World Bank and BRICS Bank

At the end of February 2023, US President Joe Biden announced that the United States had nominated Ajay Banga to be the next director of the World Bank, which was created in 1944. There will be no other official candidates for this position, since – for the sake of the conference – the American candidate is chosen automatically for this position. This was the case with the 13 previous World Bank presidents. The only exception was the acting President of Bulgaria, Kristalina Georgieva, who held the position for two months in 2019. In the official history of the International Monetary Fund (IMF), c. Keith Horsfield books that the American authorities “considered that the Bank must be led by a United States citizen to gain the confidence of the banking community, and that it would be impractical to appoint American citizens to manage both the Bank and the Fund.” Therefore, by an anti-democratic convention, the head of the World Bank must be a US citizen and the head of the International Monetary Fund must be a European citizen (Georgieva is currently the managing director of the IMF). Thus, Biden-Banga’s candidacy guarantees his promotion to the position.

A month later, the Board of Governors of the New Development Bank (which includes representatives from Brazil, China, India, Russia, and South Africa (the BRICS countries), plus one person representing Bangladesh, Egypt, and the United Arab Emirates) selected former Brazilian President Dilma Rousseff to head the National Development Bank, better known as the BRICS Bank. . BRICS Bank, which was first talked about in 2012, started in 2016, when it issued its first green financial bonds. There have only been three BRICS Bank CEOs: the first from India (KV Kamath) and the next two from Brazil (Marcos Prado Trujo and now Rousseff to end Trujo’s mandate). Presidencies of the BRICS Bank will be elected from among all its members, not by a single country.

Banga will come to the World Bank, whose office is in Washington, D.C., from the world of international corporations. His entire career has been spent in these multinational corporations, from his early days at Nestlé India to his later international career at Citigroup and Mastercard. Most recently, Banga was a director of the International Chamber of Commerce, an “executive” for multinational corporations founded in 1919 and headquartered in Paris, France. how He says Banga, during his time at Citigroup, led the microfinance division, and during his tenure at Mastercard, made several environmental promises. However, he has no experience in the world of development finance and investment. advertiser to financial times He will turn to the private sector for funds and ideas. His resume is not much different from that of most of those hired by the United States to run the World Bank. The first president of the World Bank was Eugene Mayer, who created the multinational chemical company Allied Chemical and Dye Corporation (later Honeywell) and who owned Washington Post. He also has no direct experience in eradicating poverty or building public infrastructure. Through the World Bank, the United States launched a file note to privatize public enterprises. Men like Banga have been instrumental in achieving that agenda.

Dilma Rousseff, for her part, arrives at the BRICS bank with a different approach. His political career began in the democratic struggle against the 21 years of military dictatorship (1964-1985) imposed on Brazil by the United States and its allies. During Lula da Silva’s two terms in office (2003-2011), Dilma Rousseff was his minister and chief of staff. took over Growth Acceleration Program (Programme for Accelerating Growth) or PAC, which is organized, by the government, to combat poverty. Because of her work in eradicating poverty, Dilma became widely known as the “May do buck(PAC’s mother). Stady from the World Bank 2015 that Brazil has “significantly reduced poverty in the past decade”; The extreme poverty rate fell from 10% in 2001 to 4% in 2013. The report stated that “nearly 25 million Brazilians have escaped extreme or moderate poverty”. This poverty reduction was not the result of privatization, but rather the result of two government plans developed and put in place by Lula and Dilma: family bag (Family Bonus Plan) f Brazil without poverty (The Brazil Without Extreme Poverty Plan, which helped families with employment and building infrastructure such as schools and water and sanitation systems in low-income areas.) Dilma Rousseff brought her expertise to these programmes, whose benefits her successors (Michel Temer and Jair Bolsonaro) have reflected.

Banga, who comes from international capital markets, will manage the World Bank’s net investment portfolio of $82.1 billion as of June 2022. There will be great interest in the work of the World Bank, whose power benefits from and in favor of Washington’s power. Work with the IMF’s debt austerity lending practices. In response to the debt austerity practices of the International Monetary Fund and the World Bank, the BRICS countries – when Dilma was President of Brazil (2011-2016) – established institutions such as the Emergency Reserve Arrangement (as an alternative to the IMF with a pool of $100 billion) and the New Development Bank (as an alternative to the World Bank, with another $100 billion in authorized seed capital). These new institutions aim to provide financing for development through a new development policy that does not impose austerity on the poorest countries, but rather governs them principle of eradicating poverty. The BRICS Bank is a young institution compared to the World Bank, but it has significant financial resources and will need to be innovative in providing assistance that does not lead to settled debt. It remains to be seen whether the new BRICS network of financial think tanks will be able to break with the IMF orthodoxy.

Rousseff presided over her first meeting of the BRICS Bank on March 28. Panga is likely to be named at the World Bank and International Monetary Fund meeting in April.