The BRICS’s Bank, Institutional Framework, and Other Current Limitations
Abstract: Based on Polanyi’s concepts of embeddedness, disembeddedness, and the double movement, the aim of this article is to show that the new development bank (NDB) established by Brazil, Russia, India, China, and South Africa (grouped as BRICS) lacks an institutional context to spur growth and development, similar to the growth that occurred during the Bretton Woods era. First, I examine some of the BRICS’s strengths, such as growth rates, share of world GDP (gross domestic product), and the level international reserves as a percent of the world total. Second, I outline the BRICS’s and other Third World countries’ need for financing. I maintain that the main flaw in the BRICS’s bank is that it follows market rationality in obtaining and granting resources, and that China (the most important member of the BRICS) is still dependent on the G7’s economies. Finally, I remark that as long as the NDB follows market fundamentals, it will be less likely to achieve growth.