The Brics is currently composed of Brazil, Russia, India, China and South Africa. For Argentina, being a member of this group can help obtain financing on more favorable terms than those offered other global organizations
Argentina was invited to participate on July 15 this year, 2014, in the city of Fortaleza, the summit meeting of BRICS (Brazil, Russia, India, China and South Africa) that was originally formed into 2008 for the first 4 countries and South Africa was annexed in 2010. Manchester Jim O'Neill coined the acronym at the dawn of the new century / millennium.
Lately they have also expressed their desire to join the BRICS Mexico, Iran, Kazakhstan and Indonesia.
Russia is interested in increasing its investments in Argentina, in the sectors of hydropower and nuclear energy, and diversify trade relations with Argentina and increasing links with Mercosur.
The term BRIC, began to be known in 2001, trade between the member economies was only 21,000 million at present, and as Brics, reached 280,000 million; ie, it increased more than 13. Furthermore, the five countries combined together own 45 percent of the global workforce; and account for 15 percent of world trade.
They live over 3,000 million, its gross domestic product of 17 trillion; agricultural production of 2,000 million tons; and foreign exchange reserves of over $ 3 trillion, representing 40 percent of the world total. The countries that make up the Brics collectively explain a quarter of the Gross World Product and a fifth of existing global investments. 43 percent of the population of the entire planet.
The Brics have a land area of 38.5 million square kilometers, 27 percent of the world total; and electricity generation of 1.97 million gigawatts, equivalent to 35 percent of the world total.
Both Brazilians and South Africans make weight in favor of Argentina within the BRICS, which actually need many adjustments not only by the amount of population, its huge territory or natural resources, but by the size of their economies and for their investments. On the other hand, Argentina suffered pressure from other powers that want to get the G20 has debt problems that have BRICS. But even with its problems, the movement to include it already exists.
Russia and China are still pondering the initiative. First, questions arise regarding the fact that Argentina's economy drags a large foreign debt, amounting to over 130,000 million, which could be an overwhelming burden on the group.
For this reason, the Ministry of Foreign Affairs of the Russian Federation considers that the question of the possible union of the BRICS Argentina requires a thorough study.
China and actively cooperates with that country, which has become for him a large supplier of soybeans. In addition, Beijing is investing significant resources in creating overseas brokers and Argentina is interested in this project.
The potential for cooperation between Russia and Argentina is also very large. However, the movement of goods, amounting to a value of 1.500 - 2.00 million a year, can not qualify at all satisfactory.
Business relations between Russia and Argentina began long ago. In the decades of 1970-1980, Russia to Argentina hydropower marketed production equipment and heavy machinery.
For Argentina, a member of this group can help you obtain financing on terms more favorable than those offered to other global organizations conditions. In 2013 the leaders of the BRICS agreed to create a reserve fund of 100,000 million as a financial cushion in the event of instability in the market.
Also made the decision to create their own financial institutions, such as the Development Bank (replacing the World Bank) created by the BRICS, with an amount of assets that must reach 50,000 million dollars, is they intended investment of joint production.
The BRICS will create their own IMF
The IMF will soon cease to be the only organization in the world with the capacity to provide financial assistance to international markets. The members of the BRICS group created an alternative institution.
Monetary Reserves Fund has capital of the five members of the group and will be operational in 2015.
Monetary Reserves Fund will alleviate the lack of liquidity in foreign currencies of the member countries when they experience balance problems in their payments. In case you suffer an unwanted national currency or to a sudden capital outflow inspired by a moderation of monetary policy by the Federal Reserve the U.S., members may receive this assistance sudden devaluation, thus avoiding internal problems as a possible crisis in their banking systems. Monetary Reserves Fund allow banks that are unable to cope with their loans pay off debts with foreign creditors.
This structure promises to be a good alternative to the IMF, which has traditionally been dedicated to supporting the economies that are in a serious budget situation.
Brazil has already developed the charter Development Bank, while Russia is taking care of the preparation of interstate agreements for the founding of the bank, says the diplomat.
The Development Bank credits will go not so much to the BRICS themselves, and investing in infrastructure projects in other countries, including other African countries. The granting of a loan to an African country for the implementation of a program of hydropower development, for example, benefit the BRICS, as these provide the necessary care of or provide the skilled labor teams.
Moreover, the BRICS have already agreed for the social capital of these two new structures, which amount to $ 100,000 million for each level.
China is expected to contribute 41,000 million Monetary Fund reserves, while Brazil, India and Russia will contribute 18,000 million each, and South Africa with 5,000 million. The volume of these contributions is directly related to the size of the economy of each country.
traslation. Belén Zapata