Why the BRICS idea is passé — just as the ‘BRICS Bank’ opens for business
A few years ago, the idea of a BRICS Bank was floated. It was to be an alternative to existing institutions such as the World Bank. The formal name is the New Development Bank, with headquarters in China.
The BRICS countries – Brazil, Russia, India, China, South Africa — did not have much in common, except that they had high economic growth rates. (Actually, South Africa did not have high growth rates like the other four countries. The original term was BRIC. South Africa was included later.)
Since the inception of the bank, the economies of four of the BRICS countries have experienced major economic problems. This chart from the Wall Street Journal shows clearly that only India is doing well.
The Bank’s President, Mr. K. V. Kamath told The Hindu newspaper:
To put it another way, it is the rise of the South, and so we are talking about countries of the South coming together and very humbly saying that we can set up an institution on our own and thereafter we (can) take it forward. As we go along, we will clearly look at membership on a wider framework, but I think these countries can be justly proud that this was an effort from the South to start with.
It is likely that the BRICS Bank will face teething troubles. More importantly, it is not clear what the long-term prospects for the Bank are, given that the bank’s promoters are facing economic problems.
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