BRIC member-nations, South Afrcia Mull Own Multilateral Bank
Amidst a global financial pandemonium, the group collectively known as BRIC - the countries of Brazil, Russia, India and China - in a show of collective strength is contemplating pooling resources and funds together to create a multilateral bank, but only by and for the exclusive use of developing nations such as theirs.
Media reports circulated that India thought of the proposal and that the other countries have agreed to discuss the possibility and potential of the scheme. Delegates from the four nations are scheduled to meet at the Group of 20 meetings this weekend in Mexico City.
"The idea is for the BRICS to offer the capital for this bank, but we still need to discuss if this bank will serve to give out loans to other emerging market countries," a senior Brazilian government official said on Reuters News.
It is unlikely, however, that the four nations will be able to come out with a decisive agreement this weekend. "The idea is (still) in its infancy," the official said.
The idea of a BRICS bank, recommended by India, spurred from a desire of the emerging market countries to have a greater influence in the International Monetary Fund (IMF) and other multilateral bodies. The BRICs group wants that the leadership of the IMF and World Bank should not just be one-sidedly chosen every time from Europe and the U.S., respectively.
India likewise stressed the importance of the bank as such that the prevailing multilateral bodies have not really "effectively" sponsored the developing nations, Bloomberg News reported.
Brazilian Finance Minister Guido Mantega has been reported to accommodate the proposal.
The perceived hard-headedness and boastfulness of the BRICs group is very much acceptable. After all, based on figures by the IMF, the group is projected to grow favorably in 2012. Brazil's economic growth is seen to hit 3 per cent; Russia at 3.3 per cent; 7 per cent for India; 8.2 per cent for China; and 2.5 per cent for South Africa.
The U.S. will only grow to a dismal 1.8 per cent while the 17-member nation euro area will contract by 0.5 per cent, estimates released by the IMF last month showed.
"It would be a welcome thing if it actually happens as BRICS is the fastest-growing bloc in the world," Jay Shankar, an economist in Mumbai, said in Bloomberg News. "These countries have tried to come together but they failed simply because, besides the aspiration of achieving higher growth, they don't have anything in common."