The Outcome of the 1st BRIC Summit

7/29/2019 The Outcome of the 1st BRIC Summit

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The outcome of the 1st BRIC Summit: aderelict zero

Sushovan Dhar

The first-ever summit of the BRIC1 countries took place at Yekaterinburg atRussia on 16th June 2009 calling for a more diversified internationalmonetary system. The core focus of the meeting, attended by PresidentDmitri Medvedev of Russia, the Indian Prime Minister Manmohan Singh,Chinese president Hu Jintao and Brazilian President Luis Inacio Lula da Silvawas to improve the current global financial situation, to discuss how the fourcountries could collectively work better in the future and to reform thefinancial institutions. At the end of the summit, the BRIC nations suggestedthe need for a new global reserve currency that is diversified, stable andpredictable.

Background

BRIC encompass over 25% of the worlds land coverage, 40% of theplanetary population and hold a combined GDP (PPP) of $ 15.445 trillion2

which is 22.4% of global GDP. They are among the biggest and fastestgrowing emerging markets. These countries belong to the middle rung of thedevelopment ladder and the meeting ground is essentially their high GDPgrowth rate, explosion of the financial markets with rapidly rising stockmarkets, high recipient of Foreign Direct Investment, etc. China and Indialead the pack in most of these aspects. The following table3 provides theBRIC positions vis--vis the other nations with a few macro-economicparameters:

BRAZIL RUSSIA

INDIA CHINA

Total Area 5th 1st 7th 4thPopulation 5th 9th 2nd 1stGDP (Nominal) 10th 8th 12th 3rdGDP (PPP) 9th 7th 4th 2ndExports 21st 11th 23rd 2nd

Imports 27th 17th 16th 3rdCurrent AccountBalance

47th 5th 169th 1st

Received FDI 16th 12th 22nd 5th

1BRIC 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 developingrapidly, by 2050 the combined economies of the BRICs could eclipse the combined economies of the current richestcountries of the world.2IMF, World Economic Outlook Database, Data for 2008.

3http://en.wikipedia.org/wiki/BRIC#cite_note-5

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Foreign ExchangeReserves

7th 3rd 4th 1st

External Debt 23rd 20th 27th 19thPublic Debt 47th 117th 29th 98thElectricity Consumption 10th 3rd 7th 2nd

Number of MobilePhones

5th 4th 2nd 1st

Number of InternetUsers

5th 11th 4th 1st

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 summitwas also organised at a critical juncture when the advanced industrial stateswhich also forms the core of the imperialist order or the G8 is bereft oflegitimacy. The typhoon unleashed by the neo-liberal project has resulted ina total deregulation of the financial markets and is wracking the globe in theform of simultaneous crises from global financial collapse to worseningclimate changes. It is plausible that the BRIC leaders decided to intensifytheir efforts at a time when the foundations of the G8 domination seem to betrembling. Hitherto, their attempts have been all too sporadic, either at thenegotiation table of the now derailed World Trade Organisation (WTO) or atthe 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 thereforms proposals in circulation or in the pipe-line; largely put forward by thedeveloped countries - mainly represented by the G-7, in the wake of currentcrisis. As evident from the statements and deliberations, the purpose is notreally to challenge the hegemony or to emerge as the new hegemons, atleast in the immediate future. But to protect and secure safe places withinthe current hegemonic order, which is, however, far from absolute.

The final statement felt a strong need for a stable, predictable and morediversified international monetary system. However, the summit spelt outnothing 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-economicorder that can save humanity from this predicament. To the dismay of a lotof its admirers, who envision the BRIC or the Shanghai CooperationOrganization (SCO)4 as a strong bulwark against the US imperialism, the BRICcountries are following the same neo-liberal order which has immenselycontributed to the instability, volatility and turbulence of the global economy.The monetary system which they critique so much has also been a product4The Shanghai Cooperation Organization (SCO) is an intergovernmental mutual-security organization which was

founded in 2001 by the leaders of China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. India, Iran,Mongolia and Pakistan enjoy observer status while Sri Lanka, Belarus and Afghanistan are dialogue partners.

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of the capitalist order that values profit and accumulation above anythingelse. The phenomenal growth of the BRIC is due to its ability to entrench thiscapitalist order by firmly embracing the neo-liberal tenets. No wonder thatthey earn so much praise from Goldman Sachs whose thesis 5 recognizes thatBrazil, 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 andservices while Brazil and Russia would become similarly dominant assuppliers of raw materials6. Thus, the attempt to reposition BRIC on a globalscale is essentially an endeavour of its rising capitalist class who havealready cornered large chunks of their domestic markets and, are keen tofind a larger share of the global pie. The bourgeoisie of these countries aredesperately banking upon their states to act on their behalf either alone orcollectively. It must be noted that the nation state has historically been avehicle for capital to enforce the logic of the market, while covering its trackswith fine sounding phrases about social responsibility and patriotism.

The Current State of Affairs

Let us turn our attention to the recent state of affairs within the BRICcomponents.

ChinaThe leading economic power of this group is in the strong grips of the currentglobal crisis sending exports from the workshop of the world tumbling,thereby slashing its trade surplus. It is often said that when the Westsneezes, Beijing catches cold. Exports in February dropped by 25.7%7 from a

year earlier, dwarfing forecasts of 5%. The trade surplus was only $4.84billion - a three-year 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 thepossibility of accelerated growth of unemployment and further slow down ofconsumption, despite a $586 billion8 stimulus package that the Governmenthopes will cushion the blow. Paul Cavey, an economist with MacquarieSecurities in Hong Kong, observed: China has finally and spectacularlysuccumbed to the world financial crisis on the export side, and it's difficult tosee why that would improve in the short term.9 The collapse in globaldemand for Chinas toys, footwears and other goods has already put 20

million migrants out of work. Leaders worry that more job losses could sparkunrest and are promising to spend heavily to create employment. IsaacMeng, an economist with BNP Paribas in Beijing, argued that it wasunrealistic to expect China to remain immune to the sharpest drop in globaltrade in 80 years. The exports were . a terrible number. It will have a

5Ask the expert: BRICs and investor strategy, Financial Times, Nov 6 2006

6http://www2.goldmansachs.com/ideas/brics/index.html

7China View http://news.xinhuanet.com/english/2009-03/11/content_10990447.htm

8BBC http://news.bbc.co.uk/2/hi/business/7936528.stm

9FX Press http://thefxpress.com/?tag=paul-cavey

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http://us.ft.com/ftgateway/superpage.ft?news_id=fto110620061008293518http://en.wikipedia.org/wiki/Financial_Timeshttp://us.ft.com/ftgateway/superpage.ft?news_id=fto110620061008293518http://en.wikipedia.org/wiki/Financial_Times


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pretty big impact on Chinese domestic demand. Probably 60 million to 70million workers directly work in these export sectors, so there will besecondary impacts on capital expenditure, employment and consumption.10

That is bad news for those dreaming that China, with its huge domesticsavings, could tow other economies out of the distress. It is indeed

catastrophic that the Chinese authorities perturbed by the Tibetan protestshave to face the crisis and have no practical responses to it in a year whichalso marks the 20th anniversary of the Tiananmen protests. The growth thatwas celebrated with complete disregard of labour and environmentalconcerns has considerably slowed down and would halt if the situation dragson indefinitely.

RussiaThe biggest military superpower in the group, Russia, who had called fordeveloping new reserve currencies to complement the dollar, at a separateevent earlier in the day is also not in a cosy zone. In absolute logical senses,

a post-Cold War scenario would have warranted the ultimate dismissal of allmilitary pacts and posts. However, she witnesses that NATO is beingextended right up to its front-yard and its erstwhile allies (?) capitulating toits competing political and military block. The culmination of these assaultswas the US-led action in engineering Kosovos February 2008 self-proclamation of independence. Russia is also a member of G8. Given the factthat she is the worlds wealthiest country in natural resources from fertilefarmlands and metals, to gold and timber, the erstwhile G7 could not ignoreher. Her colossal hydrocarbon reserves are too alluring. Indeed in the post-Soviet era all that represents a lucrative opportunity to exploit by globalcapitalism. 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 suchgeo-political and economic compulsions. However, it does not imply that thefellow club-members are in perfect agreement with her. Indeed, there areseveral contradictions and strains with the other members of the self-appointed group.

At the onset, the authorities insisted that they had ample cash reserves toweather any storm. But as distress has ensued trouble - plunging oil prices, a70% crash in stock markets, a global credit crunch and a slow-motion run onthis countrys private banks - Russia has had to spend its reserves sooner

than anybody imagined. In August 2008 reserves peaked at just under $600billion11, the third largest in the world. By October end, they fell down to$48412 billion after money flew out of government vaults to sustain therouble, prop up the banking system and bail out the businesses of the richRussian oligarchs. In fact, Moscows economic fortunes for long have beentied too heavily to oil - a commodity with volatile prices. In 1980, the Soviet

10The Peninsula http://www.thepeninsulaqatar.com/Display_news.asp?

section=Business_News&subsection=market+news&month=March2009&file=Business_News200903129422.xml11The New York Times, October 31, 2008.

12Ibid.

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Union overtook Saudi Arabia as the biggest oil producer. During the Putinpresidency, rising oil prices played a key role in Russian economic revival.However, if oil prices continue to descend, zero growth would pull the rugfrom under the hope for a middle-class life for millions, shrinking theirhorizons 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 latestin a long string of post-Soviet bank failures, financial swindles and economiccollapses. Few Russians own stocks and hence, the markets decline has notaffected them directly. Instead, businesspeople that relied on Western bankcredit are now burdened by debt, and foreign investors have fled to saferplaces. In September 2009, Russians withdrew 4% of deposits from privatebanks. Some went into state banks, perceived as more reliable, but abouthalf remained in cash. Deposits dropped far more precipitously in October:up to 30% for some private banks, according to an estimate by Citibank'sMoscow office. About a dozen Russian banks have failed and have beensubsequently 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 countrys top business forum, on June 5,2009 at St. Petersburg sounded cautious about the state of Russian economyand said that the global crisis is not over as yet13. His remarks were devoid ofthe bombast and exuberance which characterized last years Forum, whenglobal oil prices were riding high, Moscows coffers were full and theeconomy was growing rapidly. Indeed, the global financial crisis has hitRussia harder than any other big emerging market.

BrazilThe 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. Whatwas going on elsewhere didnt matter; growth would continue at its presentrate for the next 15 to 20 years14 . The epidemic stretched in March 2009and it scared the nation. The Bradesco banks 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 theBrazilian economy, which would be its biggest setback since 1948.15 Brazilsindustrial production plunged 14.7% in the first quarter of this year16. Eighthundred thousand workers lost their jobs between October and January17

(nearly 1% of the workforce), and that doesnt even take account of joblosses in the informal economy, which employs around 40% of Brazilian

workforce. Half a million Brazilians have found themselves back in poverty orextreme poverty. Brazils economic results meant an end to the debateabout its immunity from global contagion. The myth of decoupling was over.Initially, Lula declared that the problem of external debt no longer existed,

13Reuters http://www.reuters.com/article/worldNews/idUSTRE55421J20090605

14The delights of dullness, The Economist, 17 April 2008.

15Andre Solani and Fabiola Moura, Latin America may contract 4%, Morgan Stanley says, Bloomberg, 16 March

2009.16Latin American Herald Tribune, Caracas, June, 18, 2009.

17Source: Ministry of Labour & Employment, Federal Government of Brazil.

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and that the Brazil had recovered its total political, economic independence,etc. A little later it was evident that the external private debt is anextraordinary mortgage. The Brazilian industries have proceeded to grantadvanced holidays, to suspend and to lay-off hundreds of thousands ofpeople. In the past 15 years the countrys dependence on foreign capital has

increased drastically and one of the most significant developments has beenthe acceleration of foreign access to Brazils financial markets. Brazilianexports grew at an average annual rate of 20% in 2003-6, temporarilyresolving the balance of payments problem. But those exports werestimulated by a new surge of FDI, which went from $10billion in 2003 (about2% of GDP) to the record level of $45billion in 2008 (or 3.5% of GDP). Inother words, these exports came at the cost of even deeper penetration ofthe Brazilian economy by foreign capital.

In 2007, for example, the inflow of foreign currency linked to the exportboom 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 investors (or Brazilians who had borrowed dollars abroad at relativelylow interest rates) therefore benefited from a return on investment of morethan 30% at the end of the year. Its hardly surprising that internal debtreached 160 billion Real in January 2009 (over $80billion) which thepresident boasts of as a sign of Brazils economic independence. In thisarena all that has been achieved is further lining the pockets of the 20,000Brazilian families who hold 80% of debt securities. Servicing those debts eatsup 30% of the federal budget. Less than 5% of that budget meanwhile goeson health and 2.5% on education. In the space of a few months, the collapseof the international financial system transformed the Brazilian balance of

payments into a sieve through which money poured. Take the commercialbalance: it has been declining since 2006 the value of the Real has meantthat imports have been growing at a faster rate than exports and thisJanuary it recorded its first deficit in 93 months. Theres no real sign ofrecovery in sight since the IMF predicts an 11% fall in world trade in 2009. Inconditions such as these, it becomes more difficult for Brazil to import theequipment on which its own output depends. Repatriation of profits anddividends abroad rose to nearly $34billion in 2008 (nearly 3% of GDP), anincrease of 50% over the previous year, and of 500% compared to 2003. Thecurrent 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 ofa balance of payments crisis. It was negative in the last quarter of 2008 forthe first time since the end of 2005, but with a deficit that was seven timesgreater, at $21billion, or 1.85% of annual GDP. According to the economistPaulo Henrique Costa Mattos, current liabilities could reach $600billion18.

India

18A crise econmica e suas consequncias para os trabalhadores, Socialismo e liberdade, So Paulo, 16 April

2009.

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A report jointly prepared by World Economic Forum and Confederation ofIndian Industry was released just ahead of the annual India EconomicSummit held in November 2008 in New Delhi attended by top governmentofficials to interact with heads of global firms. The report said Indiasdependence on capital flows to finance its current account deficit is a

macroeconomic risk and the global crisis could generate a sharp increase incapital outflows and a reduction in the availability of finance19. Clearly, theglobal economic picture will be harsher next year and there will be greaterpressures on Indian economy20. The GDP grew by 6.7% for the financial year2008-09 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% annuallyduring 2003-08. Even in the first half of 2008-09 the rate of growth was7.8%. 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 thepast, capital inflows and the IT boom played a large role in driving jobcreation, investment and asset bubbles. Indias high dependence on foreign

capital and IT exports increased its vulnerability to the global crisis. FDI hasslowed in recent months and Indias IT sector may find it difficult to maintainits outsourcing competitiveness as cost differentials with the West havewaned since the last recession. Additionally, other low-cost locations haveemerged and the U.S. plans to raise taxes on outsourcing companies.There is already a dip in the employment market. Anecdotal evidence of thisin the IT and financial sectors are abound, and also reports of quietdownsizing in many other fields as companies cut costs. More than thedownsizing itself, which may not involve large numbers, what this implies isa 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 andconfidence. What the Reserve Bank of India needs to do, as events unfold, isto neutralise the outflow of FII money by unwinding the market stabilisationsecurities that it had used to sterilise the inflows when they happened. Thiswill mean drawing down the dollar reserves and that could deplete foreignexchange reserves and if the oil prices shoot up once again the situationcould be precarious.

Meanwhile, facing its worst crisis in over a decade, Indias ailing exportsector 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 andprotectionism by some economies like the US are the reasons why Indiasexternal trade industry is seeking such sops, after missing the export targetfor the previous fiscal. India's merchandise exports fell last October for thefirst time in a decade, and missed the target of $200 billion set for fiscal2008-09. Exports grew by a mere 3.4% to $168.7 billion, from $163.1 billionin 2007-08. This has resulted in the retrenchment of some 0.5 million people,

19India Risk Report, 2008

20ibid.

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especially in sectors like gems and jewellery, handloom, and textiles, withthe rising rupee further exacerbating the problems.

Outcomes andcontradictions

It is in the above contexts that we have to analyse the outcome of the BRICsummit. As said earlier, Russia had called for developing new reservecurrencies to complement the dollar, at a separate event earlier on the dayof the summit. However, that did not find any reference in the finalstatement issued at this occasion. Instead, the cautious wording appearedto reflect Chinas concerns that any anti-dollar statements could erode thevalue of its currency reserves. Chinas dollar reserves touched $2 trillion bythe end of 200821. It is important to recall that the U.S. dollar is generallythought to be an extremely safe asset to hold, which is why it has been theworlds main reserve currency since WWII. Developing countries viewplentiful 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 isbecoming more and more dangerous. The dollar has fallen sharply againstother 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 thathappens, the losses from dollar reserves for some developing countries mayexceed 20 % of their annual budgets. The damage of a declining dollar couldbe extensive: If many developing countries were to sharply increase theirexports in order to rebuild the value of their reserves, it could lead to aserious drag on world economic growth and possibly prolonged stagnation in

much of the developing world. For large corporations, this would beespecially painful because the fastest-growing markets in Asia, LatinAmerica, and Eastern Europe, which they are depending on for their growth,could be stopped cold. The absence of any criticism of the US dollarappeared to be a compromise by Russia.

There was an earnest plea for a greater representation at major institutionssuch as the IMF or the World Bank for the emerging economies such asBrazil, Russia, India and China. . In a more or less direct attack on theWestern domination of Bretton Woods institutions the statement saidemerging and developing economies must have greater voice and

representation and the heads and senior leadership of these bodiesshould be appointed through an open, transparent and merit-basedselection process. It is indeed problematic to note that this groupcompletely ignores the role that these organisations play. These agenciesportray themselves as development agencies, donors, politics-neutral andindependent. Anybody examining their role would find how state departmentof the US, US treasury, Pentagon, CIA, big multinationals, and the World Bankand the IMF go hand in hand. In many ways, investigations of the pattern of

21Source: Chinability http://www.chinability.com/Reserves.htm

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actions of these institutions reveal the visible fist behind the invisible hand.Different country experiences show how the World Bank and the IMF actuallywork for creating or smoothening path for global corporate grabbing byinfluencing, lobbying, creating support base through consultancy, trip abroadand by manufacturing consent. These institutions therefore work as

instruments to bargain or lobbying to create necessary arrangements withdifferent countries to protect global corporate and imperial interest. Theirenthusiasm for development in some countries or its indifference to crisis ofsome other countries is strongly linked with these objectives. Lendingsupport to South Vietnam or South Koreas pro-US regime, hostility toAllende government and sudden change of policy towards Chile after themilitary take over, or after reinstatement of President Aristide in Haiti, longhostile policy towards Cuba or policy towards Afghanistan and Iraq are a fewinstances of long list of rhetoric and crimes. Same goes with the IMF. The listgoes long and would virtually include all hated dictators that have steppedon this planet.

It is painful to see that the BRIC countries whose statement talks about acollective agenda ranging from food security and financial reform to thecreation of a more diversified international monetary system and a moredemocratic and just multipolar world order, prefer to fight for a larger shareof decision making of these oppressive institutions instead of raising a call todismantle it. Abandoning any initiative for South-South co-operation andsolidarity, their earnest plea is to be co-opted in the global league ofgendarmes.

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 in2007, it is not difficult to find that Brazil had been initially reluctant to jointhe Bank of the South. Brazil sees it essentially as an instrument ofcommercial policy speaking primarily in terms of economic bloc anduncritically accepts the European Union (EU) as its model. In this case, theproblem with Brazil is the orientation of the Lula government and theeconomic and social model that it practices. It is clear that Brazilsintegration into the Bank of the South will lead the Bank to adopt a muchmore traditional pattern, not too far removed from neo-liberalism, while ifBrazil did not participate, it would be easier to reach a definition closer to thealternative 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 mustmaintain its regional economic dominance.

The 16 point BRIC statement also underlined support for a more democraticand just multipolar world order based on the rule of international law,equality, mutual respect, cooperation, coordinated action and collectivedecision making of all states. However, judging the statement vis--vis therole that these countries have played in the last decade, one can onlyconclude that this announcement is an anomaly of its sort. The Chinese,

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Indian and the Brazilian government have been lobbying extremely hard tobe included in the G8 led group and the heads of these states are regularlyattending the annual summit of the select group in recent times. There isvery little doubt about the fact the G8 is a fountain head of the globalsubversion of democracy. In none of the G8 summits since its 28th edition at

Kananaskis, Alberta, Canada in 2002, there has been any discussion on theinvasion of Iraq or Afghanistan. Offensives were led by its leading memberstate, the US and also faithfully accompanied by a few other member states.These wars were not attempted to liberate the mass of humanity but, toenslave them and to have a greater control on their natural resources or atleast the hydrocarbons. The G8 has been one of the greatest violator of theinternational laws and has been a self-proclaimed agency to control theglobe by a few rich and elites. Certain BRIC members have also placedconfidence on the G20 summit to rescue the world out of this mess that weare 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 thisissue. In his speech at the summit, Dr. Singh hailed the cooperation alreadyachieved by BRIC at the G-20 deliberations on the international financialcrisis. The important issue today, he said was to implement the decisionsthat had been taken. He also said cooperation in the G-20 process must bebacked by cooperation in the real economy. As certain commentators havepointed out Yet what happened in Washington? A sorry show, a script thatlacks any credibility, but few spectators seem to care. In detective films it isseldom the case that the keys to the Court of Justice be given to archcriminals. Yet this is what the G20 summit is planning to do.22 In the midstof 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 authenticsolutions; on the contrary it was a hasty act since November 2008 to salvagethe powers that be and try to plug the ruptures of the capitalist system in thefirst place and to rescue it from further decays. Therefore, to expect thisbody to opt for measures that are sufficiently radical is conceptuallyimpossible.

Conclusion

The BRIC countries, if they desire to mean what they pronounce in thestatements, have to radical rethink their policies. They must have a

systematic break with the current global order that seeks to ensureprivileges 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 residentsto have any assets in, or relationships with partners located in, tax havens. Itmust pressurise the EU countries that function like tax havens (Austria,Belgium, the UK, Luxembourg) as well as Switzerland, to do away with

22The G20 and the Inconsistent Script: What Really Happened in Washington? - Damien Millet and Eric Toussaint,

Counterpunch, November 18, 2008. http://www.counterpunch.org/millet11182008.html

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bank secrecy and put an end to these outrageous practices. The recentdemonstrations 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 richpay the crisis! The week of global action called for by the social movements

from all over the world at the WSF at Belm last January thus had a giganticecho. Those who had announced the end of the movement for anotherglobalisation were wrong. It has proved that it is able to bring large crowdstogether, and this is only the beginning. The success of the mobilizations inFrance on 29 January and 19 March (three million demonstrators were in thestreets) is confirmation that the workers, the unemployed and young peopleall want other solutions to the crisis than those which consist in bailing outbankers and imposing restrictions on the lower classes. The BRIC leadersmust listen to those voices and act if they are keen on actualising anotherreality.

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Documents

The Outcome of the 1st BRIC Summit