BRICS to help deliver global economic recovery, fairer world order (3)

TOWARD BETTER GLOBAL GOVERNANCE

The BRICS nations' contribution to the world, however, is beyond economic terms as they have also tried to promote a reasonably structured global governing system that could better interpret the current global economic and political transformations.

For decades, the existing international institutions, like the International Monetary Fund (IMF), the World Bank and the World Trade Organization, are reluctant to make substantial reforms so as to reflect and guarantee the interests of the developing and the less developed nations.

According to media reports, the BRICS nations would announce the establishment of a development bank at the upcoming fifth summit in Durban, South Africa. That idea was first exposed at the fourth BRICS summit at the Indian capital city of New Delhi.

Meanwhile, the BRICS nations would also consider the option of setting up a foreign reserve fund, a business council and a think tank.

Once established, they would certainly serve as a major breakthrough for both inter-BRICS cooperation and global financial system.

However, these proposed organizations do not indicate that the BRICS nations are trying to overthrow the old global rules.

Isabel Christina Heyvaert, Brazilian ambassador to Ethiopia, told Xinhua in a recent interview that the idea of a development bank is to create fund to improve cooperation with the developing countries.

South African Standard Bank's Simon Freemantle, senior analyst in the African Political Economy Unit, and Jeremy Stevens, an international economist based in Beijing, said in their latest Africa Macro report that the bank is not a counterweight to multilateral development banks.

"However, on this specific score, the envisioned BRICS bank is an auxiliary funding institution -- albeit more aligned to BRICS' development agenda," their report said.

Still, they said that for the proposed BRICS development bank to be operational, the member nations have to answer a string of questions that concern the bank's funding mechanism, management, and business focuses. How to coordinate the different financial policies of the five members would also pose serious challenges.