Chinese President Xi Jinping said on Sunday a rising tide of protectionism and anti-globalization was endangering the world economy’s still fragile recovery as BRICS leaders vowed to forge closer business and trade ties.
At a summit in the Indian tourist hub of Goa, host Prime Minister Narendra Modi and the leaders of China, Russia, Brazil and South Africa issued a joint declaration on a range of measures, including the setting-up of a new credit ratings agency and fighting tax evasion.
BRICS was formed in 2011 with the aim of using members’ growing economic and political influence to challenge Western hegemony.
The nations, with a joint estimated GDP of US$16 trillion, set up their own bank in parallel to the Washington-based International Monetary Fund and World Bank and hold summits rivaling the G7 forum.
But the countries, accounting for 53% of the world’s population, have been hit by falling global demand and lower commodity prices, while several have also been mired in corruption scandals.
Russia and Brazil have fallen into recession recently, South Africa only just managed to avoid the same fate last month and China’s economy has slowed sharply.
Both Xi and Modi said the group must stick together, insisting there was much to remain positive about even though its members have been beset by domestic woes and problems sparked by the 2008 financial crisis.
“At present the deep-seated impact of the international financial crisis is still unfolding. The global economy is still going through a treacherous recovery and deep adjustments,” Xi said.
The Chinese president said “deep-seated imbalances that triggered the financial crisis” were far from being resolved.
“Some countries are getting more inward-looking in their policies. Protectionism is rising and forces against globalization are posing an emerging risk,” he added.
While Xi did not single anyone out, Republican candidate Donald Trump has threatened to erect trade barriers to Chinese products if elected US president. Britain’s vote to leave the European Union has been interpreted partly as a backlash against globalization.
While China’s economy has been running out of steam of late –although it is still the world’s second largest — India is now the fastest-growing major economy and its GDP is expected to increase 7.6% in 2016–17.
Deeper bonds
Modi said it was vital the BRICS nations increased cooperation by dismantling trade barriers and developing infrastructure.
“I think I speak for all when I say that through a common vision and collective action, we will create and sustain deeper bonds among BRICS nations, develop our economies and secure our societies,” he said.
“While our achievements have been substantial, we need to sustain the positive direction and strong momentum of intra-BRICS engagement.”
Xi said BRICS countries had much to be proud of and had contributed to more than 50% of global growth in the last decade.
“The past decade has seen the BRICS partnership expanding with win-win results,” he said.
“We need to deepen our partnership: we BRICS countries are good friends, brothers and partners that treat each other with sincerity.”
Russian President Vladimir Putin meanwhile called for closer cooperation in areas such as e-commerce and space exploration. Modi confirmed that the leaders had agreed to fast-track setting up a new ratings agency amid accusations from within the bloc that the three traditional agencies — Moody’s, Standard & Poor’s and Fitch Ratings — are all Western-based.
“We look forward to translating into reality the idea of a BRICS Credit Rating Agency,” he said, without giving details of the much-trailed agency or timeline for its establishment.
look at this monkey chaiwala
Globalization is in the mind of the beholder. And the time has come to look into its ramifications. Wild globalization is in many ways similar to US period of Robber Barrons — anything goes, especially for the rich and powerful. Globalising is a fact of life, as we are more interconnected. But it makes little sense to produce many things thousands of miles away from home. Local and regional economies need to be looked into, not just how to compete globally. We are not ready yet to open our homes to whoever wants to help themselves to our refrigerators, and so should be with nations. Having to open an economy really depends on many facors. At times, we may want to do things closer home, and in other cases it makes a great deal of sense to shop the global supermarket. But we cannot just go widely shopping, if we are not secure in basics. Every human being has basic needs, be that food or shelter — and today, good infrastructure is just as much a basic need, as once was and still is education. But the world needs to reexamine its approaches, and those are different from country to country. And bordes stil matter, as we should learn how to walk, before running. Unfortunately, the overriding power of financial system is pushing the global economy too fast into one-track thinking, and not allowing for a more graduated approach and diversity.
Hope BRICKS might address these issues better then the Western world, still steeped into the religion of financial miracles.
Whoever becomes the 45th president of the USA, they will have to address things for the people this time or sequentially have to address the systematic demise of the human experience that is definitely under threat of extinction during this century. Not mere words, but actual reality looking at the available information, including that of the UN and its average projection (not the worst scenario) of population numbers by the end of this century. And not that far away in relative terms and equivalent to a single lifespan in the West these days.
Globalization has failed Humanity and Capitalism will ultimately dispatched the Human Experience to the ‘Ashes of History during this century – https://worldinnovationfoundation.blogspot.co.uk/2016/10/globalization-has-failed-humanity-and.html
Xi is correct free trade would be beneficial, but we know the US from time to time use sanctions, commodity and currency wars to punish those that do not dance to the tunes from Washington. Lately we have seen a sharp increase on the import tariffs of Chinese steel.
With the political uncertainty in Saudi Arabia, Bahrain, Nigeria and North Africa. Russia should increase their oil production capacity in order to maintain a steady supply of oil for the BRICS countries. Today, China is forced to buy oil from the political unstable countries. Currency SWAP agreements should be made between BRICS and also with other large trading partners in order to avoid the exposure of a collapse in the US dollar. BRICS should try to become independent from Europe for all its basic needs. We have seen EU does not have an independent foreign policy and thereby is not a reliable trading partner.