Nathalie Beghin, Inesc.
Brasília, October 4th, 2016.
Between October 12th and 14th, 2016, in Goa, India the 8th BRICS Summit will take place, a block of countries that gathers Brazil, Russia, India, China and South Africa. Why would a non-governmental organization such as Inesc, headquartered in Brasília, be interested in this meeting?
There might be many reasons, but the main one is the unconditional defense of the radicalization of democracy and the promotion of human rights, both in Brazil and abroad. What does that have to do with BRICS?
Plenty. BRICS gave us the impression that the game could change the international scenery. The power of the so-called developed countries is so big that they call the rules in the great global picture. For instance: BRICS countries represent 40% of the global population and about 23% of the countries’ combined GDPs, but only have 11% of votes in the International Monetary Fund (IMF). Not conformed to such asymmetry, the Block’s governments tried to change the game within IMF, but the Americans, who call the shots, didn’t agree. BRICS’s governments, which have been talking informally for years, realized that together they could defy the status quo, and stress the current hegemonic relations. The five countries’ powers have been growing substantially: if in the beginning of the 21th Century, BRICS represented less than 5% of the global GDP, now this proportion raised to more than fourfold in 15 years. None the less, the G7 – the group of the seven richest countries in the world – have been losing ground: the group was responsible for two thirds of the global GDP in 2000 and now this proportion has decreased to around 45%.
Given this situation – the growing power devoid of voice – BRICS decided in the end of the last decade to better structure itself, establishing a common agenda and an annual meeting with heads of State. The Summit’s meetings take place every year in a different country. From its creation in 2009, Brazil has hosted two Summits: the 2nd in Brasília, in 2010, and the 6th in Fortaleza, in 2014. Although there’s plenty of asymmetries between the countries political, economic, social and cultural views, there’s a common wish of gaining autonomy towards those countries who are in charge ever since the end of the Second World War.
One of the Block’s first concrete step was the creation of the New Development Bank (NDB). Taking into account the great financing needs for development of Southern countries, estimated in more than one trillion dollars, and the growing difficulty of the World Bank and other development banks derived from Bretton Woods’ agreements to meet those demands, the NDB rises as an interesting alternative to developing countries. The idea was first introduced in 2014 in Fortaleza, and the Bank created then in 2016. The first loans of a little more than 800 million dollars were granted to Brazil, India, China and South Africa in the matters of renewable energy.
The differences regarding the existing developing banks is that, in this case, there’s fairness in decisions – each country, corresponds to a vote. There’s also shared responsibilities: The NDB’s headquarters are in China, the President is from India, the Board of Administration’s chairperson is Brazilian, the Board of Governors’ President is Russian and the Bank’ regional office is located in South Africa.
At first we should be happy, since our voices have finally defied the powerful Northern countries, contributing to changing unequal prevailing power relations. But that’s not entirely the case. The NDB brings countless challenges. It’s not enough to be from the South to be good. The Bank was born with little transparency. In spite of having introduced in July a document entitled Iterim Information Disclosure Policy, which definitely represents an advance, this policy, although provisional, was formulated without any mechanism that listens to people and communities directly affected by its actions. The New Development Bank’s website is deplorable, there’s nothing there. It doesn’t contain any information about approved projects, pipeline projects, nor which are the criteria and conditions for loans to be granted. Moreover: the NDB, instead of drawing the “old” banks to a more socio-environmental agenda, it’s driven them to ease its loan criteria. If it wasn’t enough, the NDB signed cooperation agreements with the World Bank and with the largest private bank in India, the ICICI, for counseling about risk management, project analysis, among other areas. In other words, the NDB, instead of establishing innovative practices in public transparency, accountability and social participation, it’s going backwards. It’s like a horror movie, where heroes go bad!
The picture is not relieving since the BRICS’s main authorities get further and further from democratic systems. Brazil has just gone through an institutional coup. In South Africa, India and Russia, neoliberal measures and persecution and criminalization of organizations and social movements have grown. The Chinese government, as known, has little interest in its people’s opinion. India is the most emblematic example of growth with no redistribution. In spite of enviable ongoing rates of economic growth in the past few years, the social abysm remains overwhelming. According to the Nobel Prize in Economics winner Amartya Sen and its collaborator Jean Drèze, only five countries in the world (Afghanistan, Cambodia, Haiti, Myanmar and Pakistan) have child mortality rates worse than in India. Moreover: no country, not even in Africa, has rates of malnutrition (low weight) smaller than the Indian’s. Brazil follows the same path – worse, since the economy is in recession. The current government’s proposals are based in the cut of spending, especially in work and income policies, social security, social assistance, health and education. At the same time that unemployment rises, the work income decreases. Furthermore: the idea is to freeze public spending for 20 years!
What can we expect from NDB with theses governments?
Many of the BRICS’s countries’ organization and social movement’s initiatives have been trying to expose this strategy through summits that are parallel to the official ones, written statements, letters to governments, through the proposal of creating the BRICS Civil Society Forum and the BRICS Trade Union Forum, among others. If nothing changes, the current strategy of the New Development Bank will contribute to increase inequalities; directly by the Bank’s actions, and indirectly by its impacts on financial institutions that will lower their standards in order to face the NDB’s competition and be able to keep granting loans.
Now, more than ever, we, as organizations and social movements concerned with the future of those in need, have to unite to fight and bring back the original idea, we need to have an institution that effectively boost social-environmental development that is fair, inclusive and interactive. The People’s Forum on BRICS is the privileged locus to engage these debates – and the date and place are already set: October 13th and 14th, in Goa, India, on the eve of the official BRICS Summit.
 The Institute for Socioeconomic Studies – Inesc is part of the Brazilian Network for the Integration of Peoples – Rebrip.