Proposed BRICS Bank Included in March Summit Agenda
Determined to make its presence felt in the global community, the BRICS group - Brazil, Russia, India, China and South Africa - has pen-pushed for discussion on their fourth summit scheduled on March the creation of a multilateral bank for their group's exclusive use and disposal.
Dubbed the South-South Bank, the financial depository, which India proposed before the onset of formal meetings by the Group of 20 last weekend in Mexico City, would require capital contribution from all five member nations.
"This could mean some serious contributions of capital, so everything needs to be calculated and analyzed," Andrey Bokarev, head of international financial relations at Russia's finance ministry, told Bloomberg News.
The South-South Bank will be a support institution for countries with developing markets, of which, understandably, the BRICS member nations will have the major voice.
Projections released by the International Monetary Fund (IMF) in January showed the BRICS group will continue 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 project looks promising but needs detailed studying, the Voice of Russia reported, quoting Andrey Nechayev, President of the Russian Financial Corporation.
"There are a lot of unanswered questions at the moment. Who is going to provide capitals for this bank? Who will be able to get money from it? There may be a lot more of those who want to take a loan than those willing to give loans. The new institution meets the requirements of world development. BRICS member nations need investments and not only cash but new technologies, methods of corporate management and innovations. At present it is not quite clear how this bank, if it ever opens, will help to solve this problem," Nechayev said.
The idea of a BRICS bank spurred from a desire of the emerging market countries to have a greater influence in theIMF 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.
Candidates to the IMF and WB head post, and the eventual leader, should be assessed and chosen "based on merit and not on nationality," Guido Mantega, Brazilian finance minister, said on Saturday on the sidelines of the ongoing Group of 20summit, stressing it is essential to create competition for the US candidate, either from a BRICS country or from Europe.
The entire body heard the group's plea, and was given until Mar. 23 to come up with a candidate to rival the American nominee.
The proposal to come up with the South-South Bank, according to India, also came from the experience that the prevailing multilateral bodies have not really "effectively" sponsored the developing nations.