retour article original
At the end of the Sixth BRICS [Brazil, Russia, India, China and South Africa] Summit in Fortaleza, Brazil on July 16, 2014, the leaders of the BRICS countries announced the “Fortaleza Action Plan”. This plan is in the context of the Fortaleza Declaration [i], where the leaders reinforced their position that BRICS would be an international force in challenging the neo-liberal policies of the Washington Consensus.
Touching on areas of major destabilization in the world –from Syria to Sudan and from Ukraine to Iraq– the leaders spelt out the need for new paths to peace and for strengthening the United Nations to resolve the outstanding questions of war and insecurity. The most daring aspect of the Fortaleza Declaration was the announcement of a new financial architecture to intervene in relation to the international tensions that have arisen since the Federal Reserve Bank of the United States announced the monetary policy of Quantitative Easing. This policy allows a central bank, like the Federal Reserve System, to purchase government or other securities from the market with the goal of lowering interest rates and increasing the available money supply. The BRICS summit announced two new pillars in a new financial architecture that is to be anchored with the headquarters of the New Development Bank in Shanghai, China.
The Fortaleza Action Plan and the outcomes of this summit represented a major step in breaking the Exorbitant Privilege of the US dollar as a the dominant international currency. Along with the formal establishment of the New Development Bank (NDB), the leaders announced the launch of a Contingency Reserve Arrangement (CRA), which in 2013 was approved to receive a $100 billion fund to combat currency crises. The first president of the Bank will be from India, the inaugural Chairman of the Board of directors will come from Brazil and the inaugural chairman of the Board of Governors will be Russian. It was stressed in the Fortaleza proclamations that the BRICS Bank would be organized on the basis of equality unlike the current International Monetary Fund and World Bank where the leader of the International Monetary Fund is always a European and the head of the World Bank is always a U.S citizen. The proposal for the BRICS bank had been announced at the BRICS summit in New Delhi in 2012 and at the summit in Durban in 2013 the plan for the Contingency Reserve Arrangement was also outlined. The long term goal of the Contingency Reserve Arrangement will be to provide emergency cash to BRICS countries faced with short term credit crisis or balance of payments problems. Ultimately, in the context of the present currency wars, the Contingency Reserve Arrangement will replace the International Monetary Fund (IMF) as the provider of resources for BRICS members and other poor societies when there is balance of payment difficulties.