Jim O'Neill, Columnist

A BRICS Bank Needs a Sense of Purpose to Succeed

August 5, 2013 at 10:00 PM UTC

Jim O'Neill worked for Goldman Sachs Group Inc. from 1995 until 2013, serving most recently as chairman of Goldman Sachs Asset Management, and as the firm's chief economist from 2001 to 2011. Before joining Goldman Sachs, he was head of global research at Swiss Bank Corp. O'Neill is the creator of the BRIC acronym, which was derived from his thesis that Brazil, Russia, India and China would dominate growth in emerging markets. He is a member of the boards of the Brussels-based policy-research centers Itinera Institute and Bruegel. He earned a degree in economics from Sheffield University in 1978 and a doctorate from the University of Surrey in 1982. He lives in London.

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At their fifth annual summit in April, the leaders of the BRICS nations said they would build their own development bank. If it happens, this club of leading emerging economies -- Brazil, Russia, India, China and South Africa -- will be taking quite a step. Up to now their meetings have produced bold statements, but little in the way of tangible achievement.

Their meeting in Durban, South Africa, was thin on details: no announcement about where the new bank would have its headquarters or how the institution would be funded. The vagueness suggests the new bank’s true purpose hasn’t been worked out. In a way, that’s understandable, because the BRICS grouping is unusual. Even so, for this venture to succeed, the new bank will need a clear rationale.