What next for the BRICS Bank?

A new development bank to be created by the ‘Rising Powers’ of Brazil, Russia, India, China and South Africa (BRICS) is intended to promote greater cooperation between developing countries, and address what is seen by many as a history of misguidance and underinvestment by the World Bank and the International Monetary Fund (IMF).

However, several questions remain about the establishment of the BRICS bank and its potential impact on future development cooperation. The timeframe for its creation is still uncertain and economic and political links between the BRICS countries need to be strengthened in order for them to agree a clear development agenda to underpin the new institution.

This Rapid Response Briefing makes a number of recommendations to enable conditions for the BRICS countries to make progress in achieving the goals they have set themselves with the BRICS Bank, including:

• a continued focus on domestic growth and stability in the BRICS. Creating skilled jobs, promoting infrastructure investment, rationalising regulation and attracting foreign direct investment remain essential to the continued improvement of the wellbeing of citizens still emerging from poverty and to the political legitimacy of international development engagements by these countries
• deeper engagement of the BRICS in multilateral forums and regional trade forums such as the World Trade Organization (WTO), and advocacy for qualified leadership candidates from the BRICS
• pressure to align the policies of the new bank with sustainable development and other global public goods debates. The BRICS Business Council has the potential to be a useful ally in some of these debates, particularly in the areas of energy security and water conservation
• promotion of transparent and democratic bank governance. This includes providing better quality trade and investment data with respect to the size and terms of financing flows, as well as the structure and conditions of deals, and concessions for natural resources. Demands for human rights, social impact and environmental sustainability criteria to be considered in investment decisions, and for engagement with the new bank by local populations and civil society, also need to be addressed