Friday, July 11, 2014

Putin, Russia make News ahead of the BRICS Summit

With the BRICS Summit just a few days away we have two interesting headlines in the BRICS Post. Both are generated out of Russia. If these articles are any indication it looks like Russia will try to take maximum advantage of media attention to both promote the BRICS as an alternative to the US/West and get in a few shots at the US as well. 

First we have this announcement from a Kremlin official that the BRICS bank will headquarter in China (in Shanghai). Here some quotes from that article first:

"The much awaited BRICS bank will be headquartered in Shanghai, Kremlin aide Yury Ushakov said in Moscow on Thursday."

"The location of the Bank has already been recorded in the official documents said Ushakov."

“Thus, the basis for the macroeconomic coordination of the five states will be laid. The new institutions will allow enforcing the global finance system, which is particularly important amid the IMF reform that reached a deadlock,” said Ushakov.

"The five founding members of the new Bank will retain controlling interest should any new members be admitted and the BRICS share will never dip below 55 per cent."

"Noted columnist and Russia expert Mark Adomanis says the BRICS Bank is likely to suffer significant growing pains but “the simple fact of its creation demonstrates the shockingly rapid pace of change of the past decade”.
“Ten years ago the creation of such a bank would have been greeted with open derision and laughter in Washington, London, Paris, and other Western capitals. They’re certainly not laughing anymore,” writes Adomanis.
Next we have this article quoting Russian President Putin on future expansion plans for the BRICS bank. Here are some quotes from that article:
"Russian President Vladimir Putin on Thursday said the expansion of BRICS to include newer members is an issue likely to be raised in the future as more and more countries queue up for membership in the powerful bloc of emerging economies."
"Ahead of the 6th BRICS Summit, Putin lauded the growing “political influence” of Brazil in the international community.
Moscow, Putin said, supports Brazil “as a deserving and strong candidate for a permanent seat on the UN Security Council.
Latin American nations, including Brazil, were angered by revelations in Brazil’s O Globonewspaper earlier that the US NSA snooped on oil and energy firms in Brazil and intercepted calls and emails of Brazilian President Dilma Rousseff.
Rousseff had subsequently canceled a state visit to the US. Brazil then co-drafted the “right to privacy” resolution with Germany, which has been passed by the  UN rights committee.
Putin on Thursday said the current cyber-espionage narrative “not only amounts to overt hypocrisy in relationships between allies and partners, but also a direct violation of the state’s sovereignty, an infringement on human rights and an invasion of privacy”.
my comments on both articles: In just two short articles there is a quite a bit for us to consider. I will list the bullet points I take away from these two articles.
From the first article:
-Russia leaks news that the new BRICS bank will be in China. Does anyone doubt that these two countries are solidly behind each other in the new emerging alliance?
-The Kremlin official makes it clear this new BRICS bank is needed for "enforcing the global finance system" and this is important because "the IMF has reached a deadlock". Notice this always comes back to the IMF not approving the 2010 reforms.
-the article quotes a Russian expert making a statement we could reasonably call a message to the West. Washington, London, Paris, and other Western Capitals "aren't laughing anymore". This statement gives you an idea of how these countries think they have been treated by the West. They were "laughed at" (indicating viewed as inferior), but not anymore.
From the second article: 
-Putin seems to use the pre summit media attention to send some more messages to the West such as:
-the BRICS are here to stay and lots of other nations are interested in joining with us
-Brazil deserves a seat on the UN Security Council. Does this sound like a guy ready to walk away from the UN, IMF, etc?  Or a guy who wants to pressure them into doing more of what he wants?
-jumps at the opportunity to poke a stick at the US (NSA) for spying on Brazil. This is sore spot all around the world right now and Putin uses this opportunity to call out the US for "hypocrisy", "infringement of human rights", and "invasion of privacy" (remember Snowden lives in Russia these days)
Concluding commments: Well, the summit hasn't even started yet and we see Russia taking the media lead as we anticipated. If these two articles are any indication, it appears Russia will use this summit both to try and boost the BRICS image and to take some shots at the US and the West. 
But please notice that the quoted comments DO NOT seem to indicate they are giving up on the UN, the IMF, etc.  Instead, they seem to indicate a desire to create pressure on those institutions to change in ways the BRICS prefer

Again, I can't close the door completely on the idea that the BRICS hope to use this new alliance to gain leverage at the existing global institutions as well as have their own system up and running as "Plan B" if they eventually give up on the present system. From their perspective, there is no downside to forming this alliance.

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