{"id":27206,"date":"2013-04-01T12:00:40","date_gmt":"2013-04-01T11:00:40","guid":{"rendered":"http:\/\/www.transcend.org\/tms\/?p=27206"},"modified":"2013-03-29T16:46:56","modified_gmt":"2013-03-29T16:46:56","slug":"brics-go-over-the-wall","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2013\/04\/brics-go-over-the-wall\/","title":{"rendered":"BRICS Go Over the Wall"},"content":{"rendered":"

Reports on the premature death of the BRICS (Brazil, Russia, India, China and South Africa) have been greatly exaggerated. Western corporate media is flooded with such nonsense, perpetrated in this particular case<\/a> by the head of Morgan Stanley Investment Management.<\/p>\n

Reality spells otherwise. The BRICS meet in Durban, South Africa, this Tuesday [26 Mar 2013] to, among other steps, create their own credit rating agency, sidelining the dictatorship \u2013 or at least \u201cbiased agendas\u201d, in New Delhi\u2019s diplomatic take \u2013 of the Moody\u2019s\/Standard & Poor\u2019s variety. They will also further advance\u00a0the idea of the BRICS Development Bank, with a seed capital of US$50 billion (only structural details need to be finalized), helping infrastructure and sustainable development projects.<\/p>\n

Crucially, the US and the European Union won\u2019t have stakes in this Bank of the South \u2013 a concrete alternative, pushed especially by India and Brazil, to the Western-dominated World Bank and the Bretton Woods system.<\/p>\n

As former Indian finance minister Jaswant Singh has observed, such a development bank could, for instance, channel Beijing\u2019s know-how to help finance India\u2019s massive infrastructure needs.<\/p>\n

The huge political and economic differences among BRICS members are self-evident. But as they evolve as a group, the point is not whether they should be protecting the global economy from the now non-stop crisis of advanced casino capitalism.<\/p>\n

The point is that, beyond measures to facilitate mutual trade, their actions are indeed becoming increasingly political \u2013 as the BRICS not only deploy their economic clout but also take concrete steps leading towards a multipolar world. Brazil is particularly active in this regard.<\/p>\n

Inevitably, the usual Atlanticist, Washington consensus fanatics \u2013 myopically \u2013 can see nothing else besides the BRICS \u201cdemanding more recognition from Western powers\u201d.<\/p>\n

Of course there are problems. Brazil, China and India\u2019s growth slowed down. As China, for instance, became Brazil\u2019s top trading partner \u2013 ahead of the US \u2013 whole sectors of Brazilian industry have suffered from the competition of cheap Chinese manufacturing.<\/p>\n

But some long-term prospects are inevitable. BRICS will eventually become more forceful at the International Monetary Fund. Crucially, BRICS will be trading in their own currencies, including a globally convertible yuan, further away from the US dollar and the petrodollar.<\/p>\n

That Chinese slowdown<\/strong><\/p>\n

It was Goldman Sachs\u2019 Jim O\u2019Neill who coined the term BRIC (no South Africa then) in 2001. It\u2019s enlightening to check what he thinks about it now<\/a>.<\/p>\n

O\u2019Neill points out that China, even growing by a \u201cmere\u201d 7.7% in 2012, \u201ccreated the equivalent of another Greek economy every 11-and-a-half weeks\u201d. China\u2019s slowdown was \u201cstructural and cyclical\u201d \u2013 a \u201cplanned downturn\u201d to control overheating and inflation.<\/p>\n

The BRICS push is part of an irresistible global trend. Most of it is decoded here<\/a>, in a new United Nations Development Programme report. The bottom line; the North is being overtaken in the economic race by the global South at a dizzying speed.<\/p>\n

According to the report, \u201cfor the first time in 150 years, the combined output of the developing world\u2019s three leading economies \u2013 Brazil, China and India \u2013 is about equal to the combined GDP of the long-standing industrial powers of the North\u201d.<\/p>\n

The obvious conclusion is that, \u201cthe rise of the South is radically reshaping the world of the 21st century, with developing nations driving economic growth, lifting hundreds of millions of people from poverty, and propelling billions more into a new global middle class.\u201d<\/p>\n

And bang in the middle of this process, we find an Eurasian epic; the development of the Russia-China strategic relationship.<\/p>\n

It\u2019s always about Pipelineistan<\/strong><\/p>\n

Russian President Vladimir Putin is taking no prisoners; he wants to steer the BRICS towards \u201ca full-scale strategic cooperation mechanism that will allow us to look for solutions to key issues of global politics together\u201d.<\/p>\n

This will imply a common BRICS foreign policy \u2013 and not only selective coordination on some themes. It will take time. It will be hard. Putin is very much aware of it.<\/p>\n

What makes it even more fascinating is that Putin advanced his ideas during last week\u2019s three-day visit to Moscow by new Chinese President Xi Jinping. He went out of his way to stress Russian-Chinese relations now are \u201cthe best in their centuries-long history\u201d.<\/p>\n

That\u2019s not exactly what hegemonic Atlanticists want to hear \u2013 still eager to frame the relationship in Cold War terms.<\/p>\n

Xi retributed in style; \u201cWe did not come to see you for nothing\u201d \u2013 as is partially detailed here<\/a>. And wait till China\u2019s creative drive starts yielding dividends<\/a>.<\/p>\n

Inevitably, Pipelineistan is at the heart of the ultimate BRICS complementary relationship.<\/p>\n

China\u2019s need of Russia\u2019s oil and gas is a matter of national security. Russia wants to sell more and more of it, diversifying away from the West; moreover, Russia would more than welcome Chinese investment in its Far East \u2013 the immense Trans-Baikal region.<\/p>\n

And by the way, the \u201cyellow peril\u201d is not taking over Siberia \u2013 as the West would have it. There are only 300,000 Chinese living in Russia.<\/p>\n

A direct consequence of the Putin-Xi summit is that from now on Beijing will pay in advance for Russian oil \u2013 in exchange for a share in a number of projects, for instance as in CNPC and Rosneft jointly exploring offshore blocks in the Barents Sea and other blocks onshore Russia.<\/p>\n

Gazprom, for its part, clinched a long awaited gas deal with CNPC; 38 billion cubic meters a year delivered by the ESPO pipeline from Siberia starting in 2018. And by the end of 2013, a new Chinese contract with Gazprom will be finalized, involving gas supply for the next 30 years.<\/p>\n

The geopolitical ramifications are immense; importing more gas from Russia helps Beijing to gradually escape its Malacca and Hormuz dilemma<\/a> \u2013 not to mention industrialize the immense, highly populated and heavily dependent on agriculture interior provinces left behind in the economic boom.<\/p>\n

That\u2019s how Russian gas fits into the Chinese Communist Party\u2019s master plan; configuring the internal provinces as a supply base for the increasingly wealthy, urban, based in the east coast, 400 million-strong Chinese middle class.<\/p>\n

When Putin stressed that he does not see the BRICS as a \u201cgeopolitical competitor\u201d to the West, it was the clincher; the official denial that confirms it\u2019s true. Durban may be solidifying just the beginning of such a competition. It goes without saying that Western elites \u2013 even mired in stagnation and bankruptcy \u2013 won\u2019t let any of their privileges go without a fierce fight.<\/p>\n

___________________________<\/p>\n

Pepe Escobar<\/i> is the author of Globalistan: How the Globalized World is Dissolving into Liquid War<\/a> (Nimble Books, 2007) and Red Zone Blues: a snapshot of Baghdad during the surge<\/a>. His new book, just out, is Obama does Globalistan<\/a> (Nimble Books, 2009). He may be reached at pepeasia@yahoo.com\u00a0 <\/em><\/p>\n

Copyright 2013 Asia Times Online (Holdings) Ltd. All rights reserved.<\/i><\/p>\n

Go to Original \u2013 atimes.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The BRICS meet in Durban, South Africa, this Tuesday [26 Mar 2013] to, among other steps, create their own credit rating agency, sidelining the dictatorship \u2013 or at least \u201cbiased agendas\u201d, in New Delhi\u2019s diplomatic take \u2013 of the Moody\u2019s\/Standard & Poor\u2019s variety. They will also further advance the idea of the BRICS Development Bank, with a seed capital of US$50 billion (only structural details need to be finalized), helping infrastructure and sustainable development projects.<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[180],"tags":[],"class_list":["post-27206","post","type-post","status-publish","format-standard","hentry","category-brics"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/27206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=27206"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/27206\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=27206"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=27206"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=27206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}