The IMF and World Bank sit across the street from each other, facing each other, in Washington DC. They were set up as institutions of the Bretton Woods Monetary System which ended in August 1971. These institutions have taken taxpayer money from western countries like the US and UK, to restructure so-called Third World countries. Along the way, the former First World has grown to be more like the Third World, and vice versa. This has resulted in a synthesis, the Third Way, or, as it is sometimes referred, the globalization of poverty.
Brazil, Russia, India, China and South Africa are looking to approve the establishment of a new development bank during an annual summit that begins today in Durban, South Africa. This development bank would float above and beyond markets alongside the IMF and World Bank, perhaps sowing the seeds of a future conflict.
“The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world,” Martyn Davies, chief executive officer of Johannesburg-based Frontier Advisory. “There’s a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.”
The BRICS have combined foreign-currency reserves of approximately $4.4 trillion and makeup 43 percent of the world’s population, are looking to hold greater sway in global finance to match their increasing economic power.
“We need to change the way business is conducted in the international financial institutions,” South African International Relations Minister Maite Nkoana-Mashabane said in a March 15 speech in Johannesburg. “They need to be reformed.”
The BRICs were slapped in the face in 2010 when the US did not give more sway to emerging markets in the IMF. Jim Yong Kim was put to head of the World Bank, winning out over candidates from Nigeria and Colombia.
Finance ministers and bank governors from the BRICS agreed to set up a mutual currency crisis fund of about $100 billion, according to the Brazilian Finance Minister. No details were given about the fund for the new bank, which Brazil wants established by 2014. The nation’s leaders are looking sign the final accord tomorrow.
Trade within BRIC nations climbed to $282 billion last year from $27 billion in 2002 and is anticipated to reach $500 billion by 2015, according to data from Brazil’s government. Foreign direct investment in the BRICS climbed to $263 billion last year, making up 20 percent of global FDI money movement, an increase of six percent from 2000, according to the UN Conference on Trade and Development.
“If they announce a BRICS bank it will be quite something,” O’Neill said in an e-mailed reply to questions on March 15. “At a minimum it symbolizes they can achieve something as political group and means lots of other things could follow in the future. It also means that they will have their own kind of special World Bank, which may aid infrastructure and trade projects.”
To find the origins of the World Bank and IMF, one must ponder the destruction of world wars. Out of this chaos, these central of central banks, alongside the Bank of International Settlements, were formulated to evidently put an end to the destructive world wars. As President Clinton’s mentor, Carrol Quigley, writes,
“The powers of financial capitalism had [a] far-reaching [plan], nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.
This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences.
The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.
Each central bank… Sought to dominate its government by its ability to control treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.”
In 1944, before war’s end, the US had already approved its 100% participation in the IMF and World Bank, and by 1945 the political relative of these banks, the United Nations, was born. The Federal Reserve System was globalized.
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