Institutions Built to Replace an Order Rarely Escape It

The Alternative That Needed the Original to Survive

A Decade-Old Warning In 2015,

BRICS launched the New Development Bank promising something specific: loans without Western political strings, financing in local currencies and governance free of the credit-rating regime that shapes how the World Bank and IMF operate.

A decade later, roughly half the NDB's bonds are still denominated in dollars. Local-currency lending sits around 22 percent, short of its own 30 percent target. And when Russia - a founding member holding a fifth of the bank's shares - invaded Ukraine in 2022, the NDB froze all Russian operations within days, not out of ideology but to protect its own credit standing with the very Western rating agencies it was built to bypass.

Why This Matters Now

This history matters because a new proposal is asking the Global South to try again - this time for AI, finance and climate risk. An International Institute for Regulatory Development, first floated during India's 2023 G20 presidency, would create research capacity, a shared exchange of regulatory practice and proportionate standards calibrated to emerging economies rather than borrowed wholesale from the West.

The timing is deliberate: AI risk is already crossing into financial stability and emerging markets - the largest suppliers of the data and labour that train these models - currently have no seat at the tables where their safety rules are being written.

The Honest Question The

NDB's record raises an uncomfortable question the IIRD proposal has to answer directly: what would actually be different this time? An institution can declare independence from an existing order and still end up structurally dependent on it - through the currencies it lends in, the agencies whose approval it seeks or the crisis-response rules that quietly route back to the very body it claimed to replace.

The Contingent Reserve Arrangement shows this trap clearly: a $100 billion liquidity pool that has never once been used, because drawing more than 30 percent of it requires an active IMF programme - the safety net's escape hatch leads straight back to the institution it was meant to be an alternative to.

What Would Actually Be Different The

IIRD's design choices suggest its authors have studied this failure. It is proposed as seeded in Delhi but not owned by BRICS - open to the G20, OECD and the Financial Stability Board rather than confined to a bloc with its own credibility problems.

Its core functions - an independent research secretariat, a living exchange of what has actually worked (drawing on precedents like Project Agorá and Project Dunbar) and standards calibrated to context rather than copied from elsewhere - target exactly the kind of structural dependency that sank the NDB's claim to independence.

Whether that is enough will depend on whether the IIRD builds genuinely new plumbing or simply writes a new charter inside old dependency lines.