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BRIC

(Brazil, Russia, India, and China)

BRIC
Brazil :-
President (head of state and government): Luiz Inácio Lula
da Silva
Russia :-
President (head of state): Dmitry Medvedev
Prime Minister (head of government): Vladimir Putin
India :-
President (head of state): Pratibha Patil
Prime Minister (head of government): Manmohan Singh
China :-
President (head of state): Hu Jintao
Premier (head of government): Wen Jiabao

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INTRODUCTION

In economics, BRIC (typically rendered as "the BRICs" or "the BRIC


countries") is an acronym that refers to the fast-growing developing economies
of Brazil, Russia, India, and China. The acronym was first coined and
prominently used by Goldman Sachs in 2001. Goldman Sachs argued that, since
they are developing rapidly, by 2050 the combined economies of the BRICs
could eclipse the combined economies of the current richest countries of the
world. The four countries, combined, currently account for more than a quarter
of the world's land area and more than 40% of the world's population.

Goldman Sachs did not argue that the BRICs would organize themselves into
an economic bloc, or a formal trading association, as the European Union has
done. However, there are strong indications that the "four BRIC countries have
been seeking to form a 'political club' or 'alliance'", and thereby converting
"their growing economic power into greater geopolitical clout". On June 16,
2009, the leaders of the BRIC countries held their first summit in
Yekaterinburg, and issued a declaration calling for the establishment of a
multipolar world order.

Background

BRIC encompass over 25% of the world’s land coverage, 40% of the planetary
population and hold a combined GDP (PPP) of $ 15.445 trillion [B] which is
22.4% of global GDP. They are among the biggest and fastest growing
emerging markets. These countries belong to the middle rung of the
development ladder and the meeting ground is essentially their high GDP
growth rate, explosion of the financial markets with rapidly rising stock
markets, high recipient of Foreign Direct Investment, etc. China and India lead
the pack in most of these aspects. The following table3 provides the BRIC
positions vis-à-vis the other nations with a few macro-economic parameters:

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The Summit

Held in the midst of this profound global crisis, this Summit was intended to be
a space to officially announce the creation of this loose block. The summit was
also organised at a critical juncture when the advanced industrial states which
also forms the core of the imperialist order or the G8 is bereft of legitimacy.
The typhoon unleashed by the neo-liberal project has resulted in a total
deregulation of the financial markets and is wracking the globe in the form of
simultaneous crises from global financial collapse to worsening climate
changes. It is plausible that the BRIC leaders decided to intensify their efforts at
a time when the foundations of the G8 domination seem to be trembling.
Hitherto, their attempts have been all too sporadic, either at the negotiation
table of the now derailed World Trade Organisation (WTO) or at the annual
jamboree of the big business leaders as well as the rich and elite at the Davos
World Economic Forum (WEF). The meeting aimed to face the reforms
proposals in circulation or in the pipe-line; largely put forward by the developed
countries - mainly represented by the G-7, in the wake of current “crisis”. As
evident from the statements and deliberations, the purpose is not really to
challenge the “hegemony” or to emerge as the new “hegemons”, at least in the
immediate future. But to protect and secure safe places within the current
hegemonic order, which is, however, far from absolute.

The final statement felt a strong need for a stable, predictable and more
diversified international monetary system. However, the summit spelt out
nothing new or novel in any of its deliberations, discussions or declarations to
provide a way out of the crisis or towards a new global political-economic order
that can save humanity from this predicament. To the dismay of a lot of its
admirers, who envision the BRIC or the Shanghai Cooperation Organization
(SCO) as a strong bulwark against the US imperialism, the BRIC countries are
following the same neo-liberal order which has immensely contributed to the
instability, volatility and turbulence of the global economy. The monetary
system which they critique so much has also been a product of the capitalist
order that values profit and accumulation above anything else. The phenomenal
growth of the BRIC is due to its ability to entrench this capitalist order by
firmly embracing the neo-liberal tenets. No wonder that they earn so much
praise from Goldman Sachs whose thesis recognizes that Brazil, Russia, India
and China have changed their political systems to embrace global capitalism.
Goldman Sachs predicts China and India, respectively, to be the dominant
global suppliers of manufactured goods and services while Brazil and Russia
would become similarly dominant as suppliers of raw materials .

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ROLE OF BRIC COUNTRIES IN THE GLOBAL ECONOMY

Global economy is under uncertainty due to recent meltdown of economic and


industrial growth. Though process of globalisation has boosted economic
growth resulting in the structural changes of the world economy. This has
triggered rapid changes in developing economies and may predominantly
contribute to global economic growth in the coming decade, though it has posed
several challenges in countries such as Brazil, Russia, India and China. In spite
of studies show that there may be a major shift in the global economic balance
and it is argued that BRIC countries may emerge as a global economy in future.
As a result, the current slowdown in the economy is a major concern of all
countries. This phenomenon necessitates a broad analysis. Therefore, the
purpose of this paper is to analysis various economic indicators such as GDP,
GDP growth by sectors, import and export and FDI inflows of Brazilian and
Indian economy using forecasting techniques. Based on analytical results future
trends and potential of both the economies are discussed. Results demonstrate
that both countries have a budding economic growth.

Over the last few decades the world economy has undergone a lot of changes in
geopolitical and economic terms, and in the location and distribution of
production. Therefore, many developing countries/emerging economies such as
Brazil, Russian, India, and China (BRICs) have attained an important role in the
world economy as producers of goods and services and receivers of capital. The
four countries went through major institutional transitions and changes in their
economic structure in the recent history. Though BRICs countries followed a
sustainable growth path in their integration into globalise learning economy.
Despite, these newly emerging economies having a big part of their large
population are still not integrated in the market economy. After several socio-
economic transformations around the middle of the twentieth century all these
countries were inward orientated and followed more or less centrally planned
development strategies from the 1950s to the 1970s. Therefore, they were
replaced by gradual integration in the global economy in the 1980s and 1990s.
In recent times, there is a surge in the global economy particularly in BRICs
countries due to economic liberalisation. The economic transformation blending
with diffusion of Information and Communication Technologies (ICTs) led to
major shift in the world economy.

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The new economic order and good economic policies have accelerated
developing economy like China, India in Asia, Brazil, Russia, South Korea and
South Africa. In these countries a new economy is emerging and if the current
growth persists they may be the global economic player in near future. Studies
show [1] that in the next few decades, the growth generated by the large
developing countries, particularly the BRICs (Brazil, Russia, India and China)
could become a much larger force in the world economy than it is now—and
much larger than many investors
currently anticipate. It is evident that from the onset of the 21
st
century more than a third of the world’s growth has originated in these
countries. So, the rise of new powerhouse economies in the developing world
can shift the equation of global economic [2] order. It is also projected that the
BRICs economies as a whole could be larger than the G6 in future. Thus the
BRIC thesis recognizes that Brazil, Russia, India and China [3] have changed
their political systems to embrace global capitalism. Moreover, Brazil, Russia,
India and China have long been a favourable destination of emerging market
investors. This is optimistic for economic growth and huge investment may
come to the BRICs in coming decades. The spur in economic growth requires a
broad analysis to have a right picture of the BRICs economic growth and
development. Therefore, in this paper certain economic indicators pertaining to
Brazil and India, a constituent of the BRICs countries, are analyzed by applying
mathematical models particularly growth models. Although, these models
frequently used to study innovation growth and forecasting but several studies
have also been conducted to analyze economic trajectories [4,5} by applying
growth functions. The analysis suggests that BRICs countries, particularly
Brazil and India could become a very important source of new global economy
in the coming years.

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The BRIC numbers

The Economist publishes an annual table of social and economic national


statistics in its Pocket World in Figures.[citation needed] Extrapolating the
global rankings from their 2008 Edition for the BRIC countries and economies
in relation to various categories provides an interesting touchstone in relation to
the economic underpinnings of the BRIC thesis. It also illustrates how, despite
their divergent economic bases, the economic indicators are remarkably similar
in global rankings between the different economies. It also suggests that, while
economic arguments can be made for linking Mexico into the BRIC thesis, the
case for including South Africa looks considerably weaker. A Goldman Sachs
paper published later in December 2005 explained why Mexico wasn't included
in the original BRICs. According to the paper,[13] among the other countries
they looked at, only Mexico and perhaps Korea have the potential to rival the
BRICs, but they are economies that they decided to exclude initially because
they looked at them as already more developed. According to that paper,
Mexico becomes the fifth-largest economy by 2050, ahead of Russia.

GLOBAL GIANT

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The Current State of Affairs

Let us turn our attention to the recent state of affairs within the BRIC
components.

China

The leading economic power of this group is in the strong grips of the current
global crisis sending exports from the workshop of the world tumbling, thereby
slashing its trade surplus. It is often said that when the West sneezes, Beijing
catches cold. Exports in February dropped by 25.7% [4] from a year earlier,
dwarfing forecasts of 5%. The trade surplus was only $4.84 billion - a three-
year low - compared to $39.1 billion in January and a record $40.1 billion in
November. That was far short of market expectations of $27.3 billion. The
fallout is felt across the Chinese economy, resulting in the possibility of
accelerated growth of unemployment and further slow down of consumption,
despite a $586 billion [5] stimulus package that the Government hopes will
cushion the blow. Paul Cavey, an economist with Macquarie Securities in Hong
Kong, observed: “China has finally and spectacularly succumbed to the world
financial crisis on the export side, and it’s difficult to see why that would
improve in the short term.”[6]

The collapse in global demand for China’s toys, footwears and other goods has
already put 20 million migrants out of work. Leaders worry that more job losses
could spark unrest and are promising to spend heavily to create employment.
Isaac Meng, an economist with BNP Paribas in Beijing, argued that it was
unrealistic to expect China to remain immune to the sharpest drop in global
trade in 80 years. The exports were “…. a terrible number. It will have a pretty
big impact on Chinese domestic demand. Probably 60 million to 70 million
workers directly work in these export sectors, so there will be secondary
impacts on capital expenditure, employment and consumption.” [7] That is bad
news for those dreaming that China, with its huge domestic savings, could tow
other economies out of the distress. It is indeed catastrophic that the Chinese
authorities perturbed by the Tibetan protests have to face the crisis and have no
practical responses to it in a year which also marks the 20th anniversary of the
Tiananmen protests. The growth that was celebrated with complete disregard of
labour and environmental concerns has considerably slowed down and would
halt if the situation drags on indefinitely.

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Russia

The biggest military superpower in the group, Russia, who had called for
developing new reserve currencies to complement the dollar, at a separate event
earlier in the day is also not in a cosy zone. In absolute logical senses, a post-
Cold War scenario would have warranted the ultimate dismissal of all military
pacts and posts. However, she witnesses that NATO is being extended right up
to its front-yard and its erstwhile allies (?) capitulating to its competing political
and military block. The culmination of these assaults was the US-led action in
engineering Kosovo’s February 2008 self-proclamation of independence.
Russia is also a member of G8. Given the fact that she is the world’s wealthiest
country in natural resources — from fertile farmlands and metals, to gold and
timber, the erstwhile G7 could not ignore her. Her colossal hydrocarbon
reserves are too alluring. Indeed in the post-Soviet era all that represents a
lucrative opportunity to exploit by global capitalism. Besides, she also remains
a nuclear and missile superpower and any antagonism with the country would
not let “business” flow unhindered. Hence, Russia was accommodated in the
select club considering all such geo-political and economic compulsions.
However, it does not imply that the fellow club-members are in perfect
agreement with her. Indeed, there are several contradictions and strains with the
other members of the self-appointed group.

At the onset, the authorities insisted that they had ample cash reserves to
weather any storm. But as distress has ensued trouble - plunging oil prices, a
70% crash in stock markets, a global credit crunch and a slow-motion run on
this country’s private banks - Russia has had to spend its reserves sooner than
anybody imagined. In August 2008 reserves peaked at just under $600 billion
[8], the third largest in the world. By October end, they fell down to $484 [9]
billion after money flew out of government vaults to sustain the rouble, prop up
the banking system and bail out the businesses of the rich Russian oligarchs. In
fact, Moscow’s economic fortunes for long have been tied too heavily to oil - a
commodity with volatile prices. In 1980, the Soviet Union overtook Saudi
Arabia as the biggest oil producer.

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During the Putin presidency, rising oil prices played a key role in Russian
economic revival. However, if oil prices continue to descend, zero growth
would pull the rug from under the hope for a middle-class life for millions,
shrinking their horizons back to cramped apartments and garden plots. Amid
the global fear, one thing still sets this country apart: The crisis of 2008 is just
the latest in a long string of post-Soviet bank failures, financial swindles and
economic collapses. Few Russians own stocks and hence, the markets’ decline
has not affected them directly. Instead, businesspeople that relied on Western
bank credit are now burdened by debt, and foreign investors have fled to safer
places. In September 2008, Russians withdrew 4% of deposits from private
banks. Some went into state banks, perceived as more reliable, but about half
remained in cash. Deposits dropped far more precipitously in October: up to
30% for some private banks, according to an estimate by Citibank’s Moscow
office. About a dozen Russian banks have failed and have been subsequently
bailed out. The big risk here is a loss of faith among clients and subsequent
bank runs, rather than structural troubles with liquidity.

President Medvedev speaking at the country’s top business forum, on June 5,


2009 at St. Petersburg sounded cautious about the state of Russian economy and
said that the global crisis is not over as yet [10]. His remarks were devoid of the
bombast and exuberance which characterized last year’s Forum, when global oil
prices were riding high, Moscow’s coffers were full and the economy was
growing rapidly. Indeed, the global financial crisis has hit Russia harder than
any other big emerging market.

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Brazil

The Lula government initially declared that the world crisis was not going to
affect Brazil; after a 5.67% GDP growth in 2007, his spirit was high. What was
going on elsewhere didn’t matter; growth would continue “at its present rate for
the next 15 to 20 years” [11]. The epidemic stretched in March 2009 and it
scared the nation. The Bradesco bank’s estimates of growth nose-dived from
more than 4% in June 2008 to 2.5% in December – and then to -0.3% in April.
Morgan Stanley has even predicted a 1.5% contraction of the Brazilian
economy, which would be its biggest setback since 1948 [12]. Brazil’s
industrial production plunged 14.7% in the first quarter of this year [13].

Eight hundred thousand workers lost their jobs between October and
January[14] (nearly 1% of the workforce), and that doesn’t even take account of
job losses in the informal economy, which employs around 40% of Brazilian
workforce. Half a million Brazilians have found themselves back in poverty or
extreme poverty. Brazil’s economic results meant an end to the debate about its
immunity from global contagion. The myth of decoupling was over. Initially,
Lula declared that the problem of external debt no longer existed, and that the
Brazil had recovered its total political, economic independence, etc.

A little later it was evident that the external private debt is an extraordinary
mortgage. The Brazilian industries have proceeded to grant advanced holidays,
to suspend and to lay-off hundreds of thousands of people. In the past 15 years
the country’s dependence on foreign capital has increased drastically and one of
the most significant developments has been the acceleration of foreign access to
Brazil’s financial markets. Brazilian exports grew at an average annual rate of
20% in 2003-6, temporarily resolving the balance of payments problem. But
those exports were stimulated by a new surge of FDI, which went from $10
billion in 2003 (about 2% of GDP) to the record level of $45 billion in 2008 (or
3.5% of GDP). In other words, these exports came at the cost of even deeper
penetration of the Brazilian economy by foreign capital.

In 2007, for example, the inflow of foreign currency linked to the export boom
appreciated Brazilian Real by around 20% to the dollar, while at the same time
domestic debt securities enjoyed an annual interest rate of 13%. Foreign

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investors (or Brazilians who had borrowed dollars abroad at relatively low
interest rates) therefore benefited from a return on investment of more than 30%
at the end of the year. It’s hardly surprising that internal debt reached 160
billion Real in January 2009 (over $80billion) which the president boasts of as a
sign of Brazil’s economic independence. In this arena all that has been achieved
is further lining the pockets of the 20,000 Brazilian families who hold 80% of
debt securities. Servicing those debts eats up 30% of the federal budget. Less
than 5% of that budget meanwhile goes on health and 2.5% on education.

In the space of a few months, the collapse of the international financial system
transformed the Brazilian balance of payments into a sieve through which
money poured. Take the commercial balance: it has been declining since 2006 –
the value of the Real has meant that imports have been growing at a faster rate
than exports – and this January it recorded its first deficit in 93 months. There’s
no real sign of recovery in sight since the IMF predicts an 11% fall in world
trade in 2009. In conditions such as these, it becomes more difficult for Brazil
to import the equipment on which its own output depends. Repatriation of
profits and dividends abroad rose to nearly $34billion in 2008 (nearly 3% of
GDP), an increase of 50% over the previous year, and of 500% compared to
2003. The current account balance also recorded its biggest deficit in 10 years
in 2008: $28.3billion or 2.5% of GDP. Today, Brazil stresses that it has
international reserves of around $200billion to reassure investors worried about
the risk of a balance of payments crisis. It was negative in the last quarter of
2008 for the first time since the end of 2005, but with a deficit that was seven
times greater, at $21billion, or 1.85% of annual GDP. According to the
economist Paulo Henrique Costa Mattos, current liabilities could reach
$600billion [15].

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India

A report jointly prepared by World Economic Forum and Confederation of


Indian Industry was released just ahead of the annual India Economic Summit
held in November 2008 in New Delhi attended by top government officials to
interact with heads of global firms. The report said “India’s dependence on
capital flows to finance its current account deficit is a macroeconomic risk and
the global crisis could generate a sharp increase in capital outflows and a
reduction in the availability of finance” [16]. “Clearly, the global economic
picture will be harsher next year and there will be greater pressures on Indian
economy [17]”.

The GDP grew by 6.7% for the financial year 2008-09 on the back of a better
than expected 5.8% in the last quarter (January-March). However, the economy
had grown at a heady 8.9% annually during 2003-08. Even in the first half of
2008-09 the rate of growth was 7.8%. Yet the fact remains that the 6.7% is the
lowest in six years. Also, there are doubts as to whether this rate can be
achieved in 2009-10. In the past, capital inflows and the IT boom played a large
role in driving job creation, investment and asset bubbles. India’s high
dependence on foreign capital and IT exports increased its vulnerability to the
global crisis. FDI has slowed in recent months and India’s IT sector may find it
difficult to maintain its outsourcing competitiveness as cost differentials with
the West have waned since the last recession. Additionally, other low-cost
locations have emerged and the U.S. plans to raise taxes on outsourcing
companies.

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There is already a dip in the employment market. Anecdotal evidence of this in
the IT and financial sectors are abound, and also reports of quiet downsizing in
many other fields as companies cut costs. More than the downsizing itself,
which may not involve large numbers, what this implies is a significant drop in
new hiring - and that will change the complexion of the job market. At the heart
of the problem lie questions of liquidity and confidence. What the Reserve
Bank of India needs to do, as events unfold, is to neutralise the outflow of FII
money by unwinding the market stabilisation securities that it had used to
sterilise the inflows when they happened. This will mean drawing down the
dollar reserves and that could deplete foreign exchange reserves and if the oil
prices shoot up once again the situation could be precarious.

Meanwhile, facing its worst crisis in over a decade, India’s ailing export sector
wants the new government to gift it a three-year income-tax holiday, with
experts pushing for concrete steps to protect some 20 million direct jobs in the
industry. Falling global demand, the high cost of credit and protectionism by
some economies like the US are the reasons why India’s external trade industry
is seeking such sops, after missing the export target for the previous fiscal.
India’s merchandise exports fell last October for the first time in a decade, and
missed the target of $200 billion set for fiscal 2008-09. Exports grew by a mere
3.4% to $168.7 billion, from $163.1 billion in 2007-08. This has resulted in the
retrenchment of some 0.5 million people, especially in sectors like gems and
jewellery, handloom, and textiles, with the rising rupee further exacerbating the
problems.

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Outcomes and contradictions

It is in the above contexts that we have to analyse the outcome of the BRIC
summit. As said earlier, Russia had called for developing new reserve
currencies to complement the dollar, at a separate event earlier on the day of the
summit. However, that did not find any reference in the final statement issued at
this occasion. Instead, the cautious wording appeared to reflect China’s
concerns that any anti-dollar statements could erode the value of its currency
reserves. China’s dollar reserves touched $2 trillion by the end of 2008 [18].

It is important to recall that the U.S. dollar is generally thought to be an


extremely safe asset to hold, which is why it has been the world’s main reserve
currency since WWII. Developing countries view plentiful dollar holdings as a
hedge against economic crises that might precipitate a run on their own
currencies. Dollars represent as much as 60% of reserves in some developing
countries, such as China and Thailand. However, a strategy, once considered a
source of economic stability is becoming more and more dangerous. The dollar
has fallen sharply against other major currencies in the last two years, and
because of massive U.S. current account deficits, it could fall further in the
years ahead. If that happens, the losses from dollar reserves for some
developing countries may exceed 20 % of their annual budgets. The damage of
a declining dollar could be extensive: If many developing countries were to
sharply increase their exports in order to rebuild the value of their reserves, it
could lead to a serious drag on world economic growth and possibly prolonged
stagnation in much of the developing world. For large corporations, this would
be especially painful because the fastest-growing markets in Asia, Latin
America, and Eastern Europe, which they are depending on for their growth,
could be stopped cold. The absence of any criticism of the US dollar appeared
to be a compromise by Russia.

There was an earnest plea for a greater representation at major institutions such
as the IMF or the World Bank for the emerging economies such as Brazil,
Russia, India and China. . In a more or less direct attack on the Western
domination of Bretton Woods institutions the statement said emerging and
developing economies must have greater voice and representation and the
“heads and senior leadership” of these bodies “should be appointed through an

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open, transparent and merit-based selection process.” It is indeed problematic to
note that this group completely ignores the role that these organisations play.
These agencies portray themselves as development agencies, donors, politics-
neutral and independent.

Anybody examining their role would find how state department of the US, US
treasury, Pentagon, CIA, big multinationals, and the World Bank and the IMF
go hand in hand. In many ways, investigations of the pattern of actions of these
institutions reveal the visible fist behind the ‘invisible hand’. Different country
experiences show how the World Bank and the IMF actually work for creating
or smoothening path for global corporate grabbing by influencing, lobbying,
creating support base through consultancy, trip abroad and by ‘manufacturing
consent’. These institutions therefore work as instruments to bargain or
lobbying to create necessary arrangements with different countries to protect
global corporate and imperial interest. Their enthusiasm for ‘development’ in
some countries or its indifference to crisis of some other countries is strongly
linked with these objectives. Lending support to South Vietnam or South
Korea’s pro-US regime, hostility to Allende government and sudden change of
policy towards Chile after the military take over, or after reinstatement of
President Aristide in Haiti, long hostile policy towards Cuba or policy towards
Afghanistan and Iraq are a few instances of long list of rhetoric and crimes.
Same goes with the IMF. The list goes long and would virtually include all
hated dictators that have stepped on this planet.

It is painful to see that the BRIC countries whose statement talks about a
collective agenda ranging from food security and financial reform to the
creation of a “more diversified international monetary system” and a “more
democratic and just multipolar world order,” prefer to fight for a larger share of
decision making of these oppressive institutions instead of raising a call to
dismantle it. Abandoning any initiative for South-South co-operation and
solidarity, their earnest plea is to be co-opted in the global league of gendarmes.

Even though Brazil is involved in the project for the “Bank of the South”, it has
no commitments to it. Recalling the actions of the Lula government in 2007, it
is not difficult to find that Brazil had been initially reluctant to join the Bank of
the South. Brazil sees it essentially as an instrument of commercial policy
speaking primarily in terms of economic bloc and uncritically accepts the
European Union (EU) as its model. In this case, the problem with Brazil is the
orientation of the Lula government and the economic and social model that it
practices. It is clear that Brazil’s integration into the Bank of the South will lead

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the Bank to adopt a much more traditional pattern, not too far removed from
neo-liberalism, while if Brazil did not participate, it would be easier to reach a
definition closer to the alternative model that a lot of radical movements
advocate. Brazil has joined the Bank of the South because it cannot be absent
from it; and it must maintain its regional economic dominance.

The 16 point BRIC statement also underlined support for a “more democratic
and just multipolar world order based on the rule of international law, equality,
mutual respect, cooperation, coordinated action and collective decision making
of all states”. However, judging the statement vis-à-vis the role that these
countries have played in the last decade, one can only conclude that this
announcement is an anomaly of its sort. The Chinese, Indian and the Brazilian
government have been lobbying extremely hard to be included in the G8 led
group and the heads of these states are regularly attending the annual summit of
the select group in recent times. There is very little doubt about the fact the G8
is a fountain head of the global subversion of democracy.

In none of the G8 summits since its 28th edition at Kananaskis, Alberta, Canada
in 2002, there has been any discussion on the invasion of Iraq or Afghanistan.
Offensives were led by its leading member state, the US and also faithfully
accompanied by a few other member states.. The G8 has been one of the
greatest violator of the international laws and has been a self-proclaimed agency
to control the globe by a few rich and elites. Certain BRIC members have also
placed confidence on the G20 summit to rescue the world out of this mess that
we are in. Though it seems that there is a little unanimity about the matter, even
within the group, nevertheless, to a certain extent, the statement of the Indian
prime minister amply manifests their common position on this issue.

In his speech at the summit, Dr. Singh hailed the cooperation already achieved
by BRIC at the G-20 deliberations on the international financial crisis. The
important issue today, he said was to implement the decisions that had been
taken. He also said cooperation in the G-20 process must be backed by
cooperation in the real economy. As certain commentators have pointed out
“Yet what happened in Washington? A sorry show, a script that lacks any
credibility, but few spectators seem to care. In detective films it is seldom the
case that the keys to the Court of Justice be given to arch criminals. Yet this is
what the G20 summit is planning to do.” [19] In the midst of this profound
crisis it is a matter of common sense that G20 was not born out of any genuine
concern to save the planet or to provide authentic solutions; on the contrary it
was a hasty act since November 2008 to salvage the powers that be and try to

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plug the ruptures of the capitalist system in the first place and to rescue it from
further decays. Therefore, to expect this body to opt for measures that are
sufficiently radical is conceptually impossible.

Conclusion

The BRIC countries, if they desire to mean what they pronounce in the
statements, have to radical rethink their policies. They must have a systematic
break with the current global order that seeks to ensure privileges for a selected
few imperilling the bulk of humanity. To begin with, they must raise effective
demands and strive for the abolition of tax havens. In order to achieve this, it
must declare it illegal for companies and residents to have any assets in, or
relationships with partners located in, tax havens. It must pressurise the EU
countries that function like tax havens (Austria, Belgium, the UK,
Luxembourg…) as well as Switzerland, to do away with bank secrecy and put
an end to these outrageous practices.

The recent demonstrations on 28 and 30 March during the G20 summit were
big ones, 40,000 people in London, thousands and thousands in Vienna, Berlin,
Stuttgart, Madrid, Brasilia, Rome, etc. with the common motto “Let the rich pay
the crisis!” The week of global action called for by the social movements from
all over the world at the WSF at Belém last January thus had a gigantic echo.
Those who had announced the end of the movement for another globalisation
were wrong. It has proved that it is able to bring large crowds together, and this
is only the beginning. The success of the mobilizations in France on 29 January
and 19 March (three million demonstrators were in the streets) is confirmation
that the workers, the unemployed and young people all want other solutions to
the crisis than those which consist in bailing out bankers and imposing
restrictions on the lower classes. The BRIC leaders must listen to those voices
and act if they are keen on actualising another reality.

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