Black People Politics : BRICS Bank Challenges the Exorbitant Privilege of the US Dollar

Discussion in 'Black People Politics' started by RAPTOR, Aug 6, 2014.


    RAPTOR Well-Known Member MEMBER

    United States
    Sep 12, 2009
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    by Horace G. Campbell
    Over 65 percent of the world’s nations keep their foreign exchange reserves in the US dollar, the
    dominant world currency. The creation of the BRICS Bank and other financial interventions will
    likely weaken the dollar’s dominance and contribute to the creation a new international economic

    This article previously appeared in Pambazuka News.

    This summit represented a major step in breaking the Exorbitant Privilege of the
    US dollar as a the dominant international currency.”

    At the end of the Sixth BRICS Summit in Fortaleza, Brazil on July 16, 2014, the leaders of the
    BRICS countries announced the “Fortaleza Action Plan.” This plan is in the context of the Fortaleza
    Declaration, where the leaders reinforced their position that BRICS would be an international force
    in challenging the neo-liberal policies of the Washington Consensus. Touching on areas of major
    destabilization in the world – from Syria to Sudan and from Ukraine to Iraq – the leaders spelt out
    the need for new paths to peace and for strengthening the United Nations to resolve the outstanding
    questions of war and insecurity. The most daring aspect of the Fortaleza Declaration was the
    announcement of a new financial architecture to intervene in relation to the international tensions
    that have arisen since the Federal Reserve Bank of the United States announced the monetary
    policy of Quantitative Easing This policy allows a central bank, like the Federal Reserve System, to
    purchase government or other securities from the market with the goal of lowering interest rates
    and increasing the available money supply. The BRICS summit announced two new pillars in a new
    financial architecture that is to be anchored with the headquarters of the New Development Bank in
    Shanghai, China.

    The Fortaleza Action Plan and the outcomes of this summit represented a major step in breaking
    the Exorbitant Privilege of the US dollar as a the dominant international currency. Along with the
    formal establishment of the New Development Bank (NDB), the leaders announced the launch of a
    Contingency Reserve Arrangement (CRA), which in 2013 was approved to receive a $100 billion
    fund to combat currency crises. The first president of the Bank will be from India, the inaugural
    Chairman of the Board of directors will come from Brazil and the inaugural chairman of the Board
    of Governors will be Russian. It was stressed in the Fortaleza proclamations that the BRICS Bank
    would be organized on the basis of equality unlike the current IMF and World Bank where the
    leader of the IMF is always a European and the head of the World Bank is always a U.S citizen. The
    proposal for the BRICS bank had been announced at the BRICS summit in New Delhi in 2012 and
    at the summit in Durban in 2013 the plan for the CRA was also outlined. The long term goal of the
    CRA will be to provide emergency cash to BRICS countries faced with short term credit crisis or
    balance of payments problems. Ultimately, in the context of the present currency wars, the CRA will
    replace the International Monetary Fund (IMF) as the provider of resources for BRICS members
    and other poor societies when there is balance of payment difficulties.

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  2. Kadijah

    Kadijah Banned MEMBER

    Apr 7, 2013
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    Beautifully ambitious! The REAL chance it has of succeeding is that Russia are China are on board. Without those 2, belligerent Russia and powerhouse China, the U.S. and Europe would crush the nascent federation.

    For those unaware of BRICS, it stands for:

    B = Brazil
    R = Russia
    I = India
    C = China
    S = South Africa
  3. Kadijah

    Kadijah Banned MEMBER

    Apr 7, 2013
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    **sigh** Oh well. Clicked on the link. Found this right beneath the above article:

    cc BS
    There is nothing to celebrate about the new financial architecture unveiled by the BRICS as an alternative to capitalist dominance. In fact the BRICS are happy enablers of Western capitalism and its destructive excesses
    Horace Campbell is a superb analyst but occasionally – like all of us – he gets things wrong: ‘the BRICS formation will not succumb to the International Monetary Fund and the conditionalities of the IMF... The bigger danger for the dollar is the reality that other emerging states that want to break from the conditionalities of the IMF can benefit from the New Development Bank and Contingent Reserve Arrangement.’ [See: ‘BRICS Bank challenges the exorbitant privilege of the US dollar’ in this issue].

    From that mistake, others follow. For contrary to rumour, the Brazil-Russia-India-China-South Africa alliance confirmed it would avoid challenging the unfair, chaotic world financial system at the Fortaleza summit on July 15.

    The BRICS ‘are actually meeting Western demands,’ reported China Daily, ‘to stabilize the global financial market.’ If such BRICS subservience continues, remarked financier Ousmène Jacques Mandeng of Pramerica Investment Management in a Financial Times blog, ‘it would help overcome the main constraints of the global financial architecture. It may well be the piece missing to promote actual financial globalisation.’

    Fawning to finance reminds us of the term Brazilian political economist Ruy Mauro Marini coined a half-century ago, ‘sub-imperialism’: i.e., ‘collaborating actively with imperialist expansion, assuming in this expansion the position of a key nation.’ Marini described Brazil’s ‘deputy sheriff’ role in Latin America,

    Click on link for the rest of the article.

    What I'm thinking is that this is one of those "wait and see" situations. A "hope for the best" and wait and see. :10500: