THE BRICS SUMMIT
Agencia Brasil/José Cruz
Overview: Half of Humanity Launches a New World Economic Order
The Fortaleza Declaration: New Development Bank
China, Latin America, Caribbean Forum Founded
Narendra Modi (India): We Are Nations of ‘Future Potential’
Vladimir Putin: Russia Offers Plan for Multilateral Economic Cooperation
Xi Jinping (China): We Work in the Spirit Of ‘Said and Done’
Cristina Fernández (Argentina): A New Global Financial Order Is Indispensable
LaRouche’s 40-Year Record: Fighting for International Development
Operation Juárez: Steps for a New Monetary Order
BRICS Nations: The Future Is Nuclear
A New Vista for Africa: South Africa Bucks British Opposition, Goes Nuclear
Half of Humanity Launches a New World Economic Order
by Dennis Small
July 22—In mid-July, as the planet was being wracked by growing war horrors in eastern Ukraine, Iraq, and Gaza, and by economic depression caused by the death throes of the trans-Atlantic financial system, heads of state representing half of humanity gathered in Brazil and took the first steps toward creating a New World Economic Order.
The BRICS and Ibero-America
The leaders of the BRICS nations (Brazil, Russia, India, China, and South Africa), met on July 16 in Fortaleza for the VI BRICS Summit, and the next day they were joined by the heads of state of South America in the capital city Brasilia. The BRICS account for 43% of the world’s population and 27% of the planet’s land area; when Ibero-America is added in, they jointly represent 48% of the human race, and one third of the Earth’s land area (Figure 1).
At the summit and its numerous associated bilateral and multilateral meetings, that half of humanity adopted a project that is premised on rejecting the current casino financial system, and replacing it with one providing credit for high-technology development projects; on educating and training youth to meet the growth challenges of the future; on full respect for national sovereignty, banishing the imperial policy of regime change and wars; and on explicit promotion of the common good among nations—the Westphalian principle.
“History tells us the law of the jungle isn’t the way of human coexistence,” Chinese President Xi Jinping stated on July 16. “Every nation should obey the principle of equality, mutual trust, learning from each other, cooperating and seeking joint benefits . . . for the construction of a harmonious world, sustained peace, and joint prosperity.”
The British Queen was not pleased by these developments, seeing in them an existential threat to the Empire. Lyndon LaRouche was pleased—for the same reason. For 40 years, the renowned American statesman has devised programs, and organized for them internationally, of global financial reform and great development projects—most recently his “Four New Laws To Save the U.S.A. Now!”—of precisely the sort that have now been placed on the agenda by the BRICS.
“The BRICS and allies are building a world system based on real value, not phony paper value,” LaRouche stated July 18. “They are deciding what real value is, and they are imposing it, which is the cost of the productive powers of labor in a changing situation.”
The underlying problem that we have to deal with today, LaRouche elaborated, is the “asymmetry of value in the world,” which is coming from two distinct systems that are operating with a different logic and different metrics: They are totally incompatible.
The first system is the trans-Atlantic system. “These bastards,” LaRouche stated, “who hold pieces of paper that they say are worth quadrillions, and they’re prepared to kill for that,” as the case of Argentina’s battle against the vulture funds shows, as does the pro-vulture ruling of the Aristotelian idiot otherwise known as Justice Antonin Scalia of the U.S. Supreme Court. What these people are holding, this paper, LaRouche added, is absolutely worthless. “It’s like taking rags out of a bucket and trying to sell them”; or even worse, it’s just the promise of future delivery of derivatives on those rags, that they’re saying actually has value.
This is the dead hand of the past, trying to stop humanity from creating any future for itself.
On the other side, we have an emerging system, incompatible with the first, which is building a market based on real value. And real value, LaRouche elaborated, comes from, and is measured by, the development of the productive powers of labor—that is, through the introduction of scientifically created new technologies, implementing productive processes which increase the energy-flux density through the physical economy in such fashion as to immensely increase the productive powers of labor. That new system will create a process whereby the increase in energy-flux density will itself increase at an accelerating rate.
This role of technological progress and scientific advance, LaRouche specified, is what the human species uniquely does. Such creativity is actually the source of value in an economy, and it is the way in which our action to create the future defines present value. It is the central concept of the American System of Political Economy, on which the United States was founded.
The decisive strategic question today, LaRouche concluded, is whether the United States will join that emerging New World Economic Order, or will remain joined at the hip to the British Empire—as it is under the impeachable President Barack Obama—and bring destruction down upon itself and the rest of the world. The same existential issue faces Europe.
Building a Nuclear Future
The BRICS Summit issued a 72-point Fortaleza Declaration (see below), which announced the formation of a New Development Bank (NDB), initially capitalized at $50 billion, to fund infrastructure projects in BRICS and other countries; as well as a Contingent Reserve Arrangement (CRA) with $100 billion to help nations deal with capital flight and other forms of financial warfare.
Most international commentators have engaged in endless contortions, dissecting sentences from the Fortaleza Declaration and speeches at the summit, to try to determine whether these new BRICS institutions are meant to merely complement the British Empire’s International Monetary Fund and other institutions, or to replace them with a new financial architecture. But the answer to that question lies not in parsing written or spoken words, but in the intent behind the creation of the new institutions, which is best reflected in two fundamental issues which were pervasive throughout the discussions: the future and youth, and nuclear energy.
Indian Prime Minister Narendra Modi was most eloquent on the first of these, emphasizing to the plenary session of the Summit “the uniqueness of BRICS as an international institution. For the first time, it brings together a group of nations on the parameter of ‘future potential,’ rather than existing prosperity or shared identities. The very idea of BRICS is thus forward-looking.” He urged the BRICS to now go beyond “being summit-centric,” proposing that the youth of the BRICS nations should take a lead in expanding people-to-people contact between their nations. He suggested establishing a BRICS Young Scientists’ Forum, setting up BRICS language schools “to offer language training in each of our languages,” and exploring the creation of a BRICS University.
Modi concluded: “Excellencies, we have an opportunity to define the future—of not just our countries, but the world at large. . . . I take this as a great responsibility.”
Russian President Vladimir Putin struck a similar note in comments to the press on July 17, evaluating the results of his trip: “The BRICS are all young states, and the future belongs to the young.”
As for the issue of nuclear energy, discussion of it and conclusion of numerous concrete deals permeated the summit and related bilateral meetings, especially those of Russia’s Putin with Argentina’s Cristina Fernández de Kirchner and Brazil’s Dilma Rousseff. This, despite the fact that the Fortaleza Declaration itself—in many ways a “consensus document” typical of such international gatherings—does not mention the matter, other than to defend Iran’s right to develop peaceful nuclear energy.
The true measure of value in an economy, LaRouche has emphasized, is the impact of science and technology in continually increasing the energy-flux density of the productive processes. Although the required science-driver for the world economy is the development of thermonuclear fusion energy, the current insistence on nuclear fission among the BRICS and allied countries is highly significant, as it reflects a commitment to raising the economy’s overall energy-flux density.
Far better than any monetary or GDP-based measure, energy-flux density and other physical economic parameters best indicate the BRICS’ direction.
Nuclear as Percent of Total Electricity Produced, Current and Projected
Figure 2 shows nuclear energy as a percentage of total electricity generation—which is an indicator of overall energy-flux density—in a number of BRICS countries (Russia, India, and Brazil), as compared to representative European countries (Germany and Spain), looking at both current and projected levels. In the case of Germany, for example, the British Empire’s criminal green policy of de-nuclearization has already led to a drastic collapse of nuclear from 28% of total electricity in 1990, to 15% today. The German government of Angela Merkel has adopted a policy of reducing that to zero by the year 2020! Spain is almost as bad.
Compare that to what Russia has done, increasing its proportion of nuclear from 11% in 1990 to 18% in 2013, with a policy of raising that proportion to some 27% by 2030. Other BRICS countries have smaller proportions of nuclear to total electricity today, but they are defiantly committed to a nuclear future. Brazil, for example, plans to increase nuclear from 3% to 15% by 2030. As President Rousseff stated just before the summit began: “Our countries are among the largest in the world, and they cannot be content, in the midst of the 21st Century, with any kind of dependency. Recent events demonstrate that it is essential that we seek for ourselves our scientific and technological autonomy.”
South Africa has also just announced that it is resuming its nuclear program, with plans to build six new nuclear plants (see article in this section).
It is of note that China has the largest nuclear construction program in the world today—a distinction which in the 1970s went to the Roosevelt-created Tennessee Valley Authority. In fact, of the 66 nuclear plants currently under construction worldwide, 50 of them are in the BRICS countries. In other words, 43% of the world’s population is constructing 75% of the world nuclear plants; or, the rate of nuclear construction is 4.3 times greater per capita in the BRICS than in the rest of the world.
The reality is, of course, much starker than those simple numbers indicate, because nuclear energy is being actively destroyed in much of the trans-Atlantic sector (and Japan), as a direct result of the British Empire’s suicidal green policies. The BRICS and allies have made it clear that will have none of it: They have taken the British Queen’s green agenda, as reflected in the Copenhagen Resolution, and thrown it in the trash can.
LaRouche put a fine point on it:
“What about Frau Merkel of Germany?” he asked July 18. She represents the worthless view of value; she’s tearing down nuclear energy, destroying her economy and making it absolutely worthless, he said. “What’s the value of her opinions? Not much.” The BRICS and Ibero-America are building a world market based on real value, and they are already far more productive than Europe and the United States, which insist on values being set by some crazy judge—Scalia in the Argentine case.
Great Infrastructure Projects
Also reflective of the BRICS’ focus on real value, was the emphasis placed on creating a credit system to fund major infrastructure investment. Two important such projects moved forward in and around the BRICS Summit.
The first was the idea of fulfilling the centuries-old dream of building a transcontinental railroad to connect the Atlantic and Pacific coasts of South America (Figure 3). This took shape in the discussion between Chinese President Xi and Peruvian President Ollanta Humala, and then with Brazil’s President Rousseff. An agreement was reached to open bidding for foreign, including Chinese, companies, to participate in the construction of one critical segment of that project: the “T”-shaped Palmas-Campinorte-Annapolis/Campinorte-Lucas route in central Brazil.
South America: Transcontinental Railroad
The importance of that segment within the overall project is clear from Figure 4, a schematic map first published by EIR back in 1988. The northern terminus of Palmas is a stone’s throw from the famous Carajás project in the middle of the Amazon jungle, the world’s largest (and purest) iron ore deposit, which is now connected by rail only to the Atlantic port of São Luis. Once built, the western rail terminus of Lucas would then be halfway to the Brazil-Peru border, where the projected rail line would link up with a Peruvian branch that would cross the Andes at Saramirisa—the lowest pass in that giant mountain range—and from there, to one or more Peruvian ports for shipment across the Pacific Ocean. This would drastically cut shipping time and costs from Brazil (and other Southern Cone countries like Argentina) to Eurasian powerhouses like China, India, and Russia.
Even greater efficiencies and growth and productivity can be achieved as this South American Transcontinental Railroad is able to connect directly by rail with Asia, as high-speed maglev rail lines are constructed and opened up through the Darién Gap and the Bering Strait (Figure 3).
Intercontinental Railway Commission
There are various possible routes for a South American Transcontinental Railroad. (The one under discussion among China, Brazil, and Peru centers on São Paulo-Santa Fé do Sul-Cuiabá-Porto Velho-Pucallpa-Saramirisa-Bogotá-Panamá. Another viable option is São Paulo-Santa Fé do Sul-Santa Cruz-Desaguadero-Saramirisa-Bogotá-Panamá, which has long been studied.) In fact, earlier versions of precisely this project were drawn up by the Intercontinental Railway Commission, started by U.S. Secretary of State James Blaine, which employed U.S. Army engineers to survey and project lines tying the United States through to Argentina and Brazil, presenting a completed map of the intended route project to President William McKinley in 1898 (Figure 5). The strongly pro-American System McKinley commemorated Blaine’s plans as the future of humanity, speaking in 1901 at the Pan-American exposition in Buffalo—where McKinley was shot dead in a British-run operation.
Nicaragua Interoceanic Canal
Another great project, the construction of an Interoceanic Canal through Nicaragua (Figure 6), was announced on July 9 by Nicaraguan President Daniel Ortega. The massive project will be carried out by the Chinese company HKND, but President Putin also made an unannounced stopover in Nicaragua on July 12, on his way to the BRICS Summit, to offer Russia’s support. The canal will run 173 miles from the mouth of the Brito River on the Pacific Coast in southeastern Nicaragua, to the mouth of the Punta Gorda River on the Caribbean side. It will include two locks, and 65 miles of it will pass through Lake Nicaragua, and have a projected passage time of 30 hours, coast to coast, for the 5,100 of the largest ships in the world that will be able to use this canal.
Project engineers report that over 50,000 construction workers will be required, and that once in operation it will generate 200,000 jobs, including its sub-projects (airport, two ports, tourist center, etc.).
President Ortega, in announcing the selected route, stated that the country’s entire educational system was being revamped to produce the engineers and skilled workers that the project will require, He also held up a book containing the feasibility studies for constructing such a canal produced by the United States government and adopted by the U.S. Congress 118 years ago, in 1896, detailing the benefits such a canal would bring.
The irony was lost on no one. China is actively involved in massive job-creating economic projects in Central America—the United States’ proverbial “back yard”—while the U.S. under Obama has helped destroy that area with his policy of drug legalization, on top of decades of the British Empire’s free-trade economic devastation. Today, one-third of the population of El Salvador has been forced to emigrate to the U.S., in a desperate search for the means of survival; while official unemployment in neighboring Honduras now surpasses 60%.
The broader commitment to infrastructure development was emphasized in the last of the multiple historic summits which took place in Brasilia in mid-July, that of the heads of state and special representatives of the Community of Latin American and Caribbean States (CELAC), who met with Chinese President Xi and the Unasur heads of state on July 17. Their joint declaration (see below) emphasized the “important opportunity for mutual development” which exists, announcing “the establishment of a broad partnership of equality, mutual benefit, and common development between China and Latin America and the Caribbean.”
The New Development Bank
There is little question that the New Development Bank (NDB) and Contingent Reserve Agreement (CRA) are the seed crystals of an entirely new, international financial architecture—although a major political battle lies ahead in order to force this policy through, over the violent objections of the City of London and Wall Street, including their agents within some of the BRICS countries. The founding document of the NDB cautiously sticks to the idea that the NDB and CRA are only meant to “complement” existing institutions like the IMF; but the principles on which they were founded not only contradict those of the IMF, but mutually exclusive.
Most significant, the NDB is clearly geared to lend money for real development, without the hated austerity conditionalities and green policies associated with the IMF and World Bank. For example, the CELAC-China joint declaration contains a radical departure from IMF/World Bank conditionalities, calling “to make good use of the concessionary loans granted by China, in accord with the necessities and priorities of the recipient countries. . . . We stress the importance of building and modernizing infrastructure.”
Argentine President Fernández, who was given featured billing (after host Rousseff) at the BRICS-Unasur Summit, issued the clearest call for a new world financial order: “We, sirs, are posing then, a new global financial order, one that is not just fair and equitable, but indispensable. . . . What we demand from the world, is precisely the creation of a new global financial order which will permit sustainable and global economic growth. . . . Thus, the appeal to all nations is to join forces in this real crusade for a new global political, economic and financial organization that will have positive social, political, economic, and cultural consequences for our nations.”
President Putin—who, like Argentina’s Fernández, is no stranger to being the target of economic warfare—presented a complementary proposal: “BRICS nations should cooperate more closely in commodities markets. We have a unique resource base: Our nations hold 30-50% of global reserves of various resources. Therefore, we believe it is imperative to develop cooperation in mining and processing, and organize a center for training experts in the metals industries in BRICS nations.”
Such an agreement would break the British Empire’s stranglehold on world commodities, and their ability to speculate with nations’ livelihood and their very existence.
To be viable for these purposes, the NDB and CRA would have to function with a firewall against the cancerous dollar-denominated system. It is noteworthy that the NDB is authorized to both receive additional capitalization in non-dollar currencies in the future, as well as to issue loans to BRICS and other nations in non-dollar currencies.
Once three, four, or more countries are involved in great projects receiving such non-dollar loans, a new currency will have in effect been created, in which fixed exchange rates among the national participants will also follow. That step alone would instantly bring about a return to the pre-1971 Bretton Woods system of fixed (predictable) exchange rates, wiping out, with the stroke of a pen, trillions of dollars of speculation on currency futures.
But for the NDB to be able to truly take on the tasks of global reconstruction, the United States must become a full partner in its capitalization and functioning as the centerpiece of a global Hamiltonian credit system, of the sort specified in LaRouche’s Four Laws. Today’s “dollar,” which is no longer the sovereign currency of the United States, but rather a supra-national betting instrument under the control of the British Empire, must also return to its proper role as the Treasury-issued “greenback.”
In short, the central strategic question posed by the mid-July BRICS Summit, is: When will the United States rid itself of President Obama, and return to the American System policies it was founded on, and which half of humanity, led by the BRICS, is now implementing?
Fortaleza Declaration: New Development Bank
July 15—The heads of State of the BRICS nations (Brazil, Russia, India, China, and South Africa), meeting today in Fortaleza, Brazil, for the VI BRICS Summit, issued a 72-point Fortaleza Declaration which includes the historic announcement that they agreed to form the New Develoment Bank (NDB) to fund infrastructure and other development projects in BRICS and other developing economies, and that it would be headquartered in Shanghai, China, with the first (rotating) Presidency held by India. The NDB will be initially capitalized at $50 billion, with equal contributions from each of the five countries.
The Fortaleza Declaration also announced the establishment of the BRICS Contingent Reserve Arrangement (CRA), with an initial size of $100 billion, to “help countries forestall short-term liquidity pressures.”
The relevant three paragraphs read:
“11. BRICS, as well as other EMDCs [Emerging Market Economies and Developing Countries] continue to face significant financing constraints to address infrastructure gaps and sustainable development needs. With this in mind, we are pleased to announce the signing of the Agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies. We appreciate the work undertaken by our Finance Ministers. Based on sound banking principles, the NDB will strengthen the cooperation among our countries and will supplement the efforts of multilateral and regional financial institutions for global development, thus contributing to our collective commitments for achieving the goal of strong, sustainable, and balanced growth.
“12. The Bank shall have an initial authorized capital of US$100 billion. The initial subscribed capital shall be of US$50 billion, equally shared among founding members. The first chair of the Board of Governors shall be from Russia. The first chair of the Board of Directors shall be from Brazil. The first President of the Bank shall be from India. The headquarters of the Bank shall be located in Shanghai. The New Development Bank Africa Regional Center shall be established in South Africa concurrently with the headquarters. We direct our Finance Ministers to work out the modalities for its operationalization.
“13. We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements. We appreciate the work undertaken by our Finance Ministers and Central Bank Governors. The Agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.”
Elsewhere, the Fortaleza Declaration criticizes the IMF’s unresponsiveness to the economic crisis, and states: “We call for an international financial architecture that is more conducive to overcoming development challenges. We have been very active in improving the international financial architecture through our multilateral coordination and through our financial cooperation initiatives, which will, in a complementary manner, increase the diversity and availability of resources for promoting development and ensuring stability in the global economy.” But the document also notes that “We will continue to pursue our fruitful coordination and to promote our development goals within the international economic system and financial architecture.”
The Declaration also has a strong condemnation of unilateral military interventions and economic sanctions:
“27. We stress our commitment to the sustainable and peaceful settlement of disputes, according to the principles and purposes of the UN Charter. We condemn unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations. Bearing this in mind, we emphasize the unique importance of the indivisible nature of security, and that no State should strengthen its security at the expense of the security of others.”
China, Latin America, Caribbean Forum Founded
July 18—In the last of the multiple historic summits which took place in Brasilia this week, heads of state and special representatives of the Community of Latin American and Caribbean States (CELAC), and Chinese President Xi Jinping, met July 17 to discuss deepening their relations on the basis of “equality and mutual benefit, reciprocal cooperation, and common development.”
Represented were the Presidents of Brazil and China, current members of CELAC’s leadership Quartet (Costa Rica, Cuba, Ecuador, and Antigua and Barbuda), and the rest of South America.
The Joint Declaration issued from their private meeting reaffirmed the principles upon which the United States was founded, but which it has betrayed, under the successive Bush/Cheney and Obama governments.
Announcing their agreement to found a Chinese-Latin American-Caribbean Forum, with a mandate to draw up a 2015-19 Chinese-Latin American-Caribbean Cooperation Plan, these nations opened with a forceful statement of their commitment to play an active role together in establishing a world order based on the premises which underlie the Treaty of Westphalia. They declared:
“Reaffirming our unrestricted respect for the objectives and principles of the United Nations Charter, international law, the peaceful solution of controversies, international cooperation for development, the prohibition of the use and threat of use of force, self-determination, sovereignty, territorial integrity, non-interference in the internal affairs of countries, the State of Law, and the protection and promotion of all human rights. . . .
“Reiterating steadfast mutual support in exploring development paths appropriate to national conditions. . . .
“1. We agree that our relationship is an important opportunity for mutual development, since Latin America and the Caribbean and China, as developing countries, confront common development tasks and global challenges. We announce the establishment of a broad partnership of equality, mutual benefit, and common development between China and Latin America and the Caribbean, looking to increasing the level of cooperation on diverse matters.”
Brazilian President Dilma Rousseff reported in a press conference following the meeting that Xi had proposed three different funding mechanisms:
• A specific fund to finance infrastructure projects, to start at $10 billion and rise to $20 billion; this is intended to be functional by next year;
• A preferential credit line for CELAC, from within a Chinese bank, which could be as large as $10 billion; and
• A Sino-Latin American-Caribbean Cooperation Fund of $5 billion for investment in areas as yet to be defined.
The declaration’s formulation on these funds and projects marks a radical departure from IMF/World Bank conditionalities. For example, they wrote:
“3. . . .We take note that China invited the countries of Latin America and the Caribbean to play an active role in establishing the China-Latin America and Caribbean Development Fund, and to make good use of the concessionary loans granted by China, in accord with the necessities and priorities of the recipient countries.
“4. . . .We stress the importance of building and modernizing infrastructure, such as railroads, highways, ports, airports, and telecommunications, and the efforts to make good use of the Sino-Latin American-Caribbean Special Loans for Infrastructure.”
The declaration also contains a statement of support for Argentina, in its fight with the vulture funds:
“14. We emphasize that guaranteeing agreements reached between debtors and creditors, in the context of sovereign debt restructurings, is essential for the stability and predictability of the international financial architecture.”
We Are Nations of ‘Future Potential’
Indian Prime Minister Narendra Modi addressed the Plenary Session of the VI BRICS Summit. Below are excerpts of his speech.
Press Information Bureau of India
. . .This Summit takes place at a crucial juncture. The World is facing a high level of economic and political turmoil. Conflict and instability are growing in many key regions.
This increases the challenges of tackling poverty, making growth more inclusive, and evolving a sustainable model of development.
Restoring a climate of peace and stability is an urgent global need. This calls for newer avenues of cooperation and collaboration.
I believe BRICS can answer this call. This I do because of the uniqueness of BRICS as an international institution. For the first time it brings together a group of nations on the parameter of ‘future potential’; rather than existing prosperity or shared identities. The very idea of BRICS is thus forward-looking.
I therefore believe it can add fresh perspectives and mechanisms, to existing international institutions.
Thus, we must ensure that the future development of our partnerships, and institutions, stays true to this original idea.
BRICS must provide a united and clear voice in shaping a peaceful, balanced, and stable World.
We should intensify our cooperation in confronting global challenges; like terrorism, cyber security, and climate change.
BRICS must also play a proactive role in shaping the global discourse on growth and development. This includes shaping the post-2015 Development Agenda to keep the central focus on tackling poverty.
We must seek urgent reforms of global institutions of governance like the UN Security Council and international financial institutions.
We must help shape the WTO regime. An open trading regime is critical for strong, balanced and sustainable global economic growth.
This must address the development aspirations of the developing world.
It must also accommodate the special needs of the weak especially in areas such as Food Security. . . .
The vision of a New Development Bank, at the Delhi Summit two years ago, has been translated into a reality, in Fortaleza. It will benefit BRICS nations. But will also support other developing nations. And, it will be rooted in our own experiences, as developing countries.
The BRICS Contingent Reserve Arrangement gives BRICS nations a new instrument for safeguarding their economic stability. This is an important initiative at a time of high volatility in global financial markets.
The MoU on Cooperation between Export Credit Guarantee Agencies, and the inter-Bank Cooperation Agreement on Innovation are other tangible steps that will spur cooperation among BRICS countries.
I believe we have now reached a level where we should be even more ambitious. We should focus on more such tangible mechanisms and outcomes. Make BRICS a platform of impact.
Excellencies, we have an opportunity, to define the future—of not just our countries, but the world at large. Coming from a land where the idea of Vasudhaiva Kutumbakam—the “whole world being one family”—is rooted deep in our ethos; I take this is as a great responsibility.
Our steps must reinforce the hopes, aspirations and confidence, of the developing world. . . .
Russia Offers Plan for Multilateral Economic Cooperation
Russian President Valdimir Putin addressed the plenary session of the BRICS Summit July 15. Below are excerpts from his speech.
Presidential Press and Information Office
. . .Our summits are always held in a constructive, business-oriented setting. We have a common interest in broadening multidimensional cooperation, strengthening trust, and mutual understanding.
BRICS holds a unique place in the global economy. It is the largest market in the world. Moreover, our combined gross domestic product has reached 21% of the global volume and continues to grow steadily.
Our nations play an increasingly significant role in the global political arena as well. It is thanks to Russia and China’s firm stance in the UN Security Council, with support from other BRICS participants, that we were able to rally most international dialogue participants—including the European Union and the United States—and prevent a foreign invasion in Syria, achieving the elimination of Syrian chemical weapons.
It is important that we are united by a desire to act from unified positions in all issues of global development and the formation of the global financial and economic architecture. BRICS nations are cooperating constructively within the framework of the G20, actively contributing to substantively enhancing the G20’s agenda, developing agreements aimed at accelerating global economic growth and trade and resolving employment problems. We are working together to move forward on one of the most difficult problems in global governance: IMF reform.
In the time that has passed since the Durban summit [March 2013], we have been able to achieve significant successes. I want to stress that all the plans we set for ourselves a year ago have come to fruition. I am referring, first and foremost, to our plans to create a new Development Bank and a Currency Reserve Pool for BRICS nations. Today, we have confirmed their founding documents.
The BRICS bank will become one of the largest multilateral financial development institutions in the world. Its stated capital will be $100 billion.
The scale of possible operations within the framework of the Currency Reserve Pool may also reach $100 billion. This mechanism creates the prerequisites for effectively protecting our countries from financial market crises.
The bank and the Currency Pool, with combined resources of $200 billion, lay the foundation for coordinating a macroeconomic policy between our nations.
BRICS Energy Association Proposed
I am confident that closer economic and financial cooperation between BRICS countries will allow us to implement truly large-scale joint programmes with the aim of securely developing our nations. . . .
In the conditions of increased international competition, the challenge of activating trade and investment cooperation between our nations becomes particularly important. This will allow us to realize the advantages resulting from the complementary nature of our economies, and to reduce the vulnerability of each BRICS nation to adverse global trends.
Russia, Brazil, India, China, and South Africa already account for 11% of accumulated investment and nearly 20% of global trade. Trade between BRICS nations is growing. In the last five years, this indicator has nearly doubled.
The Russian side has prepared a draft BRICS Strategy for Multilateral Economic Cooperation. We are submitting it for discussion. We feel it would be useful to create a special high-level working group to work in depth on developing the draft Strategy.
The Strategy’s key positions are specified in another document prepared by the Russian side: the Roadmap for Investment Cooperation. It includes 37 projects in various areas, from high technologies to the humanitarian sector. Please allow me to highlight just a few of the most important ones.
We propose the establishment of the BRICS Energy Association. We could create a Fuel Reserve Bank and a BRICS Energy Policy Institute under its roof. These steps would allow us to strengthen our nations’ energy security and prepare us for the creation of new instruments and new institutes to trade energy resources.
The joint use of the Russian global navigation system, GLONASS, in a wide range of areas—transport, public safety, and agriculture—seems very promising. According to expert assessments, the use of the GLONASS system in agriculture alone will allow for a 30-50% increase in crop capacity. A similar effect, and even better, is expected in other areas.
BRICS nations should cooperate more closely in commodities markets. We have a unique resource base; our nations hold 30-60% of global reserves of various resources. Therefore, we believe it is imperative to develop cooperation in mining and processing, and organize a center for training experts in the metals industries in BRICS nations.
We believe it is important to broaden humanitarian contacts and form parliamentary, civic, trade union, and youth dimensions within BRICS. We propose signing an Agreement on cooperation in culture and creating a BRICS network university that will include our nations leading schools. . . .
Assessing the Trip
On July 17, Putin answered questions from Russian journalists following his trip to Cuba, Nicaragua, Argentina, and Brazil. Asked for his assessment of the trip, he replied, in part:
. . .I would like to remind you of something we have already mentioned: the BRICS states account for over 40% of the world’s population and 21% of the global GDP. However, it is not the share that is so important, but the fact that these countries have been posting very significant growth rates.
In the past 10 years the GDP of countries with developed economies grew by 60%, while that of the BRICS states increased four-fold. We have to bear in mind, of course, that the 60% growth was in comparison to a large volume, a large starting point, while our four-fold growth was in regard to a smaller base; however, such are the rates.
These are all young states, and the future belongs to the young. Naturally, we should restore our presence in this fascinating and very promising part of the world.
What we have done is we signed some very important documents, and all this was implemented in a very short period, within a year. I am referring here to the creation of the New Development Bank. Each participant will contribute $2 billion. I believe this will be a very good, efficient, new, modern market tool for the development of our economies.
The Currency Reserve Pool is also a very good instrument that can influence the macroeconomy of our states to a certain extent. Russia intends to invest up to $18 billion. I believe, as I have said, that this may be a good instrument for the stabilisation of our economies and, of course, for the rational distribution of our states reserves. . . .
We Work in the Spirit Of ‘Said and Done’
Chinese President Xi Jinping made the following remarks July 16 in appearances around the BRICS Summit in Brazil. The first comment comes from his statement after his bilateral meeting with Russian President Putin; the second from his address to the Brazilian Congress.
Chinese President Xi Jinping remarked that in the two months since he and Russian President Putin reached “a whole set of historical agreements,” when they met at another summit in Shanghai, there have been intensive contacts between local and central government officials of both countries, making progress on “nearly all collaboration projects. . . . I tell everyone that in our collaboration with Russia, it is important to work in the spirit of ‘said and done.’ Your side has given an even more positive signal: At a major meeting of ambassadors, you called for the all-around enhancement of Russian-Chinese relations. I hope the two sides will full carry out our agreements—striking while the iron is hot, so to speak.”
In his address to the Brazilian National Congress, President Xi laid out a perspective for Ibero-Americans to free themselves from the straitjacket of the London-dominated financial system. Xi praised the 40-year relationship that China has had with Brazil, and lauded the countries of Latin America for their determination to follow their own paths in developing their economies.
Xi said that development in the world is generally pointing in the right direction, toward greater technological development, greater cooperation, cultural diversity, the creation of a multipolar world, and the general desire in the world for peace. “At the same time,” Xi warned, “the world is full of instability. The international financial crisis has a profound global influence. The uncertain, unstable elements in the world economy are increasing. The imbalance in global development is escalating. Hegemonism, power politics, and a new interventionism are increasing. Regional turbulence occurs frequently. Global issues such as food security, energy resources security, and cyber-security cannot be ignored.
“Pushing for multipolarization, democracy in international relations, realizing sustainable development of the world economy, and maintaining diversification of the world’s cultures have become important global issues. Fairness and justice are the uppermost goals for all people in the world in the pursuit of international relations. However, fairness and justice are far from being realized in international relations nowadays. . . .
“Human beings have only one Earth. All countries share one world. History tells us the law of the jungle isn’t the way of human coexistence. Military aggression can’t bring us a wonderful world. Every nation should obey the principle of equality, mutual trust, learning from each other, cooperating and seeking joint benefits. They should jointly safeguard and protect international fairness and justice and push for the construction of a harmonious world, sustained peace, and joint prosperity.”
At this point his speech was met with resounding applause from the Congress.
He went on to stress the importance of the two countries—China, the largest developing country, and Brazil, the largest Ibero-American country—working together to achieve a better future for both nations, and to advance peace and progress.
A New Global Financial Order Is Indispensable
Here are excerpts of the July 16 speech by Argentine President Cristina Fernández de Kirchner, before the meeting in Brasilia of heads of state of the BRICS nations with heads of state from the Union of South American Nations (Unasur).
[I]t is with great pleasure that we salute this decision of the BRICs to create a development bank, focused on trade, infrastructure and also—why not?—on bringing order to international finances which are absolutely out of control. Often, we have demanded, in this forum and in broader ones, such as the United Nations Organization and the G-20 as well, the indispensable reform of multilateral credit agencies and multilateral political agencies, such as the United Nations or the Security Council, etc.
These demands, however, were really not heeded, and I think it is a very positive sign—no one can interpret this BRICS initiative as something negative, but rather as an alternative proposal related to the lack of response that all the citizens of the world should have already had. . . .
That is why we feel that the BRICS’ decision to create a development bank is a more than appropriate response. . . .
And perhaps Argentina, more than anyone, can speak of this issue at a time when we’re under a very strong speculative attack by the so-called vulture funds. . . .
We’re talking about sustainable development, about investments to create jobs and employment. We’re talking about investments in trade. . . .
So, we’re faced with a situation that goes far beyond global financial questions. We’re asking if this isn’t a matter of geopolitics . . . or issues of domination, and of not understanding that there is a multipolar world different from the one that existed in 1989, when some believed that history had come to an end. But history doesn’t end. History continues because nations continue, and the emerging nations here in South America, and those of other regions, were able to emerge from their own situations and incorporate millions of their compatriots, [providing them with] health, education, housing and fundamental rights. . . .
We, sirs, are posing then, a new global financial order, one that is not just fair and equitable, but indispensable. And we are saying that Argentina is not going to default, because Argentina is going to pay its debt as it has done, and it is not Argentina that is preventing the legitimate bondholders from receiving their money, because once Argentina deposited that money, it was no longer the owner of those resources; they are the legal and legitimate property of the bondholders from 2005 and 2010. . . .
Therefore, Argentina is not going to default on its debt. Argentina pays, and what we demand from the multilateral organizations, what we demand from the world, is precisely the creation of a new global financial order which will permit sustainable and global economic growth.
We congratulate the BRICS on this initiative, and we should also say that we are also net payers to the World Bank, and now the Inter-American Development Bank. What does that mean? [It means] that we are paying more than what we receive in loans.
We call on all those of us here who have a commitment to our people and our history, to promoting their welfare—countries which for so long had the most severe difficulties, some due to indebtedness, others as a result of their own historical avatars, but which had sufficient strength to overcome that indebtedness and those historical avatars or lack of democracy, which many of us in this South American region have lived through, and in democracy and peace were able to guarantee, not just economic growth, but economic growth with social inclusion.
Thus, the appeal to all nations is to join forces in this real crusade for a new global political, economic, and financial organization that will have positive social, political, and cultural consequences for our nations.
LaRouche’s 40-Year Record
From 1970 to this day, physical economist Lyndon LaRouche has an unparalleled record of proposals for reforming international financial institutions, and for launching the great development projects that can uniquely reverse the decline of the world economy. Leading instances of those initiatives are listed below. The impact of these ideas, and the political fight on their behalf, can be clearly seen in the current dramatic moves by the BRICS nations to create a new financial architecture.
1975: At a press conference April 24 in Bonn, Germany, LaRouche presents his plan for “the immediate establishment of an International Development Bank as an agreement among the three principal world sectors—the industrialized capitalist sector, the so-called developing sector, and socialist countries.” He specifies that the immediate concentration of the investment thus made possible should be industrial development and expanded food production worldwide.
1976: The Group of 77 Developing Countries, meeting in Colombo, Sri Lanka in August, issues a call for a new world economic order, based on respect for sovereignty, technology transfer to the Third World, and mutually advantageous economic development proposals between the developed and developing world. This is followed in September at the United Nations, by a call for “new development banks” by Guyanese Foreign Minister Fred Wills.
1982: LaRouche addresses the exploding international debt crisis with his proposal for Operation Juárez, which outlines a specific Ibero-American plan for financial reorganization for development (see article below).
1988: Under the title “Development Is the Name for Peace,” the Schiller Institute, founded by Helga Zepp-LaRouche, holds a conference in New Hampshire on Jan. 30-31, dedicated to elaborating the need to establish a “just new world economic order.” Lyndon LaRouche addresses this conference on how the U.S. Presidency could establish such a new order, which he later dubbed a “New Bretton Woods.”
1997: At a Jan. 4 webcast, LaRouche issues a rallying cry for a New Bretton Woods, based on bankruptcy reorganization of the world economy, followed by establishment of an international credit system for global reindustrialization. In the months that follow, the LaRouche movement organizes a global movement of prominent political leaders and economists demanding this reorganization.
2008: In the face of the devastating global financial collapse, LaRouche, in the Fall, demands an urgent application of FDR’s Glass-Steagall principle to banking systems throughout the world, but starting in the United States.
2014: On June 8, LaRouche issues his “Four New Laws to Save the U.S.A. Now!,” which defines the urgent measures required to be taken by the U.S. Congress. These include:
“(1) Immediate re-enactment of the Glass-Steagall law instituted by U.S. President Franklin D. Roosevelt, without modification, as to principle of action. (2) A return to a system of top-down, and thoroughly defined as National Banking.
“The tested, successful model to be authorized is that which was, under the direction of the policies of national banking which had been successfully installed under President Abraham Lincoln’s superseding authority of a currency created by the Presidency of the United States (e.g., ‘Greenbacks’), as conducted as a national banking-and-credit-system placed under the supervision of the Office of the Treasury Secretary of the United States. . . .
“(3) The use of a Federal Credit-system is to generate high-productivity trends in improvements of employment, with the intention to increase the physical-economic productivity and standard of living of the persons and households of the United States. . .,” and
(4) “Adopt a Fusion-Driver ‘Crash Program.’ ”
1970—United States: “How to Lick a Depression in a Single Day” is the first reconstruction program issued by LaRouche for the United States. It emphasizes the need for investment in high-technology infrastructure development, including fusion power. This program is elaborated through LaRouche’s Presidential campaigns, which focuses on developing U.S. scientific capabilities as part of a world development program.
Book and magazine cover images: click on any image to view full size
1979—Africa: LaRouche’s Fusion Energy Foundation releases a book-length program for the Industrialization of Africa, based on developing transportation infrastructure, as well as nuclear energy development. This is followed up in 1981, by LaRouche’s own “Lagos Plan of Action” for Africa.
1979—India: EIR issues a study on “The Industrialization of India,” commissioned by LaRouche, which defines how it can go “From Backwardness to Industrial Power in Forty Years.”
1983—Asia/Pacific: LaRouche issues an EIR Special Report entitled “A Fifty-Year Development Policy for the Indian-Pacific Oceans Basin,” which presents the conceptual basis for large-scale infrastructure projects, including water development in the Indian Subcontinent, the Mekong River Basin, the Kra Canal Project, the Hangzhou-Beijing Canal, and a second Panama Canal. These projects represent the “motor for development,” LaRouche says.
1988—Ibero-America: The Schiller Institute issues a book-length study on “Ibero-American Integration, 100 Million New Jobs by the Year 2000!,” which outlined the basis for an integrated agro-industrial modernization of the continent, including projects on water management, high-speed rail, increasing agricultural productivity, nuclear energy, and other investments in high-technology development.
1989—Europe: Lyndon and Helga LaRouche put forward the “Productive Triangle” development plan, in the face of the collapse of East Germany. It builds off LaRouche’s October 1988 proposal for Western Europe to provide high-technology aid to deal with the food crisis in the East, and advancing to the development of high-technology development corridors between Moscow, Paris, and Vienna—an area which encompasses the most productive industrial centers in Europe.
1990—Southwest Asia: LaRouche releases his “Oasis Plan,” as a basis for lasting peace between Israel and the Arab world, based on programs of nuclear desalination and industrial development for the entire region.
1990s—Eurasia: With the collapse of the Soviet Union in 1991, the LaRouches expand the concept of the Productive Triangle to become the Eurasian Land-Bridge, linking all of Eurasia through development corridors. One of the high points of this organizing occurs in 1996, during a conference sponsored by the Chinese government, which features plans for a “New Silk Road.” This event is followed by many others dedicated to the Eurasian Land-Bridge over the following years.
2007—Russia/U.S.: LaRouche puts a special emphasis on the Bering Strait Tunnel during a May visit to Moscow, where he is a featured guest at the Russian Academy of Sciences in celebration of the 80th birthday of Prof. Stanislav Menshikov, a prominent Russian economist.
Steps for a New Monetary Order
In August 1982, Lyndon LaRouche authored a book-length report entitled “Operation Juárez,” which proposed a comprehensive global debt-reorganization and follow-on measures required to establish a production-oriented new financial system. Given the enduring applicability of these principles to today’s crisis, we reprint below excerpts from the specific measures proposed.
Collective Negotiation of Debt-Reorganization
No matter how lacking in economic viability a nation may be, unless we are Adolf Hitlers, we never put a nation out of business “mercifully.” No matter how bankrupt a nation may be, we are morally obliged, under any and all circumstances, to make it economically viable at whatever cost. It is sufficient to rewrite a new series of debts, and debt payment schedules, to replace the previously existing debts and payment schedules. The new issues of debt will replace, or “buy up” the old. . . .
“Common sense” may recommend to us that a great portion of the debt were better simply written off—a common condition among “least-developed nations” today. In negotiations of such matters, we must be guided by an eye to the principle of equity.
Many of the debtor nations were forced into refinancing debts at immorally usurious rates, and with other lunatic arrangements, at the point of a gun—sometimes, quite literally, Kissinger’s guns. Such features of the carried-forward debt of nations cannot be considered exactly a debt contracted in good faith.
Ibero-American Monetary Order
1) In no republic must any other issues of credit be permitted, as a matter of punishable violation of the law against immoral usury, excepting: (a) deferred-payment credit between buyers and sellers of goods and services; (b) banking loans against combined lawful currency and bullion on deposit in a lawful manner; (c) loan of issues of credit created in the form of issues of national currency-notes of the treasury of the national government.
2) Loan of government-created credit (currency-notes) must be directed to those forms of investment which promote technological progress in realizing the fullest potentials for applying otherwise idled capital-goods, otherwise idled goods-producing capacities, and otherwise idled productive labor, to produce goods or to develop the basic economic infrastructure needed for maintenance and development of production and physical distribution of goods. . . .
3) In each republic, there must be a state-owned national bank. . . .
4) No lending institutions shall exist within the nation except as they are subject to standards of practice and auditing by the treasury of the government and auditors of the national bank. . . .
5) The treasury and national bank, as a partnership, have continual authority to administer capital-controls and exchange-controls and to regulate negotiations of loans taken from foreign sources. . . .
6) The policies of taxation of the national government must be designed to expropriate ground-rent and usury income, to foster well-being of households, and to give preferential treatment to those classes of ventures which are established to be in the relatively greater national interest. . . .
7) In a number of instances, it is simply desirable, or even indispensable, that a severe currency reform be implemented immediately. . . .
8) Sovereign valuation of the foreign-exchange value of a nation’s currency must be established. The first approximation of the value of a nation’s currency is the purchasing power of that currency within the internal economy of that nation. . . .
The Future Is Nuclear
July 19—The nations participating in the recently concluded BRICS Summit in Brazil inaugurated a new international economic policy and financial institution, which holds the promise of reversing decades of economic stagnation and destroyed potential. The success of that endeavor will depend upon support for advanced technologies which have been so far largely denied the so-called developing nations. Key among them will be the full-scale deployment of nuclear energy.
Before the Summit, in bilateral meetings with the top leadership of the Russian Federation’s nuclear energy agency, Rosatom, both Argentina and Brazil concluded far-ranging agreements for cooperation in nuclear energy. Both nations, which already operate commerical nuclear power plants, plan to build families of new reactors, and to extend their capabilities into a wide range of technologies, in order to become the economic powerhouses needed for the rapid development of all of Ibero-America.
On July 12, Rosatom Director General Sergei Kiriyenko and Argentina’s Minister of Planning, Investments and Services, Julio de Vido, signed a broad-ranging document on nuclear cooperation, during President Vladimir Putin’s visit to Buenos Aires. The agreement “will become a strong foundation for close cooperation” in nuclear energy, Putin said at a press conference, World Nuclear News reported. The new document replaces an agreement that expired in December 2012, and greatly expands the areas of bilateral nuclear cooperation.
The design, construction, operation, and decommissioning of nuclear power plants and research reactors are included, as well as “water desalination facilities.” There is also Russian support for the nuclear fuel cycle (which could include enrichment and reprocessing technology), radioactive waste management, and radioactive isotope production, important for medicine and agriculture. Russian Energy Minister Alexander Novak told reporters that Rosatom has submitted a technical and commercial proposal to participate in the construction of Argentina’s planned Atucha-III nuclear plant, and is expected to offer a commercial tender in the Fall. Argentina has also been in discussions with China and South Korea on nuclear plant cooperation.
Unlike past decades, it is not the U.S., Europe, or Japan that is primarily being looked toward for nuclear technology and cooperation. What may well tip the balance concerning which nation’s nuclear industry will be engaged to work on Argentina’s next nuclear power plant, is not only the quality of the equipment, but the options that are offered for financing. It will be state credit agencies, and the BRICS’ new credit mechanisms, rather than usurious private banks, that will vector new credit to nuclear projects.
Rosatom has been offering such arrangements to most of the nations that are in the market for nuclear plants. At his press conference, Novak said that Rosatom “is prepared to provide comfortable financial terms, among other things.”
As part of President Putin’s official visit to Brazil, preceeding the BRICS Summit there, Russian nuclear representative Dzhomart Aliyev and Brazilian company Camargo Correa representatives signed a Memorandum of Understanding (MoU) on July 15, to expand bilateral cooperation in nuclear power. According to the Russian press, a spent-fuel storage facility, the construction of engineering and other technical facilities at Brazil’s Angra operating nuclear power plant site, and a “partnernship” in the construction of new nuclear plants in Brazil, are included in the MoU.
Similar to the agreement reached with Argentina, the new Russian MoU with Brazil is a follow-on to previous, more general, agreements. In 2008, a meeting between then-Russian President Dmitri Medvedev and then-Brazilian President Lula da Silva initiated the proposal for increased nuclear cooperation, which broadened a 1994 agreement. In 2009, the two Presidents discussed this again, at the first official BRIC (before South Africa joined) summit in Russia. A working group to determine areas of cooperation was created.
In June 2013, Rosatom announced that it was ready to build Russian-designed nuclear power plants in Brazil, and to finance them. At that time, Brazil’s Electrobras stated its plan to build 4-8 new nuclear plants by 2030. The new agreement broadens nuclear cooperation between these two BRICS nations, to include a wider range of nuclear technologies.
A New Vista for Africa
South Africa Bucks British Opposition, Goes Nuclear
by David Cherry and Ramasimong Phillip Tsokolibane
David Cherry writes for EIR on South Africa; Ramasimong Phillip Tsokolibane leads LaRouche SA, the LaRouche movement in South Africa.
July 18—South African President Jacob Zuma and his cabinet are now determined to build new nuclear power plants to generate an additional 9,600 megawatts (9.6 gigawatts) of electric power. South Africa currently has the only nuclear power plant on the African continent—at Koeberg, 20 miles north of Cape Town—which provides 1,800 MW, or about 5% of the country’s power. It was commissioned in 1984.
The decision to build more nuclear power plants is historic, both for South Africa and for the continent as a whole, because nuclear power—and soon nuclear fusion power—is the indispensable successor to fossil fuels. It is no coincidence that this decision comes at the moment of the founding of the New Development Bank (NDB) by the BRICS nations—Brazil, Russia, India, China, and South Africa. (All of the BRICS nations have nuclear power, and all are building more plants.) The new bank, which will make credit available to developing countries on terms favorable to them, will begin with dedicated capital of only $50 billion, but it can grow, and nations not members of BRICS can join the bank (see articles in this section). The two developments taken together—South Africa’s decision for more nuclear power and the BRICS decision to establish the NDB—open up a new vista for Africa.
The New Development Bank
President Zuma told the BRICS Summit plenary session, in Fortaleza, Brazil, July 15, that the founding of the new bank was a “historic and seminal moment.” Finance Minister Nhlanhla Musa Nene told the press just hours after his return from Brazil, that it was the “most exciting development in global development finance since the meetings in Bretton Woods . . . some 70 years ago.” He was referring to the founding of the World Bank and International Monetary Fund (IMF) in 1944. That, too, was an exciting time. But when U.S. President Franklin Delano Roosevelt died nine months after the Bretton Woods meeting, the World Bank and IMF came under the control of the private bankers. The New Development Bank is, therefore, long overdue. Indeed, the rigorous theory for a new bank, together with exemplary applications, was first published by Lyndon LaRouche as How the International Development Bank Will Work in 1975, and circulated to governments, policy makers, and scholars worldwide.
At the BRICS Summit, the South African team—including prominently Trade and Industry Minister Rob Davies—made a strong case for putting the headquarters of the new bank in South Africa, pointing to the urgent development needs of the African continent and South Africa’s qualifications to host the new financial institution. The decision was to put the headquarters in Shanghai, but also to create an Africa Regional Center in Johannesburg. South Africa had already been tasked with coordinating Africa’s interaction with BRICS.
South Africa’s Nuclear Decision
After a protracted factional attempt to derail South Africa from its nuclear path, President Zuma announced, in his State of the Nation address on June 17, that his government will indeed build new nuclear power plants. He also reiterated seemingly obligatory commitments to wind, solar, and shale fracking.
Nuclear power will not solve all of South Africa’s many problems, but without it, they cannot be solved. The decision brings with it enormous hope for the potential nuclearization of the entire African continent. In Africa, South Africa alone has a full-set economy, which could serve to drive development further north. Half of Africa’s 1 billion people have no access to electricity. More than half of sub-Saharan Africa’s electricity is generated and used in South Africa.
Conventional nuclear power is the bridge to the next step in advancing the density of the world economy’s energy-flux, namely nuclear fusion power, in which atomic nuclei are fused rather than split, without producing radioactive waste.
The government plans to take control of the full nuclear fuel cycle, largely through the existing South African Nuclear Energy Corporation. Eskom, the state electricity utility, will retain a majority stake in all nuclear-power-generating entities.
South Africa has 5.5% of the world’s known recoverable uranium deposits, and its neighbor Namibia has 5%. South Africa has been separating uranium from its gold (and copper) ores since commissioning a plant for that purpose in 1952 at the behest of the U.S. Atomic Energy Commission.
The model for the project involves full financing from an international partner such as Russia or China. The partner will also build and initially operate the plants, using South African components as much as possible, and training South Africans to master the necessary technical skills. Nothing so far has been said publicly about the NDB taking on a role in the financing, but it is conceivable.
Each of three sites will host two new nuclear reactors. Because South Africa has little freshwater, all three sites will be coastal, so that ocean water can be used as coolant. It is likely that one site will be at Duynefontein, near the existing nuclear power plant. Another, also in the Western Cape, may be at Bantamsklip, near Gansbaai. The third site may be at Thyspunt in the Eastern Cape near Oyster Bay.
Overcoming Factional Differences
Until now, the outcome of the fight in South Africa between proponents and opponents of nuclear power has seemed uncertain—the struggle has not been conducted in the open.
In 2009, Zuma organized a National Planning Commission with former Finance Minister Trevor Manuel as chairman and billionaire Cyril Ramaphosa (now Deputy President) as deputy chairman. The resulting National Development Plan (NDP) could have been written in London or Washington. It specified that South Africa needed a “less energy- and carbon-intensive economy,” and projected that the manufacturing sector should actually decline from 12% of gross domestic product in 2010 to 9.6% in 2030! At the time, the proposal to build more nuclear power plants had already been under serious consideration for years, but the NDP proposed a re-evaluation and possible scrapping of the nuclear proposal entirely. Zuma—in what now appears to have been a political maneuver—endorsed the NDP and obtained the endorsement of his cabinet and the ruling party, the African National Congress (ANC), in 2012.
In March 2013, however, at the BRICS Summit in Durban, South Africa, Zuma and Russian President Vladimir Putin met on the sidelines and discussed South Africa’s nuclear power needs. The Russian press then reported that Russia would bid for the contract to build the nuclear power plants if South Africa went ahead with the project. The two heads of state met again in Sochi, on the Black Sea, in May 2013, to continue their discussion.
The plan now endorsed by the Zuma government is similar in some respects to the one approved by the cabinet under President Thabo Mbeki in June 2008, but is less ambitious. The Mbeki cabinet approved a plan for 40 GW of new energy by 2025, of which 20 GW would be nuclear; the current plan is for 9.6 GW of new nuclear by that date. In 2008, Areva (France) and Westinghouse (United States) were both willing to build, but depended on South Africa to find the financing, which it could not.
Finance was also a major obstacle to South Africa’s continuation of its Pebble Bed Modular Reactor (PBMR) project. The project was mothballed in 2010; some of its personnel are still working in South Africa’s nuclear industry. The South African PBMR would be the reactor of choice for deployment to much of Africa because its high operating temperature makes it highly efficient, and because it can be very small (80 MW electric). It is inherently safe, requiring no sensors and no shutdown mechanisms to respond to overheating. The physics of the fuel elements is such that nuclear fission simply ceases above a certain temperature.
China is currently working on a PBMR. Resumption of the South African project is not currently under discussion, but one can imagine a collaboration with China, possibly with funding from the BRICS bank, to get PBMR units coming off the assembly line in South Africa. These units are too small to be suitable for use within the relatively more developed economy of South Africa itself.
Russia has now made clear its readiness to meet the requirements laid out by the Zuma government, including the financing. Sergei Kiriyenko, CEO of the Federal Atomic Energy Agency (Rosatom), has said that “The Russian Federation is ready to provide concessional financing” for the plants if an agreement is signed for their construction. Russia’s willingness to finance is a major reason why it is getting the contracts to build new nuclear plants in a half dozen countries.
In anticipation of an actual contract, Rosatom and the South African Ministry of Energy initialed a broad agreement on Nov. 25, 2013, for a strategic partnership in nuclear power development. It included providing technology and the training of specialists. Local content (South African components and materials) was estimated at 30% for the first plant, and more than 50% thereafter. That would include localization of fuel production, through construction of a plant to assemble fabricated fuel elements. Rosatom has also opened a marketing office in Johannesburg.
On the sidelines of the BRICS Summit just ended in Brazil, Zuma had bilateral talks with both Putin and Chinese President Xi Jinping, and nuclear power was on the agenda. China’s nuclear power companies have organized a bid to build the six reactors by 2030.
A Hostile Press
President Zuma’s announcement that his government would build the new nuclear power plants, disregarding the NDP’s view, produced the expected reaction in the press. One imagines flashing red warning lights going off at the South African daily Mail & Guardian. On June 27, under the headline, “Nuclear Urgency Raises Alarm,” it wrote, “The state seems set on going the atomic route despite the huge financial implications,” adding, “The apparent urgency about nuclear procurement runs counter to key government policies. . . .”
The flak actually started years ago. The South African press, awash with propaganda of British origin, appears to be entirely hostile to nuclear power. (The British are building more nuclear power plants at home, but their oligarchs don’t want South Africa to have them!) The press has featured a series of arguments hostile to nuclear power development by “experts,” sometimes citing the NDP’s erroneous projection of a decrease in the growth rate of energy demand—the projection could only serve the function of a self-fulfilling prophecy.
Access to abundant energy is an enabler of productive activity, which in turn, demands more energy. It is claimed that investing in nuclear power plants does not generate enough jobs. There will certainly not be many jobs if South Africa is constantly suffering blackouts. Windmills, imposed on South Africa by certain lenders, are like solar panels—they are a retreat to lower energy-flux density; these toys will never power an advanced industrial economy. South Africa’s coal and gas—of limited energy-flux density—are also going to run out. Nuclear power is a necessity.
It is claimed that South Africa needs a labor-intensive economy (creating many jobs at lesser skill levels), not a capital-intensive one (requiring higher skill levels and fewer workers per unit of output, as in a nuclear power plant). In fact, there must be employment for a continuum of skill levels if the workforce as a whole is to progress toward greater cognitive power. In South Africa today, large public works projects to provide large-scale employment, are urgently needed.
The Empire Goes for Regime Change
The British financial empire will seek all possible avenues to disrupt the implementation of South Africa’s nuclear plans and crush the assertion of sovereignty that made those plans possible. The empire has seen this moment coming. It has been laying the groundwork for another of its regime-change operations—as seen in Iraq, Libya, Georgia, Ukraine, and elsewhere. The cultivation of disrespect and often hatred for President Zuma throughout the press is a sign of worse to come.
ANC Secretary General Gwede Mantashe recently warned of a possible regime-change scheme against South Africa in connection with the recent five-month strike of platinum miners who are members of the upstart Association of Mineworkers and Construction Union (Amcu), which has made impossibly high-wage demands. Mantashe did not see the threat in relation to South Africa’s nuclear plans, but those plans alone are sufficient cause for regime change in the eyes of the British oligarchs. Regime change is, in fact, on the oligarchs’ agenda.
One arm of the current regime-change operations is the Alternative Information and Development Centre (AIDC), headquartered in Cape Town. Mantashe noted that in the conduct of the five-month strike—which damaged the economy—there was hostile foreign influence operating through the AIDC. Mantashe correctly saw in this the possibility of eventual wider action to unseat the government. (While Mantashe did not identify the AIDC by name, the press made the connection, as did the AIDC.)
The AIDC is, in fact, supported by the Open Society movement run by George Soros, the vicious speculator who has played a large role in overthrowing governments and getting drugs legalized worldwide. The AIDC—which propagates the global warming hoax—also works with the World Wide Fund for Nature (WWF), which owed its founding to Prince Bernhard of the Netherlands (a member of the Nazi Party) and Prince Philip of Britain (all four of his sisters married Nazis, and three of them joined the party). After all, Hitler was himself a greenie. This is the crowd that wants to see the population of the planet reduced from 7 billion to 1 billion.
Another expression of Soros’s influence is the Mail & Guardian, which acknowledges that “Among the M&G Centre for Investigative Journalism’s funders are two entities that are part of George Soros’s Open Society network.” The Centre is also known as amaBunghane.
It has not escaped the notice of the ANC leadership that agitator and demagogue Julius Malema was working with the AIDC-Amcu strike. Malema has referred to billionaire Tokyo Sexwale—the darling of London and Wall Street—as “my leader.” Here again is the Soros influence—Sexwale has drunk the Soros Kool-Aid and frequently referred to “the open society” in the days when he was helping to launch Malema. But Soros seems to have cut Sexwale loose in 2010, when the M&G Centre published the first of two exposés of some of Sexwale’s dirty dealings—the exposés allege that he was involved in taking over assets in the Democratic Republic of Congo that belonged to others.
The Soros operations are a major part of the picture, but not the only one. There is also the combination of Earthlife Africa, groundWork (Friends of the Earth South Africa), and Greenpeace Africa. Internationally, Greenpeace and Friends of the Earth, like their forebears the Luddites, have a history of violence.
Africa is, literally, the dark continent. A satellite photo of the continent at night demonstrates it dramatically—there are very few concentrations of light. South Africa has a mission to revolutionize Africa—and only nuclear power can provide the spark.