This week the leaders of the developing world met to announce a massive new project. Like Bretton Woods 65 years, the creation of a new global bank is sending shockwaves across every country. The BRICS development Bank, to be situated in Shanghai, will serve the purpose of financing new projects across the emerging continents as well as acting as a soverign relief fund.
The leaders of the 5 BRICS countries – Roussef of Brazil, Putin of Russia, Zuma of South Africa, Modhi of India and Xi of China – met in Fortaleza, Brazil, to announce the launch of this $100bn project. These 5 nations together account for 21 percent of global economic output and have contributed more than 50 percent of world economic growth in the past decade. The hope now is that they will also possess a financial institution to rival the western powers’ IMF and World Bank.
A statement from Russian President Putin that the creation of the bank would ‘help prevent the harassment of countries that do not agree with some foreign policy decisions made by the United States and their allies’. In other words, the hegemony of the west is being challenged and eroded in, primarily, the financial world, and, by consequence, the geopolitical world.
The news provides markets across the developing world that their governments have direct control over their economic interests in the global setting. For the Steel industry, this may mean an improvement in integration across the developing nations, with trust being built to improve cross border transactions.
metallic coated steel department, SMC
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Lloyd P.//SMC Editor
Shanghai Metal Corporation 