This week leaders from the five BRICS nations – Brazil, Russia, India, China and South Africa – have been meeting in Durban to discuss what is next for this group of new global powers.
Compared with previous summits, this meeting was met with a greater fanfare –partly because of the much anticipated announcement of the BRICS bank, an initiative first announced in last year’s BRICS summit in India.
They announced that the “New Development Bank (NDB)” – as the BRICS bank is now being called – will be launched, and it will focus on infrastructure and sustainable development. But there are more questions than answers. When will the NDB be launched? How much money will countries contribute? What will the governance structure look like? What kind of social and environmental safeguards will there be? What will be the level of transparency?
We were told that some of these questions would be answered in the formal announcement of the NDB – they haven’t been. And perhaps this tells us more about the BRICS group than we knew before.
An alliance of very different countries
For all the hype, BRICS is still an alliance of very different countries, in very different points in their development, and with very different ideas of what they would like to contribute to the world. The fact that they can even agree on this little step might in fact be reason to celebrate.
Buried in the statement announcing the NDB is a $100 billion Contingency Reserve Agreement (CRA), a fund that would be accessible to BRICS countries in the event of financial crisis. Though it might sound rather technical, this is an important development. It means, for the BRICS countries at least, they may no longer be at the mercy of the IMF and its misguided structural adjustment programmes in the event of crisis.
If the CRA does not include harmful economic conditions, is expanded to more countries, and if it can play more than a symbolic role in terms of stabilising international financial flows, it may mark a new era in global development, one in which workers and poor communities are not made to suffer for the excesses of international bankers.
As with all such proposals, the devil is in the details. The BRICS bank may talk of sustainable development, but this term has been so overused in recent years that it has lost meaning. Will it be a genuinely pro-poor, environmentally friendly model or will it be a cover for a corporate-driven exploitative model, based on the policies of Europe and the United States for the past 60 years?
The CRA sounds more radical, but it will only challenge the status quo if it challenges the model. Developing countries especially on the African continent have for too long been dependent on the export of raw commodities to maximise profit for local and global elites.
New development strategies have to focus on the need for economic transformation to ensure full employment, the creation of better jobs and human rights for all so that the cycle of poverty can at last be broken.
The BRICS countries can be a powerful force pushing for change in their own economies and internationally; or they can be another powerful force pushing for the more of the same – this time with companies from their countries instead of just from Europe and the U.S.
It’s too early to know which of these will happen, but poor communities and their allies in civil society must push for the former. There’s too much at stake to sit on the sidelines.