Prof. Kevin Gallagher on BRICS Summit
As the leaders of the worl’s most important emerging economies – the BRICS: Brazil, Russia, India, China and South Africa – move directly from the gala of the Football World Cup in Brazil to the BRICS Summit, also in Brazil’s coastal city, Fortaleze, Prof. Kevin Gallagher of the Boston University Frederick S. Pardee School of Global Studies – one of the leading experts on Latin America-China relations – is all over the press with his commentary on what could be a truly historic opportunity for BRICS and beyond.
In an OpEd published in The Globalist (July 14) that while in Brazil “the BRICS hope to establish a new development bank and reserve currency pool arrangement” and that “this action could strike a true trifecta — recharge global economic governance and the prospects for development as well as pressure the World Bank and the International Monetary Fund (IMF) — to get back on the right track.”
“Now the BRICS are taking matters into their own hands. Their governments have been diligently putting together two new institutions that hold great promise — a new development bank and a new reserve pooling arrangement. The development bank would provide financing to BRICS and other emerging market and developing countries for infrastructure, industrialization and productive development. The reserve pool would allow BRICS and other nations to draw on pooled reserves in the event of balance of payments crises or threats to their currencies. When these institutions are launched in Rio this July, BRICS could and should forge a ”Rio Consensus” — provided they do not make the same mistakes of other, mostly Western-inspired “models” in the past. The key is to make it a model for global economic governance in the 21st century.”
Prof. Gallagher’s OpEd concludes that “not only will such a framework and structure enable more appropriate finance for development and stability, it can also serve as a moral model of reform that can someday be achieved in the two Washington-based institutions themselves. This will give BRICS more leverage — and an opt-out if the industrialized countries stay set in their ways.”
Prof. Kevin Gallagher continues the argument in a report in Bloomberg BusinessWeek where the Pardee School professor is quoted as pointing out that the BRICS can also use it to pressure developed countries, particularly the U.S., to advance stalled measures to make global financial institutions more equitable:
“They can say, ‘look, we have an alternative,’” Gallagher said in a phone interview. “It gives you a lot of political leverage.”
Anoter report in The Christian Science Monitor focuses on the Summit as an opportunity for Latin America to reshape relations with China and quotes Prof. Gallagher of the Pardee School:
“The region doesn’t take enough advantage of having so many assets that the Chinese can’t get anywhere else – soy, iron, copper,” says Kevin Gallagher, professor of international relations at Boston University and author of numerous studies on Chinese investment in Latin America. “Latin America could punch above its weight a little more.”
Prof. Gallagher explains the relationship further in a news quote for McClatchy:
“The China boom lifted the Latin American boat for a long time,” Kevin P. Gallagher, a specialist at Boston University on Latin America-China financial ties, said in a telephone interview. “They’re all happy that they’ve got China, but the honeymoon stage is over,” Gallagher added. “They’re all running current account deficits with China now.”