Assignment on Bric

BRIC (Brazil, Russia, India, and China)

BRIC Brazil :President (head of state and government): Luiz Inácio Lula da Silva Russia :President (head of state): Dmitry Medvedev Prime Minister (head of government): Vladimir Putin India :President (head of state): Pratibha Patil Prime Minister (head of government): Manmohan Singh China :President (head of state): Hu Jintao Premier (head of government): Wen Jiabao

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INTRODUCTION

In economics, BRIC (typically rendered as "the BRICs" or "the BRIC countries") is an acronym that refers to the fast-growing developing economies of Brazil, Russia, India, and China. The acronym was first coined and  prominently used by Goldman Sachs in 2001. Goldman Sachs argued that, since they are developing rapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richest countries of the world. The four countries, combined, currently account for more than a quarter  of the world's land area and more than 40% of the world's population. Goldman Sachs did not argue that the BRICs would organize themselves into an economic bloc, or a formal trading association, as the European Union has done. However, there are strong indications that the "four BRIC countries have  been seeking to form a 'political club' or 'alliance'", and thereby converting "their growing economic power into greater geopolitical clout". On June 16, 2009, the leaders of the BRIC countries held their first summit in Yekaterinburg, and issued a declaration calling for the establishment of a multipolar world order. Background BRIC encompass over 25% of the world’s land coverage, 40% of the planetary  population and hold a combined GDP (PPP) of $ 15.445 trillion [B] which is 22.4% of global GDP. They are among the biggest and fastest growing emerging markets. These countries belong to the middle rung of the development ladder and the meeting ground is essentially their high GDP growth rate, explosion of the financial markets with rapidly rising stock  markets, high recipient of Foreign Direct Investment, etc. China and India lead the pack in most of these aspects. The following table3 provides the BRIC  positions vis-à-vis the other nations with a few macro-economic parameters:

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The Summit Held in the midst of this profound global crisis, this Summit was intended to be a space to officially announce the creation of this loose block. The summit was also organised at a critical juncture when the advanced industrial states which also forms the core of the imperialist order or the G8 is bereft of legitimacy. The typhoon unleashed by the neo-liberal project has resulted in a total deregulation of the financial markets and is wracking the globe in the form of  simultaneous crises from global financial collapse to worsening climate changes. It is plausible that the BRIC leaders decided to intensify their efforts at a time when the foundations of the G8 domination seem to be trembling. Hitherto, their attempts have been all too sporadic, either at the negotiation table of the now derailed World Trade Organisation (WTO) or at the annual  jamboree of the big business leaders as well as the rich and elite at the Davos World Economic Forum (WEF). The meeting aimed to face the reforms  proposals in circulation or in the pipe-line; largely put forward by the developed countries - mainly represented by the G-7, in the wake of current “crisis”. As evident from the statements and deliberations, the purpose is not really to challenge the “hegemony” or to emerge as the new “hegemons”, at least in the immediate future. But to protect and secure safe places within the current hegemonic order, which is, however, far from absolute. The final statement felt a strong need for a stable, predictable and more diversified international monetary system. However, the summit spelt out nothing new or novel in any of its deliberations, discussions or declarations to  provide a way out of the crisis or towards a new global political-economic order  that can save humanity from this predicament. To the dismay of a lot of its admirers, who envision the BRIC or the Shanghai Cooperation Organization (SCO) as a strong bulwark bulwark against the US imperialism, imperialism, the BRIC countries countries are following the same neo-liberal order which has immensely contributed to the instability, volatility and turbulence of the global economy. The monetary system which they critique so much has also been a product of the capitalist order that values profit and accumulation above anything else. The phenomenal growth of the BRIC is due to its ability to entrench this capitalist order by firmly embracing the neo-liberal tenets. No wonder that they earn so much  praise from Goldman Goldman Sachs whose thesis recognizes that Brazil, Brazil, Russia, India and China have changed their political systems to embrace global capitalism. Goldman Sachs predicts China and India, respectively, to be the dominant global suppliers of manufactured goods and services while Brazil and Russia would become similarly dominant as suppliers of raw materials . 3

ROLE OF BRIC COUNTRIES IN THE GLOBAL ECONOMY Global economy is under uncertainty due to recent meltdown of economic and industrial growth. Though process of globalisation has boosted economic growth resulting in the structural changes of the world economy. This has triggered rapid changes in developing economies and may predominantly contribute to global economic growth in the coming decade, though it has posed several challenges in countries such as Brazil, Russia, India and China. In spite of studies show that there may be a major shift in the global economic balance and it is argued that BRIC countries may emerge as a global economy in future. As a result, the current slowdown in the economy is a major concern of all countries. This phenomenon necessitates a broad analysis. Therefore, the  purpose of this paper is to analysis various economic indicators such as GDP, GDP growth by sectors, import and export and FDI inflows of Brazilian and Indian economy using forecasting techniques. Based on analytical results future trends and potential of both the economies are discussed. Results demonstrate that both countries have a budding economic growth.

Over the last few decades the world economy has undergone a lot of changes in geopolitical and economic terms, and in the location and distribution of   production. Therefore, many developing countries/emerging economies such as Brazil, Russian, India, and China (BRICs) have attained an important role in the world economy as producers of goods and services and receivers of capital. The four countries went through major institutional transitions and changes in their  economic structure in the recent history. Though BRICs countries followed a sustainable growth path in their integration into globalise learning economy. Despite, these newly emerging economies having a big part of their large  population are still not integrated in the market economy. After several socioeconomic transformations around the middle of the twentieth century all these countries were inward orientated and followed more or less centrally planned development strategies from the 1950s to the 1970s. Therefore, they were replaced by gradual integration in the global economy in the 1980s and 1990s. In recent times, there is a surge in the global economy particularly in BRICs countries due to economic liberalisation. The economic transformation blending with diffusion of Information and Communication Technologies (ICTs) led to major shift in the world economy. 4

The new economic order and good economic policies have accelerated developing economy like China, India in Asia, Brazil, Russia, South Korea and South Africa. In these countries a new economy is emerging and if the current growth persists they may be the global economic player in near future. Studies show [1] that in the next few decades, the growth generated by the large developing countries, particularly the BRICs (Brazil, Russia, India and China) could become a much larger force in the world economy than it is now—and much larger than many investors currently anticipate. It is evident that from the onset of the 21 st century more than a third of the world’s growth has originated in these countries. So, the rise of new powerhouse economies in the developing world can shift the equation of global economic [2] order. It is also projected that the BRICs economies as a whole could be larger than the G6 in future. Thus the BRIC thesis recognizes that Brazil, Russia, India and China [3] have changed their political systems to embrace global capitalism. Moreover, Brazil, Russia, India and China have long been a favourable destination of emerging market investors. This is optimistic for economic growth and huge investment may come to the BRICs in coming decades. The spur in economic growth requires a  broad analysis to have a right picture of the BRICs economic growth and development. Therefore, in this paper certain economic indicators pertaining to Brazil and India, a constituent of the BRICs countries, are analyzed by applying mathematical models particularly growth models. Although, these models frequently used to study innovation growth and forecasting but several studies have also been conducted to analyze economic trajectories [4,5} by applying growth functions. The analysis suggests that BRICs countries, particularly Brazil and India could become a very important source of new global economy in the coming years.

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The BRIC numbers The Economist publishes an annual table of social and economic national statistics in its Pocket World in Figures.[citation needed] Extrapolating the global rankings from their 2008 Edition for the BRIC countries and economies in relation to various categories provides an interesting touchstone in relation to the economic underpinnings of the BRIC thesis. It also illustrates how, despite their divergent economic bases, the economic indicators are remarkably similar  in global rankings between the different economies. It also suggests that, while economic arguments can be made for linking Mexico into the BRIC thesis, the case for including South Africa looks considerably weaker. A Goldman Sachs  paper published later in December 2005 explained why Mexico wasn't included in the original BRICs. According to the paper,[13] among the other countries they looked at, only Mexico and perhaps Korea have the potential to rival the BRICs, but they are economies that they decided to exclude initially because they looked at them as already more developed. According to that paper, Mexico becomes the fifth-largest economy by 2050, ahead of Russia.

GLOBAL GIANT

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The Current State of Affairs Let us turn our attention to the recent state of affairs within the BRIC components. China The leading economic power of this group is in the strong grips of the current global crisis sending exports from the workshop of the world tumbling, thereby slashing its trade surplus. It is often said that when the West sneezes, Beijing catches cold. Exports in February dropped by 25.7% [4] from a year earlier, dwarfing forecasts of 5%. The trade surplus was only $4.84 billion - a threeyear low - compared to $39.1 billion in January and a record $40.1 billion in  November. That was far short of market expectations of $27.3 billion. The fallout is felt across the Chinese economy, resulting in the possibility of  accelerated growth of unemployment and further slow down of consumption, despite a $586 billion [5] stimulus package that the Government hopes will cushion the blow. Paul Cavey, an economist with Macquarie Securities in Hong Kong, observed: “China has finally and spectacularly succumbed to the world financial crisis on the export side, and it’s difficult to see why that would improve in the short term.”[6] The collapse in global demand for China’s toys, footwears and other goods has already put 20 million migrants out of work. Leaders worry that more job losses could spark unrest and are promising to spend heavily to create employment. Isaac Meng, an economist with BNP Paribas in Beijing, argued that it was unrealistic to expect China to remain immune to the sharpest drop in global trade in 80 years. The exports were “…. a terrible number. It will have a pretty  big impact on Chinese domestic demand. Probably 60 million to 70 million workers directly work in these export sectors, so there will be secondary impacts on capital expenditure, employment and consumption.” [7] That is bad news for those dreaming that China, with its huge domestic savings, could tow other economies out of the distress. It is indeed catastrophic that the Chinese authorities perturbed by the Tibetan protests have to face the crisis and have no  practical responses to it in a year which also marks the 20th anniversary of the Tiananmen protests. The growth that was celebrated with complete disregard of  labour and environmental concerns has considerably slowed down and would halt if the situation drags on indefinitely.

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Russia The biggest military superpower in the group, Russia, who had called for  developing new reserve currencies to complement the dollar, at a separate event earlier in the day is also not in a cosy zone. In absolute logical senses, a postCold War scenario would have warranted the ultimate dismissal of all military  pacts and posts. However, she witnesses that NATO is being extended right up to its front-yard and its erstwhile allies (?) capitulating to its competing political and military block. The culmination of these assaults was the US-led action in engineering Kosovo’s February 2008 self-proclamation of independence. Russia is also a member of G8. Given the fact that she is the world’s wealthiest country in natural resources — from fertile farmlands and metals, to gold and timber, the erstwhile G7 could not ignore her. Her colossal hydrocarbon reserves are too alluring. Indeed in the post-Soviet era all that represents a lucrative opportunity to exploit by global capitalism. Besides, she also remains a nuclear and missile superpower and any antagonism with the country would not let “business” flow unhindered. Hence, Russia was accommodated in the select club considering all such geo-political and economic compulsions. However, it does not imply that the fellow club-members are in perfect agreement with her. Indeed, there are several contradictions and strains with the other members of the self-appointed group. At the onset, the authorities insisted that they had ample cash reserves to weather any storm. But as distress has ensued trouble - plunging oil prices, a 70% crash in stock markets, a global credit crunch and a slow-motion run on this country’s private banks - Russia has had to spend its reserves sooner than anybody imagined. In August 2008 reserves peaked at just under $600 billion [8], the third largest in the world. By October end, they fell down to $484 [9]  billion after money flew out of government vaults to sustain the rouble, prop up the banking system and bail out the businesses of the rich Russian oligarchs. In fact, Moscow’s economic fortunes for long have been tied too heavily to oil - a commodity with volatile prices. In 1980, the Soviet Union overtook Saudi Arabia as the biggest oil producer.

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During the Putin presidency, rising oil prices played a key role in Russian economic revival. However, if oil prices continue to descend, zero growth would pull the rug from under the hope for a middle-class life for millions, shrinking their horizons back to cramped apartments and garden plots. Amid the global fear, one thing still sets this country apart: The crisis of 2008 is just the latest in a long string of post-Soviet bank failures, financial swindles swindles and economic collapses. Few Russians own stocks and hence, the markets’ decline has not affected them directly. Instead, businesspeople that relied on Western  bank credit are now burdened by debt, and foreign investors have fled to safer   places. In September 2008, Russians withdrew 4% of deposits from private  banks. Some went into state banks, perceived as more reliable, but about half  remained in cash. Deposits dropped far more precipitously in October: up to 30% for some private banks, according to an estimate by Citibank’s Moscow office. About a dozen Russian banks have failed and have been subsequently  bailed out. The big risk here is a loss of faith among clients and subsequent  bank runs, rather than structural troubles with liquidity. President Medvedev speaking at the country’s top business forum, on June 5, 2009 at St. Petersburg sounded cautious about the state of Russian economy and said that the global crisis is not over as yet [10]. His remarks were devoid of the  bombast and exuberance which characterized last year’s Forum, when global oil  prices were riding high, Moscow’s coffers were full and the economy was growing rapidly. Indeed, the global financial crisis has hit Russia harder than any other big emerging market.

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Brazil The Lula government initially declared that the world crisis was not going to affect Brazil; after a 5.67% GDP growth in 2007, his spirit was high. What was going on elsewhere didn’t matter; growth would continue “at its present rate for  the next 15 to 20 years” [11]. The epidemic stretched in March 2009 and it scared the nation. The Bradesco bank’s estimates of growth nose-dived from more than 4% in June 2008 to 2.5% in December – and then to -0.3% in April. Morgan Stanley has even predicted a 1.5% contraction of the Brazilian economy, which would be its biggest setback since 1948 [12]. Brazil’s industrial production plunged 14.7% in the first quarter of this year [13]. Eight hundred thousand workers lost their jobs between October and January[14] (nearly 1% of the workforce), workforce), and that doesn’t even take account of   job losses in the informal economy, which employs around 40% of Brazilian workforce. Half a million Brazilians have found themselves back in poverty or  extreme poverty. Brazil’s economic results meant an end to the debate about its immunity from global contagion. The myth of decoupling was over. Initially, Lula declared that the problem of external debt no longer existed, and that the Brazil had recovered its total political, economic independence, etc. A little later it was evident that the external private debt is an extraordinary mortgage. The Brazilian industries have proceeded to grant advanced holidays, to suspend and to lay-off hundreds of thousands of people. In the past 15 years the country’s dependence on foreign capital has increased drastically and one of  the most significant developments has been the acceleration of foreign access to Brazil’s financial markets. Brazilian exports grew at an average annual rate of  20% in 2003-6, temporarily resolving the balance of payments problem. But those exports were stimulated by a new surge of FDI, which went from $10  billion in 2003 (about 2% of GDP) to the record level of $45 billion in 2008 (or  3.5% of GDP). In other words, these exports came at the cost of even deeper   penetration of the Brazilian economy by foreign capital. In 2007, for example, the inflow of foreign currency linked to the export boom appreciated Brazilian Real by around 20% to the dollar, while at the same time domestic debt securities enjoyed an annual interest rate of 13%. Foreign

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investors (or Brazilians who had borrowed dollars abroad at relatively low interest rates) therefore benefited from a return on investment of more than 30% at the end of the year. It’s hardly surprising that internal debt reached 160  billion Real in January 2009 (over $80billion) which the president boasts of as a sign of Brazil’s economic independence. In this arena all that has been achieved is further lining the pockets of the 20,000 Brazilian families who hold 80% of  debt securities. Servicing those debts eats up 30% of the federal budget. Less than 5% of that budget meanwhile goes on health and 2.5% on education. In the space of a few months, the collapse of the international financial system transformed the Brazilian balance of payments into a sieve through which money poured. Take the commercial balance: it has been declining since 2006 –  the value of the Real has meant that imports have been growing at a faster rate than exports – and this January it recorded its first deficit in 93 months. There’s no real sign of recovery in sight since the IMF predicts an 11% fall in world trade in 2009. In conditions such as these, it becomes more difficult for Brazil to import the equipment on which its own output depends. Repatriation of   profits and dividends abroad rose to nearly $34billion in 2008 (nearly 3% of  GDP), an increase of 50% over the previous year, and of 500% compared to 2003. The current account balance also recorded its biggest deficit in 10 years in 2008: $28.3billion or 2.5% of GDP. Today, Brazil stresses that it has international reserves of around $200billion to reassure investors worried about the risk of a balance of payments crisis. It was negative in the last quarter of  2008 for the first time since the end of 2005, but with a deficit that was seven times greater, at $21billion, or 1.85% of annual GDP. According to the economist Paulo Henrique Costa Mattos, current liabilities could reach $600billion [15].

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India A report jointly prepared by World Economic Forum and Confederation of  Indian Industry was released just ahead of the annual India Economic Summit held in November 2008 in New Delhi attended by top government officials to interact with heads of global firms. The report said “India’s dependence on capital flows to finance its current account deficit is a macroeconomic risk and the global crisis could generate a sharp increase in capital outflows and a reduction in the availability of finance” [16]. “Clearly, the global economic  picture will be harsher next year and there will be greater pressures on Indian economy [17]”. The GDP grew by 6.7% for the financial year 2008-09 on the back of a better  than expected 5.8% in the last quarter (January-March). However, the economy had grown at a heady 8.9% annually during 2003-08. Even in the first half of  2008-09 the rate of growth was 7.8%. Yet the fact remains that the 6.7% is the lowest in six years. Also, there are doubts as to whether this rate can be achieved in 2009-10. In the past, capital inflows and the IT boom played a large role in driving job creation, investment and asset bubbles. India’s high dependence on foreign capital and IT exports increased its vulnerability to the global crisis. FDI has slowed in recent months and India’s IT sector may find it difficult to maintain its outsourcing competitiveness as cost differentials with the West have waned since the last recession. Additionally, other low-cost low-cost locations have emerged and the U.S. plans to raise taxes on outsourcing companies.

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There is already a dip in the employment market. Anecdotal evidence evidence of this in the IT and financial sectors are abound, and also reports of quiet downsizing in many other fields as companies cut costs. More than the downsizing itself, which may not involve large numbers, what this implies is a significant drop in new hiring - and that will change the complexion of the job market. At the heart of the problem lie questions of liquidity and confidence. What the Reserve Bank of India needs to do, as events unfold, is to neutralise the outflow of FII money by unwinding the market stabilisation securities that it had used to sterilise the inflows when they happened. This will mean drawing down the dollar reserves and that could deplete foreign exchange reserves and if the oil  prices shoot up once again the situation could be precarious. Meanwhile, facing its worst crisis in over a decade, India’s ailing export sector  wants the new government to gift it a three-year income-tax holiday, with experts pushing for concrete steps to protect some 20 million direct jobs in the industry. Falling global demand, the high cost of credit and protectionism by some economies like the US are the reasons why India’s external trade industry is seeking such sops, after missing the export target for the previous fiscal. India’s merchandise exports fell last October for the first time in a decade, and missed the target of $200 billion set for fiscal 2008-09. Exports grew by a mere 3.4% to $168.7 billion, from $163.1 billion in 2007-08. This has resulted in the retrenchment of some 0.5 million people, especially in sectors like gems and  jewellery, handloom, and textiles, with the rising rupee further exacerbating the  problems.

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Outcomes and contradictions It is in the above contexts that we have to analyse the outcome of the BRIC summit. As said earlier, Russia had called for developing new reserve currencies to complement the dollar, at a separate event earlier on the day of the summit. However, that did not find any reference in the final statement issued at this occasion. Instead, the cautious wording appeared to reflect China’s concerns that any anti-dollar statements could erode the value of its currency reserves. China’s dollar reserves touched $2 trillion by the end of 2008 [18]. It is important to recall that the U.S. dollar is generally thought to be an extremely safe asset to hold, which is why it has been the world’s main reserve currency since WWII. Developing countries view plentiful dollar holdings as a hedge against economic crises that might precipitate a run on their own currencies. Dollars represent as much as 60% of reserves in some developing countries, such as China and Thailand. However, a strategy, once considered a source of economic stability is becoming more and more dangerous. The dollar  has fallen sharply against other major currencies in the last two years, and  because of massive U.S. current account deficits, it could fall further in the years ahead. If that happens, the losses from dollar reserves for some developing countries may exceed 20 % of their annual budgets. The damage of  a declining dollar could be extensive: If many developing countries were to sharply increase their exports in order to rebuild the value of their reserves, it could lead to a serious drag on world economic growth and possibly prolonged stagnation in much of the developing world. For large corporations, this would  be especially painful because the fastest-growing markets in Asia, Latin America, and Eastern Europe, which they are depending on for their growth, could be stopped cold. The absence of any criticism of the US dollar appeared to be a compromise by Russia. There was an earnest plea for a greater representation at major institutions such as the IMF or the World Bank for the emerging economies such as Brazil, Russia, India and China. . In a more or less direct attack on the Western domination of Bretton Woods institutions the statement said emerging and developing economies must have greater voice and representation and the “heads and senior leadership” of these bodies “should be appointed through an 14

open, transparent and merit-based selection process.” It is indeed problematic to note that this group completely ignores the role that these organisations play. These agencies portray themselves as development agencies, donors, politicsneutral and independent. Anybody examining their role would find how state department of the US, US treasury, Pentagon, CIA, big multinationals, and the World Bank and the IMF go hand in hand. In many ways, investigations of the pattern of actions of these institutions reveal the visible fist behind the ‘invisible hand’. Different country experiences show how the World Bank and the IMF actually work for creating or smoothening path for global corporate grabbing by influencing, lobbying, creating support base through consultancy, trip abroad and by ‘manufacturing consent’. These institutions therefore work as instruments to bargain or  lobbying to create necessary arrangements with different countries to protect global corporate and imperial interest. Their enthusiasm for ‘development’ in some countries or its indifference to crisis of some other countries is strongly linked with these objectives. Lending support to South Vietnam or South Korea’s pro-US regime, hostility to Allende government and sudden change of   policy towards Chile after the military take over, or after reinstatement of  President Aristide in Haiti, long hostile policy towards Cuba or policy towards Afghanistan and Iraq are a few instances of long list of rhetoric and crimes. Same goes with the IMF. The list goes long and would virtually include all hated dictators that have stepped on this planet. It is painful to see that the BRIC countries whose statement talks about a collective agenda ranging from food security and financial reform to the creation of a “more diversified international monetary system” and a “more democratic and just multipolar world order,” prefer to fight for a larger share of  decision making of these oppressive institutions instead of raising a call to dismantle it. Abandoning any initiative for South-South co-operation and solidarity, their earnest plea is to be co-opted in the global league of gendarmes. Even though Brazil is involved in the project for the “Bank of the South”, it has no commitments to it. Recalling the actions of the Lula government in 2007, it is not difficult to find that Brazil had been initially reluctant to join the Bank of  the South. Brazil sees it essentially as an instrument of commercial policy speaking primarily in terms of economic bloc and uncritically accepts the European Union (EU) as its model. In this case, the problem with Brazil is the orientation of the Lula government and the economic and social model that it  practices. It is clear that Brazil’s integration into the Bank of the South will lead 15

the Bank to adopt a much more traditional pattern, not too far removed from neo-liberalism, while if Brazil did not participate, it would be easier to reach a definition closer to the alternative model that a lot of radical movements advocate. Brazil has joined the Bank of the South because it cannot be absent from it; and it must maintain its regional economic dominance. The 16 point BRIC statement also underlined support for a “more democratic and just multipolar world order based on the rule of international law, equality, mutual respect, cooperation, coordinated action and collective decision making of all states”. However, judging the statement vis-à-vis the role that these countries have played in the last decade, one can only conclude that this announcement is an anomaly of its sort. The Chinese, Indian and the Brazilian government have been lobbying extremely hard to be included in the G8 led group and the heads of these states are regularly attending the annual summit of  the select group in recent times. There is very little doubt about the fact the G8 is a fountain head of the global subversion of democracy. In none of the G8 summits since its 28th edition at Kananaskis, Alberta, Canada in 2002, there has been any discussion on the invasion of Iraq or Afghanistan. Offensives were led by its leading member state, the US and also faithfully accompanied by a few other member states.. The G8 has been one of the greatest violator of the international laws and has been a self-proclaimed agency to control the globe by a few rich and elites. Certain BRIC members have also  placed confidence on the G20 summit to rescue the world out of this mess that we are in. Though it seems that there is a little unanimity about the matter, even within the group, nevertheless, to a certain extent, the statement of the Indian  prime minister amply manifests their common position on this issue. In his speech at the summit, Dr. Singh hailed the cooperation already achieved  by BRIC at the G-20 deliberations on the international financial crisis. The important issue today, he said was to implement the decisions that had been taken. He also said cooperation in the G-20 process must be backed by cooperation in the real economy. As certain commentators have pointed out “Yet what happened in Washington? A sorry show, a script that lacks any credibility, but few spectators seem to care. In detective films it is seldom the case that the keys to the Court of Justice be given to arch criminals. Yet this is what the G20 summit is planning to do.” [19] In the midst of this profound crisis it is a matter of common sense that G20 was not born out of any genuine concern to save the planet or to provide authentic solutions; on the contrary it was a hasty act since November 2008 to salvage the powers that be and try to 16

 plug the ruptures of the capitalist system in the first place and to rescue it from further decays. Therefore, to expect this body to opt for measures that are sufficiently radical is conceptually impossible. Conclusion The BRIC countries, if they desire to mean what they pronounce in the statements, have to radical rethink their policies. They must have a systematic  break with the current global order that seeks to ensure privileges for a selected few imperilling the bulk of humanity. To begin with, they must raise effective demands and strive for the abolition of tax havens. In order to achieve this, it must declare it illegal for companies and residents to have any assets in, or  relationships with partners located in, tax havens. It must pressurise the EU countries that function like tax havens (Austria, Belgium, the UK, Luxembourg…) as well as Switzerland, to do away with bank secrecy and put an end to these outrageous practices. The recent demonstrations on 28 and 30 March during the G20 summit were  big ones, 40,000 people in London, thousands and thousands in Vienna, Berlin, Stuttgart, Madrid, Brasilia, Rome, etc. with the common motto “Let the rich pay the crisis!” The week of global action called for by the social movements from all over the world at the WSF at Belém last January thus had a gigantic echo. Those who had announced the end of the movement for another globalisation were wrong. It has proved that it is able to bring large crowds together, and this is only the beginning. The success of the mobilizations in France on 29 January and 19 March (three million demonstrators were in the streets) is confirmation that the workers, the unemployed and young people all want other solutions to the crisis than those which consist in bailing out bankers and imposing restrictions on the lower classes. The BRIC leaders must listen to those voices and act if they are keen on actualising another reality.

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