“Meetings the Needs”: Addressing the introduction of BRICS New

“Meetings the Needs”: Addressing the
introduction of BRICS New
Development Bank for Emerging
Economies
Introduction
The recently created BRICS Bank, reputedly known as the New Development Bank by
the BRICS nations (Brazil, Russia, India, China & South Africa), which on an international
arena, will compete with the World Bank and the IMF, is yet another example of global
cooperation among nations and firm determination of emerging nations to set new
records. The current economic crisis would be a history very soon but the outcome of
the dysfunctional economy will be harsh for the entire West as they failed to adapt
themselves with the change.
Western countries came with the idea of World Bank and International Monitory Fund
(IMF), until now, the major power nations gave themselves a controlling stake within
both the institutions. This was their game and the rules were theirs. Thus, all they had to
do was to stay on the top and throw some incentives to other players which were more
or less crumbs of loaf of bread of advantages they enjoyed at the top.
It is not a rocket science. When people or nations feel they have a brighter chance to
succeed, their motivation leads to their participation. Getting success in this game
brings no reward be especially when the rules are fair. For a small percentage of
success, nations are willing to take a chance along with the modest (here is economic
stability) that comes with it. With these outcomes in mind, a nation power or not, would
enjoy the advantages for a considerable period of time.
One of the modest rewards offered by the World Bank or the International Monitory
Fund was coordinating with the European nations i.e. someday nations like Bangladesh
or India would participate with the power institutions alongside the West.
Countries were never granted equal voting power, be it International Monitory Fund of
the World Bank. The voting power was given on the basis of economic strength. Thus,
decisions weren’t taken on what people wanted; instead the decisions were ruled for
what the richest want. The top five shareholders (Japan, Germany, the US, the UK and
France) held almost 40% of the total voting power; meanwhile only 10% of the voting
power was available to the global nations, while countries such as India and China,
coming under the 20% of global wealth, enjoyed a miniscule of 2-3% of the voting
power.
For long voting system was based on the argument that economic power nations should
have a more say than others as they are potentially lenders not the borrowers. If a
nation managed to transform itself into a major economic power with sustainable
economic stability enough would then be classified as a lender , that nations would be
granted significant powers, such as more contribution in the shares and more say in the
decision making process.
That was harsh, especially for economically instable nations, not to mention that some
would even say it was very unfair, but ultimately the fact was true. All the populous
nations had miniscule powers at the World Bank and IMF; hence nations were now
forced to make their way into success.
As said in German “hope dies last.” The Germans did not mention anything after it
finally dies, but we roughly know of what it means.
BRICS nations have worked harder this time and like all efforts, their success became a
discussion. Finally they have made it. BRICS nations are substantial contributors to the
international arena, from United Nations peacekeeping mission’s international financial
programs; they do, relentlessly at times, when western nations have cut down their
contributions.
In spite of being the second largest economy, China was locked away from the top five
shareholders of IMF, with a voting of percentage of meagre 3.81%, whereas Brazil,
whose economy is most of the times compared to France and the UK, was granted a
voting power of 1.72% in the institution (France and the UK each hold 4.29 per cent of
the total voting power).
The top five IMF shareholding nations (mostly the western powers along with some
economic powers) have refused to give any more, which could, with some compromise,
allies trust can be earned. BRICS nations have played, and succeeded at, the global
economic game, even during the financial crisis, they have earned respect among
international communities. They haven’t done all the work just to attain a position of
broker in the World Bank or IMF. It isn’t too surprising that under those circumstances
anyone would look for alternatives.
So today, I feel proud to say that we have an alternative in place. Something to look after
“hope dies”.
The New Beginning
The freshly formed New Development Bank (NDB) or the BRICS bank is formed to
provide financial development along with balance of payments, funding on a global
scale. The initiative can be viewed on many levels.
Development Needs for Emerging Economies:
Some key development needs of emerging economies can be classified into –
1. The Basic requirement
We classify the basic needs into education, healthcare, food security minimum standard
living of the citizens. It can well be included into Millennium Developmental Goals or
MDGs for certain countries. Nationally, these maybe ensured to the citizens of the
economies through domestic legislation which ensures that every citizen is provided
with certain minimum amount of basic amenities.
2. Infrastructure Development
Infrastructure basically refers services and necessities that are essential for an economy
to function smoothly. Fecilities can be schools, hospitals, roads, telecommunications,
etc. Investment in infrastructure projects is essential for growth of a nation. Nations
require infrastructure growth to fast pace their process of economy’s development.
3. Research & Development of Cleaner Technologies
As we all are aware, the need for sustainable cleaner technology is a must, emerging
economy or not. Every nation must meet its goal for non- renewable resources. As a
nation takes initiative for its development, it must find out alternative sources in the
form of cleaner technologies which cause less degradation to our environment.
About the Author
Anant Mishra is a former Youth Representative to United
Nations. He has served in numerous committees including
United Nations General Assembly (UNGA), Economic and Social
Council (ECOSOC) and United Nations Security Council
(UNSC).He is an Organising Committee Member of Global
Economic Summit.