18 July 2014

Tanzania: More Global Institutions Welcome BRICS Bank

ESTABLISHMENT of a multilateral development bank by Brazil, Russia, India, China and South Africa (BRICS) is an opportunity to help the developing world bridge an 1trn US dollars (over 1,600trn/-) infrastructure financing gap.

World Bank Africa Communications Specialist, Ms Rosalie Ferrao, said there is a huge need for financing while capital is abundantly available.

"We welcome all efforts to mobilise additional capital to meet the infrastructure financing gap. We have made it clear that the World Bank Group is very open to working with this new institution,' Ms Ferrao said.

She said with 70 years of experience the Bank is working to deliver results on the ground in every corner of the globe to fight poverty and the lack of shared prosperity. Ferrao said Brics and World Bank have no choice but to work together to tackle the same problem.

"We welcome them because the problem is big enough for all of us to contribute. Clearly, the Brics countries have a key role to play in helping promote global growth," the World Bank Communications Specialist pointed out.

The World Bank Group works with all the Brics countries sharing knowledge and global experience, making available financial resources and partnering to assist other countries.

A major part of the World Bank's strategy is to partner with regional development banks, international organisations, national governments and stakeholders to enhance the effectiveness of our collective work. We anticipate that the new Brics bank will be an invaluable partner in this effort, she noted.

The Brics group of emerging powers launched a $50bn development bank last Tuesday to be based in Shanghai and a $100bn crisis contingency fund, according to a joint declaration.

The new development bank's first president will be from India, while the board's chair will be Brazilian, according to the declaration released at a summit in Fortaleza, Brazil.

The bank will have an initial subscribed capital of $50bn followed by an authorised capital of $100bn, equally shared among South Africa, Brazil, Russia, China and India.

The Contingency Reserve Arrangement will have an initial size of $100bn and will help countries avoid "short-term liquidity pressures, promote further Brics co-operation, strengthen the global financial safety net and complement existing international arrangements," the statement said.

The bank and fund are seen as counterweights to the Western-dominated World Bank and International Monetary Fund, which Brics nations say need more reform to give emerging nations more voting rights.

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