Export Mgmt BRIC FinalAG

7/31/2019 Export Mgmt BRIC FinalAG

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Prepared By: Abhishek Gautam 192001

Nitin Saha 192023

Pradeep Kumar 192024



A grouping acronym referring to the countries of Brazil, Russia, India, China & SouthAfrica

Term ―BRIC‖ was first prominently used in a Goldman Sachs report from 2003

prepared by Jim O‘Neill ,Chairman of Goldman Sachs Asset Management

South Africa was the last member to join in Dec‘2010 and thus the acronym changed

from BRIC to BRICS in 2011.

These countries aren‘t a political alliance - but they have the potential to form a

powerful economic bloc

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These five countries are among the biggest and fastest

growing emerging markets

Annual global sales of chemical double over the period 2000

to 2009, OECD‗s share decreased from 77% to 63% and the

share of the BRICS countries increased from 13% to 28%.

Already BRICS accounts for:

o 45 per cent of the world's population,

o 30 per cent of Worlds land area,

o 25 per cent of global GDP (in PPP);$ 14 trillion

o More than 50% of all Forex & Gold Reserves

According to IMF estimates, in 2012, the BRIC countries

will account for 56% of world economic growth, while the

G7 countries (U.S., Japan, Germany, UK, France, Italy and

Canada) should be responsible for only 9% growth

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http://powerpointparadise.com/blog/?attachment_id=1957



Summit Participants Date Host country Host leader Location

1st BRIC June 16, 2009 Russia Dmitry

Medvedev Yekaterinburg

2nd BRIC April 16, 2010 Brazil Luiz InácioLula da Silva Brasília

3rd BRICS April 14, 2011 China Hu Jintao Sanya

4th BRICSMarch 29,

2012India

Manmohan

Singh New Delhi

5th BRICS 2013 South Africa Jacob Zuma TBA

http://en.wikipedia.org/wiki/2009_BRIC_summit

http://en.wikipedia.org/wiki/Russia

http://en.wikipedia.org/wiki/Dmitry_Medvedev


http://en.wikipedia.org/wiki/Yekaterinburg


http://en.wikipedia.org/wiki/Brazil

http://en.wikipedia.org/wiki/Luiz_In%C3%A1cio_Lula_da_Silva


http://en.wikipedia.org/wiki/Bras%C3%ADlia

http://en.wikipedia.org/wiki/2011_BRICS_summit

http://en.wikipedia.org/wiki/China

http://en.wikipedia.org/wiki/Hu_Jintao

http://en.wikipedia.org/wiki/Sanya


http://en.wikipedia.org/wiki/India

http://en.wikipedia.org/wiki/Manmohan_Singh


http://en.wikipedia.org/wiki/New_Delhi


http://en.wikipedia.org/wiki/South_Africa

http://en.wikipedia.org/wiki/Jacob_Zuma



http://en.wikipedia.org/wiki/South_Africa


http://en.wikipedia.org/wiki/New_Delhi



http://en.wikipedia.org/wiki/India


http://en.wikipedia.org/wiki/Sanya

http://en.wikipedia.org/wiki/Hu_Jintao

http://en.wikipedia.org/wiki/China


http://en.wikipedia.org/wiki/Bras%C3%ADlia



http://en.wikipedia.org/wiki/Brazil


http://en.wikipedia.org/wiki/Yekaterinburg



http://en.wikipedia.org/wiki/Russia




Held in Yekaterinburg on June 16,2009

Focus was on improving global economic situations andreforming financial institutions

How BRIC members could be more involved in global affairs

Announced the need of Global Reserve Currency



Discussions on Iran & Nuclear weapons

Furtherance of BRIC economics as an international body

Reform of Financial Institutions

Issues related to global economic situations at that time

Global governance



Talks on Anti-terror law and terrorism

Pledged cooperation amongst themselves for increasing trade

Announced decision to cease mutual trade payment in USDand give credit to one another

Expressed misgivings about NATO airstrikes during the Libyacivil war and urged an end to the then two month conflict



The Leaders considered the possibility of setting up a new BRICS-

led Development Bank for mobilizing resources for infrastructure

and sustainable development projects in BRICS

2 agreement : Attempt to replace USD as the main unit of trade

(1)Master agreement on Extending Credit Facility in Local Currencies;

(2)BRICS Multilateral Letter of Credit Facility signed by BRICS

EXIM/Development Banks



Economy of Republic of India (as per Calender year 2011)

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Particulars Figures

Land Size (1000km sq) 3,287,263

Economy Size $1.676 trillion nominal,$4.457 trillion PPP

GDP Growth 6.5%

Inflation 7.55%

Unemployment 9.8%

Exports $303.7 billion

Imports $488.6 billion

Foreign Reserves $295.8 billion

Credit rating BBB-



India exports were worth 25.68 Billion USD in May of 2012

Exports amount to 22% of India‘s GDP.

Gems and jewelry constitute the single largest export item, accounting for16 percent of exports.

India is also leading exporter of textile goods, engineering goods,chemicals, leather manufactures and services.

India is well-positioned to surpass Japan as the Third largest Economy of the World in 2012





Economy Federative Republic of Brazil (as per Calender year 2011)

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Particulars Figures

Land Size (1000km sq) 8,514,877


GDP Growth 2.7%

Inflation 5.24%

Unemployment 5.7%

Exports $256 billion


Foreign Reserves $365 billion

Credit rating A-



Breeding and cultivation of plants contributes 27%of GDP

Brazil Exports 19.4 billion USD in month of June 2012

Export oriented country, exports contribute 14% of GDP

Contribute 25% of world Food market

One of the leaders in Coffee and Orange Juice exports

Main world producer of Ethanol from sugarcane

It also occupies world leading position in exports of soy products,chicken, beef, corn rice, pork etc.



Agriculture is a major sector of the Brazilian economy, and is key for economic

growth and foreign exchange.

Agriculture accounts for about 6% of GDP (25% when including agribusiness)

and 36% of Brazilian exports.

Brazil enjoyed a positive agricultural trade balance of $55 billion in 2009.

Brazil is the world's largest producer of sugarcane, coffee, tropical fruits, frozen

concentrated orange juice (FCOJ), and has the world's largest commercial cattle

herd (50% larger than that of the U.S.) at 170 million animals.

Brazil is also an important producer of soybeans (second to the United States),corn, cotton, cocoa, tobacco, and forest products.

The remainder of agricultural output is in the livestock sector, mainly the

production of beef and poultry (second to the United States), pork, milk, and

seafood.



A growing population, rising Incomes and a wealth of natural resources are all

hallmarks of emerging economies, among the BRICs, only Brazil can boast all three.

2011 saw more offshore oil discoveries and preparations start for the 2014

World Cup of soccer and the 2016 Olympics.

GDP growth slowed to about half the breakneck 7.5% pace of 2010- still double the

OECD average







Historical: India opened its diplomatic mission in Rio de Janeiro in 1948,

which later moved to Brasilia in 1971.

The Indian Consulate General in Sao Paulo, the industrial and commercial

hub of Brazil, was opened in 1996.

India‘s first Cultural Centre in Latin America opened in Sao Paulo in May

2011.



Bilateral trade reached an unprecedented figure of US dollar 9.2 billion in2011 (India‘s imports: US$ 3.2 billion; India‘s exports: US$ 6.0 billion)

India‘s exports registered a growth of 43% in 2011 over 2010.

India‘s main exports to Brazil : Diesel oil, coke of coal, lignite or peat,equipments related to wind energy, engineering and electrical equipment,cotton and polyester yarns, naphtha, pigments, medicines and chemicals.

India‘s main imports from Brazil : Crude oil, copper sulphates, soya oil,raw sugar, denatured alcohol, other minerals of copper and its

concentrates, asbestos, valves, motor pumps, airplanes, wheat, preciousand semi-precious stones, etc.





India and Brazil have formed a bilateral Trade MonitoringMechanism(TMM) for periodic consultations

India signed a framework agreement with MERCOSUR inJune 2003.

The India Mercosur PTA entered into force on 1st June 2009

450 items from each side will have duty reductions of 10% to100%.

Efforts are underway to broaden and deepen the India-Mercosur PTA and to link it, under IBSA to SACU as well.



Economy of Russian Federation (as per Calendar year 2011)

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Particulars Figures

Land Size (1000km sq) 17,075,400


GDP Growth 4.3%

Inflation 3.7%

Unemployment 6.3%



Foreign Reserves $513 billion

Credit rating BBB



Russia exports were worth 46 Billion USD in April of 2012.

Metals and energy make up more than 80 percent of Russia's

exports.

The country is the world‘s largest oil producer and the biggestexporter of natural gas, nickel and palladium

The Russian fishing industry is the world's fourth-largest.





Bilateral ties with Russia are a key pillar of India's foreignpolicy.

Trade in 2009 USD 7.46 billion,2010 USD 8.535 billion,2011 USD 9.5 billion

Projected 20 billion by 2015

In 2010Russian exports to India amounted to USD 6.392 billionImports from India to Russia amounted to USD 2.142 billion.



Indo-Russian Forum on Trade and Investment (estd in 2007)

India-Russia CEO‘s Council (established in February 2008

India-Russia Business Council ( 2007)

The India-Russia Trade, Investment and Technology PromotionCouncil (2007)

Objective of these forums to promote direct bilateral B2B contacts.



Economy of Republic of South Africa (as per Calender year 2011)

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Particulars Figures

Land Size (1000km sq) 1,221,037

Economy Size $422 billion nominal,$555 billion PPP

GDP Growth 3.1%

Inflation 5%

Unemployment 23.9%



Foreign Reserves $50.26 billion

Credit rating BBB+



South Africa exports were worth 62.79 Billion ZAR in May of 2012.

Historically, from 1990 until 2012, South Africa Exports averaged

23494.2 Million ZAR reaching an all time high of 68457.0 Million ZAR in

November of 2011 and a record low of 3544.0 Million ZAR in June of

1991.

South Africa has rich mineral resources.

It is the world's largest producer and exporter of gold and platinum and

also exports a significant amount of coal. Another major export is

diamonds.

South Africa's major exports partners include United Kingdom, UnitedStates, Germany, Italy, Belgium, China, and Japan.

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Multilateral Cooperation

India and South Africa have a common approach on many global issuesincluding UNSC reform, the future of multilateralism, climate change, South-

South Cooperation and multilateral trade negotiations. India has strongly supported the objectives of the New Partnership for Africa's

Development (NEPAD), A sum of US$ 200million has been committed for thispurpose to be utilized through credit lines, grants etc.

Under this support major projects in Angola, Senegal and Mali have already

been undertaken.



Bilateral trade has trebled from US$ 2.5 billion in 2003-2004 to US$ 7.5 billion in

2008-2009

Target is 15 billion by 2014

Exports from India:

Vehicles, pharmaceuticals, chemicals, textiles, rice etc.

Imports from South Africa:

Gold, steam coal, copper ores & concentrates, phosphoric acid, manganese ore,aluminum ingots & other minerals



India-South Africa CEOs‘ Forum

An India Business Forum (IBF) in South Africa

The presence of Indian banks(SBI, EXIM etc) has also

promoted economic interaction.

The International Marketing Council (IMC) of South Africa

has an office in Mumbai.





Economy of People‘s Republic of China (PRC) (as per Calender year 2011) Well-positioned to surpass U.S as the Largest Economy of the World in next 5

years

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Particulars Figures Ranking

Land Size (1000km sq) 9,596,961 IIIrd

Economy Size $7.74 trillion nominal,$12.46 Trillion PPP

IInd

GDP Growth 9.5% Ist

Inflation 5.4% -

Unemployment 4.2% -

Exports $1.897 trillion Ist

Imports $1.664 trillion IInd

Foreign Reserves $3.2 trillion Ist

Credit rating AA- Stable



Quality of Geovernmental Leadership :China‘s leadership – its development oriented

ideology,its ability to promote capable individuals, and its system of collaborative policy

review-deserves the first place as the reason for China‘s Economic success.

Cheap Labour : Incredibly large population of relatively well educated workers has kept

labour supply abundant and wages low.

More competitive products : Technological products are often refinements of imported-pre

existing technologies ; the ―import/assimilate/re-innovate‖ model has proven to be a

successful strategy

Investment in Science & Technology : China spent over $70 billion on R&D

Even during th economic downturn .Patent applications jumped over 15% in last 3 years.

Holistic Sustainable Growth : Growth comes from both huge State investment inInfrastructure and Heavy Industry and Private Sector expansion in light industry instead of

just exports.

Long-term planning & Successful Execution : Government have included aggressive

targets for economic growth, innovation & sustainability backed up with the ability to follow

through with necessary funds to achieve these goals.

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Lack of Original Innovation : ―Import/assimilate/re-innovate model‖ does not foster

climate of original innovation.

Lacks High Standards & Integrity: Many institutes of higher education receiving govt

grants for R&D experience alarmingly high rates of academic dishonesty leads to govt waste

,fraud ,and abuse in R&D spending

Cheap Labour Advantage running out sooner than expected: As citizens become

wealthier ,fewer workers remain in the country side as a new source of cheap labour ,worker

are already becoming more vocal in their demand for higher wages and better benefits.

Moreover, an ageing population of workers mainly because of ―one-child‖ policy.

Malinvestment decisions :High speculative real estate developments result in creation of

―ghost cities‖.Estimates show that China,growing at the rate of 20 cities per year,has enoughexcess houses for 64 million people.As Population growth begins to taper off, there is

practically no demand for those.

Corrupt & Poor Provincial governments: Substantial authority to its provincial and local

governments over meeting national economic and environmental standards has been

regularly misused. This leads improper usage of State funds .

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Improving Economic Freedom

Wind & Solar Energy

Improving relations with US ,Europe & South Asia

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Academic & Scientific Misconduct

Strikes against MNC’s

Allegations of Currency manipulation

Aging population

Polluted water supply

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China exports were worth 181.1 Billion USD in May of 2012.

Historically, from 1990 until 2012, China Exports averaged 47.8 Billion USD

reaching an all time high of 175.1 Billion USD in July of 2011 and a record low of

2.8 Billion USD in January of 1990.

Export growth has continued to be a major component supporting China's rapid

economic growth. Exports of goods and services constitute 39.7% of its GDP.

China major exports are: office machines & data processing equipment,

telecommunications equipment, electrical machinery, apparel & clothing, textiles,

chemicals (fertilizers),iron & steel ,optical & medical equipments

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9-fold growth in the Chinese chemical industry during 2000 – 2010 from $104.8

billion in 2000 compared to $903.4 billion in 2010.

China‘s largest exports markets are European Union, United States, Hong Kong,Japan and South Korea.

China is the largest single producer and user of the major inorganic chemicals used

to produce agricultural inputs: sulphur and sulphuric acid (used to produce

phosphate fertilizer materials); ammonia (used to produce nitrogen fertilizer) and

phosphoric acid (used to produce phosphate fertilizers) acid (used to produce

phosphate fertilizers).

China is both the largest producer and the consumer of Urea(Nitrogen based

fertilizer)

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Concept given by Brown (1949) and Kojima(1962)

Bilateral trade between two countries in relation to value of world trade and its sharein it.

Value lies between‖ 0 ―to ―infinity‖

―0‖ referrers to ―no trade‖

―1‖ means trade between countries has no geographic bias

―0<Ti<1‖ trade between partners in less intensive

Ti>1 trade between partners is more intensive

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The WB is an international institution that provides loans to developing countries

for capital programs.

It has 188 countries as members

Official Goal is ―Reduction of Poverty‖

Objectives :commitment to promote foreign investment, international trade and

facilitate capital investment Based in Washington D.C, the WB is traditionally headed by a citizen of the USA

Key area of work are :

Eradicate Extreme Poverty and Hunger

Achieve Universal Primary Education

Promote Gender Equality Reduce Child Mortality

Improve Maternal Health

Combat HIV/AIDS, Malaria, and Other Diseases

Ensure Environmental Sustainability

Develop a Global Partnership for Development

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Name Dates Nationality Eugene Meyer 1946 – 1946 United States John J. McCloy 1947 – 1949 United States Eugene R. Black, Sr. 1949 – 1963 United States George Woods 1963 – 1968 United States Robert McNamara 1968 – 1981 United States Alden W. Clausen 1981 – 1986 United States Barber Conable 1986 – 1991 United States Lewis T. Preston 1991 – 1995 United States Sir James Wolfensohn 1995 – 2005 United States

Australia[ Paul Wolfowitz 2005 – 2007 United States Robert Zoellick 2007 – 2012 United States Jim Yong Kim 2012 – present Korea Republic

United States

http://en.wikipedia.org/wiki/Eugene_Meyer

http://en.wikipedia.org/wiki/John_J._McCloy

http://en.wikipedia.org/wiki/Eugene_R._Black,_Sr.

http://en.wikipedia.org/wiki/George_David_Woods

http://en.wikipedia.org/wiki/Robert_McNamara

http://en.wikipedia.org/wiki/Alden_W._Clausen

http://en.wikipedia.org/wiki/Barber_Conable

http://en.wikipedia.org/wiki/Lewis_Thompson_Preston

http://en.wikipedia.org/wiki/James_Wolfensohn

http://en.wikipedia.org/wiki/Paul_Wolfowitz

http://en.wikipedia.org/wiki/Robert_Zoellick

http://en.wikipedia.org/wiki/Jim_Yong_Kim

http://en.wikipedia.org/wiki/Jim_Yong_Kim

http://en.wikipedia.org/wiki/Robert_Zoellick

http://en.wikipedia.org/wiki/Paul_Wolfowitz





http://en.wikipedia.org/wiki/Lewis_Thompson_Preston

http://en.wikipedia.org/wiki/Barber_Conable

http://en.wikipedia.org/wiki/Alden_W._Clausen

http://en.wikipedia.org/wiki/Robert_McNamara

http://en.wikipedia.org/wiki/George_David_Woods

http://en.wikipedia.org/wiki/Eugene_R._Black,_Sr.

http://en.wikipedia.org/wiki/John_J._McCloy

http://en.wikipedia.org/wiki/Eugene_Meyer



IMF with its Head Quarters in Washington D.C pursue the following objectives :

Promote International economic cooperation

International trade

Employment

Exchange rate stability,by providing financial resources to meet Balance of Payments needs

Historically, IMF ‗s Managing Director has been a European

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Dates Name Nationality May 6, 1946 – May 5, 1951 Camille Gutt Belgium August 3, 1951 – October 3, 1956 Ivar Rooth Sweden November 21, 1956 – May 5, 1963 Per Jacobsson Sweden September 1, 1963 – August 31, 1973 Pierre-Paul Schweitzer France September 1, 1973 – June 16, 1978 Johannes Witteveen Netherlands June 17, 1978 – January 15, 1987 Jacques de Larosière France January 16, 1987 – February 14, 2000 Michel Camdessus France May 1, 2000 – March 4, 2004 Horst Köhler Germany June 7, 2004 – October 31, 2007 Rodrigo Rato Spain November 1, 2007 – May 18, 2011 Dominique Strauss-Kahn France July 5, 2011 – Christine Lagarde France

http://en.wikipedia.org/wiki/Camille_Gutt

http://en.wikipedia.org/wiki/Belgium

http://en.wikipedia.org/wiki/Ivar_Rooth

http://en.wikipedia.org/wiki/Sweden

http://en.wikipedia.org/wiki/Per_Jacobsson


http://en.wikipedia.org/wiki/Pierre-Paul_Schweitzer

http://en.wikipedia.org/wiki/France

http://en.wikipedia.org/wiki/Johannes_Witteveen

http://en.wikipedia.org/wiki/Netherlands

http://en.wikipedia.org/wiki/Jacques_de_Larosi%C3%A8re


http://en.wikipedia.org/wiki/Michel_Camdessus


http://en.wikipedia.org/wiki/Horst_K%C3%B6hler

http://en.wikipedia.org/wiki/Germany

http://en.wikipedia.org/wiki/Rodrigo_Rato

http://en.wikipedia.org/wiki/Spain

http://en.wikipedia.org/wiki/Dominique_Strauss-Kahn


http://en.wikipedia.org/wiki/Christine_Lagarde









http://en.wikipedia.org/wiki/Spain



http://en.wikipedia.org/wiki/Germany









http://en.wikipedia.org/wiki/Netherlands














http://en.wikipedia.org/wiki/Belgium





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Voting Share Chairs

US Other

Developed

Total

Developed

Total

Borrowers

US Other Non-

Borrowers(developed)

Total

Developed

Total

Borrowing

World

Bank

15.85 44.8 61.8 38.2 1 13 14 10

IMF 17.3 49.7 67.0 33.0 1 12 13 11



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Composition of the World Bank Board and IMF :Borrowers are a clear

minority, both in voting share and Chairs.

The President or the MD has never come from a borrowing country.

United States has veto power, it can prevent the World Bank fromtaking action against its interests

The dynamics are such that‖ In the World Bank & IMF , if the borrowers

are against something, it can happen‖.

Decisions may no be balanced, with not a genuine search for consensus

between borrowers and lenders.

Borrowers play a small role in its governance, seems clearly inappropriate,

given the fact that non-borrowers (especially US) exercise influence out of

proportion to their current costs.



BRICS may have a Common Development Bank on lines of Multilateral

lending agency. The Finance Ministers of the countries are examining the

proposal and report back by next Summit.

BRICS Development Bank on the lines of the World Bank would allow the

member countries to pool resources for infrastructure development and could

also be used to lend during the difficult global environment

Alternative Global Reserve Currencies :South Africa‘s Rand, Brazil‘s Real,

China‘s Renminbi, Russia‘s Rouble and India‘s Rupee as the five majorcurrencies of global trade.

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By 2050 the combined value of the Real, Rouble, Rupee, Renminbi and Rand (or R5) is

expected to eclipse that of the richest countries today.

In 2011 ,BRIC nations issued a statement declaring that the tradition of appointing aEuropean as managing director undermined the legitimacy of the IMF and called for the

appointment to be merit-based

During the BRICS meet in India , the heads of state from BRICS nations expressed

frustration at the slow pace of reform at the Washington-based multilateral lender

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BRICS nations stressed that the ongoing effort to increase the lending capacity of the IMF

will only be successful if there is confidence that the entire membership of the institution is

truly committed to implement the 2010 reform faithfully. In 2010,the Fund‘s shareholders

agreed to shift more of its voting weight towards emerging markets nations, but the US has

not passed enabling legislation.

Possible decision to link markets and establish financial integration of the BRICS economies

from 230 billion, which is projected to increase to $500 billion in 2015, through extending

credit in local currencies and benchmark equity index derivatives that will allow investments

without currency risks while cross-linking the stock exchanges. By eliminating the

intermediate step of converting to and from the dollar, the BRICS bloc effectively reduce

their reliance on the US Dollar

By making clear that issues like Syria, Iran and Palestine-Israel dispute be resolved within

the UN framework, the BRICS leaders have moved from plain rhetoric to specific areas, and

have also given a message to those countries which tend to act unilaterally outside the UN

framework. It's a huge development,"

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Saudi Arabia and China have entered into an agreement to build a mega oil refinery worth

8.5 Billion last week, who knows how long the dollar will remain the "Petro dollar".

Iran stopped trading oil for Dollar in March 2012

India has agreed to pay the price of crude oil it imports from Iran in gold, which makes it the

first country to drop the US dollar for purchasing the Iranian oil

Australia (a stanch U.S. ally) has made an agreement with China on March 23 2012, to trade

in the Chinese Yuan and not the U.S. dollars for $30 billion over 3 years time

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Americans have been sheltered from inflation, unlike the rest of the world, due to the dollar

being the reserve currency

The propping up of the stock market and the manipulation of metals through throwing newly

printed money, and what ever it has taken, by the Federal Reserve will be uncovered at some

point when inflation hits the U.S. that is uncontrolled.

As countries around the world stop using the dollar and the Federal Reserve can't hide all the

printing and funneled money to falsely prop up markets and give money to Wall Street to

manipulate metals, situations can/will get ugly in the U.S.

Faster the countries around the world drop the dollar and enact their trade agreementsbetween their own currencies and the Chinese yuan (or BRIC currencies),sooner US would

face Hyper Inflation and the blame would squarely be on the Federal Reserve & the Federal

US govt for non-stopping printing of Dollars.

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The BRICS countries are indeed moving towards creating a full-fledged political and

economic bloc. It is interesting that they are doing it in the same sequence as the European

community: first they determined the economic mechanisms and then immediately raised

political issues.

A new international lender, for instance, the BRICS Bank, could rival the World Bank, which

focus on lending to poor nations to help speed their development and reduce poverty. It's

unclear if it could also participate in bailing out countries in crisis — a function that's largely

the domain of the IMF.

If they can pool their resources and coordinate their aid strategies, then they will be far more

powerful.

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By floating a bank, they are strategizing and clearly playing for the long run.

What the five BRICS nations have in common is a focus on eradicating poverty, securing

food and energy, developing infrastructure and gaining new technologies. They may also talk about a common position on climate change. All of the BRICS want to bolster high-tech

sectors and affordable health care.

The creation of a supranational BRICS development bank and a mechanism for mutual

crediting will have a far-reaching impact on the global financial system. In fact, it will be a

powerful and almost autonomous structure that may accumulate investment resources fromworld markets and redirect them into development projects in the BRICS countries. And

what‘s more, these will be projects that the BRICS countries themselves consider promising,

thus making all the BRICS economies more competitive without any damage to one another.

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Unlike the U.S. and European countries that underpin the IMF and World Bank, the BRICS

include diverse political systems, from authoritarian Russia and China to the South African,

Indian and Brazilian democracies.

It is also not clear how the BRICS would manage a multilateral bank. China, with bulgingforeign currency reserves of $3.2 trillion, might want to permanently lead the bank, which

India and Russia would not likely accept.

Rarely do they show a common stance on global issues, whether it be Iran sanctions or calls

for Syria's government to end violence against democracy protesters.

Such differences would complicate investment decisions that carry foreign policy

consequences. China tends to bypass organizations and give directly to governments,

favoring those that support its line against freedom for Tibet.

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The group was unable to agree in 2011 on a new leader for the International Monetary Fund

Large anti-China protests during President Hu Jintao's visit, after a Tibetan exile lit himself

on fire and ran shouting through a New Delhi demonstration . There have been 30 such self

immolations the past year in ethnic Tibetan areas of China.

In 2012, the BRICS failed to coalesce around one of the two non-US candidates seeking the

presidency the World Bank.

"It's a complicated venture which will have a hard time getting off the ground and match the

expertise of the World Bank," Zoellick said.

"What do they talk at these summits? It's just a talk shop and a photo op," an Americandiplomat had said, making no effort to hide biting sarcasm.

As per an article in the New York Times, it argued that the focus of the new bank was

misplaced. "It is the fundamental incompatibility of the BRICS nations , not their lack of

organisation, which prevents this collection of emerging economies from acting as a

meaningful force on the world stage,"

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Honourable PM of India, Mr Manmohan Singh, says the BRICS "present an

opportunity as new growth poles in a multi-polar world.“

"One's global identity, one's footprint in the world, is set by the power of its

example,"

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Multilateral Trading System

Rules

Economic

Development

Serious

Injury

Safeguard Measure for

Protections to

Domestic industries

Counter vailingduties

Anti dumpingduties

Meeting Threats of Unfair

Trade Competition

Protection through import tariffs only

Reduction in import tariffs & binding

Against further increase

MFN principle

National Treatment rule

Export Mgmt BRIC FinalAG

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