Brics and new development bank
-
Upload
daily-dunya -
Category
Education
-
view
867 -
download
0
Transcript of Brics and new development bank
PRESENTED BY:-
MUHAMMAD TAHIR
BRICS
The term BRICS was used for the first time in the Goldman
Sachs report 2003
BRICS is international political organization of leading
emerging economies.
BRICS became a new and promising political-diplomatic entity
ABOUT BRICS
BRICS stands for Brazil, Russia, China, and South Africa.
Basically Established on 16th June 2009
It is the fastest growing and emerging economics
BRICS is the international political organization of leading
emerging economies. Its five members are all developing
industrialized countries
Two main Policies
coordination in multilateral fora, with a focus on economic and political governance
cooperation between members
From ‘BRICs’ to ‘BRICS’
The BRIC became a mechanism through which thecountries can exchange opinions, seek convergence,identify areas of cooperation and influence theinternational agenda.
Officially it was admitted as a BRIC nation on 24December 2010
With the entrance of South Africa, at the 3rd BRICSSummit, in April 2011, the BRIC became BRICS,with capital "S".
6
BRICS:
Characteristics
BRICS represent 3 billion people or approximately 46%of the world population & 25% of the world’s landcoverage
Five Nations GDP of US 16.039 trillion, approximately20% of the gross world product & US$4 trillion reserves
China and India-Suppliers of manufactured goods andservices
Brazil, Russia, South Africa- Suppliers of Raw Materials
Challenges Related To Economic And Social Integration
Desire To Make The International Order MoreRepresentative
Possibility Of Cooperation In Many Areas
OBJECTIVE OF
BRICS
To achieve regional development
The BRICS advocating reform of the UN Security Council
The BRICS group acts as a bridge between developed and under developing countries
Developing countries will be able to leverage through NDB and the CRA
To Challenge Western financial institutions like the International Monetary Fund and the World Bank
Economic development
ABOUT THE
BRICS
NATIONSIMF: World Economic
Outlook
BRAZIL
KEY ADVANTAGES :
One of the fastest growing economies in the last Decades
Brazilian economy becoming less dependent on imports
Extremely rich in resources such as coffee, sugarcane, crude
oil and iron etc.
Focus on equitable development has resulted in significant
poverty reduction.
CHALLENGES FOR THE FUTURE:
Overburdened and ineffective judicial system.
Industrial output is weak
RUSSIA
KEY ADVANTAGES:
Russia has capability in high-technology sectors
Accounts for around 20% of the world’s oil and gas reserves
CHALLENGES FOR FUTURE
Labour shortages and poorly developed infrastructure
Corruption
INDIA
KEY ADVANTAGES
1.15 billion people
2nd largest labour force
Approximately 2.5 million college graduates per year
CHALLENGES FOR THE FUTURE
Improving basic educational achievement
Improving infrastructure and electrical capacity
Expanding technology industry
CHINA
KEY ADVANTAGES
Broad expansion of educational achievement
Rapid economic growth
3rd largest country in land size
CHALLENGES FOR THE FUTURE
support to rural areas and less-developed regions
Bank of China sees inflation as a bigger risk
Need to improve the investment
SOUTH AFRICA
KEY ADVANTAGE
The South African economy is now the 23rd largest in the world
Inflation is now below 5% and falling.
25% of goods produced in South Africa for export
CHALLENGES FOR THE FUTURE:
The economy is growing but not fast enough
Lack of skills, particularly in IT.
48% of the population is living below the poverty line
BRICS Summit History 1. Yekaterinburg in Russia Summit (2009)
BRIC nations announced the need for a new global reserve currency
2. Brasilia in Brazil Summit (2010)
Consensus on Reform of financial institutions
3. Sanya China Summit (2011)
Economics, anti-terror law under UN auspices, United Nations Security Council reform
4. New Delhi in India summit (2012)
BRICS development bank proposal by India
5. Durban in South Africa Summit (2013)
Negotiations for setting up the bank
6. Fortaleza in Brazil Summit (2014)
Creation of two NDB with 50$ Billion & CRA with 100$ Billion
7. Ufa in Russia Summit (2015)
Inaugural meetings of the NDB & and open up membership to non-BRICS
15
New Development Bank
Formed on July 2014 and came into force in July 2015.
Earlier known as “BRICS Development Bank”.
Headquartere in Shanghai
Unlike the world bank which assigns vote based on capital share,
In the NDB each participant country will be assigned one vote
1st president from India & Chairman of Board of Directors from
Brazil and Chairman of Board of Governors from Russia
NDB is source of rising strength of BRICS & against the
domination of western countries through WORLD BANK & IMF
FINANCIAL STRUCTURE
50$ billion (10$ billion from each country) as initial capital, this capital base to be used for financial infrastructure & sustainable development projects.
100$ billion Contingency Reserve Arrangement(CRA) for liquidity protection of brics countries during Balance of payment problem (BOP). ( 41% china, 18% india,Russia,brazil and 5% south Africa).
At the time of expansion the 55% share of the bank will be held by BRICS countries only.
Developing or less developing countries can also apply for financial assistance.
The Bank shall support public or private projects through loans, guarantees, equity participation and other financial instruments. It shall also cooperate with international organizations and other financial entities
NDB and IMF
1.IMF and World Bank are dominated by U.S and western countries
2. IMF and world bank follows different voting power based on
quota system. Though China is second largest economy after U.S it
has fewer voting rights in NDB.
3. The financial institution created by BRICS will reduce the
importance of US dollar as a global currency and eventually it will
increase importance of Yuan
4. IMF cash assistance program is conditional. If a country's
foreign policy clashes with US then it will be difficult to obtain a
loan.
TARGET SECTORS FOR BRICS TRADE
Manufacturing, services and agriculture
Energy, infrastructure, mining beneficiation and
healthcare
Construction and water provision
The green economy and tourism
Although U.S is greatest economy now but BRICS is ready to challenge the US and west economy and hegemony.
BRICS nations have the potential and resources to form a
powerful economy with greater opportunity’s than any other
nation.
A stronger BRICS can also have more influence in other
multilateral forums such as the WTO world bank etc.
In short, powerful BRICS will cause the world taking
towards multilateral system where balance of power will be enough good for world peace.
CONCLUSION
THANK YOU