BRICS Bank Chairman talks about “New Chapter of Globalization”

BRICS Bank Chairman talks about "New Chapter of Globalization"

The BRICS grouping formed by South Africa, Brazil, China, India and Russia – (Photo: Marcelo Camargo/Agnia Brasil)

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Marcos Troyjo, president of the New Development Bank (NDB), an entity created within the ambit of BRICS – a grouping formed by South Africa, Brazil, China, India and Russia – said during a hearing today (16). Senate, that the present moment represents “a new chapter in globalization” that will favor emerging countries, particularly Brazil, through agribusiness and infrastructure financing.

According to him, there are already elements and economic projections that reflect this trend. speaking through Online, from Shanghai (China) to the Senate Foreign Affairs and National Defense Committee, Troyjo begins his speech by saying that the current generation is a “secular witness” to the “change in the tectonic plates of the global economy” that will create “windows” . Unpublished of opportunity” for Brazil and for countries with characteristics of our neighbors in South America.

“I am sure that when future historians look at the moment in which we are living now, they will find that the years 2020 and 2021 indeed represent the water divide and the beginning of a new era; of a new chapter in globalisation. “, They said.

“I’m saying this because, if we add up the GDP as measured by the purchasing power of the so-called G7, which are the seven most mature economies (the US, Japan, Germany, France, the United Kingdom, Italy and Canada), this combined The total gives something like $42 trillion. Now, if we add up the E7, which is the GDP of the world’s seven largest emerging economies (China, India, Russia, Brazil, Indonesia, Mexico, and Turkey), we get 53. trillions of US dollars. GDP combined. In other words, the GDP of the seven largest emerging countries today, in terms of purchase parity, is higher than that of the G7”, he argued.

new markets Troyjo said that this global geo-economic change will bring a number of implications that can already be seen from the business point of view. “In the past 12 months, a country like Brazil exported more to Singapore than Germany; Thailand more than France; Malaysia more than Italy; more for Hong Kong than for England; More for Bangladesh than for Australia, Austria and Israel. In other words, it is indeed the emergence of emerging people which is undeniable. It happens in a very strong way”, he elaborated.

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According to him, this will create possibilities that have not been seen for a long time for countries like South America. Much of this has to do with the accelerated development of countries with large regions and large populations, as is the case with BRICS and other emerging countries with large populations.

Another phenomenon associated with these “new centers of great global demand”, cited by the bank’s chairman, which was created by BRICS, relates to the reconnection of global value networks, a phenomenon that extends beyond supply networks and into new ones. Business is involved and investment.

Demand Troyjo, citing bank studies, predicted that China would spend $25 trillion on imports over the next ten years. In this context, Brazil could benefit greatly, as China currently accounts for about 4% of what it buys from the world, representing something like US$100 billion in exports to Brazil each year. could.

In this context, the agribusiness sector will be greatly benefited. “Since countries with large populations tend to have significant increases in income, and when they begin with significantly lower income levels, it is natural that this income is primarily driven by calorie consumption, food and investment in infrastructure. allotted for it”, he said.

“This means we are seeing a dramatic shift in the demand curve around the world. It is not just a matter of cycles. Goods or raw material. This is something structural that will favor South American countries and Brazil in particular”, he said.

basic infrastructure – Troyjo said that “another feature of this world that is unfolding” is, in fact, “a great paradox”, as it presents a kind of “destruction of the economy”, with the greater presence of technologies, An increase in average life expectancy, and a “greater uncertainty in the air”.

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“Therefore, there is a reservoir of liquidity and global savings which is very important. There are a huge number of resources available in the world and on the other hand, we have a kind of small offering of big opportunities and big projects that can absorb [esses recursos]Especially in terms of infrastructure. We need to build bridges and pipelines to connect those projects which are bankable and profitable in the long term, and which transform the society with the available resources”, he said.

He recalled that BRICS had created the NDB just six years ago. “We were just a piece of paper and today we have a portfolio of approved projects. There are about 80 projects worth $160 billion. It is in this new development bank that Brazil has the largest stake among all multilateral development banks. Brazil holds 20% of the NDB, and already has $17 billion approved and ready for investment in the country, with a further R$6 billion for infrastructure investment in 2022, in addition to the possibility of approval by the bank. .

new members – The president of the NDB defended the admission of neighboring countries of Brazil as members of the NDB, to expand investment in the region. In this way, he said, South America would be able to better integrate infrastructure, as has long been done among European countries.

“The most important aspect of integration is structural integration, as has already been done in the European Union. This, in South America, still needs to be done. For example, this is the case for the integration of the Atlantic with the Pacific. It is important. In this aspect, this challenge of convergence of interests between Brazil and its neighbors is fundamental”, he said.

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Several foreign ambassadors attended the hearing, agreeing on the need to add infrastructure in the region and demanding bank action for this integration. Along with the United Arab Emirates and Bangladesh, Uruguay is one of the countries already in the process of integration to become a member of the bank.

Uruguay’s ambassador to Brazil, Guillermo Wallace, said his country has always worked to build multilateral systems, both in the financial and commercial sectors.

“Uruguay also wants to participate in this integration. We are very attentive to these historical changes [citadas por Troyjo]. Infrastructure is the cornerstone for changing the productive metrics of countries, bringing productivity and jobs from low to long term. The United Nations has already said that lack of infrastructure is the main problem for countries to achieve their Sustainable Development Goals, and this new bank is being included in exactly that. Congratulations for this,” he said.

historical debate – In his final participation in the hearing, the president of the NDB said that today’s debate with senators and diplomats was “historic” for the New Development Bank’s relationship with Brazil: “It is the first time that we have given such a detailed and covering many aspects of our operation with the Brazilian Parliament”.

“The fact that Brazil’s core equity in the Bank is something that will probably change the history of Brazil from now on. More than a bank or an international organization, the NDB embodies the power of international cooperation, an effort to fill this great gap.” In what we have in emerging countries, which is infrastructure and sustainable development”, he said.

About the author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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