Hundreds of delegates from Brazil, Russia, India, China, and South Africa converged in Durban last week for the BRICS summit. Among the buzz was the anticipated launch of a new BRICS multilateral development bank with a potential US$ 10 billion buy-in from each BRICS country. Pinned as a vocal response to decades of economy-ruining international financial institution (IFI) loans and conditions, the new BRICS bank cements the trend that emerging market borrowers are increasingly becoming lenders.
The overall growth of BRICS country economies, despite recent lags, is ringing alarm bells in Washington of a new rival to the World Bank and the regional banks. A new BRICS bank indeed raises important questions. What will be the bank's operational policies and priorities? What strings will be attached, if any, to the new Bank's loans and grants? And what about BRICS countries' questionable environmental and human rights records, enabled by years of neoliberal IFI financing, such as the recent World Bank almost US$ 4 billion investment in South Africa's dirty coal-burning Medupi power station?
As the BRICS build their own bank, they would do well to not repeat a key mistake of other IFIs: failing to match their pro-gender equality rhetoric with investments and actions that actually benefit women. Though women and their work, paid and unpaid, are central to economic development worldwide, too often IFI projects ignore them or actively harm them, as Gender Action has repeatedly shown. Three concrete initiatives, outlined below, would help the BRICS Bank succeed where its competitors have struggled.
All IFIs have 'safeguards' policies that are supposed to prevent them from making harmful investments. These usually cover a range of harms, from obvious human rights violations (forced displacement) to more technical concerns (pest management), for example. To date, the Inter-American Development Bank is the only IFI to have a mandatory policy stating that projects must take particular care to not harm women. This is no fluff policy: having a mandatory gender safeguard policy is absolutely essential to protecting women's human rights. Gender Action's research from West Africa to Central Asia, for instance, has shown how IFI-funded oil and gas pipelines have harmed women disproportionately, employing males almost exclusively, eliminating women's access to farmland, increasing their women's dependence on men, driving women to sex work, and increasing sexually-transmitted infections, trafficking in women, violence against women, and stillbirths (the latter caused by toxic pollution). This is the true cost of gender-insensitive lending. It is imperative that the new BRICS Bank must adopt a gender safeguard policy 'with teeth' to prevent harm to women.
It is easier to support gender equality in speeches, as World Bank President Jim Kim frequently does, than with money. All IFIs are dependent on their government shareholders to commit operational funds. With donor governments cutting back on foreign assistance, even the World Bank has to bargain hard for its funds. Gender, historically, has always gotten the short shrift. The result is poor capacity to respond to gender concerns in banks' operations. The World Bank had, in May 2012, only 20 staff in its Gender Unit committed to gender issues (about 0.2 percent of its around 9,000 total), and a limited number field-based employees who are 'gender focal points' on top of myriad additional duties. The BRICS bank could close this capacity gap between rhetoric and reality from the outset by mandating a well-funded gender unit at its headquarters, staffed with a team of respected gender and country experts, both at headquarters and throughout its countries of operation. Maybe then we would not keep funding investments that ignore the reality of poor women's lives, like those funded by the World Bank and African Development Bank promoting healthcare user fees unaffordable to poor women who are much less likely to control household income than men.
To work for women, the BRICS bank needs an executive leadershipthat recognizes that no development investment is gender neutral. A proven advocate for gender equality should be steering the ship. If a woman, the new bank's president would be the first woman to head a multilateral development bank and only the second, after International Monetary Fund President Christine Lagarde, to head an IFI.
Gender equality in IFI investments is primarily a matter of the equal right of men and women to shape the economic processes impacting their lives. But it is also a question of efficiency - as the IFIs continue to learn. A key reason IFI projects too often fail is that they neither respond to women's needs, nor involve them as vital economic actors, nor safeguard them from harm. The choice now facing the BRICS bank planners is to promote gender equality right from the start or to find out the hard way.