BRICS to Weaken the Dominance of the IMF and World Bank?

Joshua Ramos
BRICS Nations
Source: Institute for New Economic Thinking

Recent months have shown one reality that many thought was impossible: the BRICS collective of nations has undoubtedly shifted global political power. Yet, as the story is still unfolding, could the BRICS nations weaken the dominance of the IMF and World Bank?

This year, the BRICS bloc has already surpassed the G7 nations in GDP (PPP). Subsequently, as it takes aim at the international dominance of the US dollar, the shifting power balance is an interesting observation. Consequently, the IMF and World Bank could be the next powers to be usurped.

BRICS Threatening IMF and World Bank

Source: Center for Global Development

The BRICS countries are a collective of nations comprised of Brazil, Russia, India, China, and South Africa. Moreover, the bloc’s first official summit took place all the way back in 2009, with its first meaningful integrative steps coming in 2014. Then, the entity launched its New Development Bank, supporting seed money of $50 billion.

The development showed that the bloc was primed to challenge the dominance of the West. Specifically, taking aim at the G7 nations of the US, Canada, France, Germany, Italy, and the UK. Moreover, the BRICS nations had the tools to compete with the IMF and the World Bank.

Now, the BRICS nations lead the world in GDP contributions at 31.5%. Alternatively, the G7 countries contributed 30.7%. Additionally, the primary threat to the IMF and World Bank is the willingness and capability of the BRICS countries to expand. Yet, the immense opportunity is also a tremendous challenge. Mostly because of the difficulty in aiding new members in the maintenance of economic independence.

BRICS Currency the Final Step?

BRICS Countries Leaders
Source: DIRCO/GovernmentZA)

The IMF and World Bank have been known for the stipulation of monetary support to various countries. Moreover, the BRICS nations could aid poorer countries without the political constraints that have been enacted by both entities.

As the economic state of the West is enthralled by fragility, BRICS presents an alternative. Furthermore, it further aids the shift in global power away from the West. Conversely, the process has already begun, as BRICS has maintained its position on the diminishing importance of the US dollar. Creating an international belief in similar efforts to lessen its prevalence.

Interstingly, how the process of creating an alternate currency progresses will be vital. Importantly, the BRICS nations have already spoken about trade negotiations being executed in their own currencies. Yet, with plans in motion, how they propel BRICS further amidst IMF and World Bank dominance will be crucial to observe.