The BRICS countries (Brazil, Russia, India, China, and South Africa) announced their intention to fund a new development bank to challenge what they perceive as the Western-dominated agenda of the international financial institutions (IFIs). The move, which came about two weeks ago, has generated considerable discussion both of the charges leveled by the BRICS against the IFIs and about the role of the BRICS in global politics more generally.
The BRICS’s new development bank would be funded through an initial donation from each of the five countries, though considerable debate over what precisely the new bank will do. And therein lies the fundamental problem. The idea of South-South cooperation, that is, the exchange of resources, knowledge, and technology between developing countries, has been popular since the 1970s. Its proponents argued that South-South cooperation could reduce developing countries dependence on the developed world and could lead to a shift in the international balance of power away from the first world. But little real progress has been made.
And that precisely is the issue. As the al Jazeera article announcing the BRICS development bank noted, “Disputes remain over what the new bank will do, with all sides trying to mould the institution to their own foreign or domestic policy goals, and with each looking for assurances of an equitable return on their initial investment.”
Collectively, the BRICS countries represent approximately for one-quarter of global economic activity and are home to about 40 percent of the world’s population. And yet their interests are often at odds, reflecting the diversity of their political and economic experiences. Blogging at Project Syndicate, political economist Dani Rodrick argues that, “just about the only thing these countries have in common is that they are the only economies ranked among world’s 15 largest that are not members of the OECD.” Rodrick notes that in the structures of their economies (Russia and Brazil depend on commodity exports, India on Services, and China on manufacturing), their political systems (Brazil and China are democracies, China and Russia are not), and on their global position (China is rising while Russia is a superpower in decline), the BRICS have little in common.
Further, apart from the development bank proposal (which still lacks any real details), the BRICS have failed to articulate a coherent global policy in any real sense. Rodrick argues that the BRICS have played “a rather unimaginative and timid role” in global politics, while Joseph Nye notes that the diversity (indeed, the rivalry) between the BRICS countries undermine their potential to work together to develop a coherent challenge to the existing global political and economic infrastructure.
What do you think? Does the BRICS bank represent a challenge to the international financial institutions? Can Brazil, Russia, India, China, and South Africa present a new impetus for South-South cooperation? Or do the stark differences between the countries undermine the potential for effective cooperation? Take the poll or leave a comment below and let us know what you think.