Seventh BRICS Summit concludes
Leaders of the BRICS member states—Brazil, Russia, India, China, and South Africa—met at the seventh annual BRICS summit held on July 8-9, 2015 in the Russian city of Ufa. At the summit themed, “BRICS Partnership—A powerful factor for global development,” members discussed the two major initiatives that were formalized at their last meeting in Fortaleza, Brazil in July 2014: the New Development Bank and a Contingent Reserve Arrangement. The development bank, headquartered in Shanghai, is estimated to be operational by the first quarter of next year. It has a capital base of $50 billion at present to fund infrastructure and other development projects in BRICS and other developing economies. The Contingent Reserve Arrangement, a $100 billion BRICS contingency fund to help countries forestall short-term liquidity pressures, will be operational in 30 days.
The summit also addressed important issues of terrorism, economic instability, industrial development and increasing the competitiveness of BRICS countries in the global economy. The BRICS deliberations on the current global political and economic situation are reflected in the Ufa declaration signed by the member states yesterday.
African markets react to the Greek debt crisis
This week, global markets reacted strongly to the unfolding Greek debt crisis and Greece’s possible exit from the eurozone. Several African countries—in particular Tanzania, Egypt, and South Africa—have cited that the crisis in Europe is also affecting regional African market conditions. In Tanzania, for example, the volatile market environment created by the crisis has forced the Central Bank to postpone its plan to secure $600 million in funding through a private placement (a non-public offering) so that it can avoid being subject to unusually strict conditions for the loan. Financial analysts in Egypt have also remarked that the Egyptian stock market dropped to its lowest point in more than a year, in part due to fears of a potential global financial crisis stemming from the possible “Grexit.” South Africa’s rand weakened against the U.S. dollar last week as investors shed riskier emerging market assets due to concerns over the Greece crisis’ impact on global markets. Still, Bloomberg reports that market volatility in China, South Africa’s largest trading partner, will be a bigger risk to South Africa than the Greek crisis, given China’s demand for South African commodities.
U.S. appoints Tom Perriello special envoy for the Great Lakes Region of Africa
On Monday, July 6, the State Department announced the appointment of Tom Perriello, former U.S. congressman from Virginia, as the new special envoy for the Great Lakes region of Africa. Perriello succeeds former U.S. Senator (and long-term Chairmen of the Senate Subcommittee on Africa) Russ Feingold in the role after he resigned to announce his campaign to re-join Congress. Several advocacy groups have voiced strong support for Perriello’s appointment, including John Prendergast of the Enough Project, who stated that the former lawyer was “well positioned” to take over for Feingold, who was widely credited with many diplomatic successes in the region. Proponents of Perriello cite his service in International Court for Sierra Leone as an important representation of his qualification for the position. However, several analysts, such as noted academic Laura Seay, are critical of the choice, stating that Perriello lacks “knowledge about the Great Lakes, relevant language skills, and strong networks of contacts.” As the new special envoy in the region, Perriello will have responsibility for implementing U.S. policy in Burundi, the Democratic Republic of the Congo (DRC), Rwanda, and Uganda—Central African countries with precarious political environments and histories of extreme instability and violence.