism and inciting religious hatred in an orthodox Moscow cathedral.

There has been much global media frenzy over their perceived persecution.The international condemnation has come from Amnesty International, the White House, the European Union, the British and German governments and an assortment of human rights groups.

Among the latest to join the chorus are Yoko Ono, wife of ex-Beatle John Lennon, and Myanmar opposition leader Aung San Suu Kyi.

The story as being spun by the mainstream global media is that of three young innocent women who were merely expressing their freedom being jailed by the dissent-silencing president Vladimir Putin (ex-KGB, remember?) and as such, need the support from all the outraged freedom-loving, justice-seeking and human rights-embracing people of the world.

After presenting the Lennon Ono Grant for Peace award to Tolokonnikova’s husband, Ono said: “I thank Pussy Riot in standing firmly in their belief for freedom of expression and making all women of the world proud to be women.”

Oh yeah? Let’s look at what they did to earn such an honour. On Feb 21, they stormed the altar of Cathedral of Christ the Saviour wearing balaclavas and bright outfits to “perform” what has been reported as a “punk prayer to the Virgin Mary”.

In reality, it was a grossly blasphemous parody of a Latin hymn, the English lyrics of which read: Holy, Holy, Holy, Lord God of Hosts 

Heaven and earth are full of your glory. Hosanna in the highest, Blessed is he who comes in the name of the Lord. Hosanna in the highest

What they yelled during their “performance” was this:

Holy s***, s***, Lord’s s***! Holy s***, s***, Lord’s s***! St Maria, Virgin, become a feminist …*Patriarch Gundyaev believes in Putin *(The Russian Orthodox Church’s Patriarch Kirill of Moscow and All Russia, whose secular name is Vladimir Gundyaev)
B****, you better believe in God!

The group is an offshoot of another known as “Voina”, or “War” in Russian, which has since 2008 staged several offensively shocking events in the name of “performance art”, including painting a mural of a penis on a bridge, having group sex in a museum, throwing live cats at workers of a McDonald’s outlet, overturning of police cars and firebombing buildings. They also stole a chicken from a supermarket and performed a lewd act with it.

It’s highly doubtful that the information would be revealed by the Western media when the case comes up for appeal on Oct 1.

Imagine the repercussions if such a group entered a mosque, church, or a Hindu or Buddhist temple in Malaysia to similarly “express their freedom”.

People who commit such acts in the US or in most European countries would also be arrested, charged and jailed, so what’s the big deal about these women?

For one thing, they seem to have powerful backers, in the form of the US National Endowment for Democracy.

Yes, the same entity supporting Bersih and Suaram, which is now being probed over its sources of foreign funding.

According to, Pussy Riot and Voina have open links to the NED through Oksana Chelysheva, who is deputy executive director of the Russian-Chechen Friendship Society funded by the NED and George Soros-funded outfits.

The NED was created in 1983, seemingly as a non-profit-making organisation to promote human rights and democracy but as its first president Allen Weinstein admitted to The Washington Post in 1991, a lot of what it does overtly used to be done covertly by the CIA.

In the words of ex-CIA officer Ralph McGeehee, it subsidises and influences elections, political parties, think tanks, academia, publishers, media and labour, religious, women’s and youth groups.

Russia has since introduced a new Bill to label NGOs that get foreign funds and are involved in politics as “foreign agents”, with their accounts subject to public scrutiny.

Paul Craig Roberts, a former Assistant Secretary of the Treasury, says the US, too, has laws which require foreign interests to register as foreign agents but this does not always apply to all Israeli lobby groups.

“There are no political parties in the US that are funded by foreign interests. No such thing would be permitted. It would be regarded as high treason,” he was quoted as saying by Pravda.

So, if outsiders are not allowed to fund and interfere in US politics, why should we allow its agencies to meddle in ours?


> Associate Editor M. Veera Pandiyan sees the wisdom in this quote from Danish philosopher Soren Kierkegaard: People demand freedom of speech as a compensation for the freedom of thought which they seldom use.

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Sep 22, 2012

China, Russia sound alarm on world economy at APEC summit

By Timothy Heritage

(Reuters) – China and Russia sounded the alarm about the state of the global economy and urged Asian-Pacific countries at a summit on Saturday to protect themselves by forging deeper regional economic ties.

Chinese President Hu Jintao said Beijing would do all it could to strengthen the 21-member Asia-Pacific Economic Cooperation (APEC) by rebalancing its economy, Asia’s biggest, to improve the chances of a global economic recovery.

Russian President Vladimir Putin said trade barriers must be smashed down as he opened the APEC summit which he is hosting on a small island linked to the Pacific port of Vladivostok by a spectacular new bridge that symbolizes Moscow’s pivotal turn to Asia away from debt-stricken Europe.

“It’s important to build bridges, not walls. We must continue striving for greater integration,” Putin told the APEC leaders, seated at a round table in a room with a view of the $1 billion cable-stayed bridge, the largest of its kind.

“The global economic recovery is faltering. We can overcome the negative trends only by increasing the volume of trade in goods and services and enhancing the flow of capital.”

Hu told business leaders before the summit the world economy was being hampered by “destabilizing factors and uncertainties” and the crisis that hit in 2008-09 was far from over. China would play its role, he said, in strengthening the recovery.

“We will work to maintain the balance between keeping steady and robust growth, adjusting the economic structure and managing inflation expectations. We will boost domestic demand and maintain steady and robust growth as well as basic price stability,” he said.

Hu spelled out plans for China, whose economic growth has slowed as Europe’s debt crisis worsened, to pump $157 billion into infrastructure investment in agriculture, energy, railways and roads.

Hu steps down as China’s leader in the autumn after a Communist Party congress, but he promised continuity and stability for the economy.

Putin, who has just begun a new six-year term as president, said on Friday Russia would be a stable energy supplier and a gateway to Europe for Asian countries, and also pledged to develop his country’s transport network.


The relative strength of China’s economy, by far the largest in Asia and second in the world to the United States, is key to Russia’s decision to look eastwards as it seeks to develop its economy and Europe battles economic problems.

APEC, which includes the United States, Japan, South Korea, Indonesia and Canada, groups countries around the Pacific Rim which account for 40 percent of the world’s population, 54 percent of its economic output and 44 percent of trade.

APEC members are broadly showing relatively strong growth, but boosting trade and growth is vital for the group as it tries to remove the trade barriers that hinder investment.

The European Union has been at odds with both China and Russia over trade practices it regards as limiting free competition. Cooperation in APEC is also hindered by territorial and other disputes among some of the members.

Putin, 59, limped slightly as he greeted leaders at the summit. Aides said he had merely pulled a muscle. Underlining Putin’s good health, a spokesman said he had a “very active lifestyle.”

Discussions at the two-day meeting will focus on food security and trade liberalization. An agreement was reached before the summit to slash import duties on technologies that can promote economic growth without endangering the environment.

Breakthroughs are not expected on other trade issues at the meeting, which U.S. President Barack Obama is missing. He has been attending the Democratic Party convention and Washington is being represented by Secretary of State Hillary Clinton.

U.S. officials say Clinton’s trip is partly intended to assess Russia’s push to expand engagement in Asia, which parallels Washington’s own turn towards the Asia-Pacific region.

Also missing the summit was Australian Prime Minister Julia Gillard. Putin said she had dropped out because her father had died.

(Additional reporting by Gleb Bryanski, Andrew Quinn, Katya Golubkova, Douglas Busvine, Denis Pinchuk and Andrey Ostroukh; Editing by Janet Lawrence)

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Western Imperial powers overreach, yet again!

From Egypt to Russia, the Western urge to meddle in other countries continues to be troublesome.

Behind The Headlines By Bunn Nagara

THE so-called Arab Spring continues to spring surprises, most of all on its Western backers. With double standards in international politics, just about anything goes.

US, Israeli and European cheerleaders of Arab “regime change” through street politics have realised by now that the naive notion of ousting dictators does not travel in a straight line. Among other things, the new regimes that emerge have tended to be more independent and less Western-friendly.

In Egypt, the Muslim Brotherhood’s Islamist Freedom and Justice Party has taken the pivotal role in post-Mubarak political life, including the upper house of Parliament. In Tunisia much the same has been happening with the Islamist Ennahda party.

Shifting the goalposts: When allegations of voter fraud bore no fruit, Moscow’s street protesters switched to accusing Putin of using rough tactics on them as police made arrests. — AFP

An element of that plays in the opposition Syrian National Council’s multiple splits. The more cautious Western officials are currently hesitant to provide “hard power” to the rebels battling Damascus, since rebel ranks include al-Qaeda.

Right-wing US lawmakers like John McCain are chiding President Obama for not arming Syrian rebels. It is telling that McCain’s best claim to fame is as a veteran of the Vietnam War, that classic icon of a failed and futile US armed intervention.

Even so, the temptation for a hyperpower to intervene can be irresistible, so Washington covertly dispatches regime-change NGO activists as catalysts instead of the Marines. It is what Secretary of State Hillary Clinton calls “smart power.”

However, the double standards when compared to similar situations elsewhere then become glaring. After Western-allied Saudi Arabia sent troops into Bahrain to suppress protesters there one year ago, Western-compliant Qatar has called for supplying troops and weapons to Syrian rebels fighting President Assad.

To an incumbent government in Iran that is also being targeted by Western and Israeli policymakers, all of that is enough to invoke Islamism in defiant response. Although President Mahmoud Ahmadinejad remains the convenient bogeyman for the West, his political rivals at home are even more conservative and Islamist as shown in parliamentary elections early this month.

Nonetheless, neither religion nor showy forms of piety is the issue: it is a country’s unwillingness to comply with Western requests and demands that is. The stakes are raised when such a country is oil-rich and occasionally snubs Western concerns as well.

Currently the most conspicuous example of this is Russia, or rather president-elect Vladimir Putin’s Russia. This is a country that happens to channel the West’s worst “fears” today: being big, rich in oil and gas, independent-minded, “uncooperative” with the West over Libya, Syria and Iran, and even opposed to Nato’s eastwards expansion right up to Moscow’s doorstep.

Thus US and some European leaders are as keen for a “Russian spring” as they have been about a political spring-cleaning in Arab and Muslim countries they do not yet control. How the West would respond to anti-Putin street protests was therefore a foregone conclusion.

Russia’s recent presidential election provided the moment for a convergence of anti-Putin posturing. Russian street protesters, then Western media, and then Western governments formed a chorus to denounce Putin’s victory and the electoral process that led to it.

This happened both from a distance, such as the State Department or the Oval Office, as well as from within Russia by a visiting team of OSCE (Organisation for Security and Cooperation in Europe) election observers. It also occurred from the editorial offices of supposedly liberal Western media.

But what is the substance of complaints, apart from the usual geopolitical power plays?

If indeed the election had been a sham as the protesters and critics have been claiming, the evidence for it would have been presented, analysed, commented on and displayed. The Putin electoral bandwagon would and should have been stigmatised, although the appropriateness of any foreign political action would still be in question.

Russian protesters at least would have been justified in their street demonstrations, and assured of the justice of their cause. Instead, the protesters were already out in the streets denouncing Putin months before the election, which gives some indication about the content of their complaint.

Now weeks later, opposition claims of vote fraud favouring Putin is still without substance. Opinion polls before the election indicated a two-thirds majority support for Putin, and the results have since shown 64%.

Even Putin’s opponents had agreed that he had no problem securing enough votes to win the election. Until now his opponents and critics have not explained why he needed to cheat to win, and furthermore they failed to show that he had cheated.

No evidence

Interestingly, the OSCE observers indirectly rebuffed opposition claims of multiple voting by Putin supporters, and instead reported on the negative perceptions that attended the voting. The Europeans had no evidence of vote fraud and declared that there were no significant violations, but they still hankered after attaching a negative spin to the election and its result.

They cited no improper motives by Putin’s United Russia party, yet they were not above tainting the election result through implication or by default. Perhaps that was an attempt at smart power too.

If anyone had any “actionable” evidence of fraud it would have been the OSCE observers, yet they served up nothing. Their position would in effect have been a workable endorsement of the election’s credibility.

United Russia had failed to secure a two-thirds majority, yet the CIA-linked Voice of America reported that Putin had won “by a landslide.” Meanwhile, the opposition claim of voter fraud persisted all-round in the face of the absence of any evidence to substantiate it.

That much might have been expected of Putin’s opponents at home and even Western governments averse to his independent ways. But for Western media to chime along without questioning the basis of their presumptions, and even failing to report dispassionately, shows a decline in professional ethics.

At the heart of such reporting and editing is a tendency to approach opposition claims with less scepticism than government ones, although both sides are equally interested parties in an electoral contest. It is an approach typical of the Western media in the Third World.

As for Moscow’s street protesters, they have lately taken to shifting the goalposts. After their allegations of vote fraud bore no fruit, they switched to accusing Putin of using rough tactics on them as police made arrests.

At the same time, protesters say they want neither violence nor a revolution, just more transparency and the rule of law. They have no alternative candidate they prefer to Putin, just an alternative mode of the government’s handling of the election for a better sense of confidence in the process.

Essentially, the protesters did not endorse any particular candidate but were instead just being anti-Putin. The very fact that they have been doing so openly without being packed off to a gulag in Siberia for life shows the distance Russia has travelled since the collapse of the Soviet Union.

For now, Putin’s main rival candidates – a communist, a crypto-fascist and a controversial oligarch – seem to leave little to be desired between them. If the unspoken objective of Russian voters is getting a president who can act competently and confidently to safeguard Russia’s interests, the election might already have been purposeful enough.

The protesters and their Western backers might then just need a little time to reconcile themselves to it. That could be their best option in smart politics yet.

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