BRICS steer a new world order
With 40 percent of the world’s population and 25 percent of the global GDP, the five BRICS economies are steering a new world order in global trade, commerce and finance.
Brazil, Russia, India, China and South Africa together represent 40 percent of the world’s population and 25 percent of the global gross domestic product (GDP). Total trade among the countries is $6.14 trillion, or nearly 17 percent of the world’s total. These are the three major reasons they formed BRICS, an association to promote cooperation among the five emerging economies. Another major reason has been to oppose the US hegemony and to find a way to challenge the global financial dominance of America and its ruling lenders: the International Monetary Fund and the World Bank. BRICS took a major step in forcing its challenge during its sixth summit in Brazil in July last year. It formed two multi-billion-dollar funding structures to promote cooperative economic development independent of the West. The first is the New Development Bank, started with $50 billion and expected to quickly expand to $100 billion. The second is a crisis lending fund of $100 billion, called the Contingent Reserve Arrangement. “The BRICS countries today are richer than the advanced countries were when the World Bank and the IMF were founded. We’re in a different world — but the old institutions haven’t kept up,” commented Nobel-prize-winning economist Joseph Stiglitz in a media report after the BRICS summit in Brazil. The Brazil summit marks the establishment of a $100 billion dollar liquidity reserve and a $50 billion New Development Bank (NBD) in Shanghai. As each country acts to maximize its own utility, the emerging economies of the BRICS nations will create a parallel international financial system ultimately challenging the hegemony of the current western-dominated system. In early 2014 the Russian government announced a $28 billion plan to overhaul the aviation industry by 2025 to match up to the world's top three aircraft manufacturers. Recently Gulf Air, Bahrain’s national carrier, launched its direct services to Moscow. “We are looking forward to an extensive use of the new route by various segments to reinforce bilateral ties and cooperation,” said Maher Salman Al Musallam, the airline acting CEO, while launching the service. Gulf Air said that it would operate four flights a week to Moscow. Moscow Domodedovo Airport (DME) is the largest air hub in Russia. During the ten months of 2014 the passenger traffic of DME amounted to 28.69 million passengers that is 7.9 percent more year over year. The number of flights increased by 6.5 percent. The airport’s cargo traffic in January-October of 2014 amounted to 153,000 tons and it is 5.7 percent less than in the same period last year. Andrey Rassadkin, Sales Director, Charter Operations, Volga-Dnepr Airlines said the majority of Volga-Dnepr transportations for oil and gas industry are from Europe, India, Far East and Pacific and North America. More than 60 percent of deliveries are for such industrial regions as Russia, African countries and South East Asia. “In 2014 we have operated a 1100th ‘oil and gas’ flight. That was delivery of 45 tonnes of cargo included part of the drilling machine with the hydraulic drive and the additional equipment from Rio de Janeiro in Brazil to Prestwick in the UK,” said Rassadkin. According to a recent International Air Transport Association (IATA) forecast, India is the second fastest growing air cargo market after the Middle East and is expected to grow at a compound annual rate of about seven percent over the next five years. India, according to IATA’s Industry Forecast 2014-2018, would also be among the ten largest international freight markets by 2018 led by the US supplying 10,054,000 tonnes and China with 5,639,000 tonnes. Apart from the US and China, the remaining eight largest international freight markets would be the UAE (4,974,000 tonnes), Germany (4,763,000), Hong Kong (4,648,000), Republic of Korea (3,487,000), Japan (3,480,000), the United Kingdom (2,808,000), Chinese Taipei (2,350,000) and India (2,223,000). Noting that global freight volumes were expected to rise annually by 4.1 percent over the next five years, it showed the largest air freight traffic share last year was within Asia Pacific (21.6 percent), followed by Europe-Asia Pacific (12.3 percent) and North and Mid-Pacific (10 percent). With the new governement at the centre under the leadership of Prime Minister Narendra Modi, a new development agenda is in the making. New initiatives and policy reorms are part of the new governemnt's plan to kickstart industrial development. Changes in the civial aviaiton policies of India are initiated by the ministry to fastrack setting up of air frieght stations (AFS) and modernisations of airports. The AFS will help in penetration of international air cargo activities into manufacturing and consumption clusters located in the hinterland, as well as decongest air cargo terminals. Better planning by airlines for export will be facilitated as advance information about Customs clearance will now be available. "The idea is to cut down transaction costs for companies, improve productivity, efficiency and enhance competitiveness. By providing AFS closer to production/consumption hubs, the air cargo industry would get the required support and boost," said a ministry of civil aviation press release. The new government wants to revive the project with a few changes. This was discussed at an Air Cargo Logistic Promotion Board meeting in Delhi recenlty. India was lagging in this concept but with the advent of Customs Electronic Data Interchange, Risk Management System and Accredited Clients Programme coupled with the congestion in the approach roads, seaports have realised the advantages of container freight stations (CFS) that have sprung up in Chennai, Nhava Sheva, Kolkata, Tuticorin and Visakhapatnam.