BRICS Bank Could Change the Money Game
Date: Friday, 23-Mar-2012
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India believes a joint bank would be in line with the growing economic power of the five-nation group. The bank could firm up the position of BRICS as a powerful player in global decision-making.
"The BRICS bank does not need much capital for a start," Alexander Appokin, senior expert at the Moscow- based Centre for Macroeconomic Analysis and Forecasting tells IPS. "What is more important is that the BRICS development bank presents a unique opportunity for indirect investment of central bank foreign reserves inside the countries."
A BRICS bank could for example issue convertible debt, which would arguably be top-rated and can be bought by central banks of all BRICS countries. BRICS countries would thus have a vessel for investment risk-sharing.
"China will be the biggest beneficiary of that," says Appokin. "Moreover, infrastructure investment mostly needs not just long-term financing but external monitoring for more transparency and efficiency increases. Here, a BRICS development bank could offer some advice for successful implementation of regional projects."
But, he cautions, "development structures like a BRICS bank are effective only in case they are given independence in project financing decisions from the governments, or at least room to operate in long- term development framework."
Yuhua Xiao, assistant professor at the Institute for African Studies in the Zhejiang Normal University (ZNU) in China says the idea of setting up a development bank for financing projects in these countries is a sign of the growing self-assertiveness and of independence or interdependence of emerging economies.
"As the emerging powers' approaches to development may differ from established norms, such an institutional set-up will test the possibility of cooperation in a different framework which might generate new ideas," Yuhua tells IPS in an emailed comment.
India's proposal for a BRICS bank was long overdue, says John Mashaka, financial analyst at Wells Fargo Capital Markets. "It is a way the emerging nations are trying to pull out of the western dominated World Bank and the IMF," he tells IPS.
Read more: http://ipsnews.net/news.asp?idnews=107115
Date: Friday, 23-Mar-2012
.
India believes a joint bank would be in line with the growing economic power of the five-nation group. The bank could firm up the position of BRICS as a powerful player in global decision-making.
"The BRICS bank does not need much capital for a start," Alexander Appokin, senior expert at the Moscow- based Centre for Macroeconomic Analysis and Forecasting tells IPS. "What is more important is that the BRICS development bank presents a unique opportunity for indirect investment of central bank foreign reserves inside the countries."
A BRICS bank could for example issue convertible debt, which would arguably be top-rated and can be bought by central banks of all BRICS countries. BRICS countries would thus have a vessel for investment risk-sharing.
"China will be the biggest beneficiary of that," says Appokin. "Moreover, infrastructure investment mostly needs not just long-term financing but external monitoring for more transparency and efficiency increases. Here, a BRICS development bank could offer some advice for successful implementation of regional projects."
But, he cautions, "development structures like a BRICS bank are effective only in case they are given independence in project financing decisions from the governments, or at least room to operate in long- term development framework."
Yuhua Xiao, assistant professor at the Institute for African Studies in the Zhejiang Normal University (ZNU) in China says the idea of setting up a development bank for financing projects in these countries is a sign of the growing self-assertiveness and of independence or interdependence of emerging economies.
"As the emerging powers' approaches to development may differ from established norms, such an institutional set-up will test the possibility of cooperation in a different framework which might generate new ideas," Yuhua tells IPS in an emailed comment.
India's proposal for a BRICS bank was long overdue, says John Mashaka, financial analyst at Wells Fargo Capital Markets. "It is a way the emerging nations are trying to pull out of the western dominated World Bank and the IMF," he tells IPS.
Read more: http://ipsnews.net/news.asp?idnews=107115