On July 15, Brazil, Russia, India, China and South Africa sealed the deal on a $100 billion international bank, with a reserve currency pool worth more than a further $100 billion.During the dog days of summer, a game-changing meeting quietly took place in Brazil. It didn’t make world headlines, yet analysts say what came out of that meeting will likely have enormous implications for global economics and politics.On July 15, Brazil, Russia, India, China and South Africa sealed the deal on a $100 billion international bank – the New Development Bank, formerly known as the “BRICS Bank” – with a reserve currency pool worth more than a further $100 billion.Its aim? To lend developing countries funds to pay for infrastructure projects and other investments. The controversy? This is exactly what the American and European-backed World Bank Group has been doing since the 1940s.The implication? A new shift in the world’s economic and political power, says Brock political science professor Pierre Lizee.“Essentially, what we’ve had is a world order that was focused on the United States,” says Lizee. “Now what we have is a rise of new actors and institutions that are challenging the U.S.-led global order.”The World Bank Group consists of five institutions that aim to reduce poverty in developing nations. They do so through offering an array of financial and technical assistance, including providing loans for development initiatives, promoting foreign direct investment and mobilizing capital in international financial markets.But this assistance comes with strict “conditionalities,” such as liberalizing a country’s trade, financial and investment sectors, privatizing national industries and reducing public sector spending.Critics say these conditionalities take power away from a country to govern its own economy and provide basic services such as health care and education. And, the enormous debts incurred by countries forces governments to spend their precious resources on debt serving rather than on these basic services, keeping them perpetually poor.Enter the BRICS group, headquartered in Shanghai, China, the country on the cusp of usurping the United States’ position as the world’s largest economy. Meanwhile, the United States is among the top 10 most indebted nations in the world, but has the most debt of any country in absolute terms, according to a 2013 Forbes report.“This new BRICS bank, in large part, will be controlled by Chinese money and the Chinese will use that bank to finance development projects in Africa,” says Lizee. “In all of this, what the Chinese are trying to do is create a new sphere of influence worldwide where control financial flows, models of development, where they’ll eventually try to counter-balance the influence of the U.S. in global financial circles.“This is extremely important because this a complete reversal of what we’ve known for the past half-century in terms of the nature of global politics,” he says.Much as critics welcome this new rival to decades of World Bank-dictated policies they say have largely benefited Western nations, there is concern about rising Chinese influence on the world stage.Analysts say that, unlike Western assistance that is also tied to a country’s democracy, human rights and environmental performance, China has few if any such conditions. This raises fears that an important layer of accountability might become eroded.“Power is being shifted from Western governments to non-Western governments, but below all of this, you have people,” says Lizee. “And these people in the Western world and the non-Western world want a world of democracy, a world of human rights.“They will still pressure these governments and institutions like the BRICS bank to promote democracy, human rights and so on as they promote development around the world.”At around the same time as the New Development Bank was officially being signed into existence, things were heating up in Russia with the downing of the Malaysian Airlines flight in Eastern Ukraine.Reaction from the United States and other Western countries over the downed jet – and the entire Crimea situation in general – has further damaged a deteriorating relationship between Russia and the West, with sanctions harming both sides.Russia has set up a Eurasian Economic Union, having as its members Belarus, Kazakhstan and, on Sept. 20, Armenia. The Union aims to create a market of more that 170 million people, modeled on – and possibly rivaling – the European Union.Lizee says Russia is being motivated to seek out new markets in part because of its “growing tension with the U.S.” and its oil and gas reserves.“For Russia, the Chinese market is becoming more interesting,” says Lizee. “What we’ll see in the coming years is the sense of an ambivalence on Russia’s part in terms of how Russia defines its sphere of influence, how it defines its markets, does it look East rather than West?”“What the U.S. will do with regards to the situation in Ukraine and Crimea will be central: will the West be able to enter into a dialogue with Russia in its long-term objectives? Will that then shape Russia’s behaviour?”If you’re interested in this topic, tune into the podcast “Shall We Dance? The shifting power balances of China, Russia and the United States.” This is the first of a monthly podcast series produced by Brock University.
Updated, 18:34THE ‘IRISH EXAMINER’ and a series of local papers have been sold as part of a complex internal restructuring, after their existing parent company went into receivership.The Examiner and a series of related regional titles, including the Cork-based Evening Echo, have been purchased by a new company formed by the Crosbie family who owned the previous company.The sale has been made by Kieran Wallace of KPMG, who was appointed as receiver to Thomas Crosbie Holdings Ltd (TCH) – the previous parent company behind the newspapers – earlier today.The Sunday Business Post, the other major paper published by TCH, is to apply to the High Court to enter examinership – a process where the company is protected from winding-up orders as it attempts to establish a viable business plan.Another related company, Thomas Crosbie Printers Ltd – which printed TCH’s newspaper titles – is to apply to be put into liquidation with the loss of 12 jobs. The titles purchased by Landmark Media Investment will now be printed at the Irish Times’ printing presses in Citywest.New firm takes over local titles and radio stationsTCH’s local papers – the Waterford News & Star, the Wexford Echo, the Western People, the Roscommon Herald, and the ‘Nationalist’ local newspapers in Carlow, Laois and Kildare – have also been purchased by the Crosbie family’s new vehicle, which has also purchased TCH’s digital businesses.The new company also hopes to take over TCH’s shareholding in the local radio stations WLR FM, Beat 102 and Red FM, but will need to seek regualatory approval from the Broadcasting Authority of Ireland before this can be completed.The procedures are continuing with the support of AIB, the main lender to the group.Tom Murphy, the chief executive of the new vehicle, said today’s arrangements “represent an important opportunity for the Irish Examiner and associated titles and media to make a fresh start and that is very welcome news”.“In a challenging environment, this re-structuring and consequent acquisition provides a stable platform from which to build a sustainable business. I look forward to working closely with the management and staff to review and improve operations to successfully achieve this aim.”The media outlets bought by Landmark Media Investments employ a combined total of 554 people, all of whom will be taken on by the new firm on their existing employment terms and conditions. Landmark Media Investments intends to continue publishing each title as usual.The Sunday Business Post employs 76 people, who will be retained by the interim examiner if appointed at the High Court tomorrow. That paper will also continue publication if the examiner is appointed.The National Union of Journalists said it was “gravely concerned” about the potential threat to the future of the Sunday Business Post, and that it would seek an urgent meeting with the new owners of the other papers.It said the loss of any of the titles would be a “disaster”, and that staff had made significant sacrifices in recent years to ensure the future of the titles.“Our members employed in these titles require urgent clarification of the implciations for them of this complex restructuring. The safeguarding of employment and of media diversity is a priority for this union,” it said.“We hope this marks a new phase in the history of the company and look forward to engaging in a postive manner with the new owners on the protection of terms and conditions of employment.”Read: Newspapers record falls in circulation in second half of 2012