The big bank theory
The New Development Bank (NDB) that the BRICS nations have come up with, with a corpus of $100 billion, is not only an antidote to the systemic discrimination perpetuated by the World Bank over the years, it is also the realisation of a long-cherished dream of emerging economies and the Global South calling shots in the international arena. With the $100-billion NDB and another $100-billion Contingency Reserve Fund (CRF), the five nations can now set off long-term infrastructural and development projects as well as see through trying times of economic uncertainties. Essentially, the NDB and CRF are founded upon great democratic principles, particularly the ‘one country, one vote’, which is in direct contrast with the institutionalised heavy-handedness that World Bank and the International Monetary Fund have displayed ever since they were founded to sustain, integrate and indeed regulate global economy. However, what the BRICS nations, as diverse as Brazil, Russia, India, China and South Africa, remarkably different in size of their economies and political cultures, have achieved is that they arrived at a consensus to enshrine participatory equity and ensure that even China, which is putting in $41 billion in the NDB corpus, has exactly the same amount of say and powers, in theory and practice, as South Africa, a much smaller economy. With CRF slated to take care of sudden flights of capital and external threats to currency (such as global shocks, stock market crash, currency devaluation) within the emerging economies, a huge safety net has been, therefore, created which would certainly shield the BRICS nations from unwarranted economic sanctions from the US-led dollar-driven Western financial organisations like the World Bank and IMF. Long-term funding arrangements amongst the BRICS nations could pave the way for greater decentralisation of borrowing and lending rules, and an overhaul of economic penalties in case of inability to pay back in time. Indeed, it’s time to take international banking to a new level of egalitarianism and equality.