While the international attention is focused on Ukraine and Gaza, something of arguably larger consequence occurred recently: the ‘BRICS’ (Brazil, Russia, India, China, and South Africa) launched a development bank to compete with the World Bank. This is indeed exciting – while the post-Breton Woods era has produced some impressive economic gains, especially after end of the Cold War, the World Bank is far from living up to its potential, and could surely use some competition. But as far as an antidote the that mythical demon of ‘neo-liberalism’, the New Development Bank doesn’t have a very good chance.
The recent crisis in Ukraine has caused some contrarian-leaning liberals to embrace Russia as a counterweight to American ‘neo-liberalism’; China has long been viewed in the same way. But even a cursory glance at the numbers indicate that this is far from the case. The weighted (by nominal GDP) average Gini coefficient (a method for comparing economic inequality in countries internationally) of the BRICS countries is a whopping 46.2 – by comparison, the US comes in at 36.7, and Mexico, the least equal of the OECD nations, is at 47. In terms of workers’ rights, the environment, or corruption of Democracy, the other prime accusations hurled at ‘neo-liberal’ institutions, the BRICS nations again fail to distinguish themselves as substantially better than the OECD or leading World Bank states.
The lesson? Those who see the US as the cause and center of globally exploitative economic system ought to look twice before assuming that America’s nominal ‘rivals’ represent a better, or even substantially different, system. While there are some truly ground-breaking programs for fighting poverty coming out of Brazil, and some successes as well in the ever-challenging realm achieving democratic governance in a highly multi-ethnic states in India and South Africa, by and large those countries competing economically with the “Washington Consensus” are running parallel to it, using largely the same methods (indeed, with a greater emphasis on state power and centralization), not innovating in some kinder, gentler system. A rival organization to the current global economic norms will not lead to a global system more responsive to inequality and the needs of the poor unless it helps motivate the World Bank/IMF system to reform itself.