Monday, 28 April 2014

BRICS and the international development system - an interview with Richard Carey

Following the recent publication of The BRICS and the International Development System: Challenge and Convergence?, I had the opportunity to catch up with one of the report's authors, Richard Carey, to ask him more about what he meant by "challenge and convergence"

Formerly Director of the Development Cooperation Directorate at the OECD, Richard is now Chair of the International Advisory Committee for the China International Development Research Network and a member of the Advisory Council for the IDS Rising Powers in International Development (RPID) programme.

1. Your recent paper and brief with Li Xiaoyun outlines two development paradigms between the OECD model and a newly emerging model from the BRICS. In what way do they differ, and how do you think they are converging?

Historically, there were two emerging models.

The first is what we would call the South-South model, which came from the Bandung conference in 1955. Meanwhile, 1960 saw the establishment of the DAC (Development Assistance Committee and the IDA (International Development Association)), both US initiatives during the time of decolonisation. This was the foundation for the definition of ODA - Overseas Development Aid - and the 0.7 per cent for ODA as a percent of Gross National Income, both of which came ten years later.  The South-South paradigm emphasises knowledge transfers rather than resources transfers, and the idea of mutual benefit, because all were poor countries. Conversely, the OECD model aimed to prevent the use of aid for commercial benefit between donors, and there’s an emphasis on moral altruism.

Now, there is a form of convergence between the two.

Firstly, there has been a huge shift in wealth, as China has become the world’s biggest capital exporter – transferring resources as well as knowledge. This is a good development, but inevitably moves away from the South-South model as we knew it. One key convergence is that the emerging economies, including the BRICS countries (Brazil, Russia, India, China and South Africa), now have a big stake in the functioning of the global economy, to make sure the system functions without crises. They have new geographical interests, supply chains with physical investments and people on the ground, and thus there is a common interest between the two models in ensuring effective states and effective markets.

Yet the South still sees the North-South and South-South paradigms as relevant. There’s still the idea that North-South is a “vertical” set of relationships, whereas South-South is a “horizontal” set of relationships – equals to equals. This still impacts relationships, and there’s some controversy over Northern institutions borrowing Southern terminology and concepts, such as ‘partnership’ over ‘assistance’, which Southern countries claim as theirs. This distinction, and the South-South tradition, still has value for southern development providers and participants, and that’s something that’s persisting, not converging.
2. One of things you focus on is the significance of the BRICS New Development Bank. What does it mean for development finance and from the perspective of developing countries? What challenges does this present to current Western-led global governance arrangements?

The BRICS bank will be a challenge, rather than a convergence. It’s already shaken up the world of development banks, as people anticipate its arrival, and it’s also already prompting changes in the World Bank and Asian Development Bank, in terms of their flexibility.

But setting up this bank will still be a big task. The BRICS will need to work out a lot of logistical arrangements, such as on governance, location, professional staffing arrangements, operating modalities, and evaluation systems. Transparency will be a significant issue, as the bank will be a target for international reporting and scrutiny. They will also need the capacity to do their own research and form their own research departments, presenting alternative perspectives and modalities to the World Bank or ADB. 

Evaluation is also a big issue. BRICS bank members need to be concerned with reputation – which is not so much about creditworthiness – but the bank will need a strong evaluation function to be credible. The bank needs to be high-status to achieve the BRICS objective of being seen to be serious and effective in terms of development impact.

3. As you mentioned earlier, the South-South paradigm emphasises knowledge transfers, and perhaps a good example of this is the BRICS Academic Forum. Could you tell us a little bit more about the Future International Cooperation Policy Network, discussed as part of a parallel programme of events organised in Rio de Janeiro by RPID team and partners in Brazil*?  

What the network promotes and presentations in Rio illustrated is really in-depth research into the nature and political economy of the development cooperation efforts of the BRICS and eventually of other rising powers.

From this we see two things:
  1. There are many development lessons to share from 30 years of experience in the rising powers, which has not made itself into the textbooks yet, and this is valuable knowledge.
  2. The research articulated what the political economy drivers are in these countries, and the state of the debate studies are  helping us understand a lot more on what drives development programs and policies in the BRICS.

Beyond that, it’s given us an intellectual community for learning and practice.

Over the last two years, the RPID team and its partners in Brazil, Russia, India, China and South Africa have produced a wealth of studies which provide an excellent starting point for delving deeper, for example, analysing particular development programmes. These include the five BRICS country studies, called "State of the Debate” reports [which will be published soon], documenting public opinion and discussions with civil society, business and policymakers, in addition to a number of thematic reports.

The next step is a biannual conference in which learning can come together. Like medieval fairs – which had a very important function in bringing people together from all over to exchange goods and money and ideas in Europe – these are economical and productive ways of interacting to exchange knowledge, contacts and ideas.

Eventually, the idea is that the Network will move from an initial base in the UK, to shared institutional homes in the rising powers, as network members mobilise their own networks, and can provide a revolving base for this activity. This will better reflect the changing balances in the global economy, and emerging development cooperation partnerships – hence the name “Future International Cooperation Policy Network”.

*The RPID team was delighted and proud to work with World Centre for Sustainable Development, Rio+ Centre,COPPE-UFRJ, the BRICS Policy Center, CEBRAP, and Articulação SUL.

Yunnan Chen is a Research Officer with the Rising Powers in International Development programme at the Institute of Development Studies. This interview took place on 9 April 2014.