Will Free Basics cost us more?

While Zuckerberg has been trying to hard sell Free Basics like an extension of the free healthcare programmes run by states, it's imperative to question the long-term changes such a programme can lead to.  Photo credit: Facebook

Much like many other things in the world, the Internet is always subject to debates about its ownership, usage and regulation. What services can be provided, what can’t? Can it be free? Should it not? Lot’s of such questions arise. Essentially, it’s got to be free. That’s all net neutrality is about – the right of anyone or everyone to access any website or mobile app from anywhere. And then again, while business solutions to public problems are welcome, other related questions arise: Does the private sector also have a role in public policy? If yes, then what kind and how do we go about it in a dynamic setting?

There are times this debate seems like the debate around the ownership and regulation of the polar regions, or the high seas or even outer space. – all public commons or goods. And so, there are treaties that enshrine the rights to access these spaces and are many of these laws are a work in progress. But the Internet, in some sense, is much more than these since it was created by man and because it is in many ways inexhaustible, and because of what it can do and because it can be accessed from almost anywhere. Thus, it must be treated like a man-made public good.

But trouble arises when it comes to its delivery – when one needs a device and a telecom connection to access the Internet. Technology is cheaper today, but not so cheap that this right to access the Internet can be uniformly enforced and the operations of Internet service providers are often subject to the invisible hand. And therefore, there are always threats to net neutrality. These issues are thus the source of many debates and that’s where the current one comes in from too – Free Basics.

One step forward, two steps back?

So Mark Zuckerberg-led Facebook has big global ambitions of connecting the world by fast-tracking the reach of the Internet, providing certain free services and by reaching out more people than ever before. Free Basics is a part of that big plan that all comes under Facebook’s Internet.org and what it essentially does is provide a set of online services free of cost to a mobile user. But Facebook gets to pick these free services that it calls ‘basics’.

Now, that’s a problem – it divides the Internet into free and not free elements, it overlooks the notion of net neutrality and it promotes a certain few online services as ‘free’ and ‘basic’. However, Facebook argues that this is like introducing the user to the online world and later they are free to do anything they want. Zuckerberg says Free Basics has to be seen like free primary education or free healthcare, as provided by the state. He argues that something is better than nothing.

Internet.org also adds that the Free Basics programme is running in many other countries, but then these are places where the net neutrality debate is still far, because the net is still not yet around in visible entirety. So the debate can only come alive once that understanding is reached, and than can only happen once a threshold of Internet connectivity and knowledge is acquired along with support from the civil society. Seeing the opposition take on Facebook head is also a good sign for the Indian civil society. But it is the final government or legal call on this debate that’ll decide if it’s a good sign for the Indian democracy.

Apart from the issue around net neutrality, the idea of Free Basics also raises fundamental questions about looking for business solutions to public problems and the evolving role of the private sector in public policy. Photo credit: Facebook

While there are lots of issues people and organisations of all kinds have here, from dividing the Internet to privacy, that are being talked about, this is yet another of those indicators that signals a big shift, towards the evolving nature of capitalism, the changing dynamics of state responsibilities and action, and world politics in general.

Here’s a barrage of questions this debate provokes and some considered thoughts on them:

Who decides what are the basics on the Internet?

This step by Facebook is a big indicator about how the demarcation between who gets to take a call on the elementary services in a respective field is changing. Sure civil societies play a role, but so far, it’s always been states that have deliberated and acted upon when it came to elementary education or health services. But can corporations be the primary partakers when it comes to this? With Free Basics, Facebook has blurred that line on who gets to decide upon what are the ‘basics’ and what goes ‘free’. And clearly then, when the private sector gets involved more questions are asked, irrespective of their validity. In this case, they most certainly are valid. So this essentially marks a shift even in that model of providing basic infrastructure and services with a corporation calling the shots.

So, would it be okay if the government launched Free Basics?

This makes for an interesting hypothesis. It would have raised questions and may not have been allowed to reach the stage of execution, but had the state been the initiator of such a move, it would have lesser resistance. But then, had such a move come, it would have likely been on the back of some version of crony capitalism.

Would it work if it was not called Free Basics?

In that case, Zuckerberg’s argument about clubbing it along with free education or health programmes may not work, but it could have mitigated the opposition perhaps. While free may pass, the use of basics is also a problem. Again, who gives the right to Internet.org to decide what the basics are? Perhaps, had the name been something else that did not make the service seem like the only pathway to the Internet, it could have taken off it India already.

Why call it net neutral?

In that case though, like in the current one, the programme wouldn’t be net neutral. Then why does Facebook insist on calling it that? While there is value in the short-term for many users in what Free Basics offers, in the long-term it means more harm for the structure and accessibility of the Internet. So shouldn’t Facebook just say it isn’t net neutral, and that for now this is a temporary solution which can be scaled back once other net neutral ones kick in?

Perhaps that’d make things easier, because social issues require business solutions, and to begin with they may incline more towards the private sector, but only with strong safeguards and timelines in place to not let capitalism run unregulated in the long=term.

What else can be done then?

Instead of just labeling some services as Free Basics, Internet.org can always work on ways to provide free Internet (something it is attempting to so) and educate new users with other stakeholders to let them choose how they want to use the Internet. Or they can help build the Internet infrastructure in the state.

Let’s also look at the issue from different standpoints, without undermining the fact that irrespective of the number of standpoints or variance in them, these all co-exist, thereby making things more complex. Nothing exists in isolation.

A legal standpoint: Since the Internet is still young and widely not governed by a common set of laws, this is a legal gray area. Then there is the matter where states claim cyber sovereignty and things get murkier further. So these are perhaps the formative years when it comes to the legal basis for the Internet, and this legal foundation must enshrine in it laws that ensure net neutrality.

A financial standpoint: Two things are visible here in terms of what business do or can do. Firstly, business will always look for innovative (ethically right or wrong is another question) ways to grow– and to do so they may want to help society in the short-term with an eye on profits in the long-term. That’s more like a given. The second thing, as pointed above, is that business solutions are needed for certain social problems, but they need to be vetted. While in the short-term they may need nudges and incentives, in the long-term, businesses must never hold the upper hand when it comes to solving social problems.

A social standpoint: Thus, while this episode also exemplifies the need for and an endeavor to provide a business solution to social issues, it is also a reminder of the enormous social challenge that lies ahead globally. Especially in terms of the physical infrastructure that needs to be developed to ensure connectivity and in terms of providing balanced education to entrust users with making the ‘right choices’, even if services like Free Basics exist.

A political standpoint: While this debate illustrates how the Internet is subject to politics when it comes to deciding who gets to write its rules, there’s clear politics at play in terms of designating owners, users and regulators of the Internet because it is today, more than just a tool that promises power and profits.

But the biggest takeaway is also the ever so over powering reach of the private sector when it comes the audacity of private players to not just participate but lead in matters that were until now unquestionably believed to be exclusively under the purview of the state. Thus then, is this another manifestation of the post-national?

While Free Basics doesn’t seem to be the right move ahead, the programme must  not be dismissed without notice and consideration, for it is only through debates and revisions that will pertinent solutions to such problems be invented or discovered. While a public private partnership solution may be best, one may have to remain very wary of that morphing into a private public partnership solution, or solely a private one.

Talking tolerance

A sand sculpture in Odisha talks about the #AwardWapsi campaign and the debate around 'intolerance'.

A new Indian government was sworn-in last summer. It had a mammoth mandate. It promised reforms and began revitalising brand India across the world. While for some it has reimposed India’s position as a global player, to others it has only played on perceptions without adequately strengthening the pillars of the economy and society. Some laws have been passed, other major economic reforms are still stuck in logjam. While on a grade scale where green would stand for excellent and yellow for disastrous, the government’s performance is more like a lime green. Some of it’s said work shows, some doesn’t.

But evaluating the government’s first 18 months in office is not the aim of this essay. An 18-month evaluation could also be as misleading in hindsight in a few years as it may be detailed right now, if attempted. The use of the words tolerance and intolerance and actions that have invoked them is what this essay is about. It was also provoked by the notion of perceptions and how they affect states.

Tolerating tolerance

Tolerance by definition means “the ability or willingness to tolerate the existence of opinions or behaviour that one dislike or disagrees with,” according to the Oxford dictionary. It goes on to say that it originates as late middle English word to denote the, “action of bearing hardship, or the ability to bear pain and hardship.” Tolerate is defined as, “Allowing the existence, occurrence, or practice of something one disagrees with without interference,” by the Oxford dictionary. While the word has now become part of common parlance, such an origin and current usage of the word should be questioned, especially when it is used in lines such as, “India is a tolerant society,” “India culture is all about tolerance,” among many such one-liners.

When used in such a way, the word by itself, tends to establish or promote a certain power relationship. Viewing the statements mentioned above, is India tolerant because it is more powerful and can allow it? Or is India tolerant because it is less powerful and does not have an option to argue against it? Does that ability or willingness to tolerate not draw from a power relationship again then? And should this act of accepting or rejecting other views be excused on the grounds that the other (again a form of a power relationship) is able to or willing to tolerate or not tolerate the opinions or actions? How does the ubiquitous usage of such a word then impact the freedom of expression or the freedom of choice then? Is it seen as something that is allowed (once again a word that establishes a power relationship) or as something that cannot be allowed or rejected, but just exists? Does it not just change the fundamental meaning of a fundamental right? How is it a right if there’s a power equations involved? The word intolerance uses the same premise, making a call for tolerance seem like a request at times, more than an appeal.

Here, India’s tolerance levels were subject of the questions and thereby the playing field would be international relations. Now, wouldn’t the usage of tolerance propagate a realist ontological view then and impact policy decisions? Change that subject to say the government’s actions or a religious body’s remarks, and they would again re-emphasis on a certain power relationship, where someone is understood to have taken the high horse. 

Where’s the room for a constructive approach then? Well, that’s where the constructivism’s inherent optimism comes out. It means that even while using the word tolerance, we can actually move towards a society, a region, religious factions or even states that are more tolerant, and may be while we are attempting to get there, we can think of a newer word, or an older one to describe this attribute as a given and not just something that presupposes the existence of a power relationship.

Now let’s get to the ongoing national discussion. Rising levels of intolerance as decried by some or bogus calls as argued by others. We’ve all got sides and arguments. Choosing a side is not the objective of this essay as that may put the other content of it under a certain bias again. While such discussions strengthen or theoretically should strengthen democracy, acts of ‘intolerance’ harm it, and with it the global flow of capital (or capitalism) which has come to be very closely associated or guided with the values of democracy, political and economic stability and infrastructure among others. That’s where perceptions come in, especially global perceptions about states, their politics and economics. And these influence business.

Playing on perceptions

Perception. It’s a strong word that can make or break relationships, of any kind - from emotional to commercial. It’s also a word that impacts the sway of democracy, capitalism and  corresponding debates. The Oxford English Dictionary defines the word as “the way in which something is regarded, understood, or interpreted” and as “intuitive understanding and insight”. So, essentially, a perception is how a certain object, action or phenomenon is recognised, irrespective of the actuality of that object, action or phenomenon. 

A perception could therefore be correct, incorrect or in between the two at varying shades. What contributes to this possible change in the actual nature of the object, action or phenomenon and the perception of it could be a stubborn pre-established bias or ontological view, the complexities it exists in and an inability to sieve through them, an apparent attempt to paint it over for whatever reason, or a combination of both. And since a perception impacts the understanding and recognition of the object, action or phenomenon directly, it therefore also directly impacts any discussion on the object, action or phenomenon and the peripheries along which such a discussion is held. Thereafter, impacting any other discussion that it leads to or is invoked in.

In global politics today, perception holds great value, especially amid the changing nature of the perceived nature and discourse around capitalism, socialism and the likes. The way how a country is perceived, when it comes to political stability affects the inflow of investments, the perception about economic safety affects businesses too, and the perception about societal security affects tourism, among others. We all know the salience of brand value. It is also a great source and indicator of soft power.

In that respect, and in the current context on tolerance and intolerance, it is the perception about it that may finally seal the deal when it comes to how it affects the image or perception of India, globally, at varied levels - in academia and in regular conversations, in business and in schools as well. While the Indian Prime Minister with his numerous foreign trips is trying to build on positive perceptions of and about India, actions such as #AwardWapsi or a celebrity being vocal about insecurity about living in the country may have mixed impressions on it for different audiences. This is not to say that the former should be supported and the latter disgraced. Both have different objections and are not part of the same debate too. More importantly, both may only affect short-term perceptions, thereby having economic and cultural impact, only in the short-run. In the long run, those perceptions will only be shaped by the supporting policy measures or their absence that the government takes or does not take and the positive or negative discussions on measures like #AwardWapsi and the impacts of those discussions.

Meanwhile, let’s try and find a power-neutral word for intolerance and tolerance. Illiberality and liberality came to mind first, but  I suggest open and closed for now. Simple and direct. Won’t that work? 

Whose seat is it anyway and how do we get it?

Can India, without expressing opinion on major global issues, hope to assimilate support to push for reforms at the UNSC?   Photo credit: UNGA

India has long had aspirations to get a permanent seat at the United Nations Security Council. Many other states have had to. But who is to get this seat? Who is to give it? Can there be just one more such seat and not a bigger set of reforms? And how is this complex yet institutionalised power relationship panning out? These are just a few questions that come to mind whenever the subject is stirred. It again came up a few days ago as the United Nations marked its 70^th anniversary.

The following essay is an extract from my dissertation that I wrote last year and it argues for the establishment of a globally active state-backed Indian media house and states that such an establishment will only aide India’s bid for that permanent UNSC seat. After all, it’s all about communication, right? And that’s what the media does. It informs, it communicates. But it is essential for such state-backed media to have pluralistic and constructive values.

While over the course of the past few months, I continue to abide by this argument. However, what has changed is that the establishment of a new government in India in 2014 and its rightward tilt has made it primitive to talk about this state-backed media as a voice of the state, and not the government that is in power. Institutionalising such a media outlet and recognising the distinction between the state and the government have never appeared as paramount as they do now.

Where’s the global Indian voice?

India, as an economy and a regional power and potentially a global one, has been registering significant growth and has shown visible desire for inclusion as a permanent member of the council, but neither this growth or this desire has been reflected in the global media space by Indian actors. Nor has any Indian state media channel informed the world or even its neighbours about its opinion on major world issues, let alone spreading Indian norms and values through delivery of world news. And it is when speaking of norms that the distinction between state and government becomes even more critical because both, as entities, may favour a partially overlapping, yet separate set of ideas and norms.

I must here underline that to adjudge the sanctity and the pertinence of this ambition of acquiring a permanent UNSC seat is not the aim of this argument. The argument is premised around the factors that influence such an argument, especially the global activeness of Indian state-backed media.

“If any country has a right to be on the Security Council, India does,'' AP Venkateswaran, a former foreign secretary of the country had noted once (Monitor, 2007). The former foreign secretary, along with others who make the case for India permanently being on the UNSC, has lots of parameters to base their argument on – from India being the largest democracy in the world to being among the top ten states with the highest spending on defence. The only element that seems evasive in that equation is India’s representation in the global media space and the absence of an Indian perspective on global issues. How then, does India, without expressing opinion on major international or regional issues, hope to assimilate support to push for reforms at the UNSC? Maybe economic and military might may get India there eventually, but wouldn’t the soft power of media hasten the process? Ever since taking charge in 2014, Prime Minister Narendra Modi and his numerous foreign trips have created a certain global buzz about India, but should he be just the only public spokesperson for India? And can that buzz really last?

What further makes these questions demand urgent answers and subsequent actions is the certitude that all of the five permanent members of the UNSC, contemporarily, have strong presence in the global media space. This may not have been a necessary condition for such an inclusion in the council or reformation in its structure when China became a part of the permanent set up in 1971 or France in 1958, as these states were not represented as actively in the global media space then, as they are now. But in the contemporary scenario of world politics, a lot has changed and the soft power that state media may internationally accumulate may well be the missing ingredient to seal the argument for a permanent seat for India at the council. China’s CCTV and France’s France 24 have been vehemently active globally over the past few years; so has Russia’s RT; UK’s BBC has always been a sort of benchmark for global media actors and US’ Voice of America and CNN among other actors have never allowed America to be under represented in global media. With so many disparate voices in the global media, an Indian state-backed voice may face competition, but it will also only furnish the ground-work in terms of global and regional public opinion that needs to be urgently addressed in order for India to strongly pitch for a UNSC seat, if it is really desired/ aimed to be sought.

Of course, the establishment of such a voice must not be understood to be an easy route to that seat, but a factor that could multiply those chances. And who knows, over time this voice may grow into a regional voice given that the global system is moving towards a multi-polar structure that’s likely to be influenced more by regionalisms than individual states. And perhaps, India’s immediate neighbours could pitch in as well and could this collaborative media in a sense then, lead to constructive pathways across the most militarised border in the world too? Well, economic lobbying among all other channels of diplomacy is needed to try and get that moving, but, one can always hope. Meanwhile, it appears that the path ahead is certain to be guided in many ways by the construction of communication and the communication of construction.

The road to Refugia

Yazidi families fleeing an attack by the Islamic State near the Iraq border. The number of forcibly displaced people today stands at over 59.5 million - roughly equal to the population of Italy. Photo credit: Reuters

Can we carve out a piece of land that refugees can call home? That’s a question that many are discussing, thanks to the buzz created around the idea by real estate millionaire Jason Buzi with his Refugee Nation project. What makes this discussion so urgent is the fact despite advances in the spheres of economy, technology, human rights and academics, the number of refugees around the world has just kept on growing. That number of forcibly displaced people today stands at over 59.5 million – roughly equal to the population of Italy.

The immediate demand for attention and action comes as thousands feel outraged and perhaps helpless as they see a colossal people crisis unfold in various parts of the world. A substantial number also feel threatened by the same. The crisis in Europe may have gotten maximum attention, but similar issues in Southeast Asia or other parts of Africa are no less significant or pain-striking. And hence comes forward the idea of a refugee nation, as Buzi puts it.

That idea has perhaps long existed in fiction. Talk about the eco-refugees in the movies Mad Max or Water World or the idea of a new-age Noah’s Ark built by rich nations with tickets sold to the elite in the movie 2012. Well, for all its purposes, wasn’t the actual idea of Noah’s Ark also to provide refuge in a time of environmental disaster? These examples, irrespective of their existence in fiction, point to two types of insights when it comes to a refugee crisis – temporary and permanent.

While eco-refugees, like the ones climate change is perhaps creating, need permanent solutions today; the idea that a safe, temporary solution should be sought in the time of need is what perhaps guided the creation of Noah’s Ark, either in reality or as a myth. That’s the approach refugee camps take, don’t’ they? They are meant to serve as temporary shelters until the refugees can be granted permanent citizenship elsewhere or until conditions turn favourable for their return to their home country. But these are desired scenarios that seldom arrive, and often at snail’s pace, giving those temporary shelters permanent attributes.

Where these shelters exist, how they are sustained and how they evolve to integrate with society as refugees become citizens are the key questions then. Currently, they exist in recognised states like Jordan, Italy, Greece, Tanzania among many others. They are supported by the national governments, international organisations like the United Nations and non-governmental bodies and charities. The maximum stress, however, is often on the national government and these resources often don’t match the demand.

A refugee society-state

What this idea of a refugee nation does is that it answers these questions in different ways while also throwing up possible scenarios. The assumption is, those shelters – now permanent in nature – must exist on a separate territory that can be used to form a new state.

Further, this territory and the people should be sustained with the help of donations from the rich – states, people or companies, while the refugees take up tasks most attuned to their skills, for refugees are also people with skills and education, and some are doctors and engineers too. We tend to club them homogenously and often also mistakenly just call them migrants. So they can work there, earn a living and form a part of a refugee society that evolves into this accommodating, cosmopolitan society that takes in refugees with ease, as and when they arrive in the future (ideally that number will organically go down). Buzi is aiming for a permanent, sustainable and universal solution with this idea. So, this would be home then. Essentially, adding to the meaning of the word refugee – for now Refugia (a term coined by Professor Robin Cohen of the International Migration Institute) is a permanent home for the refugees. So either, the nature of the way we use the word changes or its meaning becomes larger.

People from the Rohingya community collect water to drink at a refugee camp in Myanmar. While the crisis in Europe has gotten maximum attention, the people's crisis is unfortunately much more universal than it appears. Photo credit: AP 

But what else changes?

A change in the usage of the word will more importantly correspondingly change the way we respond to it. While, the idea of a refugee nation is stimulating, it must grow into much more than a survivor’s camp. Can it have a permanent structure by itself? Should it?

In fact, what is primitively essential to acknowledge is that, in a lucid form, a nation as such already exists; for a nation is a large body of people with a shared history or culture, inhabiting a particular territory. Currently that territory is fluidic and is dispersed across states around the world. To consolidate that territory into one mass, and to bring those people to that mass is a legitimate response to mitigate the crisis, but it seems unlikely to be a long-term solution to it. There’s need for innovation in responses to this bludgeoning refugee crisis, and as the ‘Airbnb for refugees’ initiative shows, that innovation is happening. It is imperative to recognise that these innovations help deal with the crisis, not solve it at the source. And the problems at that source arise from hardships entrenched in socio, political and economic grounds, among others.

But for immediate responses, I vote for the creation of a refugee station, rather than a refugee nation. Without pre-conditions, it should be welcoming and serve as a platform to provide urgent security of all kinds, support to re-integrate with society and confidence to find home in the long-term. A station that is born under the aegis of the United Nations rather than as charity of a private kind, as Professor Cohen suggests. While the funds can come from donations, the efficacy in its functioning can only be derived from a principled approach embedded in perhaps a partnership of the public and the private. They’ll need to be a setup of governance quite akin to the one of federalism for self-governance to flourish or else this may end up being just another refugee camp. Freedom is what people are after – political, social and economic – let’s not forget that.

Where will this territory be and how will it be procured? These are questions that need much discussion, to ensure ease of accessibility and sustainability as well. Also, this Refugia must not just serve as the mirage of an oasis that attracts refugees, but be a station to help and assist the ones in need, irrespective of existing state or creed. Validation would be another major process again, hurting the pace of settlement. This is an area that needs urgent innovation and rethinking.

Perhaps the United Nations could finally nail the search and finally become a wholesome, combined nation in itself. And would that not be tangible proof of a post-national world? It’ll have to be – post-national and transnational. And when it comes to opening the doors of this station, it must be important to acknowledge the meaning and difference in the words migrants and refugees and to recognise that both these words, at the end of the day, comprise people.

The perils of proposal

As Alexander Betts points out, the premise of the idea of a refugee nation is exclusion, not inclusion. What a blow could that be to the notion of refugee integration and what signal would it send to the perpetrators? One that they can create havoc, force people out and be rest-assured they’ll find their way to this safe, welcoming place? The creation of such a nation/station will have to go hand-in-hand with that of fighting the causes at their roots, aggressively. For this station will also serve as the best incubation pad to come up methods to tackle the crisis at home.

There are more threats. Would the shared experiences of the refugees create harmony and brotherhood, or could the disparate cultural and religious understandings lead to conflicts that threaten the existence of this land of peace? Also, would it not create another class across the world? A class of people that donates and thinks of itself as saviours of this oppressed refugee class. But this one may not be that big a problem in the future, for such corrupt attitudes to charity already exist, promoting what Slavoj Zizek calls cultural capitalism.

Would you help form it?

Despite the perils, if an agency were to ensure the sustainability of such a station to mitigate this people’s crisis, I would. Would you, as long as you are assured of the transparency and accountability of the project? Accountability towards refugees, and you, and states too. For those national governments where these people are coming from shall continue to have stake in this crisis. But would this idea also not raise doubts about the promotion of this charity industry? Those questions are as valid as the search for responses to the crisis, and until we find them, such innovations must not only be debated but also implemented methodically with caution, perhaps with institutional help.

For whatever the nature of world politics, innovation and constructivism are what shall see us through. How we define and employ them may ultimately seal the deal. For, it’s not possible to imagine my thought processes if I were a refugee (it may also be a cruel test), but if I were to attempt to respond to the idea of this refugee station, the answer would be a definite, “Yes, take me there”. But then, I would still seek my home, and there are reasonable doubts if Refugia will be able to provide one in the long-term.

Not just mirroring development banks

While Western values may seem to have been spreading their tentacles everywhere over the last century, the Asian values syndrome that roped in the idea of cultural determinism came up in the 1990s as a retort to the West from the leaders of Malaysia and Singapore, and the idea found widespread acceptance in China and other Asian countries. It almost illustrates Newton’s Third Law of Motion – every action has an equal and opposite reaction.

The coinage of the phases was praised by many and denounced by some. Some called it the perfect answer to Western values, others said it may also be an attempt to unify the region that was home to varying value systems under different religions. The idea this theory pushed for is that from human rights and tolerance to land laws and development, the definition and applicability of these terms changes with the lens you use to look at them under. While in the West, human rights were/are made to appear paramount, under the Asian values lens their understanding was said to be different to counter allegations about human rights violations, working conditions and tolerance. The debate around these variations in perspectives and universality of values has been highly informing over the years.

Founding members of the AIIB. Two institutions that directly take on the World Bank and IMF are taking final shape this year. This may change world politics profoundly. Competition in development funding and economics was long due too. Photo courtesy: AIIB 

But what’s new?

All this has been said about a million times before, if not more. What’s new? Well, most significantly it’s the setting-up of the New Development Bank (NDB) or the BRICS bank and the Asian Infrastructure Investment Bank (AIIB). While these are perhaps the first institutional challenges to the Bretton Woods system that ushered in the age of the World Bank and the International Monetary Fund (IMF), what’ll be interesting is to see how they will function. While both banks appear to have multilateral approaches, they are being led by China. The NDB is headquartered in Shanghai and AIIB in Beijing. Will the New Development Bank really embrace a Global South-enriched approach that’s true to its founding team then or will the framework and working borrow heavily from the IMF? Will it be true to it’s name – will it work in a new way? Will AIIB spread an Asian value system then, like the IMF and the World Bank pushed for liberal democracies (or Western values) through institutional or structural changes?

Examining the agreements of the banks

BRICS Bank or the New Development Bank

Article 21 of the agreement that was signed on July 15, 2014, in Fortaleza, Brazil, underlines the operational principles of the bank. There’s a marked shift in the way it talks about the power of the bank and there's an absence of any language that would push the member states to make structural changes. This is what the article says:

Article 21 (ii): The Bank shall not finance any undertaking in the territory of a member if that member objects to such financing.

Article 21 (iii):  In preparing any country program or strategy and financing a project… the Bank will not deem to have intended to make any judgment as to the legal or other status of any territory or area.

Article 21 (v) The Bank shall place no restriction upon the procurement of goods and services from any country member from the proceeds of any loan, investment or other financing undertaken in the ordinary or special operations of the Banks.

Asian Infrastructure Investment Bank

Article 13 of the AIIB agreement that was singed in Singapore on June 29, 2015, is what deals with the operational principles of the organisation. Representatives from over 50 states – from the UK and Italy to Australia and New Zealand – along with other states from the developing world signed it.

Article 13(3) of the AIIB agreement uses the exact same words of article 21(ii) of the NDB agreement. It says, “The Bank shall not finance any undertaking in the territory of a member if that member objects to such financing.”

Article 13(8) also echoes Article 21(v) of the NDB agreement. “The Bank shall place no restriction upon the procurement of goods and services from any country from the proceeds of any financing undertaken in the ordinary or special operations of the Bank.”

Another significant change in the aim and vocabulary of the agreement is the recognition of the importance of regional cooperation to sustain growth, that is mentioned under Article 1(1) of the agreement.

What did the IMF say then?

The IMF agreement was adopted at the United Nations Monetary and Financial Conference, Bretton Woods, New Hampshire, in the US, on July 22, 1944. It’s been amended a few times since. As per section 1 of Article IV of the agreement of the IMF, member countries are obligated to: 

(i) endeavour to direct its economic and financial policies toward the objective of fostering orderly economic growth with reasonable price stability, with due regard to its circumstances;

(ii) seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions;

(iii) avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment

While the wording of the agreement suggests it is an advisory, what it effectively does is to force nations to alter their monetary and fiscal policies and annual budgets so as not to promote high debt – a relative figure decided by the IMF. This essentially leads to budget cuts and structural changes in terms of a reallocation of resources and a social services overhaul among others, in order to maintain coherence with the liberal democratic or neoliberal model promoted by founders of the IMF and the World Bank.

Obligation: 75 vs 23+ 27

Another criterion, though abstract, is to judge these agreements on basis of the occurrences of the word 'obligation' in them. While the word is often used when talking about authorised and subscribed capital of the members states and the immunities of the employees of the bank, it was also used in the IMF agreement to set aside the general obligations of members in terms of policy changes needed for loans. What also needs to be kept in mind is that, while the IMF agreement was formed in 1940s, the other two mentioned agreements are products of evolving world politics in the 21^st century. But then again, Google Ngram shows us that the popularity of the word has seen only a marginal decline over the last few decades. So, even with such reservations, it is still useful to count the number of times the word was used in the three agreements.

So, essentially, while the World Bank and the IMF funded a lot of development projects, helping economies grow, they also helped spread neoliberal values. The aim of this blog is not to criticise and evaluate the good and the bad these institutions did or do, but to point towards the change the AIIB and NDB appear to promise.

However, it is still imperative to note that, development banks, irrespective to their operational principles that may or may not demand structural changes from the countries accepting loans, still do tend to influence the political worldview of the recipient state. While the world has been edging towards a time when internal mechanisms of developing countries may be beyond intrusion for major world powers and developments banks led by them – something that the NDB and the AIIB agreements illustrate – the evaluation of how these changes affect the transfer of political knowledge across borders can only be undertaken over the next few years. The growing influence of transnational companies is another matter though. 

A core principle of Chinese foreign policy is non-intervention in another state’s internal affairs, and with the Asian giant leading two development banks that are the first to legitimately counter the established Bretton Woods institutions, these institutions hold the power to change the broader narrative around developmental funding and South-South and regional co-operation, in a constructive way.

KV Kamath (L), president of the New Development Bank, with other officials at the official launch of the bank in Shanghai on July 21, 2015. Photo courtesy: NDB BRICS 

The Dollar-dollar bills

Another aspect these agreements highlight is the acceptability for the US dollar across regions, irrespective of the US not being a member of any of the two newly formed institutions. It had in fact opposed the establishment of AIIB. Even though Article 19 of the AIIB agreement says that there must be no restriction on currencies being used, for all matters, the primary currency being used is the US dollar. While choosing another currency would have clearly caused problems across the numerous countries that have become founding members of the AIIB and NDB, the fact that there was no negotiation also to push for an alternative highlights the long-term vision of the founding members and the ability to prioritise development and co-operation over immediate currency wars.

The establishment of these development banks may literally be a watershed moment in world politics, especially if they are able to promote South-South and regional co-operation while aiding development across developing nations and emerging markets. It is clearly more than just mirroring the established development banks in an Asian or South-South setting.

It could also the precedent global institutions have been looking for to break away from West-dominated structures and working methods, for good or for worse. Think about the commotion around the International Criminal Court and it’s denunciation by many African states. Some may see this as the beginning of chaos and disorder with movement away from established rules, while others, like this blogger, view this as adding to the multi-polar understanding of the world that needs a new constructive rule book to play a new game, that’s not zero-sum. How do you see it? Could this be that special moment in International Relations evolution that the world may have needed?