with the tools, technology and know how. >> reporter: technology, will and compassion, a mixture proving many things are not impossible. >> that story and the rest of the news can be found on the website at aljazeera.com. . >> they are the emerging world powers and they're combining their economic hats. the bricks alliance hopes to challenge the western dominated world bank and international monetary fund. it's the inside story. >> hello, i'm a he libby casey. brazil, russia, india and china

and south africa today they make up a fifth of the world gdp, and they're working together. they're launching their own development and rainy day fund. it's a major shift in the western-led status quo. they say they'll be responsive to the needs of developing economies but can they overcome their stark differences to work together and what does it mean for the united states and their sometimes confine shoes relationships with thes contentious elationships with these nation nations. >> the historic dimension of our summit can be demonstrated by the importance of the agreements we sign. >> head quartered in shanghai, they have a commitment of $100 billion.

and it's capital will be divided among the five members the first president will be from india. the board of directors will be led by brazil and the africa region lending branch will be based in south africa. >> the bricks bank will be one of the biggest financial agencies in the world. >> bricks nations see their bank as counter to what they view as western-dominated financial order and a means to provide security investment and growth resources to themselves and other emerging nations. the countries have long argued for more of a say in the global system. they chafed a the way had a lenders at the world bank and international monetary fund or imf put restrictions on the countries they help. after feeling they have not been heard bricks say its time for change. >> we'll put pressure for reform. unless they reform and takes bricks nations into account

more, i think this constitutio institution will be more dominant in the bricks countries. >> reporter: the world bank acts as a world provider for developing countries. it's twin goals is to end poverty and promote prosperity. established after world war ii the imf said its fundamental mission is to insure stability in the global system. it lends to countries with pavement difficulties, but imf loans are not free money and their help comes with strings. take ukraine. the agency approved a $17 billion package in april, but on the condition that the kiev government follow strict economic reforms like raising taxes and energy prices. bricks advocates say they will be different, but some economists are skeptical of its ability to compete in an already established arena. >> they are not ready. they are risking a lot. they're risking the progress they have in the last ten years

for a project that will not render the benefits they think they will have. >> the bank is looking to provide loans for infrastructure and development projects building up other emerging economies. officials say it could be two years before it starts lending. and there's the possibility that other countries such as turkey, mexico, and indonesia could join later. >> we should push forward with our cooperation and establish the contingency reserve arrangement as soon as possible. >> 42% of the world's population live in the bricks nations today making up 20% of the world's gd p it' gdp. it's a major moment. they all have huge economic potential. at the same time bricks nations have unique and varying interests that are often at odds with washington. >> a new player in the global

aid scene, what impact will it have and dna issues spurred its creation and where does it put its efforts o on the world stage? here to talk about it from our washington studios our guests. professor, we'll start with you. why are these countries striking out on their own? >> well, for a long time these countries have deserved a greater voice at the imf in the world bank. those institutions claim to give voter rights according to the presence of the size of the economy in the world.

china is currently ranked sixth in voting strength at the imf. but we know that it's economic presence in the world ranks second and soon may surpass the size of the united states. it's been a long time that we should reform the votes at the imf and the world bank, and these countries didn't get what they were supposed to a long time ago. >> and take us back into the history. how has this not reached adequacy from these countries. we received assurances from christine la guard as she was ankling to become head of the imf for these emerging economies, how have we gotten here? >> it's taken a long time for the shares and the seats and the counts that would be give out. primarily the european countries have been reluctant to do so. but most recently it has been the united states congress that

has not approved of the reform that were agreed in 2010. this is a direct protest against the united states rather than the european. >> how do you see theocracy of the world bank and imf with what bricks is doing? >> the new development bank, as they call it, it's pretty much a parallel to the world bank. but we also have four regional development banks and the china development bank far has given . in this area there are lots of banks, and it's nice to have one more. it's not dramatic. while there arrangement is not really a competitor. it's supposed to be $1 billion. you don't know how they can be

available. you don't know how it can be activated. and the u.s. on its own put up hundred billion dollars in credit swaps to western countries, not for the bricks countries. you can't say that this is comparatively small by that comparison, it's nothing what the imf does in its programs. >> let's bring you in on the conversation, what do you see as the major motivation for these countries striking out on their own and forming a world bank, a lending agency, and also an imf, sort of a protective rainy day fund? >> i think there are at least two first run related to the fact that they're ending now the first cycle of brick summit that was started in 2009.

and it was a pressure to deliver something concrete . the second die mention i dimension relates to the reform of the financial institution. as we discussed already, bricks as a group was created in 2008 for these reforms. so far nothing has happened besides promises that wasn't realized in real life. so the second dimensions related to the pressure over the international financial institutions in order to make

strong this claim for reforms. but i do think there is a third dimension that should not be neglected, which is related to the fact that these institutions, at least the new development bank, as it is called, will offer an alternative for developing countries in terms of financing infrastructure projects, energy projects and other projects in the developing world. they would not follow the world banks guidelines. >> let's pick up on something that we heard from paolo estevez estevez. it was form back in 2009. south africa was not part of it then. they are now. how important is it to say that

they'll start lending money b by 2016. >> it's important to say that they did something. if they didn't decide this they wouldn't have any institution . they have been discussing these two things for five years now. so they need to get it done otherwise it would just look like clients. we have many such clients. we have g-7, previously g- 8. >> does a new development bank threaten the power structure?

>> it does not threaten them yet yet. there is a fund called the chang mai initiative. >> no one has borrowed from it. >> all the political problems that the imf faces are going to be faced by these other banks as well. the chang mai initiative could not come to an agreement with their loans. so what did they do? they said if you want to borrow from chang mai, you have to adhere to the imf. and they have passed it to the imf. the bricks have started out with an interesting plan. all members are equal. they each give $10 billion.

they get equal vote shares but they're not really equal, right? china's economy is two orders of magnitude larger--not quite yet but soon will be two orders magnitude larger than south africa. these are not equal partners, and at some point china will have to take the lead for the bank to be effective. >> we'll come back and talk about the agenda of these countries, like brazil, russia and china and how they may differ. you're watching "inside story." >> on tech know, >> what if there was a miracle? >> grace's stem cells are in this box. >> that could save the live of your child... >> we're gonna do whatever we can >> would yo give it a try? >> cell therapy is gonna be the next big advance in medicine >> tech know, every saturday go where science meets humanity.

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effective they'll needs a leader. an until they see a country ready to step up in that leadership position they'll have a hard time accomplishing much. how are they going to deal with that that? >> yes, there are big problems here. iraq is the most anti-western country today. you could say that russia's primary interest is to stand up to the united states. it needs support and do something against the sanctions. china is in the big picture here. china has an opportunity to play multi lateral, and the question

is whether it will be able to do as suggested. brazil and abou and india, they have very few interests in common with russia and china. >> how are these country going to benefit themselves with that lateral effort. >> i do think that every single country benefits from being at the bricks it was a clear sign of the >> china gets the opportunity to play a multilateral role. the question is if it's able to

do so. then you look at the three others. for south africa it may be nice to be in a big group. it's not held in good regard. brazil and india - very few interests in common are russia and china. >> take us there - how will the countries benefit from the collaborative effort? >> i do think that every single country benefits from being at the brics. just to give you an example - we have to remember that the brics as a group was launched in 2009, one year after the russian intervention in georgia. and it was a clear sign of the dissatisfaction of the russians regarding the international order, and regarding the presence of n.a.t.o. or the e.u.

at what they considered still being their zone of influence. brazil and south africa probably benefits from being a bric country. for all the lifestyle that the brics project over the east countries. in china, take the brics as a way to lose a little bit, its own footprint in the international system. so i do think that these countries have reasons to stay together. every one of them. it is a complete different story to think about a development bank. there are some questions that are still not answered. if we think about the kind of projects that this bank will

fund, let's think about infrastructure projects, for instance. what would be the causes related to environment, human rights, to gender rights, and so on and so forth. when we start to discuss these things, we are going to see that every country has its own take on the development model. it will be really difficult for these countries to come together with the - with a common view about what development means. they did launch a new development bank, but they are - we don't know yet what they understand by development. >> is it significant that they have gotten this far. there were debates if they could agree on a currency, if they get fundamental agreements on the table. >> exactly. that is the main thing.

they have made decisions and they have two institutions and therefore they know about the brics that could stay. >> we'll take a break, when we continue the conversation we'll talk about the brick development bank, and how could other emerging economies benefit from it. this is "inside story", stay with us. >> i've been waiting for this... i'm so nervous right now. i'm really scared. >> 15 stories one incredible journey edge of eighteen coming september only on al jazeera america r

"talk to al jazeera" saturday 5 eastern only on al jazeera america welcome back to "inside story". the five brick countries are a growing powerhouse, teaming up to create a development bank. how does that change the international lending game and what challenges does it pose for the united states and western countries. still with us - senior fellow from the peterson institute for economics. and rio de janeiro, sprovor of brics policy center.

and in washington professor of international studies at george town university. let's ask - how will the loans develop and how will the competing interests of all the countries be able to allow them to agree on the basic parameters. how will they get there. >> that is the question which is still to be aped answered. what we have for the bank is the structure, it's capital competition, and so on and so forth. the location - the scheme for chosing the presidency, the board and so on and so forth. the main question is still what these countries understand - what is the common understanding about what development is about. and we don't know that yet.

as far as we know there is - the brics countries, with their own banks, they are usually lending money to infrastructure projects abroad. using their open - very often using their own companies to deliver the infrastructure projects. we don't know much about what was agreed for the development bank. the other - but there is another side of the story. if this - if these countries could not reach an agreement about the basic lines for lending or for fostering development abroad, the bank will be an opportunity to discuss the issues and trying to reach a common ground. the bank, from my perspective at least, the bank is kind of a field or common ground from

which they will build a common understanding about development. >> will there be strings attached? should there be strings when we talk about human rights and environmental issues. it's been a complaint from many countries, is there a reason for it? >> that is a yat question. that is -- great question. that is one of the exciting features. the bank claims they will not have conditionality. everyone loves to beat up on i.m.f. conditionality, west bank conditionality, blaming them. often it is a scapegoat, but there are lots of other strings that can be attached. a lot of the research i have done shows i.m.f. and west bank mending may go to politically favourable countries, important to the united states or economically important to the the united states. even if the brics claim they are

not going to condition lending, it doesn't mean that there might not be some favouritism down the road, and they are going to have poli policy preferences. when i.m.f. was funded, conditionality didn't exist. the question is not whether there'll be conditionality, but down the road, as - if the bank works, these are going to be chinese resources. china has a lot of political issues. maybe they'll condition it on the relationships with taiwan. for example. >> what if a country like iran looks for funding, loans. that runs counter to what a lot of western countries allows, could that happen? >> sure. it's interesting if any bric country would go against iran.

>> and a country like greece, they've had trouble with loans because of basic financial requirements. >> i think the brics countries think there has been too few strings attached to agreed lines, which are not big in proportion to the economy in the i.m.f. history. >> does it allow the countries to have a bigger voice when it comes to the world economic stage? >> well, i think it's, at this stage, mainly symbolic. it is bringing into focus the fact that these countries have arrived. the emerging markets arrived. the united states has known for a long time they need to move the countries up in their voice at international institutions. we have domestic politics holding us back. the countries deserve more say.

it's hard to convince domestic forces that we should fund international institutions if we are creeding more -- seeding more power away. power is on an international tightrope, and it's going to be difficult for countries to divide up the power in a just way and still satisfy other domestic constituents. >> we'll have to leave it there. that brings us to the end of "inside story", thank you to you for being with us. the programme may be over, but the conversation continues. we'd like to hear what you think about the foishissues of today' show. log on to twitter or facebook. see you for the next "inside story" in washington. i'm libby casey.

>> on "america tonight" desperate families sending their children to another country in hopes of saving them. it's not a new story. we're on an exodus from another time go i kept looking back and seeing my mother. when they finally gave us the go ahead to get on the plane it was pretty rushed. i had a glance back towards my mother, and she was waving goodbye. >> children on the road. how these cuban children came to become americans, and what their pe