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BRICS Summit 2012: A long Journey to cover; Overview, Outcomes and Expectations



BRICS summit logo
BRICS Summit 2012 Logo

Leaders from Brazil, Russia, India, China and South Africa met on Thursday, Mar 29, 2012 in Delhi for the fourth annual Summit. Earlier known as BRIC before the addition of South Africa, BRICS is the group of emerging economies around the world, who are exploring new ways of collaboration, collective economic growth and developing common ground on foreign policy.

Sao Paulo at night
Sao Paulo, Brazil
All five economies maintain a great potential to become a superpower, but most of them are dependent on western economies. Any ups and down in the western markets leave their impact on these markets.
Moscow at night
Moscow, Russia

The summit stressed on linking economies, as in trading in local currencies as well as linking stock exchanges of the member countries. The leaders also stressed on setting up of an international bank on par with Asian Development Bank, IMF and World Bank. It would fund various development projects in member countries and other emerging economies and may act as a relief provider for first time buyer mortgages in case of real financial crisis and disaster. The goal of the bank will also include lending, in the long term, if there comes a global financial crises such as the Eurozone crisis and issuing convertible debt, which could be bought by the central banks of all the member nations. Hence it will be acting as a vessel for risk-sharing.

Mumbai at night
Mumbai, India
Shanghai at night
Shanghai, China

The idea of setting up such bank was put forward by India, which received a good response from the member countries as well as from the countries who were observing the event carefully. Analyst John Mashaka called India’s move “long overdue”, and said that setting up a bank was a means of “pulling out of the western-dominated World Bank and the International Monetary Fund.” Assistant professor at the Institute of African Studies (China) Yuhua Xiao noted that setting up the bank showed signs of growing self-assertiveness and inter-dependence among developing economies. Dr. Alexandra A Arkhangelskaya noted that creating such a bank would effectively “shift the weight of economic power”, and could also be very beneficial to non-BRICS nations.

Johannesburg at night
Johannesburg, South Africa

The nations also signed an agreement to extend credit facilities in their local currencies, a step to reduce the role of dollar between them. As of now, if Russia wants to trade with India, Russia will convert Rubles to Dollars send it to India, and then India will convert Dollars to Rupees. Completely removing the intermediate step of converting to and from dollar is not so easy, but if removed, the trade between the two countries will become independent of what the value of dollar is, which is highly unstable.

Also the nations will be launching a benchmark equity index derivatives that would allow investor of one member country to bet on the performance of stock exchanges of other member countries without currency risk.

Accounted 50% of global economic growth in last decade, BRICS accounts for 26% of global landmass, 42% of the global population and 40% of global GDP.

Below is the tabulation of the countries and their economy in therms of GDP (PPP). The data is taken from CIA World Factbook GDP PPP data update of 2011. PPP is one of the scale to measure difference between two economies. Using a PPP basis is arguably more useful when comparing generalized differences in total economic output between countries because PPP takes into account the relative costs and the inflation rates of the countries, rather than using just exchange rates, which may distort the real differences in income. The table shows BRICS as a single entity is more powerful than European Union. The data for GDP at purchasing power parity (PPP) has also been re based using the new International Comparison Program (ICP) price surveys and extrapolated to 2007. Final figures are estimates in billions of international dollars.

Rank Country GDP (PPP) $Billion Year
BRICS 20,975 2011 est.
 European Union 15,390 2011 est.
1  United States 15,040 2011 est.
2  China 11,300 2011 est.
3  India 4,463 2011 est.
4  Japan 4,389 2011 est.
5  Germany 3,085 2011 est.
6  Russia 2,373 2011 est.
7  Brazil 2,284 2011 est.
8  United Kingdom 2,250 2011 est.
9  France 2,214 2011 est.
10  Italy 1,826 2011 est.

Another method of measuring economy is GDP (nominal) based on official exchange rates. The list below includes mostly 2011 estimates from the CIA World Factbook. The table shows BRICS as the third largest economy after EU and US.

Rank Country GDP nominal $Billion Year
 European Union 17,720,000 2011 est.
1  United States 17,720,000 2011 est.
BRICS 13,766,000 2011 est.
2  China 6,988,000 2011 est.
3  Japan 5,866,000 2011 est.
4  Germany  3,739,000 2011 est.
5   France 2,919,000 2011 est.
6  Brazil  2,407,000 2011 est.
7  United Kingdom 2,370,000 2011 est.
8  Italy 2,135,000 2011 est.
9  Russia 1,995,000 2011 est.
10  India 1,954,000 2011 est.

The performance of the BRICS nations on the international platform has been brilliant, despite the fact all these countries come from different continents, having different government, political and economical structure. How far this concept of BRICS will sustain no body knows, but if it works then it will bring a great change in the current world, a change for good.

The countries have been working together to find some common ground and fortunately their thoughts match on the issues of West Asia, North Africa and Afghanistan. All five countries called for the international community to continue development projects in Afghanistan for 10 years after America led international forces will withdraw from the nation by the end of 2014.

BRICS nations together have strongly condemned the Western world’s politics on Iran to make other countries stick to the restrictions imposed by them on trade ties.  China’s Trade Minister Chen Deming said that the “rise [in the price] of crude oil has impacted all countries. The Iran issue has become an issue for all. We need to continue with normal relations with Iran, but, at the same time, we respect UN resolution. We hope that unilateral movement by one country will not affect other countries.”  The group warned against any military intervention in Syria by the West or by Israel in Iran. They added that a war with Iran would have “disastrous consequences.”

Landmass of BRICS vs EU, Click to Enlarge

Out of five BRICS nations, three of them have remained or are super power. India before 14th century, Russia in the 20th century and China almost in 21st century. No matter these countries possess power and wealth, but they may not share good relations with each other. Brazil and South Africa being geographically isolated from these nations share good relations with all. The best example is China and India,  both of them have faced each other in the war in 1965 and China is still occupying a large part of North India and claims some part of Indian territory in North East India. China was also about to open the front in Indo Pakistani war in 1971 but didn’t do so, fearing Pro Indian Soviet Union might take action against them. Russia and China have also shared cold relations following the illegal migration of Chinese in Russia’s far east and border dispute which was recently resolved.

Russia and India have been sharing good relations from the Soviet times. India also shares good relations with South Africa, one of the major reason being Mahatma Gandhi, whose work in South Africa promoted equality between blacks and whites. In South Africa, Mahatma Gandhi is equally respected as in India. Brazil has also been close to all the countries.

Leaving aside all these solid claims about BRICS, there are critics as well who discuss why BRICS might fail with some genuine facts. One of the reason is all these countries come from different continents, different social, economical and political systems and some of these countries do not share good relations as well as common ground.

One of the best example of this claim is that after the declaration of setting up of an International bank, these countries fear that China will be the most benefited country out of all and will enjoy the most.

However, just after the summit was over, India and China declared that they will keep their border issue aside for now and will take more steps to increase trade between the two neighbors. Indian government also expressed their interest in inviting Chinese investment in India’s manufacturing sector. Both the countries have together declared this year as Indo Chinese year of friendship and cooperation.

After the summit, Brazil and India also took the opportunity of exploring their way of cooperation. The two countries signed six pacts in areas ranging from closer cooperation in science and biotechnology to cultural exchanges. Under a signature, Brazilian initiative Science Without Borders, the two sides inked a pact that envisages placement of Brazilian students and young researchers in India. It will be funded by Brazil.

US State Department spokesman Mark Toner said, “We reviewed the leaders’ Delhi declaration and believe that their efforts to engage in global multilateral institutions productively can only strengthen the international system. United States welcomed the efforts by the so-called BRICS — Brazil, Russia, India, China and South Africa — to support the recovery of the global economy as well as “

Russian by roots, global citizen by choice. In love with India and Indian culture, love to report everything from politics to military news. Against the controlled media.

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Yes, You Should Start Caring About Politics!



One of the most common things that you hear from people a lot of the time is something along the lines of “I just don’t really care about politics.” In fact, you might have even said something along those lines yourself. And it can be tempting to fall into this line of thinking. After all, politics are hardly the most exciting or exotic things in the world. However, the truth is that they impact your life in different ways every single day and if you choose to ignore politics, then that just meant that you’re going to end up falling victim to policies that harm you and the people around you. With that in mind, here are some ways that you can start being more politically minded right now.

Know the issues

Do you know where you stand on many of the most important issues of the modern day? Do you know what most of those issues are? The truth is that many people would rather ignore a lot of the problems that society and the world at large face simply because it can feel as though they’re too big to deal with. Things like the economy, climate change, and social justice aren’t just abstract concepts; they’re things that impact the lives of real people every single day. Being more informed about the issues will allow you to have a much better understanding of your own political views.

Know who to speak to

Do you know who your senator is? Your representative? Most people tend to only know major politicians who have held office at one point or another. Sure, you probably know the president or a senator like John Mccain. But what about all of the other senators like Doug Jones or Mike Crapo? These are the people you can actually contact if you want to start making some changes in the world. Getting to know who you can contact can help you feel much more involved in the modern political process.

Forget about personalities and focus on policies

Modern politics has become as much of a game of personalities as anything else. But the truth is that the personalities of individual politicians are far less important than the policies that they and their party want to enact. After all, the policies are the things that will actually make a difference in people’s lives. You should never vote just because you like or dislike the way that a particular politician talks or what their personality seems to be like. Always vote on policies, not personalities.

Now, this doesn’t mean that you should suddenly let politics take over every conversation that you have or that you need to be constantly thinking about it. But trying to bury your head in the sand and ignore the things that are going on around you isn’t going to do you any good. The only way that you can start to make some genuine changes in the world is if you face up to the realities of the modern world and try to do something about it.

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How Mafia-States Get Away with Criminality



In theory, all 195 states adhere to the Charter of the United Nations and therefore pledge “to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained”. In other words, to play the game and adhere to basic governmental principles. That’s in theory: in practice, a handful of states in the world behave like mafias, and get away with it.

President George W. Bush first used the terms “failed states” or “rogue states”, during his office. Rogue states seem more adapted because, if they are failed states in the sense that they do not carry out their mission, they are not failed for everyone. Afghanistan is, still today, one of the most prominent examples of how to get personally rich by pretending to represent people. In the wake of the NATO intervention in Afghanistan, billions of dollars were poured into the country in reconstruction efforts, based on the belief that if the population was schooled and busy at work, they would be less likely to join rebel ranks. The idea was good, but most of the massive funds were sidetracked to line officials’ pockets and Afghanistan is pretty much in the same shape as it was before the program, if not worse. Business Insider covered the subject (1): “All districts receive central government budget to cover salaries of front-line forces,” reporter Jessica Purkiss wrote for the Bureau. “In many areas in Afghanistan, some of this budget disappears and the actual number of officers tasked with holding back the Taliban is much lower than the number actually allotted.”

And such rogue states also exist close to the Western sphere of Europe and the US. Almost every single State in Central and South America is at the warning level on the Fragile State Index (2) (the term was brushed up to sound less definitively damning than President Bush’s wording). Hungary was bashed this year, along with the rest of EU low-performers, for dropping sharply in the EU’s good governance ranking, as reported by Nicolaj Nielsen, for the EU observer (3): “Bulgaria scored the worst among EU states with 41, followed by Greece (44), Italy (47), Romania (48), Hungary (48), and Croatia (49). Dolan faulted the crackdown on civil society and other independent institutions in Croatia and Hungary for their worsening performance. Both governments were also embroiled in scandals last year. In one case, Hungary’s government allegedly funneled money from the Central Bank to friends and family.” Prime Minister Viktor Orbán learned from the report (4) that “Hungary loses 200 billion forints every year due to the corruption that exists in public procurement cases.”

Not to forget that States are not all mutually recognized and accepted, some of them are self-proclaimed. While some do indeed strive to carry out their stated mission and serve the people they claim to represent, some other are merely mafia groups with a political cover, which deal in various traffics and racketeering. Bordering Morocco, Algeria and Mauritania, lies Western Sahara, where a group named the Polisario Front announced to the world that it was the shield of the Sahrawi people, who originate from the arid strip of land, with the stated intent of creating a sovereign state. But that must be put into perspective with the endless list of allegations and accusations carried against it, regarding the Polisario’s management of refugee camps in Algeria for example. The self-proclaimed government of the Sahrawi – namely the SADR (Sahrawi Arab Democratic Republic) – is known for keeping the refugees captive in the camps, or keeping family members as hostage to guarantee men’s returns, maintaining a general state of violence and lawlessness within the compound. In addition, the European Anti-Fraud Office (OLAF) has serious doubts (5) as to what becomes of the humanitarian aid it sends. It suspects not only the food to be sidetracked and sold on the black market, but also to be requested in excessive numbers – the Polisario front claims it holds up to 200 000 refugees but has systematically refused census, leading humanitarian donors to believe the figures are doubtful.

Can this be avoided? Hardly, at the general level. Pablo Escobar coined the phrase which underlies the entire system : Plata o plomo (silver or lead). Officials could be paid off to keep silent and play along, or be shot. Therefore, it is in the nature of corruption systems to maintain themselves because, should a “pure” official arise, he will be removed and replaced by a more complacent one.

Mafia states use the cover of darkness or, better still, a politically activist stance. The Colombian FARCs – Polisario’s allies, incidentally… – and the Medellin Cartel, run by Pablo Escobar, had an intense PR activity with many “social and humanitarian” poses, to help improve their public image and stymie political push-backs. The Polisario Front has moved much of its assaults to the judicial level, in a new form of “civilized” piracy, including with the surprise attempt to seize a Moroccan shipload earlier this year in South Africa. “The conclusion of this case will actually tell us whether it is now conceivable, on the judiciary level, that international shipping industry – which carries 90% of global trade – become hostage to some form of unprecedented and increasingly vicious political piracy,” wrote Philippe Delebecque (6), a French judge specializing in maritime affairs.

Mafia states are here to stay, because the mafia creates the state, and not the other way around. Once the mafia has developed its tentacles and political power enough, it will make kings and topple uncooperative administrators. Other states in the world are fully aware of this fact, and that if they bust a mafia-state, another will replace it within weeks. So, in the best cases, neighboring countries let it be; in the worst cases, they get involved in the graft.


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Should You Support Universal Basic Income? Who else is in favour?

Manak Suri



In the previous article “Universal Basic Income: In Action” we explored that Universal Basic Income under different variants is already being put to trial in different provinces of a number of countries around the world. Before that, in “Universal Basic Income: The Idea” we weighed the potential of UBI in creating a monumental change in the way humanity as a society functions as of today. While there’s still quite some time required to ascertain how easily and efficiently the system can be put into effect and whether it should be put into place at all, some of the more apparent advantages, as well as flaws of the system, are repeatedly considered by experts in determining the answers to the aforementioned questions. In addition, many influential figures have also come out both in support of UBI as well as against it. Let’s take a look at the support UBI has garnered as well as the supposed benefits and criticisms of UBI.

Pros of Universal Basic Income

The first argument often cited in favour of UBI is for its potential to alleviate poverty, improve the standard of living and vastly reduce income inequality no matter which country it is implemented in. the Alaska Permanent Fund (AFP), which we’ve already discussed, was instrumental in improving the state’s income equality rank from 30 to 2. UBI trials in Namibia, Kenya, and parts of India have also yielded positive results in this regard. UBI has also resulted in the improvement of health, especially mental health, as reported by people who have been part of UBI trials in Ontario, Canada. UBI also encourages entrepreneurial behaviour since it guarantees basic subsistence thereby providing an incentive for people to take up a line of work of their liking. UBI trials in India and Namibia have also shown that it has helped promote financial decision making by women resulting in their empowerment. A guarantee of a fixed income every month also brings more power to people when it comes to deciding where they should spend money. The Roosevelt Institute research we discussed previously also suggests an overall growth in the US economy with a countrywide implementation of UBI. UBI is also expected to lead to a positive job growth and lower the dropout rates in schools since it provides more security to families.

Cons of Universal Basic Income

The critics of UBI argue that money that is essential for the poor is being redirected towards the wealthy and those citizens who have no need for it. Robert Greenstein, founder and President of Center on Budget and Policy Priorities in Washington D.C.  “if you take the dollars targeted on people in the bottom fifth or two-fifths of the population and convert them to universal payments to people all the way up the income scale, you’re redistributing income upward. That would increase poverty and inequality rather than reduce them.” In addition to that, it is often argued that UBI programs are highly ineffective when compared to welfare programs that are implemented on targeted populations. Therefore, unless UBI is implemented without the scrapping off of such welfare schemes, it is likely to find opposition from a huge number of people who currently benefit from these programs. Another argument against UBI one may repeatedly encounter is that UBI reduces the incentive to work, which leads to huge costs for the economy. This may also lead to a dearth of skilled and unskilled labour in the economy. The Swiss government have opposed the implementation of UBI for the very same reason, fearing that the current labour shortages may be exacerbated. Finally, an argument that also holds the door open for many debates is that UBI is too expensive to implement and will cost a lot to the government. As opposed to studies which show a growth in the economies through the implementation of UBI, many economists have also opposed it, claiming that UBI in the more developed nations will be very expensive to guarantee an acceptable standard of living to all the citizens.

Who Supports Universal Basic Income?

Since the idea was first proposed by Sir Thomas More in 1516, UBI has found suitors throughout recent history. Founding father of the United States Thomas Paine was in favour of it, philosopher and Nobel Laureate Bertrand Russell argued in its favour, and even Martin Luther King said: “the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income.” American economist Milton Friedman, Bishop Desmond Tutu, and even former US President Richard Nixon came close to bringing UBI to the United States. As of today, a number of high profile names in the Silicon Valley have expressed their support for UBI. An advocate of entrepreneurship and creativity, Mark Zuckerberg sighted UBI as an worth a look in his statement at his Harvard commencement address: “We should explore ideas like universal basic income to make sure that everyone has a cushion to try new ideas.” Tesla co-founder and CEO Elon Musk believes implementation of UBI is inevitable. “There’s a pretty good chance we end up with a universal basic income, or something like that, due to automation,” Musk said in an interview in 2016. Pierre Omidyar, founder of eBay also donated towards a UBI experiment in Kenya. Coursera founder Andrew Ng expressed on Twitter: “More than ever, we need a basic income to limit everyone’s downside, and better education to give everyone an upside.” The list does not stop here.

UBI has at least gained enough attention to get people, investors, world leaders, and governments to talk about it and more importantly experiment with it. The results are not yet out and will take a considerable amount of time still to be able to present a final verdict on UBI and its effectiveness. However, as robots make humans redundant in recurring waves, is there still enough time to just be experimenting?

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