Saturday, July 19, 2014
New player on the international development bank block
This is an article from the BBC about the new development bank that the BRICS countries have created. That's the grouping of middle-income nations (Brazil, Russia, India, China, and South Africa) which differ widely amongst themselves--an ag export powerhouse; an energy exporter, the world's service and manufacturing hubs, and a mining titan. I welcome the news, because it marks an important and symbolic point in the transition of developing countries from net recipients of foreign assistance to net donors. Also, having another major player in addition to the World Bank, its regional banks, and the International Monetary Fund, seems to me a good thing. I imagine this BRICS bank will take a very different approach to development and finance than the so-called Bretton Woods institutions. Surely it will have its strong and its weak points, just as the World Bank does. And there's no guarantee that these big, powerful middle-income nations' interests will align very harmoniously with those of smaller, poorer countries. But a more diverse and competitive playing field in international development finance should make for more effective, more creative, and less coercive relationships all around. More voices and more viewpoints can be taken into account, both from the donor and the recipient ends. Let's see how this goes.