BRICS bank 'will not replace' World Bank
- By Li Shen
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E-mail China.org.cn, November 7, 2014
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Vice Finance Minister Zhu Guangyao delivers a keynote speech at the BRICS Economic Think Tank Forum Thursday in Beijing. [Photo: China.org.cn] |
"The New Development Bank (NDB) of the BRICS countries is an important supplement and improvement to the current global financial system, and the World Bank in particular. The NDB is definitely not a substitute for the World Bank," Zhu Guangyao, China's vice finance minister said at the BRICS Economic Think Tank Forum Thursday in Beijing.
The NDB is a multilateral development bank operated by the BRICS states (Brazil, Russia, India, China and South Africa) to foster greater financial and development cooperation among the five emerging economies, which are characterized by their large size, rapid growth rate, huge market potential, high savings rate and large investment demand.
Top leaders from the BRICS countries signed a document to establish the long-anticipated NDB at the sixth BRICS summit held in Fortaleza, Brazil, on July 15, 2014. Headquartered in Shanghai, the new BRICS Bank, with US$50 billion in initial capital, will finance infrastructure and sustainable development projects. A US$100 billion Contingency Reserve Arrangement was also agreed at the summit, to provide assistance to members in financial difficulty.
"The BRICS states valued economic growth highly, especially infrastructure construction. The establishment of the NDB has shown our solidarity," Zhu said. "We support the current global financial institutions and pay our obligations to the World Bank and regional development banks. In order to promote infrastructure development, we should enhance cooperation and coordination with the World Bank," Zhu added.
The five member states have equal shares in the bank, 20 percent each. "This has shown the principle of fairness of the NDB. It's an innovation of global financial governance and supervision and represents the democratization of international financial relationships. This practice needs to be preserved and popularized," Zhu said.
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