BRICS New Development Bank launched in Shanghai

The BRICS group of emerging economies launched its New Development Bank (NDB) in China on Tuesday.

The agreement on establishing BRICS New Development Bank was reached on July 15, 2014 in Brazil’s Fortaleza.

“NDB’s support for infrastructure construction will effectively ease the bottleneck that has constrained emerging and developing nations for (a long time) and will offer support for their economies’ upgrade and growth”, the minister said.

Kamath, 67, who will be the bank’s President for the first five years, said he was confident to deliver people’s expectation of the new bank.

NDB president Kundapur Vaman Kamath told Reuters: “Our objective is not to challenge the existing system as it is but to improve and complement the system in our own way”.

The bank is to start out with a capital of $50bn (£32bn) though the amount is to be doubled in the coming years.

Moscow – which has suffered huge currency fluctuations and struggled to attract investors since the outbreak of the crisis in Ukraine – sees the bank and a BRICS currency reserve pool as an alternative to worldwide financial institutions such as the International Monetary Fund and World Bank, which are dominated by the United States. Each nation will have an equal say in the bank’s management, regardless of GDP size, according its officials. It can promote cooperation among developing nations without undermining the roles of existing institutions like the World Bank, he said. In the AIIB, China will hold a veto power and is the biggest shareholder. China also led the establishment of another new worldwide bank, the Beijing-based Asian Infrastructure Development Bank. “We would like to congratulate K V Kamath, NDB president, and the founding members – Brazil, Russia, India, China, and South Africa – on this important occasion”, World Bank President Jim Yong Kim said in a statement.