July 22, 2015 (LBO) – The BRICS group of emerging economies launched its New Development Bank (NDB) in Shanghai on Tuesday with the promise of more financial security to its member states and developing countries.
Set up by Brazil, Russia, India, China and South Africa, it is seen by many as a counter to the influence of the US-dominated World Bank and IMF.
Nevertheless, President of the Bank, Kundapur Vaman Kamath, said: “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 will start with $50 billion in subscribed capital provided by the member countries which have pledged to double the amount in coming years. Operations will commence next year.
“This bank will place greater emphasis on the needs of developing countries, have greater respect for developing countries’ national situation, and more fully embody the values of developing countries,” Lou Jiwei, the Chinese Foreign Minister, said.
China, the world’s second largest economy, is the largest contributor providing 40% of its funds. In June, China also spearheaded the establishment of the Asian Infrastructure Investment Bank which had 57 signatory nations including Sri Lanka. China was the biggest contributor to the AIIB taking a 30% stake.
The BRICS group, which represents some 40 percent of the world’s population, accounts for about a fifth of global economic output.
The founding agreement of the BRICS NDB can be viewed here