World Economy

Call for Early Establishment of BRICS Bank

Call for Early Establishment of BRICS BankCall for Early Establishment of BRICS Bank

China on Saturday urged BRICS nations to speed up the creation of a development bank as an alternative to the Western-dominated global financial system.

The BRICS group of emerging economic powers – which also includes Brazil, Russia, India, and South Africa – agreed in July to form the New Development Bank to finance infrastructure projects and an emergency reserve fund, AFP reported.

The Chinese have already chosen a site for the future Shanghai headquarters of the US$50 billion facility and China's vice finance minister Zhu Guangyao is keen to get moving.

"All (countries) share the view that they should speed up the process to have it completed as quickly as possible," he said on the sidelines of the G20 summit in Australia.

"And each country will identify feasible projects for the bank as quickly as possible, so that as soon as the bank is launched it will be able to immediately carry out (financing) processes."

Chinese state media has said the BRICS bank aims to reduce Western dominance of the global financial system, while criticizing multilateral agencies like the World Bank and the International Monetary Fund.

For the past 70 years, the International Monetary Fund and the World Bank have been the pillars of the world's economic system, coming to the rescue of countries in trouble and supporting development projects, respectively.

But the Bretton Woods institutions are regularly criticized for their inability to reflect the growing and important contributions of the major emerging economies to the global economy.

Since their creation in 1944, the IMF and the World Bank have only been led by Americans and Europeans.

 Russia Preparing

BRICS countries have begun the preparations for the ratification of an agreement establishing the group's New Development Bank, Vadim Lukov, Ambassador-at-Large and Foreign Ministry coordinator for G20 and BRICS affairs, said.

"Now all the parties are at different stages of the preparatory procedures for ratifying the agreement on the establishment of the [New Development] Bank," Lukov saud.

"Russia is also preparing to ratify this agreement. I know that the Ministry of Finance has already negotiated this document with the other government agencies involved. When it will be ratified depends on the State Duma," Lukov added.

The ministry's coordinator also emphasized that the issue of finding the group's political strategic partners among rising economies is particularly crucial.