Emerging Nations Bloc to Open Development Bank
Emerging Nations Bloc to Open Development Bank
"There may be potential cracks in the facade of unity once China asserts its interests," comments COA’s Eric Farnsworth on the establishment of a BRICS development bank.
RIO DE JANEIRO — At a meeting in Brazil, the leaders of Brazil, Russia, India, China and South Africa announced on Tuesday that they were establishing a development bank to challenge the influence of venerable institutions like the World Bank and the International Monetary Fund.
The New Development Bank, which will be based in Shanghai, will open with an initial capitalization of $50 billion....
Nations like Brazil already have huge development banks that dwarf the World Bank in size. Still, leaders in emerging economic powers chafe at the policy prescriptions coming from the World Bank and the I.M.F., which emerged from the Bretton Woods monetary conference in New Hampshire 70 years ago.
While the United States has long wielded influence in the global economy through those institutions, China, which accounts for about 70 percent of the collective gross national product of the countries represented at Fortaleza, has tried to play down its staggering economic weight in the bloc. But that could change over time, analysts said, if animus grows over China’s trade surpluses with other members.
“There may be potential cracks in the facade of unity once China asserts its interests,” said Eric Farnsworth, vice president of the Council of the Americas and the Americas Society in the United States....
