BRICS Development Bank gets Green Light - 23rd Apr 2012

In a first step to set up a development bank as counterweight to the US/EU-led World Bank and the IMF, the Finance Ministers of the BRICS member countries have met up this weekend on sidelines of the annual Spring Meeting of the World Bank and the IMF to discuss this important step.

In their consultations South Africa and other members of BRICS grouping have agreed on Sunday 22 April 2012 to establish a task force to come up with recommendations to set up a developmental bank, a move that has received "good vibrations" from the World Bank and IMF. "The fact that there would be a task force to elaborate on the proposal for a BRICS-led developmental bank has been agreed upon. We are all very enthusiastic about this," Kaushik Basu, the Chief Economic Advisor to the Finance Ministry of India said. There will be both policymakers from BRICS (Brazil, Russia, India, China and South Africa) and experts who will partake in this, he said. "The exact structure of such a task force or experts group will soon be worked out," Basu said, referring to the decisions made by the BRICS Finance Ministers when they met. "I have to say, contrary to earlier BRICS meetings, this time it was evident that all five countries are very enthusiastic about the importance of the new development bank. On this even from the World Bank and the IMF we have received good vibrations and they had conversations with several leaders of the Bank and the Fund," Basu said. They recognise that today's global economy is so large that another new development bank does not really take away from any existing bank; "there is space for much more; indeed there is need for much more," he noted.

This was pre-empted earlier this month already by Robert Zoellick, the outgoing president of the World Bank, when he announced his support for the plans of the BRICS nations to set up a development bank. Zoellick had expressed his support for the plans of the emerging economies already at their summit in New Delhi and pointed out that the World Bank will work with the new development body.