The BRICS emerging market nations meeting in Brazil Tuesday want to launch an international bank to lend to developing countries with the aim of countering Western influence, but that plan and the multinational group itself are unlikely to disrupt the status quo of world affairs.
The BRICS nations include Brazil, Russia, India, China and South Africa. China is the financial powerhouse of the group and would likely dominate the new bank, since the government-owned China Development Bank already has rivaled the Western-dominated World Bank in issuing overseas loans since its formation in 1994. The global financial crisis of 2008 that included the Great Recession in the U.S. gave China a chance to increase its role in international finance, and the Asian superpower is on track to become the world’s largest economy in the 2020s.
Recently elected Chinese President Xi Jinping seeks an increased global role for his nation, including more legitimacy for its yuan currency, but the BRICS group of nations seems unable to coordinate on global efforts, says Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics.
“They don’t seem to agree on much,” says Kirkegaard, who has previously worked with the U.N. “The only thing they can agree on is not interfering with each other’s policy.”
Russia, for instance, gained implicit acceptance for its annexation of Crimea in southern Ukraine from the other members of the multinational group, despite broad criticism from other nations like Germany and the U.S. Russia's aggression in Ukraine has also been labeled as a bid to counter Western influence led by NATO and the European Union.
Indecision about whether India or China will host the new $100 billion development bank, which each of the five member states would contribute to, already have stalled the plan, Reuters reports.
“In terms of actually creating new development projects around the world, I don’t think there is going to be much difference than what is already being done by China,” Kirkegaard says.