BRICS Nations Plan New Bank to Bypass World Bank, IMF
Source: Bloomberg
The biggest emerging markets are uniting to tackle under-development and currency volatility with plans to set up institutions that encroach on the roles of the World Bank and International Monetary Fund.
The leaders of the so-called BRICS nations -- Brazil, Russia, India, China and South Africa -- are set to approve the establishment of a new development bank during an annual summit that starts today in the eastern South African city of Durban, officials from all five nations say. They will also discuss pooling foreign-currency reserves to ward off balance of payments or currency crises.
The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world, Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research on emerging markets, said in a phone interview. Theres a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.
The BRICS nations, which have combined foreign-currency reserves of $4.4 trillion and account for 43 percent of the worlds population, are seeking greater sway in global finance to match their rising economic power. They have called for an overhaul of management of the World Bank and IMF, which were created in Bretton Woods, New Hampshire, in 1944, and oppose the practice of their respective presidents being drawn from the U.S. and Europe.
Read more: http://www.bloomberg.com/news/2013-03-25/brics-nations-plan-new-bank-to-bypass-world-bank-imf.html
Competition at last, isn't capitalism lovely? Where a market exists, somebody else can come in and take their share.
If the bank existed maybe they could have provided relief to other countries such as Iceland, Greece and Cyprus.
dipsydoodle
(42,239 posts)not unless they were daft in the head but I do take your point.
Ruby the Liberal
(26,219 posts)The USD has been the reserve currency (and petro dollar peg) for 4 decades - and what did we do with that stranglehold on international wealth? Use the funds we amassed to become the self-appointed world policeman while letting people starve in our own streets; and we turned a blind eye to our crumbling infrastructure and schools to fund the MIC.
Time to let someone else take the reins. Maybe then, the government can rethink fiscal priorities.
leftyohiolib
(5,917 posts)UnrepentantLiberal
(11,700 posts)and we sure weren't good for the 3rd world.
Demeter
(85,373 posts)For the banksters, they did just fine.
For the rest of us, not good at all. Terrible, in fact.
UnrepentantLiberal
(11,700 posts)They managed it like the mafia would have.
Demeter
(85,373 posts)Subverting the Economic Hit Men. I love it!
Viva Chavez! Viva BRICS!
By the way, the countries with financial problems don't need charity relief. They need to shut down and jail the banksters and nationalize or wind down theToo Big To Fail. Just like Iceland and Cyprus are....
dipsydoodle
(42,239 posts)UnrepentantLiberal
(11,700 posts)huge loans to build a pipeline and then hire people from the Middle East to do the technical jobs while paying local workers pennies an hour. In the end these countries would be stuck with huge debts and interest rates they couldn't repay with little to show for it.
pampango
(24,692 posts)while it secured Jim Yong Kim, an American, as head of the World Bank last year over candidates from Nigeria and Colombia.
The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world, Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory, which provides research on emerging markets, said in a phone interview. Theres a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.
The BRICS nations, which have combined foreign-currency reserves of $4.4 trillion and account for 43 percent of the worlds population, are seeking greater sway in global finance to match their rising economic power. They have called for an overhaul of management of the World Bank and IMF, which were created in Bretton Woods, New Hampshire, in 1944, and oppose the practice of their respective presidents being drawn from the U.S. and Europe.
Trade within the group surged to $282 billion last year from $27 billion in 2002 and may reach $500 billion by 2015, according to data from Brazils government. Foreign direct invesment into BRICS nations reached $263 billion last year, accounting for 20 percent of global FDI flows, up from 6 percent in 2000, the United Nations Conference on Trade and Development said on its website yesterday.
http://www.washingtonpost.com/business/brics-nations-plan-new-bank-to-encroach-on-world-bank-turf/2013/03/26/9e65ec9a-961d-11e2-8764-d42c128a01ef_story.html
The IMF and World Bank emerged from the Bretton Woods agreement in 1944 under FDR, but the world has changed a great deal since then.
Apparently the US failed to ratify an agreement to amend IMF rules in a way that would have favored the developing world in 2010. If you don't adapt to a changing world, the world goes on without you. That seems to be what the BRIC nations are doing.
Theres a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world. - There is angst aplenty and the emerging world will go right on emerging.