ul 17 2014 : The Economic Times (Delhi)
First Indian Head can Safeguard Country's Interests at BRICS Bank
DEEPSHIKHA SIKARWAR
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NEW DELHI
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India may have lost out to China on hosting the proposed BRICS Bank, but the government is happy that New Delhi gets to head it from the start, which will give it room to safeguard its interests.The BRICS Bank, which the leaders of India, China, Brazil, Russia and South Africa endorsed on Tuesday at a summit in Brazil, will be headquartered in Shanghai, China's business capital.
India will head the bank for the first five years, followed by Russia and Brazil. China will get the presidency only after two decades, a decision taken to address concerns over the country acquiring an unusually large say in the bank, which will fund infrastructure projects in member countries.
“The first president will shape the design of the bank. This means the developing countries' needs, peculiar circumstances, experience, would be fully factored in, which would mean protecting Indian interests. HRD policies would also be designed to make best use of Indian talent,“ said a senior finance ministry official.
The bank will have $50 billion in equity capital, contributed equally by the five members, giving them an equal voice, a victory for India and Brazil, which had resisted China's attempts for a greater share.
“India has huge requirements industrial corridors, 100 smart cities, housing for all, total sanitation. This will be a good source,“ said the finance ministry official.
The BRICS Bank will be able to leverage its strong balance sheet and strength of sovereign rating to raise long-term resources to fund infrastructure.
Finance secretary Arvind Mayaram called the decision a landmark one that “establishes a multilateral financial institution shaped by the changed global economic reality“.
“After Bretton Woods, this would be the first multilateral financial institution of standing established by the emerging market economies and not by the developed economies,“ Mayaram told ET from Brazil.
The bank has been in the making for over two years out of frustration with the developed world in giving emerging economies a bigger say in the International Monetary Fund (IMF), which was conceived at a UN conference in Bretton Woods, New Hampshire, in 1944.
Quota reforms of September 2010 that would see India's share in the IMF rise to 2.75% from 2.44% have been stuck because of lack of support from the United States.
India will head the bank for the first five years, followed by Russia and Brazil. China will get the presidency only after two decades, a decision taken to address concerns over the country acquiring an unusually large say in the bank, which will fund infrastructure projects in member countries.
“The first president will shape the design of the bank. This means the developing countries' needs, peculiar circumstances, experience, would be fully factored in, which would mean protecting Indian interests. HRD policies would also be designed to make best use of Indian talent,“ said a senior finance ministry official.
The bank will have $50 billion in equity capital, contributed equally by the five members, giving them an equal voice, a victory for India and Brazil, which had resisted China's attempts for a greater share.
“India has huge requirements industrial corridors, 100 smart cities, housing for all, total sanitation. This will be a good source,“ said the finance ministry official.
The BRICS Bank will be able to leverage its strong balance sheet and strength of sovereign rating to raise long-term resources to fund infrastructure.
Finance secretary Arvind Mayaram called the decision a landmark one that “establishes a multilateral financial institution shaped by the changed global economic reality“.
“After Bretton Woods, this would be the first multilateral financial institution of standing established by the emerging market economies and not by the developed economies,“ Mayaram told ET from Brazil.
The bank has been in the making for over two years out of frustration with the developed world in giving emerging economies a bigger say in the International Monetary Fund (IMF), which was conceived at a UN conference in Bretton Woods, New Hampshire, in 1944.
Quota reforms of September 2010 that would see India's share in the IMF rise to 2.75% from 2.44% have been stuck because of lack of support from the United States.
