By JC Collins
The Russian Foreign Minsiter Sergey Lavrov, speaking at a University in Moscow yesterday, made it very clear that the BRICS institutions, being the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA), hold the primary function of supporting the interests of its five members within the existing international monetary framework.
“It was formed to uphold the interests of these “new countries” in the framework of international financial relations, including the IMF and the World Bank. It’s not some whim but a reflection of objective reality.”
As I’ve long stated, the BRICS will be facilitating, along with the IMF, World Bank, and United Nations, the transformation of the international monetary framework from the existing unipolar model to a more reflective multilateral architecture.
There are many posts on this site which can be referenced by the reader to help more thoroughly understand the purpose of BRICS and how it relates to the overall multilateral transition.
Lavrov explained much about the intent and purpose of the BRICS institutions. Both the NDB and CRA will initially be funded with $100 billion each. Along with both of those institutions, the Asian Infrastructure Investment Bank (AIIB) will also be instrumental in implementing BRICS member policies into the macro mandates of the multilateral transition.
It was made extremely clear in Lavrov’s speech that the reform of the international monetary and financial system is of the highest priority for BRICS members. It was stated that they are “actively pushing” for the IMF 2010 Quota and Governance Reforms. This in the face of those reforms being “exclusively blocked” by the United States.
The IMF has given the US until September 15th to pass the required legislation to support the reforms before they will take alternative action, which will be reflective of the Plan B reforms which were previously discussed.
Additional material can be reviewed at the following posts:
During the upcoming United Nations General Assembly, which coincidently also begins on September 15th, the BRICS members will be meeting on the sidelines and discussing the Plan B initiatives. Other topics they will be discussing involve key international policies on such things as Syria, and the broader Middle East, as well as Ukraine, and the unilateral sanctions which the US has placed on Russia and other countries.
With so much else happening in September, the real focus should be on the United Nations General Assembly and what the response from the rest of the world will be on the “exorbitant privilege” of American and what Plan B reforms will actually mean on the existing monetary framework.
The geopolitical and potential military ramifications are perhaps outside of the scope of this post. Readers should be prepared for dramatic action in the closing days of 2015. There will be much posturing but hopefully very little military engagement between the major players. My analysis has always been that there will be no major war over this transition.
I would also encourage readers to revisit the post from last week titled Meet the Asian Monetary Fund, as it will be an instrumental component of what happens moving forward. – JC