Binod Ajatshatru: BRICS offers hope for a positive role of global finance

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SFC Markets and Finance|Binod Ajatshatru: BRICS offers hope for a positive role of global finance

For BRICS, we are going to grow peacefully with mutual respect.

The five-member group of nations known as BRICS – Brazil, Russia, India, China and South Africa – just wrapped up the 15th annual summit in Johannesburg. The three-day meeting has attracted a level of international attention unseen in years.

The summit has decided to bring in Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates as new members. This bloc of emerging markets, without a doubt, is on its way to making history.

For more insights, we talked to Dr. Binod Singh Ajatshatru from BRICS Institute New Delhi. He believes BRICS is offering hope that the global finance can play a more positive role, to work for the growth of those who need the capital.

Ajatshatru said, “the BRICS is giving a hope that maybe the global finance will play a positive role, not a negative role. We are not colonial powers. We don’t believe in taking away your stuff, and this is mine. We believe in a kind of growing together.”

SFC Markets and Finance: Good evening. Dr. Ajatshatru. The BRICS was founded in 2009. We know the acronym “BRIC”, or “the BRICs”, was coined in 2001 by Goldman Sachs economist Jim O’Neill to describe fast-growing economies that would collectively dominate the global economy by 2050. In the past 14 years, what BRICS has offered to its member countries and what it has accomplished in terms of reforming global economy?

Binod Ajatshatru: Thank you for asking about BRICS. It is very important for most of the countries in the world. The very first thing when we talk about BRICS is that the leaders of India, China, Russia, Brazil, and South Africa have a very good time. They can say hello to each other. They can talk a lot of topics. For me, whenever there is a summit on meeting about BRICS, the good thing is that the BRICS members get closer. Since the BRICS started, I see that Russia, China, and India are getting very good. BRICS is a platform for us to speak about many issues. Despite we have some issues, but when it comes to BRICS, we make sure that we will go there. So, the good thing is that we can talk. We can discuss anything. Did we change something about the world’s financial governance? I think it’s too early, but there’s a hope. Just having New Development Bank (NDB), it’s again a hope. Because we had not changed the system. We just added one more club. It’s a question of the way international finance works is not in the favor of those who need the finance. It is in the favor of those who give the capital. The main issue, the main battle for the world, is the capital should work for the growth of those who need the capital. So, the system has not been changed. And we really don’t, I mean, BRICS leaders, they don’t say they want to change the system. They say they want to work with the system, the current system. So we don’t want to replace the dollar. We don’t want to replace the United Nations. We don’t want to replace G20, G7. But we do have to make some changes. What I see is that still we’re talking about some good hopes from BRICS that we can change something. The BRICS is giving a hope that maybe the global finance will play a positive role, not a negative role. So that countries in the West, they have been giving aid to the Africa. But where is Africa today? The whole concept of aid has to be, or the financial assistance has to be redefined. And BRICS is a good platform for that. And that’s why many African countries want to join BRICS. But we have to still work out something which we do different from World Bank, from International Monetary Fund (IMF), from Asian Development Bank. And that is coming up, that is emerging, but it’s still very slow.

SFC Markets and Finance: We have also learned that the New Development Bank set up by BRICS plans to begin lending in the South African and Brazilian currencies. And there have been talks to reduce reliance on the dollar, and even creating a new currency for the BRICS country. What’s your take on this?

Binod Ajatshatru: These loans in the Rand, or in Brazilian currency or Indian currency should have done much earlier, not today. I’m not saying de-dollarization. I would like to say that loans in different currencies, in multiple currencies, should have been there. To many countries, giving them loan in their own currency is something very feasible for the last five, six years since the bank come up. So, we can coexist with the dollar. Dollar is also important. We cannot delink or decouple (with dollar) in a very short time. But there are certain stairs with NDB should take it faster. And as you mentioned, the loans in the local currency is something should have done much more earlier. So, we welcome it and will look forward for more kind of trading and issuing bonds in your currency.

SFC Markets and Finance: So, it’s not about de-dollarizing, it’s about diversifying world currency?

Binod Ajatshatru: Some people want to use BRICS as a kind of anti-Western bloc. The world is getting bipolar. Western world and our world. But South Africa, Brazil, China and India do not want BRICS to become a kind of anti-dollar and anti-Western bloc. We want to coexist. In Chinese, you say Gongcun. We want to coexist. And we want to share the ideas. World Bank, IMF, they might have some good ideas that we can take from them. We don’t want to start from zero. But the kind of terms and conditions they had for developing countries, didn’t work. That’s why we have the whole South, the whole of Africa, still living below the subsidies lively now. So they have a lot of hope from China, India, and Russia, because we have the capacity to help them. We have the manpower, technology, and agriculture products. We are willing to help them. And we don’t call it ‘help’. We call it a win-win situation. We also need Africa, including African market and African resources. And at the same time, what we have in manufacturing products, we can supply, or we can help them for African infrastructure. So it’s not de-dollarization, BRICS is not at all going to have a kind of anti-Western block. This is Asian values. And Asian countries are not imperial countries. We are not colonial powers. We don’t believe in taking away your stuff, and this is mine. Now, we believe in a kind of growing together. This is an issue of values. Our values are more attractive than values offered by Western countries. Western countries have very poor record in Africa, in Asia. They cannot get away with the colonial past, imperialism. And the worst thing is they interfere in the internal matters of countries, such as human rights, democracy, etc. BRICS has no such problem. Your country, you decide how to rule your country. We don’t say anything on your internal affairs. This is called respect, a mutual aspect. And we are also inclusive. So BRICS is something which really gives hopes that end of the day, all human beings, all countries are equal. So it’s a mutual respect at the BRICS, which is attracting many countries to come and join BRICS. Because they can speak, they can say, they speak their mind. There is no hidden cost. There’s a hidden cost when you take a loan from World Bank, IMF, there is to be hidden cost. In BRICS, there is no hidden cost. Everything is transparent.

SFC Markets and Finance: We know that the five BRICS nations now have a combined Gross Domestic Product (GDP) larger than that of the G7. So what does it tell us about BRICS’ influence?

Binod Ajatshatru: Simply saying, it is our time. I mean, the time of Western nations has come to a point where BRICS has to come forward and try to make rules for the global governance. Before this, we were just watching. For example, 2008 financing crisis, the whole world was shocked. It’s because the G7 was controlling the world finance. But now, from 2015, our economy is bigger than G7, so we have the same role what G7 is doing. So both are now equally important. G7 is important. But, the members of G7 represent big economies, a very small population. With BRICS, you should not forget that BRICS is representing 42% of the world’s population. So we have larger impact on the life of livings of the people, quality of life. And the world is suffering from inflation, unemployment, very serious issues in many countries, including in BRICS countries. Under these circumstances, we don’t have to look to G7 and their monetary policy. If BRICS currencies are strong, we can control the inflation. We have the resources, the market, and the technology. So we are not relying on the West. If the market is very open between China, India, Russia, and South Africa, our trading power will increase very high. Right now, we are not trading up to our potential. We are trading very low. So the trading to South Africa and China can go very high. But we need to open the market. And let me also say that the West is not happy with BRICS, especially United States. They don’t like BRICS. They even try to stop this BRICS conference with their influence. So I don’t know why they’re so uncomfortable that we are coming up with our own platform. This is the Western mindset. It’s like they win you lose. They don’t believe in a win-win kind of understanding. They always believe that if we come out with something, they will lose it. So, they try to sabotage it.

SFC Markets and Finance: And also, expansion of BRICS, which is a major topic on the agenda. So what do you think are the criteria for possible new members? And how do you view the expansion of BRICS?

Binod Ajatshatru: My answer is that the Indian stand is very clear. We want quality membership in BRICS. Because, as if now, whatever BRICS has done, it has done wonderful. We just really want to go for quality membership. We don’t want to include everyone, because, BRICS is a democratic institution. And if we listen to every country, it becomes like a marathon kind of debate. So we just want to say that go slow, go for quality membership. But 23 countries officially applied. We welcome new members, but we want to make sure that these new members are really important players for the world peace, world economy, and world politics.

SFC Markets and Finance: Apart from the expansion, how do you expect the future of BRICS? What do you think the bloc will become?

Binod Ajatshatru: This is a very futuristic question. I think as long as there’s peace, we are going to be the fastest growing economy. And it is the economy. China is very popular and very important because of economy. China has always been very big. But if (Chinese) economy is not good, I will not speak Chinese. I will not learn Chinese. BRICS’ economy is going to grow, not very fast, but it’s going to grow for another 20 to 30 years. So it’s the first time that we will decide our finance, our stock market, our role. We will not wait for Moody. Moody will decide our credit rating. Moody, not Modi the Prime Minister India. We always look to the West to decide, our team, our match. But now BRICS means we can play our match, any match, economic match, football match, cultural match, or even we can talk about peace, if there is a problem. But we don’t need an American empire. We don’t want to invite people who don’t know about China, who don’t understand India. World Bank doesn’t understand China or India, but they were making our plan. That’s the mistake. For Africa, let the Africans decide what they want. Not a guy from France, a guy from Washington DC, will decide. So what I say for BRICS is that we are growing, we are going to grow, but we will grow peacefully. And we will also respect, we will not force you to speak English, or speak Chinese. We will respect your culture, African culture. So let’s be positive that we are going to have a bigger economy. Chinese economy is going to surpass the US economy. Indian economy will become the 3rd largest. Russia is also a big economy. South Africa is also trying its best in African region. This looks all good. I mean, it’s a win-win for everyone.

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