Brics Bank :
opportunities and challenges to do different
Coordination
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The BRICS
When the economist Jim O’Neil, former chairman of Goldman Sachs, in November 2001 coined the acronym “BRIC” to refer to a group of countries whose relative weight was becoming more significant for the development of the global economy in the near future (Brazil, Russia, India and China)1, he never imagined that, a few years later, that group of countries, despite the meaningful differences among them, would take the initiative to form an economic bloc (South Africa was included in 2011). Their main aim was to take a leading role in the construction of a new geopolitical order and to be able to influence, in both symbolic and political way, the global economic agenda, until then hegemonized by G82 and OECD countries, as well as to influence policies about development cooperation, a sensitive subject for an even larger group of countries, especially from the South.
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In 2006, on Russian initiative, the “BRIC Summit” was launched, first in the level of Ministers of Foreign Affairs and, from 2009 onwards, in the level of Heads of State. The first BRIC Summit with Heads of State was held in June 2009 in Yekaterinburg (Russia), the second was in April 2010 in Brasilia (Brazil), the third was in April 2011 in Sanya (China)3, the fourth Summit was hosted in New Delhi (India) in May 2012, and the fifth in Durban (South Africa) in May 2013. These meetings helped to establish and measure the existing differences between the member countries and the challenges faced by creating a bloc among them, as well as it helped to establish the grounds of the bloc and outline the path for a future agenda. Yet, as the Ministry of External Relations of Brazil acknowledges, the BRICS have an informal nature: it doesn’t have any constitutional document, it doesn’t have a fixed secretariat, nor funding for its activities. Ultimately, what supports this mechanism is “its member´s political will”4. The degree of institutionalization is being defined as the process moves forwards, which is a relevant aspect to assess its future viability.
1 O’Neill, Jim. Building Better Economic BRICs. Global Economics, Paper n. 66, Goldman Sachs, November 2001 2 Between 1998 and 2014, Russia was part of the Group of Eight (formerly Group of Seven), but after the annexation of Crimea in March 2014, Russia was excluded from the group, which became G7 again. That reinforces even more the importance of the BRICS to that nation. See: <http://www.dailymail.co.uk/news/article-2588490/G8-G7-leaders-kick-Russia-Its-not-big-problem-says-Putins-foreign-minister.html> 3 South Africa participated for the first time in this Summit 4 See: <http://www.itamaraty.gov.br/temas/mecanismos-inter-regionais/agrupamento-brics>
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The structure of the BRICS as a bloc can be understood as a widening of the global governance system established in the Post-World War II, but now pointed towards a polycentric governance system that, although not questioning the grounds of the system, it seeks for reconfiguring those grounds in order to ensure a larger piece of power for the so-called “emerging powers”5. The changes that have occurred since the end of the Cold War regarding the correlations between hegemonic and emerging6 countries, have led the latter to identify themselves with the need or common desire of having a Forum different from the G7, where they wouldn’t have to fight for some minutes to participate, nor hardly negotiate to put their items in the agenda. Therefore, they would empower their ability to influence on the most important decisions in the context of an increasingly complex interstate system and an increasingly competitive economic regime. As it is worded in the second item of the eThekwini Declaration, issued at the end of the Fifth BRICS Summit: We met at a time which requires that we consider issues of mutual interest and systemic importance in order to share concerns and to develop lasting solutions. We aim at progressively developing BRICS into a full-fledged mechanism of current and long-term coordination on a wide range of key issues of the world economy and politics. The prevailing global governance architecture is regulated by institutions which were conceived in circumstances when the international landscape in all its aspects was characterised by very different challenges and opportunities. As the global economy is being reshaped, we are committed to exploring new models and approaches towards more equitable development and inclusive global growth by emphasising complementarities and building on our respective economic strengths7.
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However, the BRICS shouldn’t be seen as a radical systemic contestation. The bloc aims to rearrange or readjust the balance of global power, favoring the convergence over the rupture. This is clearly shown when the BRICS reaffirm their commitment to the United Nations system and the importance of the G208 as a strategic forum for the economic coordination and international cooperation among its member countries. In fact, for the BRICS, the G20 is relevant since it represent a greater influence stage than the limited G7 - controlled by western powers -, which may give them better opportunities for constructing a base of supporters concerning sensitive subjects of the international agenda. The North American and the Eurozone crises that have been spreading since 2008 have opened growing opportunities for that influence to increase, although the evolution of this new stage regarding the relationships among international forces is still uncertain.
BRICS is the acronym of “Brazil, Russia, India, China and South Africa”, a bloc of countries formed in 2006, whose economic weight is huge: according to data provided by the Institute of Applied Economic Research (IPEA), between 2003 and 2007 the first four countries’ growth represented 65% of world GDP’s expansion. Regarding the purchasing power parity, the BRICS GDP has already surpassed USA or EU. If in 2003 the BRICS were responsible for 9% of world GDP, already in 2009 that figure increased to 14%. In 2010, the GDP of all five countries (including South Africa) totalized US$ 11 trillion (18% of world economy), and in 2013, that figure increased to US$ 15.8 trillion, equivalent to 21% of world economy. Considering the GDP by the purchasing power parity, that amount is even higher: US$ 19 trillion, or 25%.9
Shared GDP of 5 countries 21% of world economy
5 Xiaoyun, Li and Carey, Richard. The BRICS and the International Development System: Challenge and Convergence? Evidence Report n. 58, Institute of Development Studies, 2014. 6 We used this pair to simplify the analysis. However, we must see that it is not totally exact. Russia was, during the Soviet Union times, the second economic and military world power; China has a long economic history and already in the 19th century reached an extraordinary industrial development, only threatened by the war against the English (the First Opium War). In turn, Brazil has more than 80 years of accelerated economic growth, despite the ups and downs, time when the country became industrialized and it diversified its economic grounds in an accelerated way. Thus, when we talk about “hegemonic” and “emerging” it is necessary not to disregard a historical dimension that allows us a refined analysis of the relationships between these countries beyond the immediate present time. 7 See the complete document (in Portuguese and English), in: <http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/v-cupula-do-brics-durban-27-de-marco-de-2013-declaracao-de-ethekwini> 8 The members of the G20 are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, the United States and the European Union. For more information visit: <https://www.g20.org/ about_G20> 9 For more information visit: <http://www.ipea.gov.br/forumbrics/pt-BR/conheca-os-brics.html> and <http://data.worldbank.org/>
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The BRICS Bank
During the Fourth BRICS Summit, hosted in New Delhi (India) in May 2012, the creation of a South-South Development Fund was announced, which was the first step towards the creation of a development bank of the BRICS. In the 2013 Summit in Durban (South Africa), the intention of creating the bank was confirmed, its project design would be ready and would be presented in 2014, during the Sixth BRICS Summit in Fortaleza (Brazil). In the eThekwini Declaration already mentioned, it is said: Developing countries face challenges of infrastructure development due to insufficient long-term financing and foreign direct investment, especially investment in capital stock. This constrains global aggregate demand BRICS cooperation towards more productive use of global financial resources can make a positive contribution to addressing this problem. In March 2012 we directed our Finance Ministers to examine the feasibility and viability of setting up a New Development Bank for mobilising resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, to supplement the existing efforts of multilateral and regional financial institutions for global growth and development [...] We have agreed to establish the New Development Bank. The initial contribution to the Bank should be substantial and sufficient for the Bank to be effective in financing infrastructure. [Emphasis added]
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d estimate ts of with an ursemen b is d l a n annu $ 9 billio ly e t a im x appro
In fact, the New Development Bank of the BRICS will prioritize the support of infrastructure projects and, additionally, “sustainable development projects”, not only among its members but also in other countries. The institutional design favors an equitable model of investment (US$ 10 billion each member) and a capital stock of US$ 50 billion10, in order to avoid potential conflicts as a result of the predominance of one or another country in the initial capitalization; specially China, being the richest of the five members, it has a highest capacity to invest resources in the new bank, but this would give them a major control on the investing decisions, something that not everyone would accept. Beyond the creation of the Bank, we must remember the fact that a Mechanism for Interbank Cooperation already exists involving the development banks of each member country, which helped to gain expertise in interinstitutional coordination, serving as the grounds for a new financial institution. As well, it is necessary to highlight the fact that in the Summit where the proposal of the bank was presented (Durban), it was also defined the need of constructing a financial safety net through the creation of a Contingent Reserve Arrangement (CRA) amongst BRICS countries. The CRA’s main function would be to “forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability. It would also contribute to strengthening the global financial safety net and complement existing international arrangements as an additional line of defence.” (eThekwini Declaration). The CRA’s initial size was established in US$ 100 billion11. Furthermore, the Multilateral Agreement on Cooperation and Co-financing for Sustainable Development and the Multilateral Agreement on Infrastructure Co-Financing for Africa were also presented, to be implemented by the ExportImport Banks (EXIM) and Development Banks of the member countries.
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This new framework needs to be understood as a whole, as an attempt to reshape the role of the BRICS in the international financial system, clearly dominated by western countries. A new investment bank, an agreement on availability of currency facing the external pressures, and cooperation and investment mechanisms determine the guidelines of this new financial structure promoted by the BRICS, moving from mere official declarations to implementing policies and specific policy tools that would focus on counterbalancing the power held by the dominant “players”.
10 See: <http://economia.estadao.com.br/noticias/geral,brasil-entrara-com-us-28-bilhoes-para-criar-banco-dos-brics,1509024> 11 China will invest US$ 41 billion; Brazil, Russia and India will invest US$ 18 billion each and South Africa US$ 5 billion. See: <http://economia.estadao. com.br/noticias/geral,brasil-entrara-com-us-28-bilhoes-para-criar-banco-dos-brics,1509024>
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Do we need a new development bank?
Yet, some key questions arise: do we need a new development bank? Which would be the differential of this new entity when compared to the development or investment banks already existing in the countries of the bloc? What reasons lead the BRICS to creating a new financial institution of this kind? As we have seen, the authorities of the bloc made clear their intention of intensifying the policies that aim to the promotion of infrastructure projects, especially in the areas considered as bottlenecks for export economy. The new bank would not be a policy institution, its aim would be to promote infrastructure in the developing countries through an amount invested by the member countries (US$ 50 billion) and funding from international markets. But when we see that each BRICS country has its own national development bank, the creation of another bank of that kind may seem strange. However, the reason for founding the BRICS Bank seems to lie in the pursuit of a progressive increase in scale and in the construction of a mechanism of dispute over power in a planetary scale. The factual magnitude of the territorial extension, the population, the markets and the natural resources of the BRICS as a whole allow them to act with heavier weight in international economy and politics, fostering new rules that will benefit new winners in the system. It is assumed that the new bank will act according to the bloc’s objectives and not just for specific national interests of its members. But it will be a slow founding process, since the agreed financial basis won’t allow heavy disbursement compared to those in each national investment bank (and to other development financing institutions)12. On the other side, the governance model of the new bank will need to establish agreements concerning sectorial and geographic priorities of the investments, something it is not totally guaranteed due to the differences among the five member countries and the possible divergences that may arise.
Thereby, referring only to the country with the most dynamic economy in the bloc, we observe that China still has a huge lack of primary products and commodities, which explains the strong Chinese import policy and the simultaneous promotion of primary production in countries that are rich in natural resources. “Natural” characteristics that may become an obstacle for Chinese growth, in a globalized capitalism context, have become an important economic stimulator, given the existing setting. As China increments its needs and its possibilities of importing raw materials, the exporter countries start receiving more currency. In turn, in the pursuit of growing in a social liberalist context13, in which the governments are not only in charge of reducing poverty but also of contributing for the “old paupers” to become part of the mass markets as consumers, there is an increasing need of credit raise and consumption encouragement policies. In the end, the capitalist accumulation circle is completed with the consumption of Chinese industrial products, which are available in popular markets worldwide.14 Besides this “growing” cycle, that some still define as “development”, the Chinese growth encourage infrastructure investments in countries that export primary products in order to enable and undercut the outflow of that production. Is in this growing context that the main aim of the new Bank will be financing infrastructure, roads, hydroelectric power stations and ports. A development goal for many receiver countries, but also for supply and commercial mobility strategies, with which these countries - China especially - will promote their economies in the 21st century.15
The great challenge will be to move towards a new development paradigm
12 Recent estimative figures point that the announced capital structure will permit annual disbursements of approximately US$ 9 billion; that amount is low if compared to the portfolio of institutions such as the BNDES, the CDB, the World Bank and the existing regional development banks (Asia, Latin America, Africa and Europe). Xiaoyun and Carey, 2014: 14. 13 See: José Maurício Domingues, “Social liberalism and global domination”, Mulemba. Angolan Magazine of Sociology, vol. 3, no. 6, 2013 (pp. 203-231). 14 In turn, Brazilian, Russian, Indian and South African interests, regarding their spheres of influence, have to face some issues difficult to set out within the bloc. Geopolitical aspects, as the relationship of each country with the western powers, military policy issues, sovereignty and national territory, etc. play an essential role when making decisions. Brazil is member of regional alliances such as MERCOSUL and UNASUL and it cannot simply ignore the impacts of the regional reality, and so on. Each country has specific relevant characteristics and contexts when thinking on the acting of the bank. 15 Another important aspect is to discuss if this new Bank will empower the companies and contractors of the five countries that will have a guaranteed market as contractors and equipment suppliers, reproducing the influence and preference that the hegemonic companies in the US and the UE have on the IMF and the WB.
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The creation of the infrastructure implies the advance of capitalist production spaces over new territories. It is not about a path without conflicts. On the contrary, many disputes arise in the middle of an expropriation process of the old occupancy, affecting especially indigenous people and peasants and traditional populations, in order to establish a new productive structure. On the one hand, the actions of infrastructure expropriation and implantation for exporting commodities are often seen by the direct damaged population and by the portion of the population that support them as harmful for the national and local territory. But the pursuit of growth with the inclusion of big masses of people in the consumption market transformed the restructuring of the territory into an enterprise of multinational scope. It is not only the interest of one sovereign state that is at stake. It is about a set of interests, that join governments and big multinational companies together, that struggle for “development”. Therefore, the dispute over the meaning and the priorities of development becomes the central issue of the bank. Chinese banks and BNDES representatives repeatedly state the importance of institutions that aim at carrying out projects not privileged by central countries, which are considered basic in a dispute process over a place among the global power elites for the BRICS countries. But the major challenge of this new bank won’t be the struggles with the central powers to get a larger piece of power, the challenge will be to create a different approach to “development”: different from the one we already know, based over new concepts of income, justice and equality for vast layers of the excluded population, together with the guarantee of human and environmental rights for the groups of people directly damaged by the projects and a clear, truly effective safeguard environmental policy for the short, middle and long-term. Nevertheless, this aspect shouldn’t be seen just in safeguard policies terms, but mainly considered as a result of how the financed projects will be oriented towards the construction of this new paradigm. Furthermore, unlike the traditional and unequal logic of development, the new bank must be oriented towards the pursuit of better connections between the emerging countries and, at the same time, not imposing new dependencies for other Latin American and African countries. The union and the interconnection among the growing countries are crucial for the development of this new paradigm, but not through the super exploitation of natural resources.
New infrastructure projects may be necessary, but the issue is which ones? Today, a big portion of the huge financing and disbursement made by the development banks are assigned for transport and energy areas, which have the clear aim of producing commodities and primary goods, in both Latin America and Africa. It is highly probable that the new bank will have the same objective, which will just deepen the model of constructing hydroelectric power stations, roads, ports and airports aiming to send the primary products to the big economic centers. Finally, it is important to remember that the acting of the national development banks of the BRICS countries have arisen fierce controversies with the civil society, due to social and environmental damage caused by infrastructure projects. Although the many resistances are very weak, the “total sum” of them have raised difficulties in spreading the legitimacy and popular support of the model. The case of Belo Monte and Tipnis are not isolated examples. The local struggles may gain planetary dimension, though they are not always successful in stopping the projects. The civil society struggles for improving the rules and acting of the banks, the governments and the contractors; it tries to reduce the social and environmental impacts of the projects, or even create inclusive and participatory policies of social consulting and control. Other struggles are challenging the “development” policies and model in itself. From this point of view, the civil society is in charge of organizing the resistance groups, joining forces and pressing for defining the real meaning of development. Will it be possible - not necessarily now, but as a future horizon - to move on towards proposals for a social and economic organization, allowing equalitarian consumption and access to the goods and services produced, guaranteeing at the same time policies concerning the caring and respect of the common goods and planetary boundaries?
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The major challenge of the new bank won’t be the struggles with the western powers to get a larger piece of power, the challenge will be to move towards a different paradigm of “development”: different from the one we already know, it must be based over new concepts of income, justice and equality for vast layers of the excluded population, together with the guarantee of human and environmental rights for the groups of people directly damaged by the projects and a clear, truly effective safeguard environmental policy for the short, middle and long-term.
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Reflecting on the grounds of a New Development Bank
Reflecting on a new bank, belonging to countries that get together in the margins of the central capitalism and - consequently emerging countries, is not an easy task. This means that it is not only about thinking of the financing rules or supporting certain projects. What will be financed by the bank is, from a political point of view, as important as the financing rules. And that should be the key issue to debate in our societies and governments. We simply cannot shut our eyes towards the decision the BRICS Heads of State made concerning the new bank, and absent ourselves from the struggle for fairer rules and actions related to these big projects. The countries that were once known as developing, then as emerging and now as new world actors are starting to act in the international scene and defining with autonomy their own direction and relationships in the international arena. They have everything to alter the balance of today’s world forces, at least as for the financing and construction of development projects for them and for the less favored countries. However, being classified as important countries in the international arena has its price. For instance, the demand for a more responsible and advanced acting concerning human and environmental rights regulations is one of the prices. The countries of the bloc cannot pretend to be global players in issues that are convenient for them and, at the same time, adopt an ambiguous speech regarding transparency and better levels of socioenvironmental sustainability. The question that needs to be asked is: what does a development bank mean from the developing countries perspective? Would the new bank be able to offer a way out of poverty for the communities that had their rights denied form century to century? Would the new bank aim to carry out projects not privileged by central countries, which are considered basic in a dispute process over growth and development? Would the bank help to satisfy the growing demand for project financing that have not been totally answered by global multilateral institutions, which have been for many years strongly criticized for interfering in the internal policies of the debtor countries and for the excessive conditions for the granting of loans?
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The BRICS try to avoid some of what they consider failures of the World Bank and of the regional development banks. Thus, the new bank’s function and operational feasibility would have to be open to a new institutional design, without political maneuvers and uncertainties. The BRICS bank certainly has the opportunity of making a considerable difference within this context. At present, there is an empty niche in the world governance, as well as in the financing of investment projects. This is why it should be possible to establish a more transparent institution with clear socioenvironmental guidelines, without being suffocated by bureaucracy. The creation of this new bank may represent one more step towards the old process of exclusion and exploitation, or it may mean an important turning point in the struggle path of African, Asian and Latin American countries, to reach new levels of economic and social development. In order to start reflecting on this transformation of the development in itself, it should be crucial and pragmatic to start with the own Bank’s structure, not just the rules and guidelines but also its council boards and departments structure. The participation of other countries different from the big five BRICS is fundamental for constructing an equalitarian environment where new ways of economic growth can be discussed. The role of smaller countries with delicate conditions for credit access should be crucial in the new bank, as well as the role of the civil society to debate on the projects financed by the institution. To face this challenge, the BRICS bank can benefit from the existing development banks experience and expertise, such as the BNDES and the Chinese Development Bank among others. Furthermore, the bank may have an important research department, which may assemble experience and knowledge from the “Global South”. Jim O’Neil suggested that the new bank should approve loans based in its ability to help the borrowers reach reference values for governance, education and access to technology. Some may think it is an interesting but quixotic idea. However, this new bank should really mean a new development paradigm for the poorest countries in the world. It is a fact that the private sector is incapable of directing the sum of more than US$ 800 billion (stipulated value of the infrastructure bottleneck of underdeveloped countries) needed to improve the living conditions of the thousands of million people that do not have access to electricity, drinking water, basic sanitation and other basic needs. A development bank anchored in emerging markets and developing countries may help solving this historic lacuna and become a powerful catalyst towards the transformation.
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“Southern countries”, having low average income levels, really need specific policies to construct better conditions and have access to inalienable social and economic rights. Transportation must be essential to sell the small producers’ production and for them to have access to fundamental products, but not to transport coal in Mozambique or soybeans in Brazil or copper in Peru. Energy must be essential to reach all communities and have access to light and important equipment, but not to extract ore, or to supply agricultural machines in the Brazilian cerrado or the African savanna, all of which show very little profit to the local population. Still, we have to admit that exists little contribution in the debate on these “development” ideas and policies. Or rather admit that the disputes and conflicts caused by the capitalist expansion have not still consolidated a project capable of disputing over the hegemony. The capitalist crisis of 2008, considered as the worst crisis since the second decade of the 20th century, did not caused a meaningful break in the system. Thus, the emerging countries generally try to follow, and not surpass, the existing development model. Up to now, the popular and civil society struggles and resistance have conquered changes that attenuated certain harmful effects of the capitalist expansion. We should start from here. To acknowledge these changes as a starting point should not cool our effort to establish the new grounds of a development model able to answer to the difficult dilemma: guaranteeing proper life conditions and convenient consumption to everyone, caring and respecting, at the same time, the planetary boundaries. Simultaneously, we must value diversity and respect the people that want to maintain their lifestyles with little relations with the markets: indigenous populations and other traditional people. The whole world is witnessing the creation of this Bank, not only the World Bank and the IMF, not just the countries and the companies hungry for money, also the whole of nature and the whole society. We are expectant to see how the new bank defines the sustainable development. We hope not to repeat the same old sad stories, for we know very well that big infrastructure works have produced dramatic impacts for the population and the environment, never reaching the [false] promise of “development” that was so useful to raise governments and amass a huge fortune, harming large layers of population still in misery in many of our countries.
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Last but not least, there is another issue concerning the designation of “sustainable development” that the new bank has gained. In some development banks of the BRICS countries, namely the case of the Brazilian BNDES, the final “S” refers to the social aspect of the Bank. Nonetheless, that dimension has a low meaningful importance in the institution behavior, which privileges a developing logic that only shows its social concern in some guidelines and little investments related to big projects. Thereby, we should raise a similar concern about the “sustainable development” dimension that the bank has. Besides being an ambiguous and problematic concept, useful for everything and everyone, the sustainable development issue is part of the speech of many actors such as multilateral banks, international development agencies, important transnational companies and governments, all of which are linked, in one or another way, to fundamental rights violations of the populations harmed by the capitalist model of “development”. This is why it is imperative to define clearly what would it mean for the new bank, being also necessary the participation of the civil society in this debate.
The creation of the new development bank of the BRICS represents a risk and an opportunity. The risk is given by the danger of reproducing a development financing pattern exclusively towards the construction of big infrastructure works, according
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to the logic of “big is beautiful” that just benefits the great winners of the system and that, pursuing to control strategic resources and increase profits, deepens the socioenvironmental crisis we are witnessing today. However, the opportunity is to think of a bank from a multilateral logic based in the needs and perspectives of the Southern countries and population, contributing for the creation of a balanced power and different from the one known up to now, whose legitimacy would be given by the emphasis put on social and environmentally sustainable development.
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Perspectives
Perspectives are uncertain and scenarios open. The new Development Bank of the BRICS will be officially presented during the 6th BRICS Summit (Fortaleza, Brazil, July 2014) and we don’t know yet every detail about its organizational and governance structure and the relationship with the national development banks that already act in the BRICS group. We know something about the initial capitalization and that the headquarters will be in China, but not more than that. The reaction of relevant actors such as the World Bank and other regional development banks has been cautious, and third governments potentially interested on the creation of the new bank have not expressed themselves yet. The global civil society, especially in the Southern countries, stay attentive and alert regarding the possible risks of reproducing the same ongoing model, deepening even more the impacts caused on human beings and the environment. Therefore, they demand for a turning point paradigm that will result in welfare for the poorest and respect for the environment, and not just in wealth for those already excessively wealthy and in mega enterprises of doubtful public interest. Nonetheless, the global financial and economic crisis is spreading without a clear direction for recovering the rhythm the main capitalist economies had before 2008. Despite the BRICS countries were less affected by the crisis, there are some downturn signs in countries such as China and Brazil. The policies for mitigating the impacts, at least in Europe and the United States, aim to reduce even more the government spending and to control inflation, with some countries getting into debt beyond the limits to face the serious internal fiscal situation and the commitments with external creditors. In this context, the development investments have been focused in huge infrastructure projects, leaving behind important social projects that may allow, beyond the bank’s rescue, better inclusion for big poor populations in both the North and the South. In this manner, what should we expect for the near future regarding the performance of the BRICS, their policies of mutual and other countries cooperation and concerning the New Development Bank announced by them? Will all these be translated into the improvement of social indicators, and the reduction of urban and rural inequality? Will it be possible to move towards the idea of development understood as income improvement and access to essential social services such as health, drinking water and education, together with a real concern about the environment and the indigenous people and traditional communities human rights? Although these aspirations may seem excessively optimistic - as in a crisis context the rivalry over strategic resources, profits and public credit tend to become intense,
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with perverse socioenvironmental consequences - the civil society, especially in the so-called “Global South”, cannot retreat towards its responsibility of showing crucial transformation paths based on inclusion and respect for life. Perhaps this may imply a radical turning point paradigm... And not everyone want to hear about radical changes. But the social and environmental boundaries that we have reached are worrying, and a group of countries of such a size and such meaningful abilities as the BRICS, through the proper design of instruments and coordinated public policies, may make an important contribution for a new direction and a new global consensus around the so controversial issue of development. In agreement with other civil society entities, at IBASE we consider absolutely necessary that the new bank should establish its grounds over some basic concepts that may allow them overcome the lack of legitimacy suffered by some institutions such as the World Bank or the International Monetary Fund. These concepts imply, at least, the following aspects: 1. To adopt a comprehensive policy of public information and transparency; 2. Social control and accountability criterion; 3. To create and implement effectively a safeguard socioenvironmental policy that should be applicable compulsorily to every project, in order to avoid the development financing continue being a downward spiral towards human rights violations and environmental destruction; 4. Environmental impact assessments - EIA - (exante e ex-post) 5. The bank must assure that the financed projects will be executed according to environmental laws and regulations of the debtor country and that will obey international environmental laws and regulations, generally established by international principles and agreements; 6. An open environment for wide, free and grounded discussion and consulting with the population directly and indirectly impacted by the financed projects - before, during and after the disbursements; 7. A public environment for general discussion about the new institution, including countries outside the BRICS and civil society organizations; 8. To create mechanisms to denounce and solve conflicts. Banco dos BRICS: Oportunidades e Desafios para fazer diferente Produção: Nucleo Democratização do Estado e da EconomiaIBASE. Instituto Brasileiro de Análises Sociais e Econômicas Apoio: Oxfam / Ford Fundation Instituto Brasileiro de Análises Sociais e Econômicas (IBASE) Avenida Rio Branco 124, 8° andar, Centro, RJ - TEL: 2509-0660 / CEP: 20040-001 // www.ibase.br
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