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Their economic performance has weakened since 2008/9 in spite of healthy government reserves, while the crisis has also worsened Africa’s structural defects. The BRICS are aware of the deleterious effect of the global economic meltdown on their own economies.
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#Briqs bank drivers#
These challenges include the need for new and better funding towards infrastructure development, industrial production and beneficiation of raw materials, boosting economic competitiveness, human resource development, technology development or transfer and innovation, all of which are seen as critical drivers of economic development in the developing world. They considered strategies through which the BRICS could respond to deficiencies in international development finance in order to provide developing countries with access to new capital for stimulating their economic growth and development.įor some time, the BRICS countries have decried the unpreparedness of International Finance Institutions (IFIs) like the World Bank and the IMF to respond to the needs of developing countries, especially during difficult times like the current global economic crisis. In New Delhi, the March 2012 BRICS Summit assessed the need for upgrading South-South cooperation from mere political solidarity and ordinary economic relations to a high level of catalysis in the area of development finance in response to a changing global political economy. There is room for a constructive response to this development which says, whatever the motives of the plan’s initiators, the BRICS Bank could become a catalyst for functional cooperation, and alternative development financing as well as new development knowledge production that is good for both the emerging and developed worlds. While they recognize the aspiration on the part of the BRICS to take an initiative, they doubt if the five countries have sufficient cohesion in vision and political muscle to make this a truly global game-changer. These positions are replicated in response to the proposed BRICS Development Bank. The latter see the BRICS as a potential counterpoise to the G8, which is seen as a bulwark for a west-dominated global economic hierarchy, while the former see in it a great promise that will not materialize because of internal cleavages and an uncertain global agenda. The idea of a BRICS Bank is now a huge bone of contention in South Africa (maybe, in other BRICS countries as well) between those who are skeptical of the BRICS’ ability to act as an underwriter of a South-led global economic development plan designed to help poor countries cope with, and overcome the effects of the current global economic crisis, and those who over-estimate the forum’s ability to rewrite the history of global development by turning western modernity-on which this history is based-on its head.