Photo Courtesy of WSJ
Do We Need Another Bank?
This week the BRICS (China, India, South Africa, Brazil, and Russia) met in Delhi to discuss the possibility of a BRIC bank; One that would rival the World Bank and the IMF, which have long been described as Euro and American-centric, failing to reflect the global economy. #
- should these regional powers take more responsibility for their own development?
- does a centralized bank model still work for development? Or have we gone beyond that? With corporations, foundations, social entrepreneurs, and a thriving civil society, are more grassroots and collaborative measures more effective?
- do large injections of capital in development aid help?
Meanwhile, this week, Obama nominated Dr. Jim Yong Kim, president of Dartmouth College, to lead the World Bank. Many termed him an “odd” choice. He has immense experience in global public health, making him a suitable choice for development projects. But, one Telegraph writer wasn’t impressed: #
As a sop to the developing world, he has at least gone for someone with an Asian-sounding name, Dr Jim Yong Kim. But let’s not be flippant. Kim may be a first-generation Korean immigrant, yet in most other respects he’s an all-American boy. Ultimately, he’ll dance to his master’s tune.
The debate for years, if not decades now, has been that the World Bank and the IMF do not take into account developing countries, even though they lend to these nations and are aspiring to help them rise economically. So, it’s no surprise that the BRICS concocted a plan to start their own version of the World Bank, financing it themselves and using it for development projects in their respective regions.
But critics this week noted the differences, not commonalities, in BRICS. The Telegraph described them as a motley group, which makes the European Union seem harmonious. Martin Wolf of the Financial Times spoke with Council on Foreign Relations, expressing the same hesitancy: he argued that the BRICS are not even a group, just an entity formulated by Jim O’Neil of Goldman Sachs. They lack cohesion, a common purpose, similar governing techniques, and global perspectives. Essentially, they have very little common ground.
Wolf said: “So there’s no reason whatsoever to expect them to agree on anything substantive in the world, except that the existing dominating powers should cede some of their influence and power. That’s the one thing they have in common.”
Much of that distrust is embedded in the two largest players, India and China. In terms of geopolitics, territorial disputes along their borders have increased that mistrust; couple that with their starkly different political systems. Plus, while India has regional and international allies, China is being framed as an omnipotent force, without a strong support system.
Ultimately, though the BRICS failed on a variety of fronts, according to news sources:
– the FT writes about the missed opportunity to support a World Bank candidate from a developing country:
…But they were far away from doing the one thing that would give their summit real clout – backing a common candidate for the World Bank presidency from the developing world, even though there is a first-class contender in the race, Nigerian finance minister Ngozi Okonjo-Iweala.#
– The NYTimes reported that a BRICS bank would be reconsidered next year, when they meet for their 4th annual summit:
…but fell short of achieving the tangible goal most discussed before the gathering: the establishment of a new development agency to rival the World Bank. Instead, the leaders created a high-level working group to examine the issue and report back when they meet next year.
- India’s university system in crisis, WashPost reports on the poor quality of education in the subcontinent.
- Kristof writes about the inequalities in education through a personal tale of young man from South Sudan who made it to Yale.
- Lessons from Oxford’s Skoll World Forum? This week, hundreds of changemakers convene at Oxford University. One perspective in the Guardian argues that the strong presence of global brands and the elite at the forum indicates a movement towards “philanthro-capitalism.”