BRICS Policy Dialogue

BRICS Bank – Transforming the International Financial Landscape?

Brics Business CouncilOn the 19th of June 2014, Oxfam funded a meeting of the South Africa Network on Inequality (SANI), network of localy funded Oxfam partners, and the South Africa Forum for International Solidarity (SAFIS), an INGO supported formation that is trying to establish itself as a legitimate solidarity voice within South African civil society. 

The one-day policy dialogue on BRICS brought civil society organisations, academics, activists and individuals together to share insights on BRICS and also discuss some of the challenges that BRICS poses to the continent as a whole. The main focus of the discussion was to raise awareness amongst civil society organisations and individuals and to explore opportunities to engage with government to discuss the implications of the BRICS bank and other BRICS initiatives, including how BRICS intends to function in Africa, taking into considerations some of the challenges that the continent is facing.

In July 2014, a new multilateral and Southern-led development bank is expected to be launched by the leaders of Brazil, Russia, India, China and South Africa – better known as the BRICS. The BRICS Development Bank will provide a fresh source of finance for developing and emerging economies to meet their development needs. Little has been made public regarding the proposed Bank’s core mandate or activities but while governments negotiate the technicalities of the Bank, it is critical that they also provide a solid vision of the principles, priorities and objectives on which the Bank’s activities and operations will be premised. Some of the issues identified include commitments to ending extreme poverty and inequality, with a special focus on gender equity and women’s rights; aligning with environmental and social safeguards and establishing mechanisms for information sharing, accountability and redress, leadership on the sustainable development agenda, the creation of mechanisms for public consultation and debate, and the adoption of a truly democratic governance structure.

It was argued that the association of five major emerging national economies –  Brazil, Russia, India, China and South Africa (BRICS) – has 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. But given the fact that these countries are competing for raw materials, markets and trade, it remains to be seen if they truly have the best interests of the continent at heart. Despite remarkable strides made in reducing poverty within India and China, BRICS countries still house 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 BRICS Bank, and with it the promise of reforming the global development architecture, offers a real and concrete opportunity for governments of these countries to ensure development financing is sensitive to the needs of those who are poorest and most marginalized. If the BRICS Bank fights poverty and inequality it could be a big success. But if it focuses only on big-ticket schemes that fail to directly benefit poor people it could do more harm than good.

The opportunities to build stronger civil society partnerships with the BRICS initiative, and to input into and learn more from events like the BRICS Summit will be further explored by the ASC. These efforts should be led by Southern based civil society organisations and calls should be made to northern INGOs to allow space for these formations to find their own voice, avoiding the past mistakes of dominant well resourced groupings like Oxfam who have sometimes been accusedof speaking on behalf of people without any clear mandate or accountability mechanisms in place.