The last BRICS conference held in New Delhi, will become as milestone in the history of world. this conference take decision about to start BRICS bank. India's proposal to set up a bank of the BRICS nations (Brazil, Russia, India, China and South Africa) will top the agenda at the summit of the group in New Delhi Mar. 28. India believes a joint bank would be in line with the growing economic power of the five nation group. The bank could firm up the position of BRICS as a powerful player in global decision-making. "The BRICS bank does not need much capital for a start," Alexander Appokin, senior expert at the Moscow-based Center for Macroeconomic Analysis and Forecasting tells IPS. "What is more important is that the BRICS development bank presents a unique opportunity for indirect investment of central bank foreign reserves inside the countries."
Outgoing World Bank president Robert Zoellick on Tuesday gave his backing to a new development bank proposed by the leaders of the BRICS emerging countries. Zoellick said the World Bank would be prepared to work with the new financial institution, which was discussed by the leaders of Brazil, Russia, India, China and South Africa when they met in New Delhi last week.
A BRICS bank could for example issue convertible debt, which would arguably be top rated and can be bought by central banks of all BRICS countries. BRICS countries would thus have a vessel for investment risk-sharing. "China will be the biggest beneficiary of that," says Appokin. "Moreover, infrastructure investment mostly needs not just long-term financing but external monitoring for more transparency and efficiency increases. Here, a BRICS development bank could offer some advice for successful implementation of regional projects." But, he cautions, "development structures like a BRICS bank are effective only in case they are given independence in project financing decisions from the governments, or at least room to operate in long-term development framework."
"The effectiveness of the bank is yet to be seen; this plan is not going to be cakewalk. China has already said it wants permanent presidency. Russia and India may demand the same. We know that Africa is a lucrative market for China in terms of natural resources and as a market for industrial products.
"Africa being such a strategic region, China may want the bank to finance many of its projects in the African region, or simply cooperate with the African Development Bank." Mashaka says there are also unanswered questions about capital structure, such as which BRICS member state will foot the bigger bill needed to establish the bank, and the role of various countries. Albert Khamatshin from the Center for Southern African Studies at the Russian Academy of Sciences believes South Africa will benefit most because the primary focus of the bank will be development projects within BRICS. Dr. Alexandra A. Arkhangelskaya, head of the Center for Information and International Relations at the Institute for African Studies at the Russian Academy of Sciences says a bank like this could shift the weight of economic power even though the creation of such an institution would be difficult.
"It is a good in terms of a multilateral framework of cooperation," Arkhangelskaya tells IPS. "But the BRICS states have differing economic weight, and to find the right balance to avoid one or some members dominating can pose a challenge. The threat of marginalisation of members in comparison to China is evident.
"BRICS is unity in diversity, and to take new steps towards mutual cooperation can be challenging. Therefore, it is interesting to see the development of this idea and to clearly understand the mechanism of its implementation."
BRICS bank will be a good benefit for developing nations and under developed nations. world bank is a bank for develope d nations. so the planning about BRICS bank will be helpful for equal development of world
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