The BRICS Summit held in Durban, South Africa in March 2013, was one of the most watched international summits this year, due to the expected launch of the BRICS Development Bank. Unfortunately, coverage by the mainstream media paints the BRICS Summit as more of a failure than a success. But Funeka Yazini April, a research specialist at the Africa Institute of South Africa, believes that the BRICS Development Bank would help facilitate some of the World Bank and IMF infrastructural efforts on the continent. Excerpts of her opinions follow:

News agencies such as Al Jazeera published headlines announcing, "BRICS Nations Fail to Launch New Bank." The Voice of America declared, "BRICS summit ends without development bank deal." Money Web proclaimed, "Deal on development bank eludes BRICS nations at summit; BRICS ministers fail to agree on development bank details," while Firstpost claimed that "BRICS bank is just a castle in the air."

The rush to dismiss the Fifth BRICS Summit output was interesting given that, only 10 years ago, "the BRICS Grouping" was only an obscure term coined by Goldman Sachs in 2001. This coverage placed a lot of emphasis on questions relating to whether or not the BRICS have enough in common to sustain a shared institution, and whether a new development bank would pose a challenge to the World Bank. Would the BRICS Development Bank ever be established? And would the developing countries even welcome the BRICS Development Bank? What the media and various pundits seemed to forget was the fact that the World Bank and International Monetary Fund (IMF) were institutions that got a lot of support in their early years. The economic cooperation plans behind these banks were laid in July 1944, while fighting was still raging in the European and Pacific theaters. At a mountain resort in New Hampshire called Bretton Woods, financial representatives from the 44 allied nations devised institutions to alleviate the impediments to international financial growth that had resulted from the war. The IMF was created to restore international trade volumes, which had dropped due to instability since the 1930s, when countries had abandoned the gold standard. A pool of currencies would be contributed by member states upon which any member country could draw in order to correct any balance of payment problems. The U.S. dollar was the universal standard, and this was freely convertible to gold at a fixed price.

The World Bank on the other hand, was the world's first multilateral development bank, and was funded through the sale of World Bonds. Its first loans were to France and other European countries. This process led to the establishment of the International Bank for Reconstruction and Development (IBRD), which gave loans for the reconstruction of Europe after World War II. For instance, in 1950, a total of $28 million was made available by the IBRD for the reconstruction and modernization of steel production in France, Belgium, and Luxembourg. The demand for funds however, failed to match the expectations of the World Bank, and its lending portfolio failed to grow within the industrialized countries. The World Bank then shifted its focus to developing countries and has stated that its goals include the reduction of poverty in developing countries, protecting the environment, and the promotion of both private sector and human resource development.

However, the Bretton Woods institutions have come under much criticism over the years. This criticism has come from the entire spectrum of political thought, ranging from the "aid is imperialism" school, which believes that foreign aid has been used as a tool of coercion by rich countries, to more conservative critics who believe that foreign aid gets in the way of market forces that would ultimately end poverty. Starting in the mid-1990s, hundreds of non-governmental organizations worldwide continuously mounted campaigns calling for major restructuring and re-evaluation of the policies of Bretton Woods institutions.  These calls were due to the fact that developing countries had started owing billions to the World Bank and the IMF. This debt pressure, as well as the export-oriented Structured Adjustment Programs, had forced many countries to sell their assets, mine their natural resources and cut spending.

Considering the negative record that the Bretton Woods institutions have acquired, one questions why the mainstream media immediately wrote off the Durban Summit for not having launched the BRICS Development Bank or determining the bank location and financing. After all, the Durban Summit helped to institutionalize the grouping between the BRICS countries by establishing some of the technical mechanisms for cooperation. For example, the summit included an agreement establishing a $100 billion Contingency Reserve Arrangement (CRA), a reserve pool to buffer the BRICS from temporary reserve liquidity shortages. China, the biggest economy among the BRICS, is expected to inject as much $41 billion into the fund. The BRICS also agreed to set up a Business Council to act as a bridge between senior government officials and business leaders. Moreover, the BRICS being very different from each other underlines a new trend: such groupings don't need to have a common history, similar culture or religion, or even be made up of countries in the geographical neighborhood. Instead, they can be born out of comparable stages of development and shared economic interests, as seen with the OECD. 

When analyzing the BRICS Development Bank prospects, it is important that critics take into account the establishment and impact of the World Bank, which had the advantage of funding through the sale of World Bonds at its inception. Critics, especially those in the South African media, also need to consider the fact that the BRICS Development Bank will provide a positive alternative for funding infrastructural development in Africa. That Africa remains the poorest region of the world, as home to 34 of the world's 50 least developed countries, is a reflection of its low level of industrialization and marginalization in global manufacturing. Given the urgency of the continent's industrial growth, the BRICS bank would help the continent gain influence on the world stage, countering Europe's dragging economic crisis and addressing the $4.5 billion in infrastructure spending the BRICS are estimated to need over the next five years. In essence, the BRICS Development Bank would help facilitate some of the World Bank and IMF's infrastructural efforts on the continent. The BRICS leaders were correct in taking only pragmatic and cautious steps at the recent summit. They should be given an opportunity to focus more on consolidating intra-group economic cooperation as they prepare to take further steps.