According to Global Times of 26 Feb 2013, the establishment of a BRICS development bank has been a major subject of discussions in the build-up for the 5th BRICS Summit to be held in Durban on 26-27 March. It is widely expected that the summit would provide a long-awaited institutional underpinning to the grouping (Brazil, Russia, India, China and South Africa).
South African Standard Bank's Simon Freemantle, Senior Analyst in the African Political Economy Unit, and Jeremy Stevens, an international economist based in Beijing, said in their latest report in Africa Macro that the BRICS development bank is an agenda item which is sure to feature strongly at the Durban summit, guided by the theme "BRICS and Africa -- partnerships for integration and industrialization".
According to Xinhua, the details around the BRICS bank are expected to emerge clearly. The main objective of the bank will be to direct development in a manner that reflects the BRICS priorities and competencies. Such as, infrastructure development, project preparation and feasibility studies. Later, a working group will be asked to get the necessary technical commitments and governance structures. China has become the top trading nation in Africa as well .Seen against the background of flourishing BRICS trade with Africa as the pivot, there is diplomatic and commercial momentum to which the bank can add an institutional foundation. "The proposed bank contributes constructively to the development of more robust and inter-dependent ties between the BRICS members," the report states. The member states are expected to dig deep into their pockets to make the bank work.
According to Financial Times blog, even though key decisions have yet to be made – such as where it would be based and what exactly it would do – some elements are emerging from the discussions, notably the bank’s possible capital – $50bn.
The bank is not a counterweight to multilateral development banks—notably the World Bank. Yes, the dominance of the US and Europe in Bretton Woods Institutions is a source of contention for BRICS. However, on this specific score, the envisioned BRICS bank is an auxiliary funding institution—albeit more aligned to BRICS’ development agenda. Nor will the new bank try to compete with the domestic development banks in the Brics.
The BRICS bank’s relevance will depend on its effectiveness and specialization. Rather than posture as a common denominator or create overlapping agendas with other development finance institutions and BRICS state policy banks, including Brazil Development Bank (BNDES), China Development Bank (CDB), and Export-Import Bank of India, the Bank will need flesh on its bones before we shift from cautious optimism.
As made evident in India’s 2013-14 budget, Delhi needs massive investments in infrastructure .The Brics bank with China’s surplus funds, expertise and experience in enlarging its infrastructure specially railways, can provide a multilateral platform to iron out doubts and suspicions in this sorely needed sector, only if US proxies and pimps will stop creating differences between the two Asian giants .Look how China and Russia are cooperating in energy and other sectors for mutual benefit. Asia needs peace for development and to rise up its masses from poverty and misery.
The Standard Bank quarried, “a host of pragmatic issues require resolution.” These include funding sources (very important for bank, you might think), types of project for financing, and bank headquarters – always contentious as the founders of the European Bank for Reconstruction and Development discovered 20 years ago before they settled on London.
Standard expects each of the five member states to initially contribute $10bn in seed capital to the bank, with further funds raised from the markets as necessary. That sounds very egalitarian. But it will clearly put a greater financial strain on the modest South African economy and public purse than on China’s. Inevitably, Beijing, with a bigger GDP than all the other Brics put together, will be in a position to make its voice heard, whatever the rules and regulations of the planned institution. Or as the Standard Bank said that skewed economic might may lead to skewed problems.
While China, India, Russia etc are trading and investing in Africa , old colonial powers like now socialist France, UK and the big daddy of all , USA are destroying states and want to loot their gold and natural resources as in 19 and 20 century. I had circulated a week ago a note on Manipulations and Mystery about Gold Reserves; an ounce in hand is better than two with US Federal Reserve.
The article below makes almost a surrealistic reading about gold reserves and its manipulations by the usual suspects i.e. The Wall Street and the City, London Bankers and financiers. What info is available makes for a scary reading and how the so called international Financial System is nothing but a house of cards aka perhaps open chicanery, roguery and worse .After all US went on its word of giving an ounce of gold for US$ 35 in 1971, as agreed to at Bretton Woods which accorded Dollar the status of reserve currency.
IMF Information Leaks: Central Banks Gold Manipulations Valentin KATASONOV | 07.02.2013 |
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|Allen L. Jasson|