India announces first BRICS Bank President

File Photo: KV Kamath

Ahead of the 7th BRICS Summit in Russia, the Indian government on Monday announced the appointment of Indian banker Kundapur Vaman Kamath as president of the $100 billion New Development Bank being set up by the BRICS. Kamath has earlier worked with the Asian Development Bank and was the FORBES ASIA’s 2007 Businessman of the Year.

The BRICS Bank launched last year will fund infrastructure projects in Brazil, Russia, India, China and South Africa, and challenge the dominance of the Western-led World Bank and the IMF.

The bank is likely to be operationalised within one year, Indian Finance Ministry official Rajiv Mehrishi said.

Russian Finance Minister Anton Siluanov will become the bank’s first Chairman of the Board of Governors, while the first chairperson of the Board of Directors will be Brazilian. South Africa will establish an African regional center for the bank.

Leaders of of BRICS had in 2014 reached an agreement to establish the New Development Bank, with its headquarters in Shanghai. Russia’s Finance Minister Anton Siluanov told reporters after the Summit in Brazil that the BRICS decided in favor of Shanghai because the city offers better infrastructure, opportunities to capture private funding, and is home to more investors than the competitors.

South African Trade and Industry Rob Davies said last year that although the capital of the New Development Bank and the Contingency Reserve Arrangement had been set at $100 billion each, this did not mean that this capital would necessarily be held in US dollars.

“We want to move away from the same old, same old way of doing things. What currencies the capital will be held in is something that will be part of the Sherpa process with the pace set by Brazil, but we expect substantive progress by the time of the next BRICS summit in Russia in June 2015,” he said.

The BRICS combined GDP grew 300 per cent in the last decade as opposed to 60 per cent growth registered by the developed world.

The launch of the bank and the $100 billion currency reserve pool in July is their first concrete step toward reshaping the Western-dominated international financial system.

“For the past 15 years, the BRICS have been seen as the world’s best hope for sustainable growth. These five countries, representing 40 per cent of the world’s population and 25 per cent of its GDP in 2013, recorded growth rates 4 to 5 times greater than those of the US, Europe and Japan, and threatened to displace them as the world’s most important economic powers in another 20 years or so,” say Prof. Ingo Walter and Prof. Roy C. Smith of the New York University, writing for The BRICS Post.

 

TBP