President Lula Raises Alarm at BRICS: Are IMF and World Bank Financial Aids Truly Fair? "Money is Flowing from South to North"

Prologue: The "Reverse Marshall Plan" Echoed in Rio Bay
On the evening of July 6, 2025, the BRICS leaders gathered at the Museum of Modern Art in Rio de Janeiro. President Luiz Inácio Lula da Silva of Brazil, the chair country, declared, "For 80 years, the countries of the South have been supporting the North. This is a 'Reverse Marshall Plan,'" as the IMF and World Bank logos were displayed on the screen behind him. The venue erupted in applause and murmurs, and international news agencies quickly released the first reports. Lula's speech, demanding IMF quota reforms and interest-free World Bank loans, simultaneously highlighted the debt crisis in the Southern Hemisphere and the AI disparity.infomoney.com.bragenciabrasil.ebc.com.br

1. What is the "Reverse Marshall Plan"?

After World War II, the Marshall Plan, in which the United States provided $16 billion (at the time) for European reconstruction, is remembered as a success story of funds flowing from the North to the South. In contrast, in the modern international financial system, developed countries hold the majority of SDRs (Special Drawing Rights) and receive low-interest loans with high credit ratings, while developing countries rely on IMF support during crises and are bound by high-interest, short-term loans. Lula's "Reverse Marshall Plan" criticizes this reverse flow of funds—a rhetoric that "poor countries are indirectly lending to wealthy countries."infomoney.com.br

2. The True Intent Behind the 25% IMF Quota Demand

Currently, the BRICS 11 countries hold an 18.23% share in the IMF. Lula argued that this should be raised to "at least 25%." Under the 85% voting rule, a block holding over 25% would effectively gain veto power, providing a check on policies led by developed countries. According to estimates by the Brazilian Ministry of Finance, if a new calculation formula weighted by purchasing power parity (PPP) and population is introduced, the total BRICS share could grow to 27%. In negotiations, the U.S. and EU strongly demand that "long-term debt repayment history and foreign exchange reserves" remain as indicators, and discussions are at an impasse.agenciabrasil.ebc.com.br

3. From "Development Loans" to "Co-Creation Capital"—Proposal to the World Bank

While the World Bank's main business is infrastructure loans to developing countries, the "spread" of market interest rates plus α makes the interest burden heavy. At the meeting, Lula argued, "The era of building schools with debt is over. We need interest-free or ultra-long-term repayment schemes of over 20 years." As a concrete measure, a "Co-Creation Capital Facility" limited to climate, AI, and public data collaboration was proposed, centered on the New Development Bank (NDB) and the Asian Infrastructure Investment Bank (AIIB), with an initial fund of $60 billion to be covered by SDRs and national development banks. China and the UAE are positive about contributing, but India is wary of increasing yuan-denominated bond issuance, leading to mixed intentions within BRICS.reuters.cominfomoney.com.br

4. AI Disparity and the "Public LLM" Concept

The sub-theme of this summit was AI. Lula warned, "If AI is monopolized by a few companies or countries, information colonialism will return." Brazil has already submitted the "AI Equal Access Bill" to parliament in May, proposing open access to public research datasets and a joint development fund for multilingual LLMs ($500 million annually). South Africa promised support for semiconductor manufacturing using its mineral resources, China pledged high-performance GPUs, and Russia committed to expanding cybersecurity training, launching a "Southern Hemisphere AI Moonshot."infomoney.com.brreuters.com

5. The Temperature on Social Media—Praise and Sarcasm

No sooner had Lula's speech ended than the hashtag #ReverseMarshallPlan trended globally on X (formerly Twitter). Brazil's left-wing media outlet RT Brasil quickly reported "Lula Speaks for the South," garnering 10,000 reposts.x.com

On the other hand, economist Javier Badelli pointed out, "The NDB's annual lending performance is 60 cases, only 1.5% of the World Bank," posting "Words over deeds." Responding to this, @rahulsveu attached an interest rate disparity graph, stating, "Germany's bond yield is 1%, Ghana's is over 8%. The opposite world is reality," collecting 4,000 likes.twitter.com

From English-speaking users, there were also skeptical voices asking, "Show the funding sources" and "Feasibility under US-China conflict?" with debates swirling with pros and cons.

6. The "Quiet Debt Crisis"—Voices from the Field

The debt ratio of Sub-Saharan African countries rose from an average of 48% before the COVID-19 pandemic to 61% in 2024. Ghana applied for IMF restructuring in 2023, but reorganization approval was delayed by over two years, resulting in late fees exceeding the national education and health budget. A Brazilian government official stated, "Conditionality and temporal delays are the biggest barriers to support." Lula's speech brought this "quiet debt crisis" back to the forefront of the world media.infomoney.com.br

7. Reactions from Developed Countries—Silence and Caution

The US Treasury refrained from official comments, but an anonymous senior official stated, "IMF governance reflects cumulative contributions and is fair," showing indifference to Lula's proposal. The EU's top leaders issued a neutral statement, saying, "We take the indication of development funding shortages seriously," but emphasized that SDR redistribution "requires the consent of national parliaments." Japan's Ministry of Finance expressed readiness to join discussions on the condition of "ensuring transparency of fund flows," but no specific measures have been decided.

8. The Alignment Within BRICS

Amid economic slowdown, China is cautious about lending, but Premier Li Qiang declared support for reform under the banner of "Common Prosperity of the Global South." India agrees with the quota increase but is concerned about deepening dependence on yuan-denominated funding. South Africa is joining the AI research fund. Russia participated online, with President Putin emphasizing, "Exclusion due to sanctions invites a new Cold War." New member countries like Iran, Saudi Arabia, and Egypt are poised to support IMF governance reform as a negotiation card for lifting their own sanctions.infomoney.com.br

9. The Roadmap Ahead

• October 2025: Final negotiations for the 17th IMF quota review (Washington, D.C.)

• March 2026: Official launch of the NDB "Co-Creation Capital Facility"

• November 2026: Submission of specific proposals for the climate finance framework at COP30 (Belém, Brazil)
  Lula stated, "Overcoming these three milestones will be the first step towards reversing the North-South divide," and domestically, legal preparations are urgently needed.reuters.com
  
  

Conclusion: Is History at a Turning Point?

The "Reverse Marshall Plan" that resounded in Rio is not just rhetoric but a proposal to overturn the global North-South disparity. However, its realization faces the dual barriers of the "outer wall" of vested interests of developed countries and the "inner wall" of differing interests within BRICS. IMF quota reform, interest-free World Bank loans, and a public AI fund—unless these three levers move simultaneously, they will not reach the threshold to change history. "What is truly needed is not the courage to ignite the fire, but the tenacity to keep it burning," Lula said at the press conference after the meeting closed. Will the "Reverse Marshall Plan" become a new growth myth for the Southern Hemisphere, or will it remain a fleeting slogan in international conference halls? The next stage for judgment is in Washington in October.