Five threats faced by BRICS

Any person or institution faces opportunities and threats at one and the same time.  Here is my analysis of the five significant threats faced by BRICS in terms of business strategy and geoeconomics:

1. The posture of USA is the first in line in threat perception. Being number one power America is not going to stand down easily without offering a fight overtly and covertly. The perception that any alternative form in geoeconomics where USA is not the lead party is anathema to Americans in general and the White House in particular. In this regard, USA has plethora of counter measures. Trade flow, currency flow investment flow are three avenues where America can checkmate BRICS members in terms of geoeconomics power play.

2. EU is next in importance. As a group EU accounts for 16% of the World GDP and in currency terms USD 20 Trillion nominal and USD 28 Trillion in purchasing Power Parity (PPP). More pertinent is the manufacturing output approximately 22% of global share contributed by employing 28.5 million workers via 2 million enterprises. In addition to trade volume the Euro as a currency   could be effectively used as weapons in a one to one fight.

3. Bretton Wood sisters originally twins i.e., the International Monetary Fund (IMF) and the World Bank (WB) got another adopted sister in the form of Bank for International Settlements (BIS) christened as specialized agencies of the United Nations are out there as wolves in waiting for some easy prey. In hunting the discerning wolf looks for the weak one out of the herd to pounce upon. BRICS may sound as a united front but there are strong as well as weak members. It so happened that Saudis at the final moment declined to join the then proposed 10 member group causing the figure to be one down at nine.

4. Alternate to BRICS could emerge as soon as possible. The former global power centre ‘non-alignment’ can be dusted and brought up to the fore by vested interest which in an earlier occasion rendered it useless. The prompt action by the powers to be, knocking off Argentina from signing off with BRICS is a recent memory. There are enough countries in Africa and Latin America that could be corralled to bite the bait and become members of a new alternate group with blessings from all three interested parties, America, EU and the Bretton Wood sisters.

5. Finally it is the Trojan War to be replayed once gain by the introduction of the new Trojan Horse that might open the gates for the anti-BRICS forces to enter directly and indirectly in subverting the goals and objectives of this group and finally lead to its demise as we have seen happening in the last few decades where every attempt to demolish unipolar world met with similar fate. Which country in the BRICS could be the Trojan Horse? Your guess is as good as mine. In the geoeconomics arena anything could happen. Let’s wait and see how the western business strategy to unseat BRICS play out!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist

 

 

 

West cannot let go resource rich Ukraine, but it should

Fifteenth century war for resources is back in Ukraine now. The West fear losing Ukraine’s immense resources to Russia in the event of peace breaking out. So geoeconomics war must continue until Russia is defeated or takes out major chunk of Ukraine and comes to negotiation table.

This stark reality is now wire-framed post-delivery of Oreshnik hypersonic missile against targets in Ukraine. True, globalists have over-invested in Ukraine with money & materials. Recent attempt by the coalition of Black Rock and JP Morgan spearheading Ukraine Development Fund of USD 15 billion for re-construction of the country is well received. Although total cost for the re-construction is estimated as USD 500 Billion a start was made and that is laudable.

The types of mineral resources available across the country is mind boggling. Almost 116 types of minerals are spread throughout in and around 20,000 locations. Titanium tops the list with more than 10 to 20 million tons accounting for close upon 7% of the global findings. Lithium is estimated as 500,000 tons, largest in Europe. Ukraine is one of the top ten producers of manganese, graphite and zirconium. Many others including, sulphur, kaolin, gallium and uranium are still being counted for the total amount available. All in all the estimated value of the resources is around USD 26 Trillion.

Besides, Ukraine is one of the most fertile land with 25-30 percent of the world's black soil reserves, spread over approximately 100 million acres of agricultural land, covering vast area of the landmass. More to it: Ukraine has energy sources: coal, natural gas and crude. But things are not going the way globalists planned.

The catch is that more than 70% of these resources are located in the east of Dnipro River especially in Donbass area, where Russians are advancing steadily. My view is that oblasts Lugansk & Donetsk (collectively known as Donbass), Dnipropetrovsk, and Zaporizhzhia along with Kharkiv, Sumy and Kherson would be captured by Russia by 2025.

A geoeconomics grand bargain is better thing to do now. The West has to oblige Russian terms outlined in their SMO that began on 24^th February 2022.  Getting something out of the so far failed attempt to subdue Russia is an appropriate business strategy. Discarding the sunk cost theory is a must because otherwise there is nothing to forestall Russian juggernaut reaching Russian-Polish border.  

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategis

 

 

 

Chinese USD bonds issue in Riyadh, key takeaways

Business strategy amid geoeconomics made a big display recently in Riyadh when China issued USD Bonds amounting to 2 Billion that was oversubscribed by 20 times. Here are key takeaways of this issue:

1. The issue in question was made by China after a lapse of three years, a dual tranche, with duration 3 and 5 years and amounting to USD 2 Billion, tradable both in Dubai & Hong Kong.

2. Riyadh as a location was carefully chosen as the issue can be easily sponged by petrodollars available in plenty on the one hand and promoting Riyadh as a financial centre, mindful of fact that the People's Bank of China and the Saudi Arabian Monetary Authority have signed earlier on 20^th November 2023, a currency swap of US$6.98 billion for three years.

3. Behind this issue underlies a crafty business strategy of capitalizing quietly upon the petro yuan and to encourage its use. Needless to say Saudi Arabian officials are on record expressing willingness to accept the Chinese yuan as payment for crude on the eve of the visit of Premier Li Qiang's visit to the kingdom in September 2024.

4.  Here is the masterful move. Once the bonds matures the proceeds in USD would follow back to America for which the Government there has no mirror facilities to utilize these. On the flip side of the coin, stands the inability of America to issue fresh USD dominated bonds of the same tenor and amount as the market stands saturated by this tranche.

5. Looking from the contrarian point of view it is not only America that can print USD, if  the trend continues China would be able just to print US$ currency indirectly.

6. Solely, from the point of view of USD debt, China gets more and more opportunities to issue USD dominated bonds without ever coming under the purview of US monetary authorities. Consequently, excess supply of dollars take US inflation tads higher than what the Fiscal planners would have already planned to tackle.

7. In the medium run KSA and the Gulf monarchies would be dis-incentivised to park their funds in America as they have already a brightening market close home territory in Dubai & elsewhere in Mid-East region for investments.

8. Finally, in the long run China scuppers the ability of US administration issuing US debt instruments to finance among other things the policy of ‘forever war’ targeted against the global south. At this point China can deliver a double whammy by scaling down trade with USA that brings excess USD inflow into China and whatever Dollar funds raised via issue of bonds to be easily transferred into BRI projects worldwide.

In sum, Riyadh bond issue would go down in the history of geoeconomics as Sun Tzu style business strategy intend to take the daylight out of the embattled USA!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist