BRICS will create a bank to end hegemony of Europe and the U.S.

The bank will be the headquarters for trade in multiple currencies which do not include the dollar or the euro as references.

By LUIS MIRANDA | THE REAL AGENDA | MARCH 27, 2013

The first day of the fifth annual summit of BRICS (Brazil, Russia, India, China and South Africa) was dedicated to the bilateral relations of its members, and it served to meet the intent of the five members on Wednesday who issued a joint statement on the commissioning of a bank, which would serve as a counterweight to the World Bank and the International Monetary Fund. The BRICS consider both institutions excessively controlled by Europe and the United States.

Issues such as decision-making or the contribution of each member are yet to be decided, which will likely prevent the release of the specific plans for the bank today, ahead of the meeting of Finance Ministers.

The creation of a joint fund of foreign exchange reserves will be another issue on the table, and the establishment of a self-study center and a business council of the BRICS.

Furthermore, the investments that BRICS make in Africa will be one of the key issues to be addressed at the summit today. “The association of the BRICS and Africa for the development, integration and industrialization” will be the slogan used to bring everyone together during the discussion.

The South African Minister of Trade and Industry, Rob Davies, stressed the importance of economic relations between the five and the mainland during his speech to businessmen from all members in the Business Forum of the BRICS.

“The African continent is recognized as the second fastest growing after Asia,” Davies recalled, citing the need for infrastructure as one of the attractions for investing in Africa at this time of economic crisis in Europe and the U.S..

A study by the Standard Bank, the BRICS trade with Africa rose last year to 340,000 million dollars, far exceeding the number of exchanges between the five economies of the group.

Moreover, the currency swap agreement reached by Brazil and China has a value of 30,000 million dollars, said the president of the Brazilian Central Bank, Alexandre Tombini, in the South African city of Durban. “The objective is to facilitate trade between the two countries regardless of international financial conditions,” said Tombini.

The agreement is valid for three years and protects trade between the two economies against dollar fluctuations and international financial turmoil.

The Brazilian Finance Minister Guido Mantega told reporters that, along with their counterparts from the BRICS, he proposed to the presidents of their countries to create an agreement of the same type in a multilateral way among all partners.

In the intense round of bilateral meetings which marked the first day of the summit, South African President and summit host, Jacob Zuma, met with colleagues from China, Xi Jinping, Russia, Vladimir Putin, and Brazil, Dilma Rousseff. For his part, the president of Brazil did the same with Prime Minister Manmohan Singh.

Rousseff meets today with the president of China, the largest trading partner of Brazil, according to Brazilian sources who are part of the  country’s delegation in South Africa.

Moreover, the human rights organization Human Rights Watch (HRW) today took an opportunity to urge the BRICS to stop the Syrian conflict and to require an “immediate cessation” of “indiscriminate” violence against civilians. In a statement, HRW called for India, Brazil and South Africa to “pressure” to Russia and China, which have good relations with Damascus to “suspend weapons sales and assisting the Syrian government.”

BRICS countries account for about 42 percent of the world’s population and nearly 45 percent of the labor force on the planet, according to the group’s own figures. In 2012, Brazil, Russia, India, China and South Africa accounted for 21 percent of world’s GDP and trade between them reached a total of 282,000 million.

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