BRICS dev’t bank launches in China

brics

Five emerging countries of Brazil, Russia, India, China and South Africa popularly known by their acronym BRICS Tuesday established their long awaited New Development Bank (NDB) in Shanghai, China with a subtle aim of competing with US-dominated International Monetary Fund (IMF),and World Bank.

Like the two global financial giants, NDB plans to lend money to development countries in Africa, and Asia.

“Our objective is not to challenge the existing system as it is but to improve and complement the system in our own way,” NDB President Kundapur Vaman Kamath said at the launch.

The bank plans to start its lending operations in 2016.

The five emerging economies boast 40% of the world’s population.

At the recent BRICS summit in Russia, the Russian Foreign Minister said the new initiative “illustrates a new polycentric system of international relations”.

The bank’s initial capital will be $50 billion, but in a few year the member countries plan to double it.

“It can help avoid another crisis (like the 2008 global financial crisis) through establishing a fund pool within the BRICS, which can help cushion instability in the currency market” Li Daxiao, a Chinese Economic Analyst told AFP.

China, the world’s second economy is the leading contributor to the bank.