BRICS challenging status quo

The International Economic Order is seriously shaking up and getting ready for a complete overhaul, the signs of this became apparent this week when the world’s leading emerging markets Brazil, Russia, India, China and South Africa had what some deem as the audacity to openly challenge the existing status quo by announcing that they were going to form their own versions of the International Monetary Fund (IMF) which they will call the New Development Bank.

                      

What is the purpose of the NDB? Some might ask, well it’s quite simple the New Development Bank is an institution set up to help these nations and other emerging markets pursue their own economic interests in areas such as regional trade, investment and infrastructure development, domestic job creation and poverty reduction. What makes this institution unique is that it has absolutely no ties to any of the major western powers but is built specifically with the concerns of developing countries in mind (or at least that’s what they claim), the BRICS countries have not been  shy to point out that structural adjustment programmes have not always worked given it’s “one size fits all” approach which is impossible to do because every country is inherently different, it’s problems are different and thus the solutions to fixing this problem should be just as varied, hence the need for the NDB.

        

Anyone who has been following the trend of the world economy lately should not at all be surprised that this has come to pass,  truth be told then writing was already on the wall, the emergence of these news players on the economic stage has been long coming, China is predicted to take over from the US as the world’s most powerful economy, while Russia and India don’t seem very far behind, issues that are of importance to the International Political Economy have moved from discussions at G7/G8  to summits for the G20 which includes all the BRICS countries, the US, Japan and Western Europe who’s economic supremacy once went unchecked and unchallenged are now finding themselves stiffly competing with these new players particularly China who will soon no doubt become (if not already) the new manufacturing capital of the world.

The formation of NDB is far more than just an economic statement, more importantly it is a political statement after years of simply undermining the existing political-economic order as established by the Bretton Woods system, they’ve now decided to openly defy the status quo for all the world to see, knowing full well that there’s not a single thing the West can do to push back against this challenge to its supremacy, this is a war of words, a war of ideas,  a battle for control of the world’s economy which the US and company are sorely loosing.  

                         

Of course all this could simply be my speculating, maybe the US and its allies don’t really see it as a threat  to the continuation of its own institutions such as the IMF and the World Bank, maybe they have no ill feelings toward the establishment of this new BRICS owned entity that they cannot control like they have been doing with similar institutions for the last 70 odd years, but one thing is certain though, there was a time when no nation (or alliance of nations) would ever dare to try something like this but times have certainly changed and soon developing countries will be signing up to join, given their disillusion with institutions such as the IMF and the World Bank which they don’t see as acting in their own best interest.

                      

The implications are numerous as far the setting up of the New Development Bank is concerned as is the implications of how it will be received which right now are bordering on cautiously optimistic, very little is certain but one thing that is certain however is that the influence of the traditional powers significantly waning and thus making way for a new world order.