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An African-Asian Development Bank: Stronger than BRICS?
By admin May 15, 2015

 

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In the recent 60th commemoration of the Asia-African Summit: Strengthening South-South Cooperation to Promote World Peace and Prosperity in Jakarta, Indonesia; the idea of an African-Asian Development Bank was discussed. Such a move comes at a time where emerging players in the global arena are seeking to shift the balance of power away from the dominating powers in the International Monetary Fund (IMF) and World Bank Group (WB), and more towards a just and equitable representation of traditionally under-represented if not unrepresented powers.

In an international arena where the global balance of power is being redistributed in light of emerging/rising economic powerhouses such as the Brazil, Russia, India, China and South Africa (BRICS) grouping, the African-Asian Development Bank could mean a break from what was to what could be. In the Goldman Sachs Report of 2003, the first four BRICS states were specifically identified for this potential. Moreover, the global Gross Domestic Product of these countries and global economic growth presents a new economic dynamic and challenge to the current global economic constellation.  The development of such a bank is essentially about siphoning the over-reliance on traditionally western institutions such as the IMF and WB which is viewed as being tainted by inequitable/inappropriate conditionality.

The crux of the issue is that the potential opening of an African-Asian Development Bank might not only shift the self-understanding of the economic world-order, but also the self-understanding/dynamic of the multipolar order in which global affairs play themselves out. Zimbabwean President Robert Mugabe told the conference that Asian and African countries “should no longer be consigned to the role of exporters of primary goods and importers of finished goods”. This proposed African-Asian development bank will further contribute to the fostering of South-South solidarity and cooperation whilst making developing/emerging countries more self-sufficient.

 It is worth adding that in 2014 the BRICS group launched a Development Bank, which also aims to change the status quo. The overall objective of the BRICS Development Bank is to mobilise private and public projects through various equity payments, loans, guarantees and various related financing machinery. In effect, the aim of the African-Asian development bank is to solve the world’s problems by looking at a different, un-traditional contingent. It can be derived that the general pattern in the emergence of such banks is to change the status quo of the multilateral order, typified by fairness in international arrangements and agreements.

What remains to be seen is whether the existence of such a bank would be able to distribute wealth equitably, as well as bridge the inequality cleavage amongst the populations in the Global South. Moreover, whether the potential African-Asian development Bank may just stand to serve in the interest of the South is worth asking. The success of not only the African-Asian Development Bank but also of BRICS depends on how effectively the economic stance of African populations may be sustainably advanced. Nonetheless, it may remain a distant hope.

For more information: 

http://mg.co.za/article/2015-05-07-african-and-asian-leaders-call-for-new-development-bank/

http://unctad.org/en/PublicationsLibrary/osgdp20141_en.pdf

http://www.aacc2015.id/?p=about

http://www.businessinsider.com/r-asian-african-nations-challenge-obsolete-world-order–2015-4?IR=T

http://www.goldmansachs.com/our-thinking/archive/archive-pdfs/brics-book/brics-full-book.pdf


Thanks for sharing !


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