The BRICS Development Bank and human rights

The BRICS Forum

Where will the BRICS Development Bank fit into the wider spectrum of multilateral development banks (MDBs)? Gary Pienaar sketches the background to MDBs, their role in human development and deliberates on the direction the bank could take.

Multilateral development banks (MDBs) have an indirect relationship with the international human rights framework. MDBs include the World Bank Group (WB), the Asian (ADB), African (AfDB), Inter-American (IADB) and European (EBRD and EIB) Development Banks.

They are not states and are therefore not signatories to the Universal Declaration of Human Rights (UDHR), its covenants and protocols, and the like. However, their members and shareholders are states that usually have ratified these legal documents. Because rights are universal, MDBs have a moral obligation akin to the duties of states parties to ‘respect, promote, protect and fulfil’ all rights.

The human development approach aims to enhance the quality of life by widening people’s life choices and emphasising human dignity.

Human development

The human development (HD) approach emerged in response to conventional economic development models’ failure to produce general improvements in human conditions. Quantitative economic growth, measured by gross domestic product (GDP), is not an end in itself, but merely one way to improve human wellbeing. The United Nations Development Programme’s (UNDP) Human Development Index (HDI) focuses on education, health (longevity) and economic equity, using gross national product per capita as a measure of comparative inequality, unlike the conventional GDP measure that doesn’t assess resource distribution in an economy.

This approach aims to enhance the quality of life by widening people’s life choices and emphasising human dignity. Poor, unhealthy and illiterate people simply have fewer choices in life, whereas an HD approach enables the correlation of inputs and outcomes to increase opportunities to choose and the capabilities that enable meaningful choices and self-actualisation. HD is flexible, recognising the complexities of human existence. People are simultaneously individuals, social beings and political actors, with different needs, aspirations and autonomy. HD thus embraces its relevance for social cohesion and for sustainable human development, widening choices of both present and future generations.

HD enhancement of personal agency promotes active citizenship. Knowledge and health – together with a livelihood and political freedom – provide their bearers with even greater chances for a better life. Traditional and formal modern education develops knowledge, which is applied to information to produce awareness, understanding and action.

The advancement of human rights promotes human development, which entails the realisation of all human rights and vice versa.

Human development and human rights

The advancement of human rights promotes human development, which entails the realisation of all human rights and vice versa. The global human rights framework, starting with the Universal Declaration of Human Rights (1948), the Covenants on Civil and Political Rights, and on Economic, Social and Cultural Rights (1966), regards these rights as essentially ‘indivisible, interrelated and interdependent’; a virtuous circle.
Consequently, the UNDP’s 2000 report Human Development and Human Rights declared that ‘poverty eradication is not only a development goal – it is a central challenge for human rights in the 21st century’ and that ‘an adequate conception of human development cannot ignore the importance of political liberties and democratic freedoms’.

The causal links between human rights render them mutually reinforcing. Ensuring civil and political rights – freedom of expression (which requires access to information), association and participation – thus empowers people to claim their social, economic and cultural rights.

Political and civil rights are necessary to exercise influence and power in a democracy to effect change to structural injustices that prevent human development, whether by social or economic exclusion, marginalisation or discrimination, which undermine dignity and equality. Enjoyment of essential levels of development likewise optimises choices over exercise of power.

In moral philosophy, the basis for human rights, access to information is understood as necessary in order to live a
‘minimally good life’. Human beings are creatures with desire and capacity for knowledge. Deprived of adequate information and knowledge, life is seriously impoverished. Knowledge is a primary good – useful to everyone, whatever their conception of the good life – and pragmatically essential so people have the capacity to exercise their other rights.

The right to information is an instrumental right, pivotal to creation of awareness of the existence of rights, to break down barriers of disbelief, to mobilise for changes in policy and behaviour, and to create a culture of accountability for realising other human rights. Before the adoption of the UDHR, the UN general assembly declared that ‘freedom of information is a fundamental human right… and the touchstone of all the freedoms to which the United Nations is consecrated’ (1946).

MDBs have progressively developed standards and policies that ever more closely approximate international human rights norms.

Implications for multilateral development banks

A broad HD approach may be discerned in the African Development Bank’s mission to ‘support the economic development and social progress of African countries individually and collectively, by promoting investment of public and private capital in projects and programmes designed to reduce poverty and improve living conditions.’

As institutions with independent legal personality, but protected from legal accountability by diplomatic immunity, MDBs have opted for self-regulatory systems. Accountability is exacted not through judicial enforcement, but through forms of administrative justice. Monitoring, reporting and advocacy create incentives to nurture a culture of compliance, as do performance standards, complaint mechanisms and dispute resolution forums. Underpinning all of these mechanisms is the right of access to information: none can be effectively utilised without this essential prerequisite.

MDBs have progressively developed standards and policies that ever more closely approximate international human rights norms. They have succeeded in doing so despite their member states’ national practices sometimes lagging behind. Thus, the purposes for which aid or lending is undertaken, and the way in which those activities are managed, have arguably become more consistent with this normative framework. MDBs have become standard-setters in respecting social and environmental standards. How have they done so, and will the BRICS Development Bank will be able to improve on those standards?

For example, the AfDB, in following the World Bank and the Asian Development Bank, recently adopted a very progressive disclosure and access to information policy, ‘fulfilling a key commitment to shareholders’ and reaffirming the centrality to the bank of good governance, with emphasis on transparency, accountability and information sharing.

Prospects for the BRICS leadership

That the BRICS Development Bank (BDB) should fulfil this commitment to shareholders is hopefully beyond question. Widespread hope has been expressed that BRICS members
– the BDB’s first shareholders – will provide impetus for greater democratic fairness, voice and accountability in global governance institutions. Internal BRICS arrangements are currently too informal and inchoate to allow many insights into the features of its first formal entity.

Some basic considerations, although not adequately predictive, may permit a preliminary assessment of the prospects for desired BDB leadership. First, BRICS members have mostly supported or ratified the primary components of the international human rights framework.

Second, the internal power distribution (shareholding) in existing MDB boards reflects dominance of the most powerful Western democracies. In the WB, add China and Japan. In the ADB they’re joined by India, Australia, Indonesia, Canada and South Korea. The IADB is dominated by the USA (30%), Argentina, Brazil, Mexico, Japan and Canada, while the AfDB enjoys the most egalitarian leadership, spread among Nigeria, Algeria, the USA, Germany, Japan, Libya, Egypt, Canada, South Africa and France.

Hope has been expressed that BRICS members – the BDB’s first shareholders – will provide impetus for greater democratic fairness, voice and accountability in global governance institutions.

Third, the quality of national governance, particularly voice and accountability (as a proxy for participation and access to information), is assessed in the 2012 Worldwide Governance Indicators (WGI). Scores range from more than 90% for Canada and Germany; per cents in the 80s for France, the USA and Japan; per cents in the 60s for South Africa and Brazil; 58.29% for India; 27.5% for Nigeria; 19.91% for Russia and 4.74% for China.

The absence of WGI leaders will likely mean that the BDB will test its shareholders’ commitment to democratic human development approaches.

Author: Gary Pienaar, senior research manager, Democracy, Governance and Service Delivery programme, HSRC.