The BRICS Bank and Fund – radical for some, not radical enough for others

The meeting of the Brazilian, Russian, Indian, Chinese and South Africa (BRICS) governments at the end of the World Cup in Brazil last month was probably the most successful summit of the five emerging economies, because for the first time they did more than agree a joint communique.

The New Development Bank (the BRICS Bank) that they set up – and the associated Contingent Reserve Arrangement (CRA – let’s call it “the Fund”) – were intended to mimic the World Bank and the International Monetary Fund, and many commentators saw the move as a declaration of independence from the old world order.

In truth, it was more of a break with new world order of the post-1970s Washington Consensus, although it didn’t go as far as some wanted (opinion on the left is divided.)

The Fund, while designed to free governments in the south from the IMF, reproduces some of its less radical features, such as requiring those applying for emergency loans of above a certain level to meet the same economic conditions as the IMF imposes.

The Bank, however, manages to be more radical by returning to some of the original founding principles of the Bank for Reconstruction and Development (still its official title) as set out by the Bretton Woods Conference that an ailing John Maynard Keynes attended.

Some still see the lending facility as a break more with global banking than the international financial institutions.

Commentators like Mark Weisbrot and Stephany Griffith-Jones have been very positive about the development, although John Weeks has been more sceptical and organisations like Human Rights Watch have sounded a friendly concern – while generally positive – that the Bank needs to adopt the sort of human rights requirements that the World Bank clearly hasn’t.

International Trade Union Confederation (ITUC) President João Antonio Felicio, from Central Única dos Trabalhadores (CUT) Brazil, who was in Fortaleza in north-east Brazil for the trade union forum, also indicated critical support, saying:

“The New Development Bank and the CRA could become effective tools towards transforming the current international economic architecture on condition that they reject the austerity and structural adjustment conditions applied by the international financial institutions in Europe and elsewhere, which have had disastrous consequences for workers.

“The new BRICS financial instruments must put forward real alternatives that bring benefits to working people and meet the challenge of climate change.”

The trade unions in the BRICS also met in Fortaleza at the same time for their 3rd BRICS Trade Union Forum, and their communique was more radical, in more ways than one.

It wasn’t surprising that they backed a formal role in the BRICS structure to match the business forum that already exists (a sign of how the BRICS governments have mimicked the G20 by embracing employers unilaterally, rather than the more tripartite structure of the Organisation for Economic Co-operation and Development, which has institutional arrangements with business, industry and trade union advisory committees BIAC and TUAC).

But the breadth of trade unions represented was a major step forward, and the official, state Chinese trade union movement signed up to some words that would have been unthinkable just a few years ago.



The BRICS trade union forum is clearly the brainchild of the ITUC-affiliated CUT in Brazil (the confederation Lula led) and the Congress of South African Trade Unions (COSATU) in South Africa, and the left-leaning governments of their countries, whatever the internal strains, helped make the union forum happen.

The Federation of Independent Trade Unions of Russia (FNPR)is also closely aligned with a slightly less left-leaning Russian government.

Only two union confederations from the notoriously divided Indian trade union movement attended, including the ITUC-affiliated Hind Mazdoor Sabha (HMS) and the communist Centre of Indian Trade Unions (CITU), a genuinely mass trade union confederation despite its political links. But they are at least two of the more progressive Indian confederations.

Involving the All-China Federation of Trade Unions (ACFTU) is not in itself unusual – they now take part in the ITUC-led Labour 20 in the G20 structure after all, and a BRICS trade union summit without the largest country represented would be an anomaly.

What was impressive about the BRICS union communique, though, was the language that CUT and COSATU evidently managed to persuade the ACFTU to agree to.

As well as calling for environmental policies predicated on “respect for local communities, sustainable use of natural resources and the search for a low carbon, clean energy matrix”, the statement puts the call for workers’ rights at the heart of the trade union demands on the BRICS (despite China’s frankly lamentable record on this issue, as demonstrated by the failure to ratify four of the eight core labour conventions of the ILO, although India have not done any better and – for comparison – the USA has only ratified two.)

More important, the communiqué envisages engagement in multilateral decision-making, which is a step forward for the ACFTU’s traditional support for non-interference, including a commitment to:

“Defend the legitimate rights of the working class within a progressive social dimension; promoting a development agenda that puts industrialisation, environmental justice and human progress for equitable and fair growth models at the centre of our common commitments”


“Establish a dialogue and cooperation to promote peace, security, human rights and global sustainable development.”

It is also worth noting that they also backed the call for a financial transactions tax. While this is not big news in Brazil or South Africa, it’s interesting in terms of China…