- the new bank would be based in Shanghai, which doubtless pleased the Chinese, who in turn conceded that
- India would preside over the NDB for the first six years of its existence, followed by terms for Brazil, then Russia…
- they would back the NDB with a further $100 billion to act as a currency reserve pool should any member hit liquidity issues.
The NDB’s role will be to fund infrastructure projects in emerging nations, a role that the World Bank and the Asian Development Bank already play to a very significant extent across Africa and Asia. However, the presence of another funder with a real incentive to lend will doubtless be seen as a blessing to any developer or region with a major infrastructure project that needs to be got off the ground.The NDB initiative was first mooted in Delhi in 2012, and represents a fairly stunning victory for the BRICS, who have been saying for some years that they want and deserve a bigger say in the global scheme of things...as the current global financial order is very much a product of the big western powers in the period post the Second World War.
The NDB takes its place as part of a concerted push by the BRICS and Asia generally to do something to formalize the shift in the economic tide from west to east. The Holy Grail, of course, would be for the BRICS in general and China in particular, to succeed in their stated objective of finding an alternative global reserve currency to the U.S. dollar. By comparison with that objective, this is a fairly small step, but it remains a highly significant one.
If it can help to overcome Africa’s chronic infrastructure deficit, for example, then the creation of the NDB will turn into a real blessing instead of being merely the BRICS’ way of “cocking a snook” at the IMF and the World Bank.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
* http://www.qfinance.com/blogs/anthony-harrington/2014/07/18/brics-bank-becomes-a-reality-what-next (© Bloomsbury Information Ltd, 2009–13. All Rights Reserved.)
Follow the munKNEE!
- Register for our Newsletter (sample here)
- Find us on Facebook
- Follow us on Twitter (#munknee)
- Subscribe via RSS
Frustrated with what they viewed as being ignored by the West and not having a prominent role in institutions like the World Bank and the International Monetary Fund, Brazil, Russia, India, China and South Africa (also known as the BRICS countries) have held their second summit…[and declared war on the U.S. dollar. Let me explain.] Words: 572 Read More »
The U.S. holds great power over international monetary transactions via the SWIFT network system given the USD’s world reserve currency status…It is entirely possible, however, that China and its closest partners might someday implement their own SWIFT system…The world’s players could then choose between the two and, given the resentment that exists worldwide toward the U.S. for the bullying of FATCA, many would likely align with China in their SWIFT system. In doing so it would eliminate their need to comply with FATCA and other draconian U.S. demands [which might well bring about a swift] end to the U.S. dollar as the world’s default currency. Read More »
The American dollar will be overthrown…in as short a period as 5 to 10 years says one analyst while another believes it will happen as early as 2015, 2016 latest. Here’s why. Read More »