Few western eyes on BRICS summit

While most pundits and market savants were preoccupied with the Greek crisis and the plunge in Chinese stocks, a potentially far more important event, with deep political, economic and financial implications for the US, began to take place on Wednesday.

Chinese President Xi Jinping is meeting with Russian President Vladimir Putin at the 15th Shanghai Cooperation Organization (SCO) Summit and the seventh BRICS Summit, both of which are being held from July 8 to July 10 in Ufa, Russia. The meetings will focus on regional trade and infrastructure, bilateral cooperation within multilateral frameworks as well as coordination and cooperation in regional and international affairs, according to China’s Foreign Ministry.

SCO and BRICS are part of the alternative world order that China is building with the help of Russia. This matters because last year the combined economic output of the BRICS (Brazil, Russia, India, China and South Africa) countries was $17 trillion, almost equal to the U.S.’ gross domestic product, according to Bloomberg. In 2007, the US’s GDP was double the BRICS’ output.

“Despite some disappointments in some of the BRIC economies, led by China and India, their collective weight in global GDP continues to rise and therefore also does their importance,” Jim O’Neill, the former Goldman Sachs Group chief economist who coined the acronym back in 2001, told Bloomberg.

The main thrust of the summit will be the first meeting for the BRICS’ New Development Bank. The meeting will appoint the bank’s first management team including the president and four vice presidents. The management team will have offices at the bank’s Shanghai headquarters, which will begin operating by the end of 2015 or at the beginning of 2016.

The bank will have an initial capitalization of $100 billion, with half from BRICS countries. Banker K.V. Kamath will be its first president while the other two officials will come from Russia and Brazil, reported China Daily.

Even before the summit, the BRICS countries have been building closer working relationships. After China, India and Russia are the next two biggest contributors to the China-led Asian Infrastructure Investment Bank. The US and Japan are not among the 57 member-nations.

“Additional glue for the BRICS leaders is a $100 billion currency-exchange reserve program discussed at last year’s summit,” said Bloomberg. “Along with China’s “One Belt One Road” strategy.”

Categories: Asia Unhedged, China, South Asia

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  • Mr. Bernard Wijeyasingha

    Quoting the article ” This matters because last year the combined economic output of the BRICS (Brazil, Russia, India, China and South Africa) countries was $17 trillion, almost equal to the U.S.’ gross domestic product, according to Bloomberg. In 2007, the US’s GDP was double the BRICS’ output.”
    True but America consumes 25% of the world’s energy resources with a population that is only 5% of the world or 330 million people. If America stops this consumption or slows it down, it will dramatically effect the world in a negative way.
    The 17 trillion that represents the BRICS nations also must include a population of over 3 billion people. The sum total of energy consumption of the BRICS group is higher than the US but against a population that is over half the world’s population or above 3 billion people.

  • Jams O’Donnell

    If the US stops this obscene imbalance between it’s energy consumption and it’s population, it can only be good for the world. The dollar is going down the tubes soon as the BRICS start to use other currencies. The US will have to learn to live within its means.

  • Mr. Bernard Wijeyasingha

    You are wrong. It is due to our consumption from gasoline to consumer goods that other markets are growing.
    China, India and many Asian nation are trying to emulate the US economic growth story.
    so you cannot tell that US that our consumption is wrong while telling China that their consumption is right.

  • Mr. Bernard Wijeyasingha

    One measurement of a healthy economy is its consumption of energy. Consumption and production of goods and services have defined great economies through the ages and especially after the Industrial revolution
    the biggest flaw in your comment is “US will have to learn to live within its means”. can you define what are those levels? that of Zimbabwe? or maybe Pol Pots Cambodia? which would you prefer? would you then apply the same standards on any other nation such as China or Japan or the continent of Europe?
    do you think for example the renaissance was “excessive”?

    What about the consumption of the Roman Empire?
    Or that of the Industrial revolution.was that too excessive to you?

  • shiva iyer

    Yes they all excessive and fallen. Economics looks beautiful with numbers but not helping. Just think all India/China/Indonesia… want car like Europe. Disaster to the planet.

  • Fernando Martinez

    If the BRICS want to really create an alternative to the USA. they have to be able to roll back the USA’s Hyper-hegemony, eliminate it’s bully pulpit, it’s spying, it’s interventions and other destabilization that is screwing up the world. A balance is needed. The constant push for unlimited rights and liberties is insane and anarchic. The fact that the USA implemented gay marriage is fine for the USA but other countries and peoples want nothing to do with that, now the peanut gallery’s mantra; “Well the USA did it, they’re an advanced country, we should do it too”, this has become a war cry. I’m merely referencing this as a case in point concerning the imbalance currently extant. A poster on Atimes called Laura Enrihght kept saying that other countries “should grow up”, really Laura, civilizations with centuries of existence really have so much to learn from your adult perspective. Anyway, the BRICS have their work cut out for them at this point in time with regards to the aspect pointed out.

  • Mr. Bernard Wijeyasingha

    What is the difference between excessive and austere? just an opinion.
    You may want to Google “Steam driven cars”

  • George Silversurfer

    It is not in western govt (media) interest to help divulge this matter to its people. They will just wake up one day and find decreased demand for dollar, euro, imf, world Bank, Nato etc

  • jako777

    “Consumption and production of goods and services have defined great economies through the ages”

    The problem is that US is not any longer good, healthy, let alone “great economy”.

    Also consumption of energy and renaissance can not be directly compared.

    Specially not as something “excessive” or not “excessive” in the comparison to each other.

  • jako777

    US didn’t emulate UK economic growth story by copying UK , so China and India if they want to be powers of 21st century they should not copy 20 century US growth story.
    The 20 century economic growth model is thing of the past.
    China & India must find their own way into 21st century.

  • Mr. Bernard Wijeyasingha

    I disagree for the GDP of a nation or the Gross Domestic Product of a nation starts with the consumption of energy and includes goods and services. That is mainly how an economy is judged. other factors that are important is the debt a nation bears.
    It is not necessarily negative, but can become negative. Like any business a certain amount of debt shows a healthy business, for she has the ability to borrow and the need. It becomes a problem when she cannot pay the debt, as in Greece.

  • Mr. Bernard Wijeyasingha

    US economic growth story did include being part of the British industrial revolution, We did take from others. Case in point is “Operation Paperclip” where 1 thousand Nazi Scientists including Werner Von Braun, were allowed entry into the US
    Von Braun was the father of rocket technology, he was one of the main scientists for the V2 rocket of Germany and the head of the US NASA program till the 1960’s
    The US will not fade away that fast. A good deal of the current economic problems are directly due to the Obama administration and their extreme socialist economic policies. it borders on a suicidal radical destruction of the American economy.
    The age of Information that allows you the computer, the internet, the search engines, and the satellite technology are spin offs from the US. (Not necessarily the satellite itself but the age). The US is still defining the wold.
    Also if the US does collapse, the world[‘s economies will be hammered hard.

  • jako777

    Details are not so relevant I think.
    US was much more than “part of the British industrial revolution” US was more like BIG evolution of the British industrial revolution results. I’m not saying that India and China shouldn’t “take from others”
    All I say is that “British industrial revolution” was 19th century, revolution with different tech and different approach.
    US industrial revolution was 20th century revolution with different tech and different ideas….
    And now we are in post industrial cyber revolution of 21st century and everything is CHANGING so fast, that the approach to the life can not be the same.
    US is still important but on downward spiral just like UK before 1st world war.
    China will take over soon and then India maybe, if not some wars make change of the situation …

    20th century high tech?! See any “futuristic” SyFy movie movie from 1970-80 some things look like tech that is 100 years old. So fast things are accelerating.
    US might not collapse at all, they just can dwindle away. Just like UK did and UK was huge Empire as well…

  • Mr. Bernard Wijeyasingha

    The “Age of America” was a term applied to the commercial, technological and cultural expansion of American culture which then defined the modern world.
    -ford Assembly line. the underpinning of manufacturing.
    -Chain store culture, refined by the US from fast food restaurants to Grocery stores to goods and services. A standardized economy.
    -Technology from modern planes, cars, television, radio, CD, computer, vinyl records, etc.
    -Ways of living. Feminist movement, free speech movement. civil rights movement leading to the bill of rights. even fashion such as the “sameness” of the blue jean culture. Much more but you got the picture.
    The great trans Atlantic railway- which was a result of the British Steam engine and the train.
    the Panama canal (which is similar to the Suez Canal a French/British act).
    This was the era of people who defined the US without even a PhD. People such as Rockefeller, J.P. Morgan, Vanderbilt, Carnegie, Melon. etc. who then help build financial dynasties as petroleum, steel which led to Skyscrapers (Rockefeller center was the tallest skyscraper of New York). Auto industry.
    The new deal of the US helped built such structures as the Hoover dam. The US was very innovative but also shared in European tech. New Orleans flood pumps influenced those in the Netherlands.
    The issue of the US economy being so massive has changed from a work related economy to a “corporate economy” now the same massive economy of the US is defined by “corporate America” who outsource jobs to other nations while giving the world an impression of a massive economy. That is what will not change. You keep pointing to the unskilled labor among the blacks and Hispanics. It does not matter for Corporate America. The US elite hold large chunks of other economies.
    I hope this is our last comment for this is now becoming into a chat room. I believe we both have covered what we have to say on this issue.

  • Mr. Bernard Wijeyasingha

    Just one more issue I forgot. The entire 15 to 17 Trillion dollar economy of the US is only on 6 to 10% of our landmass. About 90% of the US is either national parks or open land. A good deal of that “economy” are holdings in other nations.
    I did not intend to engage you again and you do not have to reply. I just forgot to include this point. 90% of the US include rich forests and fertile land but without any economy or people even though the US has 330 million people.

  • jako777

    Good points.
    Huge untapped resources .
    US of A will stay very important country if things go wrong for US.
    Things like collapse of the dollar or similar.
    Countries with plenty of gold will survive such Armageddon.
    Don’t get me wrong I do not have anything against Americans in general. I just think that many things are going wrong way for them lately, be cause of their lousy leaders.

    But you have in way covered that already underneath…

  • jako777

    Thanks for excellent comment!
    It was nice talking to you.

  • Mr. Bernard Wijeyasingha

    One of the rare moments I will violate my rule. I am in the US. I see on a daily basis what Washington is doing. It is not business friendly
    -Use of EPA regulations to stifle business
    -Obama care has hammered businesses, Taxes from Obama care is devastating for business. 2000 pages long of regulations, gutted private insurance for many. Insurance companies are making a bundle
    -Government non legislative regulations (not going through courts or Congress) between Bush and Obama is now around 800 thousand regulations.
    -Centers of wealth has shifted from manufacturing cities, by and large, to centers of government. Washington D.C. has one of the highest income levels in the nation, so do many State capitals. Detroit, once the car capital of the world, is now a rust bucket. Many other cities are going bankrupt because of government interference.
    -greatest flight of born Americans. Americans who were born in the US with ancestry dating back for a long time, are giving up their citizenship and fleeing. why? because of over burdened taxes. They are some of the most wealthy people who generate jobs. they are closing shop and getting out.
    -Obama’s “Amnesty program” has opened up our borders to tens of millions of uneducated Hispanics. when they come here they join the welfare programs. they do not contribute enough for the number of them. They are also hitting the black community hard. for they will take low income labor for less pay,. than a black person.
    The US economy is not collapsing due to lack of business know how but the blatant interference of the Federal government.

  • Mr. Bernard Wijeyasingha

    Same here. thank you.