BRICS nations plan new development bank

The BRICS group of five nations—Brazil, Russia, India, China and South Africa—held its sixth annual summit this year from July 14 to July 16 in Fortaleza in the northeastern Brazilian state of Ceará and in Brasilia, the Brazilian capital. The main business for the five nations' leaders was formalizing their agreement on a plan to create a development bank to serve as an alternative to lending institutions like the International Monetary Fund (IMF) and the World Bank, which are largely dominated by the US and its allies. Although the project will need approval from the countries' legislatures, the BRICS leaders indicated that the group's lending institution would be called the New Development Bank, would be based in Shanghai and would be headed for the first five years by a representative of India. The bank is to start off in 2016 with $50 billion in capital, $10 billion from each BRICS member. The BRICS nations will maintain control of the bank, but membership will be open to other countries; in contrast to the IMF and the World Bank, the New Development Bank will not impose budgetary conditions on loan recipients.

The BRICS nations—which together now account for about 20% of the world's total gross domestic products, according to Russian president Vladimir Putin—all have major economies but lack the economic power of the traditional advanced industrial sector based in Europe, Japan and North America. However, there are important differences in their economies, their political systems and their objectives; the New Development Bank plan was held up for years as China, by far the largest of the five economies, sought to dominate the bank. (The Guardian, UK, July 15 from Reuters; Wall Street Journal, July 16)

Grassroots organizations charge that the BRICS governments frequently don't represent the needs and wishes of their populations. The Brazilian Network for the Integration of Peoples (Rebrip) joined with a number of other groups to hold a sort of counter-summit in Fortaleza on July 15. "[S]trong social inequalities and development models based on the super-exploitation of natural resources motivate social organizations and movements in the bloc's countries to set up joint actions that aim to guarantee rights, equality, and social and environmental justice," the event's announcement said. "We believe that the BRICS' impacts—positive or negative—in the international system and in our societies depend on the ability of the peoples to mobilize themselves, to debate and to dispute the directions taken by their countries and the international coalitions that they are part of." (Adital, Brazil, July 16)

On the way to the summit, Russian president Putin visited Cuba and then Argentina, where he and Argentine president Cristina Fernández de Kirchner signed several accords on July 12, including one on nuclear power. A Russian delegation was planning to visit the Vaca Muerta region's shale deposits, which Argentina is planning to exploit through hydrofracking in a joint venture with the US-based Chevron Corporation. (La Jornada, Mexico, July 13, from correspondent)

From Weekly News Update on the Americas, July 20.

See our last post on Latin America's alternative integration.