Development bank expands BRICS platform

The BRICS development bank will take shape at the fifth BRICS summit to be held in the eastern port city of Durban, South Africa, next month.

The governments of Brazil, Russia, India, China and South Africa will each make an initial capital injection of $10 billion to fund the bank, which will not only symbolize the unity of the world's five most dynamic economies and showcase the rise of emerging nations, it will also become a global tool for "mobilizing resources for infrastructure and sustainable development projects in the BRICS and other emerging economies and developing countries".

Despite their political and cultural differences, the five countries share many common economic and trade interests and similar views on global and regional political issues. The bank can play a constructive role in multiple arenas by capitalizing on the fact that between them the five members of BRICS have 26 percent of the world's land, 42 percent of the world's population, 20 percent of the world's GDP, 15 percent of the world's trade volume, and contribute about 50 percent of the world's economic growth.

Infrastructure projects give people access to opportunities. Even in China, which is the strongest of the five countries in infrastructure, more roads, airports, bridges, sewers, power plants, schools and hospitals need building or upgrading.

To ensure more people, especially the poor, in developing countries benefit from the bank, it should lend to both private and public companies as well as governments in and outside the BRICS if the proposed projects promote sustainable economic and social development and reduce poverty. These projects should include green technologies, biofuels, dams and nuclear power plants that the World Bank will not fund due to environmental and social concerns.

Additionally, the bank will be a platform for the BRICS to push for reform of the international financial system.

The five countries are major borrowers from the World Bank, as well as contributors of increasing funds to the International Monetary Fund, but they are discontent with their marginal role in the decision-making process in these Western dominated multilateral financial institutions. That was what was behind the joint declaration at the fourth BRICS summit in New Delhi in March last year that voiced their determination to "supplement the existing efforts of multilateral and regional financial institutions for global growth and development".