After two days of hectic negotiations at the BRICS Summit India on Tuesday got the presidency of the BRICS New Development Bank. A senior government official involved in the talks said the bank will be headquartered in Shanghai.
China and Russia were in close coordination during the negotiations, after their recent multi-billion dollar gas deal.
“The BRICS Bank is an idea originally conceived by India. Every BRICS member is certain that such a bank is the need of the hour, particularly with the Bretton Woods institutions such as the World Bank and the IMF failing to give adequate representation to developing nations over the last many decades,” said the official.
The four issues that were open for discussion on the BRICS Bank were its name, location, presidency and shareholding. The bank has been formally named BRICS New Development Bank.
South Africa, which was originally pitching for the presidency, withdrew its bid and backed India instead. South Africa sees in India an ally at the World Trade Organisation talks, particularly in areas of agriculture, concessions to LDCs and non-binding issues.
India has ensured that all countries have equal shareholding in the bank, with equal contribution to the capital.
“Equal shareholding is a fait accompli now. Nobody wants BRICS Bank to end up like the Bretton Woods institutions,” said the official.
The project costs would be based on a formula depending on the economic weight of the member countries. “We have a large number of new big projects. We will gain,” said an official.
The bank will be capitalised at $ 50 billion, with each country chipping in $ 10 billion over the next seven to eight years.
Under the earlier UPA government, India had agreed to China’s demand for locating the bank’s headquarters in Shanghai. “We fought hard for the presidency, and we got it,” said the official.