{"id":318023,"date":"2026-07-06T12:00:39","date_gmt":"2026-07-06T11:00:39","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=318023"},"modified":"2026-07-05T08:58:34","modified_gmt":"2026-07-05T07:58:34","slug":"have-the-brics-countries-built-an-alternative-to-the-world-bank-and-the-imf","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2026\/07\/have-the-brics-countries-built-an-alternative-to-the-world-bank-and-the-imf\/","title":{"rendered":"Have the BRICS Countries Built an Alternative to the World Bank and the IMF?"},"content":{"rendered":"

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The five founding members of the BRICS (Brazil, Russia, India, China and South Africa) account for around 40% of the world\u2019s population, nearly a third of global GDP in purchasing power parity (PPP) and around 20% of global exports.<\/em><\/p><\/blockquote>\n

3 Jul 2026\u00a0<\/em>–\u00a0The valid rejection of harmful policies pushed by traditional imperialist powers (North America, Western Europe, and Japan), along with announcements from the BRICS (Brazil, Russia, India, China, and South Africa), has generated a lot of interest and hopes for significant changes, especially regarding the New Development Bank (NDB) and the BRICS Monetary Fund (CRA). What is the situation? An initial assessment is possible, as it has been 10 years since the NDB began granting loans and the CRA was established on paper. Following the meeting of BRICS+ foreign ministers held in mid-May 2026 in India, it appears that the CRA is still not operational and the New Development Bank has not received a fresh impetus. The BRICS+ countries state that they will strengthen their cooperation with the World Bank and other multilateral development banks (AfDB, ADB, IDB). We are a long way from the myth of the BRICS+ building an alternative financial architecture to that dominated by the World Bank\/IMF duo and the Washington-led bloc.<\/p>\n

The five founding members of the BRICS (Brazil, Russia, India, China and South Africa) account for around 40% of the world\u2019s population, nearly a third of global GDP in purchasing power parity (PPP) and around 20% of global exports. Including the five countries (Indonesia, Iran, Ethiopia, Egypt and the United Arab Emirates) that have become full members since 2024, BRICS+ accounts for around 45% of the world\u2019s population, nearly 35% of global GDP (PPP), approximately 25% of global exports and around 35\u201340% of global oil production.<\/p>\n

This fund, known as the CRA (Contingent Reserve Arrangement) and established in 2014, was intended to fulfil, for the BRICS countries, the role normally played by the IMF when one of its members faces a shortfall in foreign exchange reserves to make payments and turns to it for a loan.<\/p>\n

Although this fund was established on paper in 2014, it has still not become operational.<\/p>\n

The CRA was intended to assist BRICS member countries facing a shortage of foreign currency to meet their international payments by enabling them to borrow the currency they lacked. Thus, BRICS members in need of foreign currency to address payment difficulties could avoid the conditionalities imposed by the IMF.<\/p>\n

This situation is not the case because the BRICS Contingent Reserve Arrangement (CRA) includes a condition in its founding statutes that clearly states that a BRICS member country seeking assistance must comply with IMF conditions if it exceeds 30% of the total amount to which it is entitled. For instance, South Africa, which in principle is entitled to borrow up to US$10 billion. If South Africa wished to borrow more than $3 billion from the BRICS Monetary Fund, it would have to demonstrate that it is implementing a programme with the IMF and complying with the conditions set by the IMF. This is stated very clearly in Article 5 of the founding treaty of the CRA, the \u2018BRICS Monetary Fund\u2019.<\/p>\n

If it did not contain this clause and had become operational, the BRICS Monetary Fund could be useful for countries such as South Africa (a founding member) and others such as Ethiopia and Egypt, which have been part of BRICS+ since 2024. Indeed, they regularly face a shortage of foreign currency, forcing them to turn to the IMF.<\/p>\n

For example, in mid-2020, instead of turning to the BRICS, the South African Minister of Finance secured a $4.3 billion loan from the IMF. This resulted in extreme austerity measures, which in 2021 sparked widespread public discontent with the ANC government before the president softened the finance minister\u2019s social austerity policy.<\/p>\n

The BRICS summit held in early July 2025 in Rio de Janeiro produced a vague statement regarding the BRICS Development Bank. In paragraph 531, the BRICS+ leaders state that the founding treaty will be revised and that new members will be able to join the BRICS Development Bank. At the most recent high-level meeting, held in May 2026 in India, the lengthy final declaration adopted by the foreign ministers of the ten BRICS+ member countries addresses the issue of the CRA only in very vague terms and only at the very end of the document in point 58 (even though the declaration comprises 63 points). Nothing concrete, then.<\/p>\n

What about the New Development Bank?<\/strong><\/p>\n

In point 45 of the final declaration of the Rio summit in early July 2025, the BRICS leaders stated regarding the New Development Bank (NDB), established in 2014:<\/p>\n

\u201cAs the New Development Bank is set to embark on its second golden decade of high-quality development, we recognize and support its growing role as a robust and strategic agent of development and modernization in the Global South.”<\/p>\n

They also stated that they were reappointing Dilma Rousseff, former President of Brazil from 2011 to 2016, to the post of President of the New Development Bank (NDB), a position she has held since 2023.<\/p>\n

In paragraph 56 of the New Delhi Declaration of May 2026, we find a grand statement:<\/p>\n

\u201cAs the New Development Bank embarks on its second golden decade of high-quality development, the Ministers recognized and supported its growing role as a robust and strategic agent of development and modernization in the Global South.\u201d<\/p>\n

However, a serious examination of the content will highlight that members are divided regarding the quality of the Bank\u2019s leadership, as the text goes on to state that the ministers<\/p>\n

\u201cThey encouraged the NDB to follow the member-led and demand-driven principle, and the ongoing strengthening of its governance framework, which enhance the Bank\u2019s institutional resilience and operational effectiveness, to continue executing its purpose and functions in a fair and non-discriminatory manner.\u201d<\/p>\n

In paragraph 57:<\/p>\n

\u201cThe Ministers reiterated the importance of enhancing partnerships and benefitting from co-financing opportunities with other major Multilateral Development Banks (MDBs).\u201d<\/p>\n

This means that BRICS+ leaders are not promoting the NDB as an alternative to the World Bank and banks such as the African Development Bank (AfDB), the Asian Development Bank (ADB) and the Inter-American Development Bank (IDB). On the contrary, the BRICS+ are promoting cooperation and co-financing with these institutions, which are dominated or heavily influenced by the major traditional imperialist powers. This aligns with other BRICS+ statements that the IMF and World Bank must remain central to the global financial system.<\/p>\n

BRICS leaders have announced their support for the NDB\u2019s continued expansion of financing in local currencies, which is positive, but they fail to mention that the bulk of the NDB\u2019s financing is conducted in US dollars through the issuance of securities on financial markets. The NDB borrows in dollars and also lends primarily in dollars. In 2023 and 2024, the NDB issued bonds with AA+ (stable outlook) ratings from Fitch Ratings and AA (stable outlook) ratings from S&P Global Ratings. To maintain this rating level, the NDB has, in practice, complied with the sanctions imposed on Russia since the invasion of Ukraine in late February 2022; this compliance means it has not granted any further credit to Russia since 2021. The NDB\u2019s management believes that if it were to continue lending to Russia, rating agencies and investment funds would consider the NDB to be taking significant risks and would demand a higher yield to purchase bonds issued by it in international markets.<\/p>\n

Conclusion<\/strong><\/p>\n

Twelve years after the creation of the Contingent Reserve Arrangement (CRA) and the New Development Bank (NDB), the results fall far short of the expectations raised by their launch. The CRA has never provided any funding and remains largely inactive. As for the NDB, despite some concrete achievements, its activity remains modest on a global scale, both in terms of volume and geographical scope. Its financing remains predominantly denominated in dollars, and its funding model remains heavily dependent on international financial markets.<\/p>\n

More fundamentally, the BRICS+ do not present themselves as an alternative to the IMF and the World Bank. On the contrary, their official statements reaffirm the central role of these institutions in the global financial architecture. Ten years after their creation, it must therefore be acknowledged that the financial instruments established by the BRICS have neither challenged the dominance of the Bretton Woods institutions nor built an international financial architecture based on different principles.<\/p>\n

The emergence of a genuine alternative would require not only far greater financial resources but also a shared political will to break with the logic of financial dependence, conditionality, creditor hierarchy and submission to capitalist markets. To date, such a break is not on the agenda. Behind the rhetoric of multipolarity, the BRICS countries appear more as actors seeking a greater role in the existing capitalist financial order than as promoters of a new international financial order based on social justice, the sovereignty of peoples and respect for ecological limits.<\/p>\n

__________________________________________________<\/p>\n

Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Li\u00e8ge, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France.<\/em><\/p>\n

Go to Original – infobrics.org<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

3 Jul 2026\u00a0–\u00a0The five founding members of the BRICS (Brazil, Russia, India, China and South Africa) account for around 40% of the world\u2019s population, nearly a third of global GDP in purchasing power parity and around 20% of global exports.<\/p>\n","protected":false},"author":4,"featured_media":318024,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[180],"tags":[239,3311,3380,354,562,1289,3041,1700],"class_list":["post-318023","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-brics","tag-brics","tag-brics-central-bank","tag-brics-currency","tag-economics","tag-finance","tag-imf","tag-new-development-bank","tag-world-bank"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/318023","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=318023"}],"version-history":[{"count":1,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/318023\/revisions"}],"predecessor-version":[{"id":318025,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/318023\/revisions\/318025"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/318024"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=318023"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=318023"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=318023"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}