BRICS Bank Good for Africa

Published on 15th July 2014

Africa suffers the negative effects of the prevailing exclusionary global economic model supervised by the World Bank and the International Monetary Fund. An effective competition to the existing global financial system is good for Africa. If Africans strategize well, competition to the existing global systems can liberate the over a billion people and wealth of natural resources into valuable participation in the global economy.

Brazil, Russia, India, China and South Africa (BRICS) are in the final stages of approving a New Development Bank in what will usher  a new multilateral order. The BRICS will set up a $100 billion (73.5 Billion Euros) joint US dollar currency reserve pool - called the Contingent Reserve Arrangement (CRA). The New Development Bank will also provide emergency cash to BRICS countries faced with short-term currency crises or balance-of-payments problems.

While the "New Development Bank" (NDB) is most likely to trigger the much needed reform in the international financial system, it should  guard against becoming another parallel system without regard to negative social and environmental impact. The good intentions espoused by the bank are just one step; the real work is spurring economic productivity in member countries. South Africa’s inclusion is a pointer that African countries can play a meaningful role in the global economic and geopolitical architecture.

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