Press Release: BRICS must not replicate the World Bank and IMF

Partner Press Release: Action Aid





Release date: Friday, July 11, 2014

International development agency, ActionAid warns today that the BRICS nations of Brazil, Russia, India, China and South Africa must not replicate the World Bank and International Monetary Fund when they launch their own alternative financial institutions next week.

Leaders from the BRICS meet from 14 – 16 July in Fortaleza, Brazil for the sixth BRICS summit. The group plans to officially launch a development bank as an alternative lender to BRICS and other developing countries, and the Contingency Reserve Agreement (CRA) which is billed as an alternative to the International Monetary Fund (IMF).

“The BRICS development bank is heralded as a much-needed alternative to the World Bank but this will only be the case if it breaks from the tradition of the World Bank and does not impose economic conditions on borrowing that have been so harmful to developing countries,” said Sameer Dossani, advocacy coordinator, ActionAid.

ActionAid joins other civil society organisations in calling for strong transparency policies, strong environmental and social safeguards, and formal mechanisms for consultation with affected communities and civil society in the development of the new financial institutions.

“For years the IMF and the World Bank have pushed a failed model of development based on a one-size-fits-all prescription of privatization, liberalization and budget austerity policies which have hit the poorest and most vulnerable hardest. What is needed is economic transformation towards a sustainable industrial and agricultural model that ensures more and better jobs and increased access to human rights for all,” said Dossani.

ActionAid will also be attending the parallel civil society summit in Fortaleza which will discuss the impacts of the development models adopted in the different BRICS countries.

ActionAid is launching a paper Brazilian Cooperation and Investment in African Agriculture at the summit, which analyzes the practices and projects funded by the Brazilian Development Bank (BNDES), and their impact on food rights and access to land in Africa.

“Brazil is promoting both good and bad agricultural models to Africa,” said Jorge Romano, country director, ActionAid Brazil. “The Brazilian Development Bank is very keen to reproduce huge industrial sugarcane production in countries like Mozambique but such large-scale production has often had a devastating environmental and social impact in Brazil. Other Brazilian agencies are trying to share positive aspects of the Brazilian model, including support for small farmers, food security initiatives and even some elements of the climate resilient sustainable agriculture that ActionAid uses in our own work with communities.”

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