The conclusion of the Sixth Summit of BRICS countries (Brazil, Russia, India, China, South Africa) in Brazil has rekindled the hope of change for many progressives who aspire for the righteous place for poor countries in the world community of nations.The grand inauguration of two institutions is a cause for celebration. A Contingency Reserve Arrangement (CRA), with an initial capitalization of $100 billion, will assist BRICS members in need of funds, and the New Development Bank (NDB), with a total authorized capital of $100 billion, is open to all members of the United Nations. By this endeavor, the BRICS became an economic alliance challenging the US- and European-dominated International Monetary Fund (IMF) and World Bank. Both new institutions, CRA and NDB, have the potential of breaking the global North’s stranglehold on finance and development. The BRICS Bank will be based in Shanghai, China’s financial hub, and it will be operational in about two years.However, different perceptions exist among the enthusiasts of these institutions. Asserting that the NDB would not to challenge the existing multilateral financial institutions like the IMF and the World Bank, Raghuram Rajan, the Governor of Reserve Bank of India, the central banking institution controlling the Indian Monetary Policy, said, “… but it certainly is saying, look, we have plenty of money ourselves, why don’t we put some of this money to use in a way that benefits us rather than necessarily depending on the multilateral institutions to change which is taking much more time than anybody thought of.” His rationale for the BRICS bank was that it could provide risk capital to long-term projects.This view represents the outlook of practical economist bureaucrats. Anyway, from the point of view of practical requirements of the developing nations, and from the long term perspectives on altering international economic relations as well, the formation of NDB will be a welcome development. One could hope that such regional institutions would help the developing countries to attain self-sufficiency by reducing their dependence on the big powers for economic assistance.It is now an established truth that the so-called Structural Adjustment Programs that the World Bank and IMF imposed upon their borrowers ruined the economies of poor and developing countries.Read More.Source: Populist.Com/N. Gunasekaran