BRICS development bank: What's in it for India
The formation of the BRICS bank is being hailed as a significant step in
the developing world`s endeavour to have a more credible say in the
global economy.
Five emerging economies – Brazil, Russia, India, China and South Africa – have proposed to form the $100 billion development bank with its headquarters in Shanghai and the first president being from India. The money would be invested in infrastructure projects within the BRICS countries, including the construction of roads and airports.
While the intent behind the move is to end the dominance of the West, especially USA, in the global financial order through the World Bank and the IMF (both headquartered in America), the BRICS grouping is also hoping that the bank would lead to the resetting of balance of power equations in the world at large.
With relatively strong economies - about one-fifth of the global economic output - the BRICS have taken a significant step with the formation of the New Development Bank (NDB). And the setting up of an African regional centre of the NDB in South Africa, has made it clear that the BRICS countries want the bank to develop into a BRICS + other developed countries entity.
While it is unlikely that the NDB would be able to seriously challenge the clout of the IMF and the World Bank, especially when Europe and the US appear closer to an economic recovery and trust growing again in the financial markets in the West.
The BRICS countries hope that their war chest, buoyed by the strong backing of China which holds the world`s largest foreign exchange reserves, will give them enough monetary power to take corrective actions in events like the exodus of capital from emerging markets last year after the US scaled back the monetary stimulus to its economy.
Five emerging economies – Brazil, Russia, India, China and South Africa – have proposed to form the $100 billion development bank with its headquarters in Shanghai and the first president being from India. The money would be invested in infrastructure projects within the BRICS countries, including the construction of roads and airports.
While the intent behind the move is to end the dominance of the West, especially USA, in the global financial order through the World Bank and the IMF (both headquartered in America), the BRICS grouping is also hoping that the bank would lead to the resetting of balance of power equations in the world at large.
With relatively strong economies - about one-fifth of the global economic output - the BRICS have taken a significant step with the formation of the New Development Bank (NDB). And the setting up of an African regional centre of the NDB in South Africa, has made it clear that the BRICS countries want the bank to develop into a BRICS + other developed countries entity.
While it is unlikely that the NDB would be able to seriously challenge the clout of the IMF and the World Bank, especially when Europe and the US appear closer to an economic recovery and trust growing again in the financial markets in the West.
The BRICS countries hope that their war chest, buoyed by the strong backing of China which holds the world`s largest foreign exchange reserves, will give them enough monetary power to take corrective actions in events like the exodus of capital from emerging markets last year after the US scaled back the monetary stimulus to its economy.
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