Committee for the Abolition of Illegitimate Debt

The five founding members of the BRICS BRICS The term BRICS (an acronym for Brazil, Russia, India, China and South Africa) was first used in 2001 by Jim O’Neill, then an economist at Goldman Sachs. The strong economic growth of these countries, combined with their important geopolitical position (these 5 countries bring together almost half the world’s population on 4 continents and almost a quarter of the world’s GDP) make the BRICS major players in international economic and financial activities. (Brazil, Russia, India, China and South Africa) account for around 40% of the world’s population, nearly a third of global GDP GDP
Gross Domestic Product Gross Domestic Product is an aggregate measure of total production within a given territory equal to the sum of the gross values added. The measure is notoriously incomplete; for example it does not take into account any activity that does not enter into a commercial exchange. The GDP takes into account both the production of goods and the production of services. Economic growth is defined as the variation of the GDP from one period to another. in purchasing power parity (PPP) and around 20% of global exports. Including the five countries (Indonesia, Iran, Ethiopia, Egypt and the United Arab Emirates) that have become full members since 2024, BRICS+ accounts for around 45% of the world’s population, nearly 35% of global GDP (PPP), approximately 25% of global exports and around 35–40% of global oil production.

 The CRA: a phantom monetary fund

What about the BRICS joint monetary fund? Has it become operational?

This fund, known as the CRA (Contingent Reserve Arrangement) and established in 2014 [2] , was intended to fulfil, for the BRICS countries, the role normally played by the IMF IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org when one of its members faces a shortfall in foreign exchange reserves to make payments and turns to it for a loan.

Although this fund was established on paper in 2014, it has still not become operational.

The CRA was intended to assist BRICS member countries facing a shortage of foreign currency to meet their international payments by enabling them to borrow the currency they lacked. Thus, BRICS members in need of foreign currency to address payment difficulties could avoid the conditionalities imposed by the IMF.

This situation is not the case because the BRICS Contingent Reserve Arrangement (CRA) includes a condition in its founding statutes that clearly states that a BRICS member country seeking assistance must comply with IMF conditions if it exceeds 30% of the total amount to which it is entitled. For instance, South Africa, which in principle is entitled to borrow up to US$10 billion. If South Africa wished to borrow more than $3 billion from the BRICS Monetary Fund, it would have to demonstrate that it is implementing a programme with the IMF and complying with the conditions set by the IMF. This is stated very clearly in Article 5 of the founding treaty of the CRA, the ‘BRICS Monetary Fund’ [3] .

If it did not contain this clause and had become operational, the BRICS Monetary Fund could be useful for countries such as South Africa (a founding member) and others such as Ethiopia and Egypt, which have been part of BRICS+ since 2024. Indeed, they regularly face a shortage of foreign currency, forcing them to turn to the IMF.

For example, in mid-2020, instead of turning to the BRICS, the South African Minister of Finance secured a $4.3 billion loan from the IMF. This resulted in extreme austerity measures, which in 2021 sparked widespread public discontent with the ANC government before the president softened the finance minister’s social austerity policy.

If South Africa wished to borrow more than $3 billion from the BRICS Monetary Fund, it would have to demonstrate that it is implementing a programme with the IMF

The BRICS summit held in early July 2025 in Rio de Janeiro produced a vague statement regarding the BRICS Development Bank. In paragraph 531, the BRICS+ leaders state that the founding treaty will be revised and that new members will be able to join the BRICS Development Bank. At the most recent high-level meeting, held in May 2026 in India, the lengthy final declaration adopted by the foreign ministers of the ten BRICS+ member countries addresses the issue of the CRA only in very vague terms and only at the very end of the document in point 58 (even though the declaration comprises 63 points)2. Nothing concrete, then.

This shows that the CRA has so far been nothing more than a myth and has been ineffective.

What about the New Development Bank?

In point 45 of the final declaration of the Rio summit in early July 2025, the BRICS leaders stated regarding the New Development Bank (NDB), established in 2014:

“As the New Development Bank is set to embark on its second golden decade of high-quality development, we recognize and support its growing role as a robust and strategic agent of development and modernization in the Global South." http://www.brics.utoronto.ca/docs/250706-declaration.html.

They also stated that they were reappointing Dilma Rousseff, former President of Brazil from 2011 to 2016, to the post of President of the New Development Bank (NDB), a position she has held since 2023.

In paragraph 56 of the New Delhi Declaration of May 2026, we find a grand statement:

“As the New Development Bank embarks on its second golden decade of high-quality development, the Ministers recognized and supported its growing role as a robust and strategic agent of development and modernization in the Global South.” https://www.mea.gov.in/bilateral-documents?dtl/41144

However, a serious examination of the content will highlight that members are divided regarding the quality of the Bank’s leadership, as the text goes on to state that the ministers

“They encouraged the NDB to follow the member-led and demand-driven principle, and the ongoing strengthening of its governance framework, which enhance the Bank’s institutional resilience and operational effectiveness, to continue executing its purpose and functions in a fair and non-discriminatory manner.” https://www.mea.gov.in/bilateral-documents?dtl/41144

In paragraph 57:

“The Ministers reiterated the importance of enhancing partnerships and benefitting from co-financing opportunities with other major Multilateral Development Banks (MDBs).”

This means that BRICS+ leaders are not promoting the NDB as an alternative to the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

and banks such as the African Development Bank (AfDB), the Asian Development Bank (ADB) and the Inter-American Development Bank (IDB). On the contrary, the BRICS+ are promoting cooperation and co-financing with these institutions, which are dominated or heavily influenced by the major traditional imperialist powers. This aligns with other BRICS+ statements that the IMF and World Bank must remain central to the global financial system.

BRICS leaders have announced their support for the NDB’s continued expansion of financing in local currencies, which is positive, but they fail to mention that the bulk of the NDB’s financing is conducted in US dollars through the issuance of securities on financial markets. The NDB borrows in dollars and also lends primarily in dollars. In 2023 and 2024, the NDB issued bonds with AA+ (stable outlook) ratings from Fitch Ratings and AA (stable outlook) ratings from S&P Global Ratings. To maintain this rating level, the NDB has, in practice, complied with the sanctions imposed on Russia since the invasion of Ukraine in late February 2022; this compliance means it has not granted any further credit to Russia since 2021. The NDB’s management believes that if it were to continue lending to Russia, rating agencies Rating agency
Rating agencies Rating agencies, or credit-rating agencies, evaluate creditworthiness. This includes the creditworthiness of corporations, nonprofit organizations and governments, as well as ‘securitized assets’ – which are assets that are bundled together and sold, to investors, as security. Rating agencies assign a letter grade to each bond, which represents an opinion as to the likelihood that the organization will be able to repay both the principal and interest as they become due. Ratings are made on a descending scale: AAA is the highest, then AA, A, BBB, BB, B, etc. A rating of BB or below is considered a ‘junk bond’ because it is likely to default. Many factors go into the assignment of ratings, including the profitability of the organization and its total indebtedness. The three largest credit rating agencies are Moody’s, Standard & Poor’s and Fitch Ratings (FT).

Moody’s : https://www.fitchratings.com/ and investment funds Investment fund
Investment funds Private equity investment funds (sometimes called ’mutual funds’ seek to invest in companies according to certain criteria; of which they most often are specialized: capital-risk, capital development funds, leveraged buy-out (LBO), which reflect the different levels of the company’s maturity. would consider the NDB to be taking significant risks and would demand a higher yield Yield The income return on an investment. This refers to the interest or dividends received from a security and is usually expressed annually as a percentage based on the investment’s cost, its current market value or its face value. to purchase bonds issued by it in international markets.

The fact that the NDB is complying with the sanctions and consequently no longer grants new loans to Russia is clearly evident on the NDB’s website: https://www.ndb.int/projects/all-projects/, where it can be seen that since early 2022, the NDB has approved funding for more than 50 different projects, none of which are in Russia. Regarding loans to Russia, if you click here: https://www.ndb.int/projects/all-projects/?country=russia&key_area_focus=&project_status=&type_category=&pyearval=#paginated-list, you can see that the last project financially supported by the NDB in Russia dates back to September 2021. In the report presented to investors by NDB President Dilma Rousseff, it is clearly stated that the Bank has frozen the granting of loans to Russia since 2022; see page 35 of https://www.ndb.int/wp-content/uploads/2025/03/Investor-Presentation-April-2025_FINAL.pdf

It would be wrong to claim that the BRICS countries have established instruments such as the Contingent Reserve Arrangement (CRA) and the New Development Bank, which are reportedly making significant progress and challenging institutions such as the IMF and the World Bank.
We reproduce here an extract from a highly critical statement regarding the NDB made in October 2023 at the Valdai Club, which is very close to Putin, by Paulo Nogueira Batista. Paulo Nogueira is Brazilian and was vice-president of the NDB. Although he is a staunch supporter of the BRICS, he stated:

"Why can we say that the NDB has been a disappointment so far? Here are some of the reasons. Disbursements have been surprisingly slow, projects are approved but not turned into contracts. When contracts are signed, the actual implementation of projects is slow. The results on the ground are meagre. Operations – financing and loans – are mainly conducted in US dollars, which is also the Bank’s unit of account.

 

How can we, as BRICS, credibly talk about de-dollarisation if our main financial initiative remains predominantly dollarised?

 

Don’t tell me that it is not possible to carry out operations in national currencies in our countries. The Inter-American Development Bank, the IDB, for example, has many years of considerable experience in operations in Brazilian currency. I don’t understand why the NDB has not taken advantage of this experience." [4]

 The New Development Bank: a marginal lender

How significant are the loans granted by the BRICS Bank compared to the volumes lent by other categories of public lenders?

Source: author’s calculations based on the annual reports of the institutions concerned, the IMF database, NDB reports and estimates from AidData and the Rhodium Group. The NDB’s net portfolio stood at USD 35.2 billion at the end of 2024, with cumulative approvals reaching USD 39 billion since 2016. There is a difference between actual disbursements and the amounts of approved/announced loans.

In compiling this table, the author has focused on the period from 2016 to 2024, as the NDB and the Asian Infrastructure Investment Bank (AIIB) began granting loans only from 2016 onwards. A comparison of the amounts lent highlights the relative importance of the various lenders. Commentators who claim that the BRICS have established instruments such as the Contingent Reserve Arrangement (CRA) and the New Development Bank (NDB), which are supposedly making significant progress and challenging institutions such as the IMF and the World Bank, are painting a false picture of reality. Of the two financial institutions created by the BRICS, one, the CRA, has not yet become operational despite having been established over 10 years ago, whilst the other, the NDB, has granted loans only in small amounts compared to other public lenders. Loans from the World Bank and the IMF are nearly 30 times higher than those from the NDB. Loans from the Asian Development Bank, which is closely linked to the World Bank and the IMF, are six times larger than those granted by the NDB, and if we consider only loans destined for Asia, the difference is even greater. As for China, it favours its own instruments for granting loans, even though it is a member of the NDB and the bank’s headquarters (like that of the BRICS Monetary Fund) are located on its territory. Through its state-owned banks, China has lent an amount 25 to 30 times greater than the volume granted by the NDB. Furthermore, China has placed greater emphasis on the development of the Asian Infrastructure Investment Bank (AIIB), in which it is the majority shareholder with 30% of the capital and holds 26.5% of the voting rights (see https://www.aiib.org/en/about-aiib/governance/members-of-bank/index.html).

Let us recall this observation made by Paulo Nogueira in October 2023, which remains valid::

"Let me assure you that when we started with the CRA and the New Development Bank, there was considerable concern in Washington, at the IMF and the World Bank, about what the BRICS were doing in this area. I can attest to this because I was there at the time, serving as an executive director for Brazil and other countries on the IMF Executive Board.

 

Over time, however, people in Washington relaxed, perhaps sensing that we were not going anywhere with the CRA (= the BRICS Common Monetary Fund) and the New Development Bank." (same source as previous quotes).

 The New Development Bank: a dollarised bank

What percentage of loans granted by the BRICS Bank are in US dollars?

According to the report presented by the NDB President to investors in April 2025, 65.5% of loans were granted in US dollars, 8.8% in euros and 1.6% in Swiss francs. This amounts to a total of 75.9% of loans granted in the currencies of the Western capitalist powers: the United States, the Eurozone and Switzerland. Only 17.9% are granted in Chinese currency (and this actually refers to loans granted in China by the NDB), 0.3% are in Indian currency (in India) and 6% in South African currency to entities in South Africa. See page 17 of the presentation given to investors in April 2025 https://www.ndb.int/wp-content/uploads/2025/03/Investor-Presentation-April-2025_FINAL.pdf This means that almost all loans granted by the NDB in India are in dollars, the majority of loans granted in Africa are in US dollars, all loans granted in Russia are in US dollars, 100% of loans granted in Brazil are in US dollars,…

Source: NDB, Investor Presentation, April 2025

65% of the NDB’s borrowing is in US dollars; is this evidence of a de-dollarisation process currently underway on the part of the New Development Bank of the BRICS?

The answer is no. The NDB is not becoming independent of the dollar and financial markets, despite some claims. 65% of its outstanding loans are in US dollars and consist of bonds sold on the financial markets. Only 32% of its outstanding loans are in Chinese currency, 1% are in South African currency and 0% are in Russian, Brazilian or Indian currency. See the presentation given to investors in April 2025, p. 21 of https://www.ndb.int/wp-content/uploads/2025/03/Investor-Presentation-April-2025_FINAL.pdf If the NDB really wanted to, it could finance itself mainly in its members’ currencies and could do without financing itself on the financial markets. Even if part of the loans were to be granted in dollars, China, Russia, India and Brazil have large dollar foreign exchange reserves that could be drawn upon.

In March 2025, the NDB borrowed $1.25 billion at an interest rate of 4.375% by issuing three-year bonds [5]. In February 2026, the NDB borrowed $2 billion on the financial markets at a rate of 4% [6].

Source: NDB, Investor Presentation, April 2025

 Conclusion

Twelve years after the creation of the Contingent Reserve Arrangement (CRA) and the New Development Bank (NDB), the results fall far short of the expectations raised by their launch. The CRA has never provided any funding and remains largely inactive. As for the NDB, despite some concrete achievements, its activity remains modest on a global scale, both in terms of volume and geographical scope. Its financing remains predominantly denominated in dollars, and its funding model remains heavily dependent on international financial markets.

More fundamentally, the BRICS+ do not present themselves as an alternative to the IMF and the World Bank. On the contrary, their official statements reaffirm the central role of these institutions in the global financial architecture. Ten years after their creation, it must therefore be acknowledged that the financial instruments Financial instruments Financial instruments include financial securities and financial contracts. established by the BRICS have neither challenged the dominance of the Bretton Woods institutions nor built an international financial architecture based on different principles.

The emergence of a genuine alternative would require not only far greater financial resources but also a shared political will to break with the logic of financial dependence, conditionality, creditor hierarchy and submission to capitalist markets. To date, such a break is not on the agenda. Behind the rhetoric of multipolarity, the BRICS countries appear more as actors seeking a greater role in the existing capitalist financial order than as promoters of a new international financial order based on social justice, the sovereignty of peoples and respect for ecological limits.

The author would like to thank Patrick Bond, Sushovan Dhar and Maxime Perriot for their review and for their input.

Next article: Do the New Development Bank and the BRICS Contingent Reserve Arrangement (CRA) constitute an alternative to the Bretton Woods institutions, as some claim? 8 reasons to say no.