Category Archives: 3.31.12 World Bank Open to Partnering Brics Bank
When you read this article, one has to ask why there needs to be a seperate BRICS bank from the world bank? If the world bank is loaning money to these countries and has commitments as large as the ones to India, then why? Why is the right question. If you have read Perkins book, The confessions of an Economic Hitman, then you would know why these countries want no more to do with the world bank and want to start and share their own version of it.
This should also enlighten you all that things are STILL not well in the upper echelons on the finance world so how can we RV yet?
World Bank Open to Partnering Brics Bank
NEW DELHI – The World Bank is interested in partnering the development bank proposed by the top five emerging economies, its president Robert Zoellick said Friday, but he listed possible hurdles in the way of creating such a multilateral lending agency.
Brazil, Russia, India, China and South Africa have asked their finance ministers to study the possibility of setting up a development bank that they hope could offer an alternative to the U.S.-dominated World Bank.
“It’s not an easy sort of task,” Mr. Zoellick said at a news conference.
The Brics members need to agree on capital composition, governance structure, location, and on the person who would head the organization, he added. Getting a top credit rating to ensure access to cheap cash would also be one of the key challenges for the Brics bank, Mr. Zoellick cautioned.
The Brics members Thursday signed two pacts that would allow their export-import banks to offer credit in local currencies. The move, which is aimed at boosting trade among the countries, underscores a growing resolve to tighten financial cooperation.
Mr. Zoellick said the World Bank, already a partner of regional development banks, would be open to sharing its knowledge on global operations and even pursuing opportunities for joint financing with the proposed Brics bank.
“I suspect we would be able to complement each other,” he said.
The World Bank, which plans to lend India at least $1.8 billion annually to fund development initiatives, said its International Finance Corp. unit will invest $1 billion in the South Asian country this year.
The World Bank group has so far invested $42 billion in Asia’s third-largest economy, Mr. Zoellick said, while expressing his confidence on India’s potential to grow at about 7%.
He added that the global economy remains under pressure as tension between Iran and the West threatens to squeeze crude oil supplies and push up prices.