The governments of the five large countries of the Global South, the BRICS states, met in New Delhi this week for their fourth summit. These five countries, Brazil, Russia, India, China and South Africa, are home to forty per cent of the world’s peoples, and their share of the world’s Gross Domestic Product is now just over twenty-five per cent.

...There are at least two significant developments that set this summit apart. First, the BRICS states not only repeated their critique of the world economic order and North Atlantic financial hegemony, but they offered new policy guidelines and institutions as a counterpoint. Second, the BRICS states have taken some more steps toward the rejection of the North Atlantic’s political leadership over the planet. It is not clear on this second point where the BRICS states propose to plant their own flag, but what is clear is the frustration with the NATO agenda in North Africa and West Asia and with the North Atlantic agenda in the trade debates that will take place in Doha, Qatar next month.

Little of this summit came into the papers of the North Atlantic. Part of this is to be expected, as newspapers generally abjure stories about seemingly dull trade negotiations and routine political meetings. No wonder that the news of the Arab League in Baghdad this week is simply about the fact that it is happening there for the first time since 1990 than about what the Arab states shall discuss in the way of trade deals and Syria. The character of the debates and the measures taken are not going to be reported at all. All that we shall hear is that the Arab League will not take a position on Syria consonant with what the West would like. That is the measure of the North Atlantic presses’ interest in that summit. ....

The key is to be found in paragraph 17 of the Delhi Declaration which considers “UNCTAD to be the focal point in the UN system for the treatment of trade and development issues.” The Declaration also “reiterates our willingness to actively contribute to the achievement of a successful UNCTAD XIII, in April 2012.” UNCTAD is the UN Conference on Trade and Development, based in Geneva, and since 1964 a thorn in the side of the Atlantic world. Sustained attack on UNCTAD by the Atlantic powers since the 1980s pushed it into a corner, and made it largely irrelevant as the Atlantic world took its business into forums, such as the World Trade Organization, where it was able to rule the day. Slowly, the South has tried to revive UNCTAD, whose policy framers have become a bit more aggressive in their defense of an alternative to neo-liberalism.

One example of this new motivation is in UNCTAD’s 2011 Report, which is a carefully argued assault on the power and influence of finance capital. In Chapter 5, on commodity markets, UNCTAD argues that the commodity boom cannot be explained by rising demand from the BRICS states. Instead, the culprit can be found amongst the index investors, the speculators whose commodity trades are motivated by “factors totally unrelated to commodity price fundamentals.” What explains the rise in commodity prices, including food and oil, is “the greater presence of financial investors, who consider commodity futures as an alternative to financial assets in their portfolio management decisions. While these market participants have no interest in the physical commodity, and do not trade on the basis of fundamental supply and demand relationships, they may hold – individually or as a group – very large positions in commodity markets, and can thereby exert considerable influence on the functioning of these markets.” Reining in finance capital from commodity markets will do a whole lot more for food and fuel prices than offshore drilling, the XL pipeline or the subsidies to ADM and Cargill.

UNCTAD’s studied criticism of finance capital and its insistence on reform of the financial sector has earned it the ire of the Global North’s mandarins. In the negotiations toward a consensus document for the UNCTAD’s April 2012 meeting, the North has put up as many obstacles as possible. Its seasoned negotiators have fought to remove all reference to the financial crisis from the document, and to insist that UNCTAD deal only with its core mandate. They expanded the draft text from 24,000 words to 30,000 words with issues having to do with the World Bank’s favorite idea, “good governance,” and with matters of freedom and democracy – all, incidentally, outside the UNCTAD mandate. Each paragraph had to be minutely scrutinized by the North’s negotiators, slowing down the process and thereby making a mockery of it. On March 19, the Swiss Ambassador to UNCTAD Luzius Wasescha pointed out gleefully that at the rate of progress (3 hours per paragraph) it would take 487.5 negotiation days to get through the draft. This was the strategy of what he called “creating chaos.” The US statement on March 19 was as snarky, “The [UNCTAD] Secretariat should not pursue issues outside UNCTAD’s mandate – such as the reform of global financial systems. Not only does this particular issue stray far beyond UNCTAD’s mandate and its expertise, it also faces strong opposition by many members,” namely the United States. How finance can be seen as “far” from issues of trade and development boggles the mind.

Such mischief has finally enraged the BRICS states. They have thrown their support behind the UNCTAD round, and have pledged to work in a united fashion to contest the North’s protectionist policies regarding its agriculture, to push for reform of the financial system, and to create an autonomous development platform for the South. To the point about the financial reform, the Delhi Declaration pointed out, “It is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs.” A majority of the world’s workers are now in vulnerable employment or in the informal economy. Austerity programs make life harder for these workers, who are often made to carry the burdens for family members who lose formal sector employment. Austerity might create GDP but it will not create jobs.

Brazil’s Dilma Rousseff told the press that the monetary policy of the North “brings enormous trade advantages to developed countries, and results in unfair obstacles to other countries.” To counteract this, there is now a move to create economic linkages outside those of the dollar-denominated financial system dominated by the North. The BRICS states created a new credit facility in local currencies, so that BRICS states and others can now trade with each other without recourse to the dollar or other such “international” currencies. This reduces the transaction costs for intra-BRICS trade as well as threatens the dollar from its pedestal as the main currency of international trade.

The BRICS states directed their finance ministries to research the possibility of the creation of a new development bank, a Bank of the South (a BRICS version of the South American Banco Sur, founded in 2009 with an initial capital outlay of $20 billion, to supplant the hegemony of the World Bank and the IMF). The new BRICS bank, it is hoped, will mobilize resources for infrastructure and development in the BRICS states and in other developing countries. If it were influenced by the Banco Sur, the BRICS bank could be a practical venue for the creation of a new institutional foundation outside neoliberalism.

The US delegates to UNCTAD told the body on March 19 that the UN organization must “move past tired old debates from another era.” But these debates, such as over financial system reform and development for the vast mass, have returned in the deliberations of the locomotives of the South. Whatever the limitations of the regimes in Brazil, Russia, India, China and South Africa – and there are many limitations in each of these countries – it is undeniable that they are forcing open a new debate in such forums as the UNCTAD meetings to be held in April. ....