By Amitabh Pal on July 21, 2014

The IMF and the World Bank may finally have a rival. It’s called the New Development Bank, and it is being set up by Brazil, Russia, India, China, and South Africa together (the BRICS, as they are called).

Nobel laureate Joseph Stiglitz, a former chief economist for the World Bank and a fervent critic of the IMF, contends that the bank represents a major realignment.

“It reflects a fundamental change in global economic and political power,” he told Democracy Now. “We’re in a different world.”

The initial capitalization will be $50 billion, and each country will have one vote.

“The fact that BRICS nations have pulled off a one-country-one-vote governance structure demonstrates that the idea of BRICS is here to stay and proves wrong all the skeptics in the Western press who had suggested these countries will never reach an agreement on critical issues like voting power, location of the bank and other matters relating to sharing of governance,” writes FirstPost, an Indian website. “Till a few years ago, no one gave the bank a ghost of a chance. Today, it is a reality.”

Sameer Dossani, advocacy coordinator for ActionAid International, is “cautiously optimistic” about the new bank and what it means for poorer countries.

“Alternatives to the Bretton Woods Institutions [the IMF and the World Bank] are a good idea,” Dossani tells The Progressive. “Those institutions were founded seventy years and have been largely used as instruments of U.S. foreign policy ever since. The Washington consensus policies of liberalization, privatization and budget cuts have proved disastrous time and again for citizens around the world.”

The bank has a few predecessors.

“In the late 1960s, Andean nations created the Corporación Andina de Fomento (CAF), also known as the ‘Development Bank of Latin America,’ as a way of bypassing the stringent rules imposed by the World Bank on infrastructure loans,” reports the Washington Post. “In 2009, seven Latin American countries signed an agreement to establish the ‘Bank of the South’ or BancoSur to fund regional development and social protection, and in which each member nation would have one vote.”

A few Latin American nations have even established a common currency of sorts: the SUCRE.

“The SUCRE is essentially a series of clearing accounts between Cuba, Bolivia, Venezuela, and Ecuador that allow the countries to trade freely without transaction costs,” writes Stephanie Pearce in NACLA Report on the Americas. “Accounts are balanced every six months with one hard currency transfer. The value of trade conducted via the SUCRE in its first year of operations, 2010, was just over $8 million. It grew exponentially, to almost 100 times that the following year.”

Dossani asserts that regardless of the problematic nature of the BRICS leadership—especially the Chinese and Russian autocracies, underscored recently by Russia's invasion of Ukraine, and the deepening conflict there after the downing of a passanger airplane, apparently by Russian-supported separatists—the new bank will open up space for alternative policies.

“The BRICS countries all use state industrial policies to promote their national development strategy,” says Dossani. “We can argue about whether those particular strategies are good or bad, but using the state in this way is not an option for most countries who have had their budget and revenue streams gutted by IMF austerity and privatization policies.”

Section: 

Topics: 

Add new comment

By submitting this form, you accept the Mollom privacy policy.

More

Wisconsin election officials and advocates are being forced to make an "extraordinary effort" to adjust to voter ID...

Occupy changed how we felt. We were the motor of history, not just its victims. The mic check gave us a...

The Center for Media and Democracy/Progressive Inc. (CMD) has joined more than 50 watchdog, advocacy, and labor...

By Wendell Berry

Manifesto: The Mad Farmer Liberation Front

Love the quick profit, the annual raise,
vacation with pay. Want more 
of everything ready made. Be afraid 
to know your neighbors and to die.
And you will have a window in your head.
Not even your future will be a mystery 
any more. Your mind will be punched in a card 
and shut away in a little drawer.
When they want you to buy something 
they will call you. When they want you
to die for profit they will let you know. 
So, friends, every day do something
that won’t compute. Love the Lord. 
Love the world. Work for nothing. 
Take all that you have and be poor.
Love someone who does not deserve it. 
Denounce the government and embrace 
the flag. Hope to live in that free 
republic for which it stands. 
Give your approval to all you cannot
understand. Praise ignorance, for what man 
has not encountered he has not destroyed.
Ask the questions that have no answers. 
Invest in the millennium. Plant sequoias.
Say that your main crop is the forest
that you did not plant,
that you will not live to harvest.


Say that the leaves are harvested 
when they have rotted into the mold.
Call that profit. Prophesy such returns.
Put your faith in the two inches of humus 
that will build under the trees
every thousand years.
Listen to carrion—put your ear
close, and hear the faint chattering
of the songs that are to come. 
Expect the end of the world. Laugh. 
Laughter is immeasurable. Be joyful
though you have considered all the facts. 
So long as women do not go cheap 
for power, please women more than men.
Ask yourself: Will this satisfy 
a woman satisfied to bear a child?
Will this disturb the sleep 
of a woman near to giving birth? 
Go with your love to the fields.
Lie easy in the shade. Rest your head 
in her lap. Swear allegiance 
to what is nighest your thoughts.
As soon as the generals and the politicos 
can predict the motions of your mind, 
lose it. Leave it as a sign 
to mark the false trail, the way 
you didn’t go. Be like the fox 
who makes more tracks than necessary, 
some in the wrong direction.
Practice resurrection.

Wendell Berry is a poet, farmer, and environmentalist in Kentucky. This poem, first published in 1973, is reprinted by permission of the author and appears in his “New Collected Poems” (Counterpoint).

Public School Shakedown

Progressive Media Project

Newsletter

Get Breaking News and Alerts!