BRICS Nations Reveal World Bank Alternative (NPR)
NPR's David Greene interviewed Senior Fellow Arvind Subramanian on the outcome of the BRICS Summitt held in Durban, South Africa.
DAVID GREENE, HOST:
The leaders of five giant economies gathered in South Africa this week for a summit. The group is known as the BRIC nations - that would be Brazil, Russia, India and China. Now South Africa is sometimes in the group, which puts the S in BRICS. The meeting and the grouping are largely an effort to counterbalance what many in the developing world see as the dominance of America and Europe in the global economy.
Now, to talk more about what came out of this meeting, we're joined by Arvind Subramanian; he's with the Peterson Institute for International Economics.
Arvind, thanks for joining us.
ARVIND SUBRAMANIAN: Great to be here, David.
GREENE: It's a little ironic when we talk about these BRIC countries because the name BRIC was first coined by a British banker who was working at Goldman Sachs, the investment bank, right?
SUBRAMANIAN: Exactly. And it's an amazing tribute to the power of an idea that he came up with this grouping and now it's become a political reality.
GREENE: Well, before we get tothis meeting, I mean give us the background. These countries ran with this idea. What are they trying to create? A political bloc? Are we just talking about economics?
SUBRAMANIAN: Well, I think initially we're just talking about, you know, and economic grouping aimed at achieving certain things. But primarily the motivation is what you said, David, that, you know, there is a lot of frustration at the fact that the existing international institutions are dominated by America and Europe.
Take the IMF, for example. This is an organization where the voting structure and who has power was shaped about 50 years ago after World War II, and that has barely changed. So we have a situation where Europe, which is now a debtor - it's borrowing from this - still has veto power de facto in the institution. And, you know, the new guys are saying, hey, this can't be right. You know, the world has changed. We, China, are a big creditor. We're going to give a lot of money and we don't have the same say that the U.S. and Europe have, so we want to change that. Now, they're unable to change that, and the frustration is getting reflected partly in creating these new alternative structures.
GREENE: And one reason is, right, that they're not natural allies, these countries. I mean Russian President Vladimir Putin, didn't he refer to these five countries as different kinds of animals that are very different?
SUBRAMANIAN: Exactly. I think that's going to be the challenge, that there's a negative reason for getting together - i.e., we don't like the dominance of the status quo powers. But you need something positive to actually translate that negative commonality into action, and that - it's far from clear that they have that.
