The 6th Summit of the BRICS nations would be remembered as a watershed event in global economic governance because it marks the first time that emerging economies stepped out of the shadows of the big powers to establish two financial institutions, the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA). These institutions should be seen as counterparts of the Bretton Woods institutions—the World Bank and the International Monetary Fund (IMF)—not competitors, as some Western observers have likened them to. Another significant outcome of the Summit, one which was not as well highlighted as the establishment of the NDB and CRA, was the BRICS Multilateral Cooperation Agreement on Innovation (MCAI) within the BRICS Interbank Cooperation Mechanism, an arrangement between the development banks (India’s Exim Bank and its counterparts) that was formalised in 2010. The MCAI aims at supporting projects that foster investments in technological innovation, especially in infrastructure and sustainable energy, as well as innovation in industry, services and agribusiness. Further, it also seeks to expand cooperation between the development banks in the member countries for increasing trade of goods and services as well as intra-BRICS investments. Through the establishment of the NDB and CRA, and the MCAI, the BRICS have made a strong statement about their role in the management of the global economy.
That the BRICS were intent on playing an important part in altering the contours of global economic governance became clear in the aftermath of the recent economic downturn. One of the most important issues raised by the BRICS was the need to reform the Bretton Woods institutions to their reduce legitimacy deficits. An important first step, according to the BRICS, was to alter the governance structures of these institutions by increasing the voting shares of emerging market countries in keeping with their larger presence in the global economy.
The impact of the pressures brought by the BRICS nations—China and India, in particular—was immediately felt. In 2010, the IMF took a major decision to overhaul of the Fund’s quotas and governance structure, which was seen as a historic step towards strengthening the Fund’s legitimacy and effectiveness. The IMF Board also endorsed proposals that called for a more representative, all-elected Executive Board. These changes were expected to be in place by 2012, but the unwillingness of the US Congress to endorse the proposed changes have effectively blocked any move towards the reform of the governance structure of the