Home|South-South Cooperation|South-South Cooperation in the News|Brics development bank to have $50b initial corpus

by KA Badarinath

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by KA Badarinath

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The two major issues under discussion are — where the bank will be headquartered and its mandate and structure. Both India and South Africa want to host the bank and have proposed New Delhi and Johannesburg, respectively, as its main base. Its structure and functioning may be on the lines of the Asian Development Bank (ADB) based in Manila. ADB is broad based with about 100 countries from the region and outside as members, whereas the Brics bank will be restricted to members of the group. “We will consider the option of widening the bank’s mandate, constitution and reach in the medium term, say after 10 years of its operation,” said an official involved in the proposal. The board of governors, management and all key functions will be with the Brics member-countries unless and otherwise decided at a later date.

Work on the bank proposal will be done before the next Brics summit in South Africa next year. This will be the first major Brics event to be hosted by South Africa since it joined the group. Presidents and prime ministers of Brics cleared the bank proposal at its fourth summit in New Delhi on March 9 this year. The summit’s Delhi declaration directed their finance ministers to “examine the feasibility and viability of such an initiative”. A working group was also formed to set the ball rolling. The group met in Rio de Janeiro last month.
The bank will supplement and complement efforts of other multilateral and regional development banks and institutions. It does not seek to either displace ADB, the World Bank or the International Monetary Fund. Instead, it will work with these institutions to push for development and prosperity in these five emerging economies.

An official told Financial Chronicle that the bank was only a first step towards larger economic, trade and investment cooperation among the five members. Brics accounts for 25 per cent of global GDP and 43 per cent of the world population.

This article was first published on 5 September 2012 by mydigitalfc.com
http://wrd.mydigitalfc.com/news/brics-development-bank-have-50b-initial-corpus-698

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