The BRICS countries (Brazil, Russia, India, China and South Africa) on Wednesday were wrapping up what has, since 2009, been their annual meeting. Held this year in Durban, South Africa, a site of many significant international conferences, the five countries with rapidly growing economies and enormous populations were largely expected to announce the creation of a development bank that would be more sensitive to their needs as developing countries.
Such a bank would also serve as a counterbalance to the World Bank and the International Monetary Fund, which have traditionally been seen as prioritizing the interests of the West. Indeed, both institutions have been headed solely by Americans and Europeans since their inception at the Bretton-Woods Conference in the wake of the Second World War.
The BRICS countries represent just over 40 percent of the world’s population, and measured in dollars their collective GDP is about one quarter of the global total and growing. The anticipated statement about a bank, however, was pushed back to a later date, though the group did announce that they would be putting together a $100 billion fund of central bank reserves as a bolster against future economic crises.
Much is made of the widely divergent economies and societies comprised by the five “emerging market” nations, with Russia and China largely still considered autocratic states. These disparities have been routinely cited when noting the failure of the Durban meeting as well as last year’s meeting in Delhi to make the development bank happen, and certainly they play their role.
At the same time, institutions like the IMF and the World Bank had the benefit of being created at an extraordinary time of global crisis, with the United States and allies firmly in charge of the proceedings and dictating the terms. The BRICS countries are not by any means working from such a position of strength, and putting together such a massive project would certainly take time.
On the other hand, the announcement about the $100 billion dollar fund is not insignificant. China, being the largest economy in the group, will provide the bulk, at $41 billion, while Russia, India and Brazil will give $18 billion each, with South Africa pitching in $5 billion. Though the mechanisms of the fund’s operation have not yet been established, the project is far more feasible than the development bank, and would serve as an alternative to dependency on some of the more traditional Western-funded economic assistance packages, which many on the Asian continent feel come often times at too high a cost.