Wednesday, July 30, 2014

BRICS Bank to Complement/Challenge "Bretton Woods Twins" (World Bank & IMF) - Fortaleza Summit Creates New Development Bank and Contingency Reserve Arrangement - "Energy Association" of Major Developing Countries - BRICS Countries Building a New Internet Backbone via an Undersea Fiber-Optic Cable

Emerging Nations Set Up BRICS Bank to Counter Western Domination

Alonso Soto and Anthony Boadle, Reuters
July 16, 2014, 3:48 AM

Russian President Putin, Indian Prime Minister Modi, Brazilian President Rousseff, Chinese President Xi and South African President Zuma talk at a group photo session during the 6th BRICS summit in Fortaleza (Thomson Reuters)

FORTALEZA Brazil (Reuters) – Leaders of the BRICS emerging market nations launched a $100 billion development bank and a currency reserve pool on Tuesday, in their first concrete step toward reshaping the Western-dominated international financial system.

The bank, aimed at funding infrastructure projects in developing nations, will be based in Shanghai, and India will preside over its operations for the first five years, followed by Brazil and then Russia, leaders of the five-country group announced at a summit.

They also set up a $100 billion currency reserves pool to help countries forestall short-term liquidity pressures.

The long-awaited bank is the first major achievement of the BRICS countries – Brazil, Russia, India, China, and South Africa – since they got together in 2009 to press for a bigger say in the global financial order, created by Western powers after World War Two and centered on the International Monetary Fund and the World Bank.

The BRICS were prompted to seek coordinated action following an exodus of capital from emerging markets last year, triggered by the scaling back of U.S. monetary stimulus. The new bank reflects the growing influence of the BRICS, which account for almost half the world's population and about one-fifth of global economic output. The bank will begin with a subscribed capital of $50 billion divided equally among its five founders, with an initial total of $10 billion in cash put in over seven years and $40 billion in guarantees. It is scheduled to start lending in 2016 and be open to membership by other countries, but the capital share of the BRICS cannot drop below 55 percent. The contingency currency pool will be held in the reserves of each BRICS country and can be shifted to another member to cushion balance-of-payments difficulties. This initiative gathered momentum after the reverse in the flows of cheap dollars that fueled a boom in emerging markets for a decade. "It will help contain the volatility faced by diverse economies as a result of the tapering of the United States' policy of monetary expansion," Brazilian President Dilma Rousseff said.

"It is a sign of the times, which demand reform of the IMF," she told reporters at the close of the summit.

China, holder of the world's largest foreign exchange reserves, will contribute the bulk of the contingency currency pool, or $41 billion. Brazil, India, and Russia will chip in $18 billion each and South Africa $5 billion. If a need arises, China will be eligible to ask for half of its contribution, South Africa for double, and the remaining countries the amount they put in. Negotiations over the headquarters and first presidency were reached at the eleventh hour, due to differences between India and China. The impasse reflected the trouble Brazil, Russia, India, China, and South Africa have had in reconciling stark economic and political differences that made it hard for the group to turn rhetoric into concrete action.

"We pulled it off 10 minutes before the end of the game. We reached a balanced package that is satisfactory to all," a Brazilian diplomat told Reuters.

Negotiations to create the bank dragged on for more than two years, as Brazil and India fought China's attempts to get a bigger share in the lender than the others.

In the end, Brazil and India prevailed in keeping equal equity at its launch, but fears linger that China, the world's No. 2 economy, could try to assert greater influence over the bank to expand its political clout abroad. China, however, will not preside over the bank for two decades.

Facing efforts by leading Western nations to isolate Russia for annexing Crimea and stirring revolt in eastern Ukraine, the BRICS summit provided President Vladimir Putin with a welcome geopolitical platform to show he has friends elsewhere, economic powers seen as shaping the future of the world.

The BRICS abstained from criticizing Russia over the crisis in Ukraine, and called instead for restraint by all actors so the conflict can be resolved peacefully.

http://www.businessinsider.com/r-brics-set-up-bank-to-counter-western-hold-on-global-finances-2014-15


BRICS establish $100bn Development Bank to cut out Western dominance (RT)

Escobar: BRICS bank on its way to beat casino financial system (RT)

BRICS Bank to Rival Western Banking Monopoly | Interview
with Vijay Prashad (RT)

BRICS Establish $100 Billion Bank to Rival IMF, Western 
Dominance! (Dahboo7)

________

BRICS bank to be worth $100 bn; India gets first presidency

Associated Press | Fortaleza (Brazil) | Updated: Jul 16 2014, 08:49 IST

Summary

BRICS leaders give final nod to creating their own development bank with headquarters in China.

Vladimir Putin shakes hands with Xi Jinping as Narendra Modi looks on during BRICS Summit in Fortaleza. (Reuters)

The leaders of five emerging market powers said at a summit Tuesday that they gave final agreement to creating their own development bank worth $100 billion that will have its headquarters in China.

The first president of the New Development Bank will be from India and the position will rotate every five years among Brazil, Russia, India, China, and South Africa – the so-called BRICS nations, a joint statement from the leaders said.

BRICS leaders conferred in a closed session earlier in the day at their conference in northeastern Brazil, then announced concrete plans for the bank at an afternoon session open to the press.

The new bank is seen as a strong push by the BRICS against the World Bank and the International Monetary Fund, which the developing world has long complained is far too U.S.- and European-centric.

"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," the statement said.

Russian Foreign Minister Sergey Lavrov told the Russian news agency ITAR-TASS that the decision "confirmed that BRICS members, while speaking against unilateral actions in the world economy and politics, are not seeking confrontation but propose working out collective approaches toward the resolution of any problems."

The New Development Bank will have an African regional branch in South Africa, and eventually other nations would be able to participate.

The statement also alluded to Brazil's and India's longstanding quest to overhaul the United Nations Security Council, of which China and Russia are two of five permanent members with veto power. Those nations have in the past proved reluctant to endorse Brazil's and India's ambitions, but Tuesday's statement said the BRICS nations "support their aspiration to play a greater role in the U.N."

Though exhaustive, the joint statement largely steered clear of potentially divisive issues, like the conflict in Ukraine between pro-government and pro-Russia factions.

It touched only briefly on the matter, saying the five countries expressed their "deep concern" with the situation in Ukraine and urged "comprehensive dialogue, the de-escalation of the conflict, and restraint from all the actors involved, with a view to finding a peaceful political solution, in full compliance with the U.N. Charter and universally recognized human rights and fundamental freedoms."

http://www.financialexpress.com/news/brics-bank-to-be-worth-100-bn-india-gets-first-presidency/1270294
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Source: The Conversation

World Bank watch out, the BRICS Bank is a game-changer

21 July 2014, 10.47am
BST Ali Burak Güven
Lecturer in International Relations & International Political Economy at Birkbeck, University of London

Banking on success. Ria Novosti/EPA

The top news from this year’s BRICS summit was the announcement of a New Development Bank. Headquartered in Shanghai, the bank will become operational in 2016 with an initial capital of US$50 billion. Its core mandate is to finance infrastructure projects in the developing world.

The bank, announced at the summit in Fortaleza, Brazil, will also have a monetary twin to provide short-term emergency loans, the Contingency Reserve Arrangement. While the bank will be open to all UN members, the reserve will lend only to the contributing BRICS countries in times of crisis.

This combination of timing, actors, and institutions is noteworthy. It was in July 1944 that the Allied nations gathered at Bretton Woods to form two of the most vital institutions of the post-war era: the International Monetary Fund and what would become the World Bank. Now, 70 years later and only a few years on from the global financial crisis, the leading developing nations of our time have joined forces to forge new institutions of international economic cooperation with mandates identical to the World Bank and the IMF.

This move is born out of a belief that the Bretton Woods twins, despite numerous governance reform initiatives over the past decade, remain set to reflect the policy preferences of their original creators. In creating complementary institutions, the BRICS will be hoping to use these alternative platforms of international economic governance as leverage to accelerate the reform of existing arrangements.

Game-changing potential

The New Development Bank is currently the more interesting of the “Fortaleza twins”, for it is designed as a freestanding organisation that’s open to all. Yet it has not received a warm welcome in business columns. While the political symbolism of the new institution is widely acknowledged, its immediate economic utility has been challenged – why do the BRICS need a development bank of their own when infrastructure projects are already easily financed through private as well as official channels, especially through the World Bank?

This is a narrow criticism. In the long run, the New Development Bank has the potential to become a game-changer in development financing. In fact, if its evolution even remotely parallels that of the World Bank, it might end up having a formative impact on economic policy-making and overall development strategy in the Global South.

To begin, while there is no shortage of national and regional development banks as well as private financiers of infrastructure projects, there is still a massive gap in development finance, estimated to be as high as US$1 trillion per year. Many developing countries encountered significant financing problems during the global crisis of the late 2000s. This shortfall necessitated a surge in World Bank commitments, from an annual US$25 billion in 2007 to about US$60 billion in 2010.

But commitments declined just as swiftly over the past few years, and as of 2013 stood at about $30 billion. Given these figures, the New Development Bank’s readily available $10 billion in paid-up capital and the extra $40 billion available upon request are not exactly pocket money for development financing.

Yet just as the World Bank was never simply a money lender, so too will the new bank represent far more than a mere pool of funds. The existing geostrategic and policy inclinations of its founding stakeholders imply a bigger role to play for the institution. In the process, it is bound to offer a formidable challenge to the World Bank’s financial prominence and so influence policy in the developing world.

Client-side

The new bank has been long in the making. It is the culmination of nearly two decades of intense South-South cooperation and engagement. In recent years especially, the BRICS and other emerging nations have become donors and investors in both their immediate regions and in less developed areas of the world – with Chinese and Brazilian involvement in sub-Saharan Africa and parts of Latin America representing the prime examples.

They have made an effort to establish more equal relationships with their lower-income developing peers and have emphasised an attractive narrative of partnership, non-intervention, and knowledge transfer, instead of smug, superior Western notions of top-down aid and restrictive conditionality. To the extent that it could keep its rates competitive, the New Development Bank is unlikely to suffer from a dearth of clients from among its fellow developing nations.

Paradoxically, BRICS and other large middle-income countries still remain the most valuable clients of the World Bank. Since the financial crisis, India has been the largest borrower from the World Bank, and has been closely followed by Brazil, China, and a few other near-BRICS such as Indonesia, Turkey, and Mexico. But once the new bank fully kicks off, it is possible the World Bank will lose a lot more business from this traditionally lucrative market of large middle-income borrowers who now have a serious alternative.

Political implications

A reduced loan portfolio will ultimately translate into declining policy influence for the World Bank, which has held a near-monopoly on development wisdom over the past 70 years. Perhaps in recognition of their waning power, there has already been a slight but steady decline in World Bank loans that emphasise policy and institutional reforms.

Also, a larger portion of the Bank’s resources have been allocated to conventional development projects, such as environment and natural resource management, private sector development, human development, and social protection. These are precisely the types of projects in which the Bank will encounter fierce competition from the new BRICS-led bank.

Knowledge and power

Consider also that the World Bank has labelled itself as a “knowledge bank” in recent years. Employing thousands of policy specialists, it doubles as one of the biggest think tanks in the world. Yet if it loses considerable financial ground to initiatives such as the New Development Bank, this threatens a decline in the power it has through knowledge.

Crucially, none of the BRICS adhere to the Bank’s standard policy prescriptions, nor do they advocate a different common strategy either. Brazil’s social democratic neo-developmentalism is quite different from China’s state neoliberalism, which in turn differs from established policy paths among others in the group. The only common denominator is a substantially broader role given to the state. But beyond this, there is much flexibility and experimentation, and little in the way of templates and blueprints like there is with the Western institutions. This policy diversity itself dismisses any idea of superiority of knowledge and expertise.

None of this suggests that the World Bank, as the dominant, Northern-led development agency, is now on an ineluctable path of decline. Cumbersome as they may appear, large organisations often accumulate considerable resilience and adaptive capacity over generations. Yet the World Bank does have a serious contender in the New Development Bank.

While it may not overtake the World Bank in financial prowess and policy influence any time soon, at a minimum it should be able to exert significant pressure over the World Bank to respond more sincerely and effectively to the new balance of power in the global economy.

http://theconversation.com/world-bank-watch-out-the-brics-bank-is-a-game-changer-29437


BRICS summit decisions may change world economic climate (ITAR-TASS)

World Bank Chief Welcomes New BRICS Development Bank (IBTimes UK)

BRICS will launch their long-awaited development bank at a summit next week (PressTV)
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Walking the talk: Indian to be first CEO of BRICS Bank, Shanghai will host NDB

By Manish Chand 16 Jul 2014

Don’t write off BRICS; bank on BRICS. The journey that started in Delhi two years ago culminated in the Brazilian seaside resort town of Fortaleza July 15, with the formal launch of a BRICS-patented New Development Bank that seeks to provide an alternative source of infrastructure finance to emerging economies and the larger developing world.

The BRICS Bank, as it was informally called, found crystallisation at the sixth summit of the grouping in Brazil, with the leaders unveiling key facets of the bank that marks a major defining step in remapping the West-dictated global financial architecture. Finally, the developing world has a Development Bank of its own sans asymmetries of the post-war Bretton Woods institutions. The negotiations had gone down to the wire, with the leaders agreeing on the architecture of the New Development Bank, based on the principle of equity.

In a pithy and eloquent speech at the plenary session of the BRICS summit at the Ceara Convention Centre in Fortaleza, India’s Prime Minister Narendra Modi encapsulated the spirit and essence of the BRICS Bank. “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.”

Intense partisan lobbying preceded before the details of the bank were firmed. The location of the headquarters of the Bank was embroiled in last-minute hectic negotiations, with India pushing hard for Delhi to host this prized institution and China pulling out all stops to get other BRICS leaders to endorse Shanghai as the HQ of the new bank of the developing world, managed and driven by emerging powers of the global South.

In the end, China, the largest economy within the BRICS grouping, with over 3 trillion dollars in foreign exchange reserves, prevailed, with Shanghai declared as the seat of the Bank in the July 15 Fortaleza Declaration. It could have been a disappointment for India, but it was somewhat mitigated by the collective decision by BRICS leaders to get an Indian to head the Bank. Reliable sources said that there was a trade-off between Indian and Chinese negotiators, with India willing to concede China’s case to host the bank in return for an Indian to get the rotating presidency of this signature project. The Fortaleza Declaration reflected consensus and a generous spirit of give-and-take on the broad contours of the NDB.

Clearing the thicket of confusion and speculation surrounding the Bank, the Fortaleza Declaration spelt out key features of the Bank: I) 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. II) The first President of the Bank shall be from India. III) The first chair of the Board of Governors shall be from Russia. IV) The first chair of the Board of Directors shall be from Brazil. V) The New Development Bank Africa Regional Center shall be established in South Africa concurrently with the headquarters.

The BRICS leaders directed their finance ministers to work out the modalities for its operationalisation. If all goes well, and there are all indications it will, the Bank will start lending by 2016.

Touted as an alternative to the West-dominated IMF and World Bank, the Fortaleza Declaration was more grounded and pragmatic in the mandate and agenda of this first multilateral institution of the South. “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.”

The leaders of BRICS countries also formally announced 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,” said the Fortaleza Declaration.

With the concretisation of these two signature initiatives, the BRICS club of emerging powers has proved beyond a shade of doubt that the BRICS is not a glorified talk shop, but a powerful instrument for recasting the world order. Dial B for BRICS, and dial B for business.

http://www.indiawrites.org/diplomacy/walking-the-talk-indian-to-be-first-ceo-of-brics-bank-shanghai-will-host-ndb/


BRICS bank likely to have same problems as World Bank and IMF (News24)

BRICS Development Bank: Is this a way to depoliticise Chinese credit? (CNBC Africa)

Is the New BRICS Bank a Challenge to US Global Financial Power?
(The Real News)


BRICS: Progressive Rhetoric, Neoliberal Practice
(The Real News)


Webster Tarpley (July 19, 2014): Malaysian Airliner Massacre is Wall Street-City of London Riposte to Fortaleza Summit’s Creation of BRICS Bank, The Most Formidable Challenge Yet to International Monetary Fund, World Bank, Federal Reserve and Dollar Domination of World Trade; Putin Should Implement Full Glazyev Dirigism in Response to New US Sanctions [download audio] or [YouTube version]

Jim O'Neill - BRIC Countries and the Global Economy


Putin to Form ‘Energy Association’ of Major Developing Countries

Michael Bastasch
07/22/2014 – The Daily Caller

While the world is distracted by escalating tensions in Ukraine, Russian President Vladimir Putin announced plans to create an “energy association” of developing countries.

World Nuclear News reports that Putin is looking to form an energy coalition, complete with its own “fuel reserve bank and an energy policy institute,” among BRICS nations. BRICS countries include the world’s major developing economies of Brazil, Russia, India, China, and South Africa.

The energy alliance would seek greater cooperation between BRICS, including nuclear power agreements.The announcement comes after BRICS agreed to form a New Development Bank to act as an alternative to the World Bank and International Monetary Fund.

“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,” Putin announced at the 6th annual BRICS meeting in Brazil.

“It would be possible to create a fuel reserve bank and an institute of BRICS energy policy under its auspices. These steps would allow strengthening energy security of our countries,” Putin added.

In the wake of the unrest in Ukraine, Russia has been looking to expand its energy influence outside of Europe as the continent looks for ways to wean itself off of Russian oil and gas. Putin recently sealed a natural gas pipeline deal with China, where the growing economy is hungry for more energy.

Russia has also been increasingly looking to strengthen its energy ties with South America. Prior to the announcement, Russia had already “signed a number of nuclear power cooperation agreements,” reports Nuclear World News.

The Russian state-owned nuclear company Rosatom signed agreements with Argentina and Brazil earlier this month for construction of nuclear power plants, generators, and storage facilities in South America.

Putin himself has already held talks with Indian Prime Minister Narendra Modi on expanding the two countries’ energy and defense partnerships. India is also negotiating with Russia on extending an international natural gas pipeline as well.

Russia’s expansion of natural gas pipelines to Asia has some market analysts and lawmakers worried that the U.S. may miss out on the opportunity to ship its own natural gas to potential east Asian customers.

“Competition in the international gas markets is bound to heat up, and the United States may have already missed its opportunity for an LNG [liquid natural gas] export bonanza,” writes Richard Martin of Navigant Resources for Forbes magazine. “Expanding pipelines, more export terminals, and better technology for liquefying and shipping natural gas will all help globalize the natural market, in the way the crude oil market is already globalized.”

“Already, the relatively low price that China will pay for Russian gas (around $350 per thousand cubic meters, analysts estimate) is putting downward pressure on higher prices for Japan and South Korea,” Martin added.

http://dailycaller.com/2014/07/22/putin-to-form-energy-association-of-major-developing-countries/

Russia and China Do Pipelineistan (Zero Hedge)
________

Source: Voice of Russia

BRICS countries are building a "new Internet" hidden from NSA

28 October 2013
Valentin Mândrăşescu

The NSA spying scandal created a need for a cyberspace hidden from the prying eyes of American spooks. While countries like Germany are trying to create a secure cyberspace built on current infrastructure, a consortium of BRICS companies are working to create a "new Internet". The Hindu reports that Brazil is building a "BRICS cable" that will create an independent link between Brazil, South Africa, India, China, and Russia.

The length of the fiber-optic cable will be over 21 thousand miles, making it one of the most ambitious underwater telecom projects ever attempted. The cable will run from the Brazilian town of Fortaleza to the Russian town of Vladivostok via Cape Town, Chennai, and Shantou.

The main goal of the project is to create a network inaccessible to the NSA, bypassing all parts of internet infrastructure located outside BRICS countries. While this ambitious project certainly has potential, it also has some inherent weaknesses. So far, it is not clear whether the project company has enough funds to finish it, although the Brazilian president has voiced her support for the cable's construction. It remains to be seen whether this political support will generate financial support from Brazil or from other countries. Another weakness is that the cable will only protect the data sent through it and won't help the people who use US-based web services like Google, Facebook, or Yahoo because American IT companies have been willingly helping the NSA spy on their users. The last significant weakness is that the cable will still be vulnerable to eavesdropping by specialized American military units, which learned how to intercept communications on underwater cables during the Cold War. It is possible that constant checking and patrolling of the cable will be required in order to protect it from US intelligence agencies or from the American military. All these weaknesses can be overcome through cooperation of BRICS political leaders, IT companies, and maybe militaries. In today's world, privacy is an expensive privilege, but BRICS countries are one of the few able to pay for it.

http://voiceofrussia.com/2013_10_28/BRICS-countries-are-building-a-new-Internet-hidden-from-NSA-7157/

  BRICS Cable video
 
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Source: Infowars

BRICS countries building new internet to avoid NSA spying

Fiber optic undersea cable bypassing U.S. to be completed by 2015

Paul Joseph Watson
Infowars.com
October 24, 2013

BRICS countries are close to completing a brand new Internet backbone that would bypass the United States entirely, and thereby protect both governments and citizens from NSA spying.

In light of revelations that the National Security Agency hacked German Chancellor Angela Merkel’s phone, in addition to recording information about 124 billion phone calls during a 30-day period earlier this year, the fallout against the NSA has accelerated.

Brazil is set to finalize a 34,000-kilometre undersea fiber-optic cable by 2015 that will run from Vladivostok, Russia to Fortaleza, Brazil – via Shantou, China; Chennai, India; and Cape Town, South Africa.
According to The Hindu, the project will create “a network free of US eavesdropping,” which via legislative mandates will also force the likes of Google, Facebook, and Yahoo to store all data generated by BRICS nations locally, shielding it from NSA snooping.

“The BRICS countries have the muscle to pull this off,” notes Washington’s Blog. “Each of the BRICS countries are in the top 25 largest economies in the world. China has the world’s second largest economy, India is 3rd, Russia 6th, Brazil 7th, and South Africa 25th.”

However, some privacy experts fear that this will do little to stop the NSA, given that it has tapped undersea cables since the Cold War era. Others are more positive.

“Any alternative would be a positive thing,” writes Michael Dorfman. “The more choice you have, the better. Yet no-one can say for sure whether this new Internet will be safer than its US counterpart and will be able to protect the rights of regular users, including the privacy of personal data and free access to resources, more effectively.”

The BRICS cable was already in development months before the revelations of whistleblower Edward Snowden first became public in June.

In September it emerged that the NSA had been spying on Brazilian government communications as well as Brazilian oil company Petrobras. Spooks hacked into the firm’s computer network to eavesdrop on conversations between CEOs.

The current Internet architecture is dominated by ICANN (the Internet Corporation for Assigned Names and Numbers), which is largely controlled by the United States.

Other entrepreneurs are also fighting back against NSA surveillance. Tech maverick John McAfee recently announced that he was to fund a $100 gadget named Decentral that would sync up with a modem to thwart NSA spying and provide total anonymity.

Asked what he would do if the US government banned the product, McAfee responded, “I’ll sell it in England, Japan, the Third World. This is coming and cannot be stopped.”

READ ALSO:
- Analyst: Germany Secretly Planning to Join BRICS
- BRICS Nations Plan New Bank to Bypass World Bank, IMF
- The BRICS' "Independent Internet" Cable, in Defiance of the "US-Centric Internet"

http://www.hangthebankers.com/brics-countries-building-new-internet-to-avoid-nsa-spying/


Brazil-Europe Internet cable to cost $185 million

February 13, 2014, 7:38 am

Rousseff has worked with European and South American allies to pressure the US on illegal NSA spying overseas [Xinhua]

Brazil is pushing ahead with plans to boost its Internet security by developing an undersea fibre-optics communications cable that would reroute its online traffic directly to Europe, bypassing the United States.

State-owned telecom provider Telebras recently announced that it was entering into a joint venture with Spain’s IslaLink Submarine Cables to build a link between the northeastern city of Fortaleza and the Iberian Peninsula.

The undersea cable is budgeted at $185 million and construction is scheduled to begin in July.

Brazil, along with most Central and South American countries, traditionally routes its Internet traffic through the Network Access Point, which is hosted in Miami, Florida.

Brazil, Russia, India, China, and South Africa currently use hubs in Europe and the US to connect to one another, which translates into higher costs and leaves open the opportunity for data interception and theft.

Telebras project coordinator Ronald Valladão says the cable will boost Brazil’s Internet security and cut online costs for the consumer.

“This new submarine cable provides a direct connection to the European continent, decreasing latency. It is expected that this will result in cost reductions,” he recently told the media.

Since Edward Snowden, the National Security Agency contractor who leaked vital intelligence to the media on US domestic and overseas surveillance, published information that Washington was aggressively spying on Brazilian officials, including the president, Brasilia has made Internet security and communications a priority.

Brazil and its fellow BRICS partners are also moving ahead with building a massive undersea cable that would connect all members.

By the time it is completed, the BRICS Cable will be the third longest undersea telecommunications cable in the world, covering a distance of 34,000 km.

Brazilian President Dilma Rousseff has also pushed a new Internet bill that would compel Google, Facebook, and other networks to store locally gathered data in the country, and not on overseas servers.

The new legislation would force foreign-based Internet companies to maintain data centres inside Brazil that would then be governed by Brazilian privacy laws, officials said.

Rousseff has repeatedly said that the US spying regimen is unacceptable, and postponed an official visit to the US originally scheduled for October 23 in protest.

“The illegal practices of intercepting the communications and data of citizens, companies, and members of the Brazilian government constitute a serious act against national sovereignty and individual rights, and are incompatible with the democratic coexistence of friendly countries,” a presidential statement said when revelations of espionage in Brazil were made public.

On November 24, Brazil and Argentina urged other South American countries to discuss a bilateral treaty on cyber-security.

On November 27, the UN Rights Committee passed a “right to privacy” resolution, drafted by Brazil and Germany.

The Third Committee of the UN General Assembly, which deals with social, humanitarian, and cultural affairs, unanimously adopted the resolution, saying surveillance and data interception by governments and companies “may violate or abuse human rights.”

In late January, talks between Brazil and the US failed to satisfactorily answer the spying charges or eke out a “permanent solution” to restore bilateral ties damaged by the Snowden revelations.

http://thebricspost.com/brazil-europe-internet-cable-to-cost-185-million/

Prime Minister Narendra Modi poses with leaders of the BRICS and South American nations at the BRICS summit at Itamaraty palace in Brasilia, Brazil on Wednesday

Sixth BRICS Summit – Fortaleza Declaration

Putin Blamed for #MH17 to Launch Attack on BRICS World Bank

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