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BRICS bank a necessary step, but needs more transparency
At their Summit in Fortaleza, Brazil on July 15-16, the leaders of the BRICS nations (Brazil, Russia, India, China and South Africa) are expected to announce the details of the much anticipated “BRICS Development Bank”.
The idea of this bank was first mooted at the 2012 BRICS Summit in New Delhi, where the Finance Ministers of the collective were charged with preparing a feasibility report on a ‘New Development Bank’. In 2013, at its fifth Summit in Durban, South Africa the BRICS announced their intent to launch the bank in 2014. Little information was revealed to the global community then, other than an agreed focus on “mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries”, and in a manner that will “supplement the existing efforts of multilateral and regional financial institutions for global growth and development”.
This matters. The BRICS have a special responsibility towards helping the world achieve its goal of ending extreme poverty, reducing inequality and achieving sustainable development as they collectively represent some of the world’s greatest challenges and achievements. Despite remarkable strides made in reducing poverty within India and China, BRICS nations are home to nearly half of the world’s poor and – with the exception of Brazil – have experienced a rise in inequality in recent years.
The creation of a Southern-led BRICS Bank, and with it, the promise of reforming the global development architecture, offers a real and concrete opportunity for governments of the BRICS countries to ensure that development financing is sensitive to the needs of those who are poorest and marginalised.
Details of what is planned are sketchy, and little is in the public domain. This needs to change. It is time for the discussion to move beyond the BRICS governments’ current focus on technicalities around capital contribution and governance, and instead provide a solid vision for the principles, priorities and objectives on which the bank’s activities and operations should be premised.
The BRICS Bank could – and should - be used as an instrument to promote pro-poor development and reduce inequalities, both within the BRICS countries, as well as in other partner countries where projects will be implemented.
So what needs to happen? Firstly, it is essential that the BRICS bank is built and operates in a way that puts fighting poverty and inequality at the heart of its mission. Second, it must be set up in a way that is transparent and accountable both to BRICS citizens – whose money will form the bank’s capital - and to people in borrower countries. Finally, the bank needs to institute safeguards and accountability mechanisms which protect and promote the interests of everyone affected by the projects it funds.
In the next weeks and months, India has an opportunity and responsibility to influence the shape of the BRICS bank, and to make sure it prioritises the interests of the poor. It is an opportunity that we must seize, not just for the sake of our country, but for people living in poverty throughout the world.
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