We've been blogging over the past few years on this site about the development of the BRICSA entente cordial as a geopolitical counterweight to the waning political and moral capital of the West, and more importantly, as a response to post Cold War American unipolarism. As a component of our analysis here, I have pointed out that the BRICSA nations (Brazil, Russia, India, China, South Africa), in order to give this geopolitical bloc the teeth it needs, would have to develop a parallel financial structure, i.e., its own equivalents to the WTO, the IMF, and World Bank, and ultimately and more importantly, it would have eventually to compete with the West directly in the establishment of competitive international clearing.
With that in mind, and because you may have missed it, at the recent G-20 meeting, the BRICSA nations agreed to capitalize their development bank at $100 billion:
What is interesting about the picture at the top of this article is its suggestive nature: Russian President Vladimir Putin is in the center of the photo, flanked on his right by Indian premier Singh, and on the far right, Brazilian President Dilma Rouseff, and to his left by the leaders of the more authoritarian state of China, and then South Africa. The picture, in a way, is symbolic of the centrality of Russia to the BRICSA entente, and to the role that Putin has played in helping to create and shape the bloc.
It is the bank itself, however, with which we care concerned, and with its implications, of which, in my opinion, there are principally two.
In the first case, the bank's capitalization was formalized at a meeting of the G-20 which, by anyone's lights, highlighted just how badly the USA is becoming on the world stage. The USA's Syrian policy, as yet the most recent example of its post-9/11 unipolarism, did not find ready support. Even France and Germany backed off, and as we saw, the UK's House of Commons recently handed Prime Minister David Cameron a sound rebuke on any British support for a "punitive action" on Syria. The bottom line message was simply this: the hypocrisy is all too apparent, and the growing evidence that the whole incident in Damascus was a false flag to begin with is simply eroding the Western alliance. Against this backdrop, the BRICSA nations announced the capitalization of their bank.
Thus, I suspect one reason for doing so was to send its own geopolitical message, namely, that a mechanism was being agreed upon and established that could, if necessary, function as a means to bypass US dollar reserve status for international trade and clearing among the BRICSA nations and their allies and satellites, if the need arose. It was a subtle, and powerful, message to send in that context.
But in the second case, and beyond the message of "emergency mechanisms", there is a more long term goal that this bank represents, and that is that it is meant in some ways to be a competitor to the IMF and other such institutions. As such, it is also a way to leverage more influence for the BRICSA nations at the IMF. It will, I believe, be the principal development bank - increasingly so - for nations in South America, and more importantly, Africa, to turn to. The Chinese, as is now well known, have been pushing into Africa with infrastructure and development projects...
...and the USA's response?
Our "response" was typically shortsighted: our response was to establish a military command for Africa. In short, our response really offers nothing to that continent except the potential of more American intervention and bombs raining from the sky. And if the recent stupidity of a foreign policy intent upon intervening in order to create radical Islamicist regimes in previously authoritarian and secular states in the region is any indicator, the BRICSA nations will be at a profound advantage in that continent. Consider only the fact that none of the BRICSA nations are Muslim, a situation that is taylor-made for them to present themselves as looking out for the persecutions of Christians and other groups in trouble spots in Africa.
All this to say that the BRICSA nations are playing for keeps, and they are playing a very long term game, a game of "isolate and implode" the west, a game of calculated economic warfare. Small wonder, then, that the West, in response, has been pulling capital out of the developing world at a furious rate, and maneuvering carefully, planting the necessary memes about 3d printing and so on, before the unleash the capital for investment that they've been sitting on for years.
See you on the flip side.