BRICS are taking on the United States, the Eurozone and the World Bank

Posted by PITHOCRATES - March 31st, 2012

Week in Review

BRICS are on the ascendant.  Producing healthy economic growth while the old dogs who taught them everything they know are wallowing in economic despair.  Then again, the old dogs aren’t what they used to be.  For they are nothing like their former selves.  Or BRICS.  Who are embracing economic growth.  Instead of worrying about income redistribution and environmental policies that are killing the old dogs.  And these new dogs are looking to teach the old dogs a new trick (see Bank tops agenda at Brics summit of emerging nations posted 3/29/2012 on BBC India).

Brazil, Russia, China, India and South Africa (the Brics group) are proposing an alternative to the World Bank.

Leaders of the five nations, which now account for nearly 28% of the global economy, discussed closer trade links…

“The Brics countries have agreed to examine in greater detail a proposal to set up a South-South development bank, funded and managed by the Brics and other developing countries,” Mr Singh later said.

The Delhi Declaration expressed concern over the current global economic situation, especially in the euro zone…

The countries also resolved “to promote greater interaction among the business communities of Brics nations and easier visa facilities for businessmen”.

Mr Singh said the Brics group must speak with one voice on important issues such as reform of the UN Security Council.

President Hu said Brics nations should “enhance co-operation and intensify communication in international trade”…

The Brics nations have radically different economies and political systems and have often struggled to find common ground in the past.

But, they have been looking at ways to increase their trade links and decrease dependency on Europe and the United States.

Speak with one voice and improve international trade?  To compete against Europe and the United States?  Other than that part about Europe this sounds very familiar.  Oh, yes.  I remember.  This is what the Europeans said when they set up the Eurozone.  Which is struggling to survive.  Because they can’t speak with one voice.  For the individual nations may have surrendered their currency.  But they won’t surrender their sovereignty.  Which is why uber responsible Germany is continually frustrated by spendthrifts like Greece and Spain.  Not to blame Greece or Spain.  A common currency without a political unity was just a bad idea.

I suppose as long as BRICS don’t do anything foolish like try to set up a common currency to compete against the US dollar or the Euro they may do all right.  Being as they have such “radically different economies and political systems.”  But let’s just hope they don’t follow the “institutions of global political and economic governance created more than six decades ago” and ruin their emerging economies by turning them into social democracies.  Perhaps they can take a lesson from the Chileans.  Who have done a remarkable job embracing free market capitalism.  Thanks to their Chicago Boys.  And a little Milton Friedman.  Even privatized their social security system.  They’re doing pretty well now.  Unlike the nation that helped create them.  Spain.  Who is struggling with riots in their streets as they try to implement austerity to get their social spending under control.  So they can remain in the Eurozone.  And save the Euro.

Perhaps BRICS will be able to help bailout the Eurozone, too.  You know, as long as they don’t follow the Europeans down the Road to Serfdom.

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