Will BRICS Bank
Transform Regional Development
We believe the BRICS are an important force for incremental change and reform of current institutions towards more representative and equitable governance, capable of generating more inclusive global growth and fostering a stable, peaceful and prosperous world. BRICS has a new confidence, and it was more than apparent at the summit. The only world grouping that is not region, security or trade-based, its members have come together with the determination to create a more multilateral global order. China and Russia have backed the other three BRICS members on the issue of UN reform and Security Council expansion. But the grouping needs to find a stronger political voice in new world order.
As its name implies, the agreement for the New Development Bank, signed by Brazil, Russia, India, China and South Africa at their sixth BRICS summit in Brazil, signals the start of a new global financial order that aims to be more inclusive than the Western-focused International Monetary Fund and the World Bank. The $100 billion bank will have an initial subscribed capital of $50 billion. The five members managed to iron out their differences to agree on an equal share for each in the bank, so no one member dominates the institution. India and South Africa both wanted to host the headquarters. The eventual decision to locate it in Shanghai was an acknowledgement that China’s is the biggest economy in the grouping and other development banks in the region are also dragon influenced? India will hold the Presidency of the $100 billion BRICS development bank for the first six years, it was disclosed on Wednesday, a day after the five emerging economies decided to set up the institution in a major step towards reshaping the international Financial system dominated by the West.. The Bank will also have an African Regional Centre in South Africa and India will assume the first presidency of the bank. First mooted at the fourth BRICS summit in New Delhi in 2012, the Bank will certainly have an impact on the existing arrangements put in place by the Bretton Woods institutions, and will give more say to smaller countries. But BRICS also appears to recognize that the NDB cannot replace the IMF, the World Bank or the regional development banks. Thus, the Fortaleza Declaration describes the NDB as a “supplement to the efforts of multilateral and regional financial institutions for global development.”
