Thursday, March 14, 2013
BRICS; A Rising Coalition against Western Hegemony
BRICS; A Rising Coalition against Western Hegemony
During the Cold War era following the Allied powers victory in WWII, the Atlantic nations (& Japan, reluctantly after industrialisation,when French president Gen de Gaulle had to receive the Japanese PM at Palace du Elysee, Paris, he complained that he had to meet with a transistor salesman) were collectively known as the first world (like Brahmins and high castes in India) in international pecking order. Non-communist world was described as the 2nd world if not evil empire i.e. OBCs .India and other poor nations in Asia and rest of the world was condemned as the third world aka underdeveloped nations i.e. like Dalits in India.
Now the situations has been changing fast , rather very fast , especially during the last 15 years with the coming end of the US century and fast decline of its hegemony . The new appointments of secretary of state and defence secretary by re-elected president Obama, to wind down US's destructive wars in Iraq and Afghanistan is not out of love for the people of these two terribly damaged states and its people but is a result of historic military over reach and its consequences as happened to the British and other European empires, Ottomans, the Arabs, the Roman/Byzantine and Persian empires. USSR collapsed as apart from other causes it could not match USA in military expenditure like previous empires in the past .Say, the collapse of the Roman/Byzantine and Persian empires following centuries of warfare , leading to the rise of the Bedouins from the sands of Arabia as a new world power .Like USSR, now it is the turn of the US Empire to decline.
USA, a paper tiger
Barring Germany and perhaps France (now the stupid chase for imperial glory in Mali), the Atlantic nations are bankrupt. USA has become a paper tiger .It is economic viability rests on the paper (US securities with declining values, held by China, GCC petro-states, Japan etc by virtue of US$ being still a reserve currency) In 1960s at the height of US Chinese tensions, Beijing used to describe USA a paper tiger .Now it is coming true .Yes, tiger even a paper tiger will take some time to bend, fold and collapse.
I had circulated earlier a piece
Brics Bank; First Nail in US Dollar Coffin!
Below is another piece by Amb Bhadrakumar on the Brics summit at Durban, South Africa.
Finally at the end is a piece from Russian TV on how China is taking the lead in strengthening the new coalition of non-Atlantic nations; Brazil, Russia, India, China and South Africa.
Watch this space for more good news.
K. Gajendra Singh 13 March 2013.Mayur Vihar, Delhi
Happy landing for BRICS at Durban
The BRICS' splashy 'arrival' in the African continent is bound to arouse disquiet in the western capitals.
South Africa is taking very seriously its onerous responsibility to host the BRICS summit meeting in Durban on March 26-27. The invitation extended to the African Union [AU] and African economies to the BRICS summit sets a new chapter in the grouping's 5-year long chronicle.
The decision to spread wings is a trendsetter, no doubt. Why it didn't occur to India to invite SAARC to last year's summit in New Delhi, I do not know, but it would have been good to do that.
South Africa's invitation to Egyptian President Mohamed Morsi to attend the Durban summit is even more important. The big question is whether Egypt would have a permanent berth in the BRICS tent. But then, how long can Egypt are kept out if Morsi makes a pitch for it? Egypt is a pivotal state.
Undeterred by the fact that it takes many summers to put together a BRICS development bank, South Africa remains optimistic that the Durban summit will take a firm decision. It has begun pitching for basing the proposed bank in South Africa. Conceivably, China would favour the idea, as a Xinhua report might suggest.
How many of the BRICS member countries have thought of establishing an exclusive BRICS 'think tank'? Well, again, South Africa has. The South African government has entrusted the Human Sciences Research Council with the task of functioning as 'incubator' for a South Africa BRICS think tank.
Perhaps, the most fascinating idea that the South African hosts have come up with is the holding of a 'defence seminar' on the sidelines of the Durban summit. South African defence delegations have visited Brazil and Russia in the run-up to the Durban summit. One may visit New Delhi too shortly, according to indications.
Of course, South Africa's defence cooperation with Brazil and Russia has gained appreciable ground. South Africa can expect full-throttle support from Moscow for revving up the BRICS process.
An expert study released in Moscow over the weekend has made some far reaching recommendations such as setting up a permanent BRICS secretariat, offer to host the BRICS development bank, creations of a $240 billion 'anti-crisis fund', strengthening of joint work in the security area and so on. The report was commissioned by the Russian government with a view to counter the tendencies in the West to view the BRICS as a 'rival'.
Africa is becoming a playground of big power rivalries. The BRICS' splashy 'arrival' in the African continent is bound to arouse disquiet in the western capitals. In South Africa it there is a strong lobby that seeks to debunk the BRICS process.
The fact that China is looming large as an economic presence in Africa and is offering an alternative partnership of development to the regional states upsets the West, which has been dominating the continent as its exclusive preserve for sourcing raw materials and as market for exports. The visits to various African countries by China's new leader and incoming president Xi Jinping in his first official tour abroad will surely raise hackles in the West, especially in the United States.
All in all, therefore, South Africa will run into air pockets in the coming period, but for the present the weather looks fine and the BRICS jet is coasting happily toward the Durban summit for a good landing.
"China is focused on building industries, increasing development and improving administrative and well as physical infrastructure . The propagation of force, which one would historically associate with a colonizer, is entirely absent from China's approach".
Published time: March 12, 2013 10:51
The fact that China's incoming president, Xi Jinping, is set to visit Africa on his first foreign trip is a strong indication of where Sino-African relations are headed. But as Beijing focuses on building African industry, Washington has other plans.
At a recently held meeting of the National People's Congress in Beijing, China's leaders unveiled a dramatic long-term plan to integrate some 400 million countryside dwellers into urban environments, by concentrating growth-promoting development in small- and medium-sized cities. In stark contrast to the neglected emphasis on infrastructure development in the United States and Europe, China spends around $500 billion annually on infrastructural projects, with $6.4 trillion set aside for its 10-year mass urbanization scheme, making it the largest rural-to-urban migration project in human history.
China's leaders have mega-development in focus, and realizing such epic undertakings not only requires the utilization of time-efficient high-volume production methods, but also resources – lots and lots of resources. It should come as no surprise that incoming Chinese president Xi Jinping's first trip as head of state will take him to Africa, to deepen the mutually beneficial trade and energy relationships maintained throughout the continent that have long irked policy makers in Washington.
The new guy in charge – who some analysts have suggested could be a populist reformer that empathizes with the poor – will visit several African nations with whom China has expressed a desire to expand ties with, the most prominent being South Africa. Since establishing relations in 1998, bilateral trade between the two jumped from $1.5 billion to $16 billion as of 2012. Following a relationship that has consisted predominately of economic exchanges, China and South Africa have now announced plans to enhance military ties in a show of increasing political and security cooperation.
During 2012's Forum on China-Africa Cooperation, incumbent President Hu Jintao served up $20 billion in loans to African countries, which were designated for the construction of vital infrastructure such as new roads, railways and ports to enable higher volumes of trade and export. In his address to the forum, South African President Jacob Zuma spoke of the long-term unsustainability of the current model of Sino-African trade, in which raw materials are sent out and manufactured commodities are sent in.
"Africa's past economic experience with Europe dictates a need to be cautious when entering into partnerships with other economies," Zuma said. "We certainly are convinced that China's intention is different to that of Europe, which to date continues to attempt to influence African countries for their sole benefit."
Xi's visit highlights the importance China attaches to Sino-African ties, and during his stay, he will attend the fifth meeting of the BRICS, the first summit held on the African continent to accommodate leaders of the world's most prominent emerging economies, namely Brazil, Russia, India, China, and South Africa. The BRICS group, which accounts for around 43% of the world's population and 17% of global trade, is set to increase investments in Africa's industrial sector threefold, from $150 billion in 2010 to $530 billion in 2015, under the theme 'BRICS and Africa: Partnership for development, integration, and industrialization.'
With focus shifting toward building up the continent's industrial sector, South Africa is no doubt seen as a springboard into Africa and a key development partner on the continent for other BRICS members. Analysts have likened the BRICS group to represent yet another significant step away from a unipolar global economic order, and it comes as no surprise. As eurozone countries languish amidst austerity, record unemployment and major demand contraction, the European Union has declined as a share of South Africa's total trade from 36% in 2005 to 26.5% in 2011, while the BRICS countries' total trade increased from 10% in 2005 to 18.6% in 2011.
The value and significance of the BRICS platform is its ability to proliferate South-South political and economic ties, and one should expect the reduction of trade barriers and the gradual adoption of economic exchanges using local currencies. China's ICBC paid $5.5 billion for a 20% stake in Standard Bank of South Africa in 2007, and the move has played out well for Beijing – Standard has over 500 branches across 17 African countries, which has drastically increased availability of the Chinese currency, offering yuan accounts to expatriate traders.
It looks like the love story that has become of China and Africa will gradually begin shifting its emphasis toward building up a viable large-scale industrial base. Surveys out of Beijing cite 1,600 companies tapping into the use of Africa as an industrial base, with manufacturing's share of total Chinese investment (22%) fast gaining on the mining sector's (29%).
Gavin du Venage, writing for the Asia Times Online, highlights how Beijing's policy toward Africa aims to be mutually beneficial and growth-promoting: "Chinese energy firm Sinopec teamed up with South African counterpart PetroSA to explore building a US$11 billion oil refinery on the country's west coast. Refineries are notoriously unprofitable, with razor-thin margins. Since South Africa has no significant oil or proven gas reserves itself, the proposed plant would depend on imports, and would have to serve the local market to be viable. The plant will therefore serve the South African market and not be used to process exports to China. This is only the latest of such investments that demonstrate a willingness by Chinese investors to put down roots and infrastructure in Africa. It also shows that China's dragon safari is about more than just sourcing commodities for export."
Indeed, and Beijing's dragon safari is loaded with a packed itinerary, with Mao-bucks flying everywhere from Tanzania and the Democratic Republic of the Congo, to Nigeria and Angola. Xi Jinping will also grace the Angolan capital of Luanda, where China has provided the oil-rich nation with some $4.5 billion in loans since 2002. Following Angola's 27-year civil war that began in 1975, Beijing played a major role in the country's reconstruction process, with 50 large-scale and state-owned companies and over 400 private companies operating in the country; it has since become China's largest trading partner in Africa with a bilateral trade volume at some $20 billion dollars annually. Chinese Ambassador Zhang Bolun was quoted as saying how he saw great potential in further developing Sino-Angolan relations and assisting the nation in reducing its dependence on oil revenues while giving priority to the development of farming, service industries, renewable energies, transport and other basic infrastructure.
Chinese commercial activities in the Democratic Republic of the Congo have significantly increased not only in the mining sector, but also considerably in the telecommunications field. In 2000, the Chinese ZTE Corporation finalized a $12.6-million deal with the Congolese government to establish the first Sino-Congolese telecommunications company, while Kinshasa exported $1.4-billion worth of cobalt to Beijing between 2007 and 2008.
The majority of Congolese raw materials like cobalt, copper ore and a variety of hard woods are exported to China for further processing, and 90% of the processing plants in resource-rich southeastern Katanga province are owned by Chinese nationals. In 2008, a consortium of Chinese companies were granted the rights to mining operations in Katanga in exchange for $6 billion in infrastructure investments, including the construction of two hospitals, four universities and a hydroelectric power project; the International Monetary Fund intervened and blocked the deal, arguing that the agreement violated the foreign debt relief program for so-called HIPC (Highly Indebted Poor Countries) nations.
China has made significant investments in manufacturing zones in non-resource-rich economies such as Zambia and Tanzani, and as Africa's largest trading partner China imports 1.5 million barrels of oil from Africa per day, accounting for approximately 30 percent of its total imports. In Ghana, China has invested in Ghanaian national airlines that primarily serve domestic routes, in addition to partnering with the Ghanaian government on a major infrastructural project to build the Bui Hydroelectric Dam. China-Africa trade rose from $10.6 billion in 2000 to $106.8 billion in 2008, at an annual growth rate of over 30 percent.
By the end of 2009, China had canceled out more than 300 zero-interest loans owed by 35 heavily indebted needy countries and the least developed countries in Africa. China is by far the largest financier on the entire continent, and Beijing's economic influence in Africa is nowhere more apparent than the $200 million African Union headquarters situated in Addis Ababa, Ethiopia – which was funded solely by China.
China's deepening economic engagement in Africa and its crucial role in developing the mineral sector, telecommunications industry and much-needed infrastructural projects is creating "deep nervousness" in the West, according to David Shinn, the former US ambassador to Burkina Faso and Ethiopia. During a diplomatic tour of Africa in 2011, former US Secretary of State Hilary Clinton insinuated China's guilt in perpetuating a creeping "new colonialism." When it comes to Africa, the significant differences in these two powers' key economic, foreign policy strategies and worldviews are nowhere more apparent. Washington has evidently launched efforts to counter China's influence throughout the African continent, and where Beijing focuses on economic development, the United States has sought to legitimize its presence through counterterrorism operations and the expansion of the United States Africa Command, better known as AFRICOM – an outpost of the US Military designated solely for operations on the African continent.
During a visit to AFRICOM in 2008, Vice Admiral Robert T. Moeller cited AFRICOM's stated mission of protecting "the free flow of natural resources from Africa to the global market," before emphasizing how the increasing presence of China is a major challenge to US interests in the region. Washington recently announced that US Army teams will be deployed to as many as 35 African countries in early 2013 for training programs and other operations, as part of an increased Pentagon role in Africa – primarily in countries with groups allegedly linked to Al-Qaeda.
Given President Obama's proclivity toward the proliferation of UAV drone technology, one could imagine these moves as laying the groundwork for future US military interventions using such technology in Africa on a wider scale than that already seen in Somalia and Mali. Here lies the deep hypocrisy in accusations of Beijing's purported 'new colonialism' – China is focused on building industries, increasing development and improving administrative and well as physical infrastructure . The propagation of force, which one would historically associate with a colonizer, is entirely absent from China's approach.
Obviously, the same cannot be said of the United States, whose firepower-heavy tactics have in recent times enabled militancy and lawlessness, as seen in the fallout of the North Atlantic Treaty Organization's 2011 bombing campaign in Libya, with notable civilian causalities. As Xi Jingping positions himself in power over a nation undertaking some of the grandest development projects the world has ever known, Beijing's relationship with the African continent will be a crucial one. While everything looks good on paper, Xi's administration must earn the trust of their African constituents by keeping a closer eye on operations happening on the ground.
The incoming administration must do more to scrutinize the conduct of Chinese conglomerates and business practices with a genuine focus on adhering to local environmental regulations, safety standards and sound construction methods. The current trajectory China has set itself upon will do much to enable mutually beneficial economic development, in addition to bolstering an independent Global South – a little less red then how Mao wanted it, but close enough.