BRICS: India gets Presidency, Shanghai the Bank

A senior govt official involved in talks said China may walk away with bank’s headquarters in Shanghai.

Written by Vaidyanathan Iyer | Fortaleza | Updated: July 16, 2014 8:54 am
modi Prime Minister Narendra Modi with President of China Xi Jinping during the bilateral meeting in Fortaleza in Brazil on Monday. (Source: PTI)

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.

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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.

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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.

 

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  1. A
    arvind
    Jul 15, 2014 at 2:37 pm
    It is a fruitful visit. Our Maharashtra CM Antule had visited London to bring back Bhavani Talwar from London Museum. He could not able see that Sword forget about bringing back to India. After one visit Modi has got Presidency of new Bank, it is a good and commendable thing. Our Pratibhatai Patil had visited atleast 100 times to various foreign Cities, what she had done? Can she tell at least one things out of 100 visits which had any fruits that she had brought.
    Reply
    1. S
      Sbatra
      Jul 15, 2014 at 1:44 pm
      One year presidency for loss of permanent headquarters in China.
      Reply
      1. C
        C B
        Jul 15, 2014 at 4:48 pm
        f the BRICS are to be insutionaly balanced, its bank's headquarters should be located in South Africa. Such a bad move to choose a Chinese city instead.
        Reply
        1. G
          Girish
          Jul 15, 2014 at 1:27 pm
          china is the cat among pigeons.basing the bank there doesn't strike as a particularly bright idea when china is already aggressively getting into everybody's territory. president of the bank is just a post, and it will change.is this how modi sarkar firmly negotiate?resign yourself to china taking over more Indian territory then because our PM would much rather do business. profit at any cost, profit at all costs.
          Reply
          1. O
            OpinionatedOrator
            Jul 16, 2014 at 8:58 am
            There is no end to your baseless imagination, appreciation, and clueless criticism
            Reply
            1. O
              OpinionatedOrator
              Jul 16, 2014 at 8:56 am
              You don't have any clue what are you talking about? Read the timeline of the events and you will realize setting up BRICS Bank was India's original idea during UPA's tenure
              Reply
              1. J
                jayplanes
                Jul 15, 2014 at 1:29 pm
                $ 50 Billion is a good start, but to be a heavy weights in this field -IMF and World Bank, the capitalization should rapidly aim to $ 100 Billion mark. Low capitalization will ensure playing second fiddle to the Brentwoodies.
                Reply
                1. J
                  jayplanes
                  Jul 15, 2014 at 4:41 pm
                  India can have the headquarters when 5 essentials for a headquarters are met- 24-7 water, 24-7 electricity, no hartals, no communal violence, no temperamental politicians in the opposition. China can ure 24-7 water, 24-7 electricity, zero hartals, zero communal violence in its capital, and absolutely zero opposition- temperamental or otherwise. Mr. Modi - the genius in diplomacy understands that and opted for two things that could be achieved - a) the first Presidency, b) equal partner status in shares and voting rights for all the member countries forming the bank.
                  Reply
                  1. K
                    kalhan bhat
                    Jul 16, 2014 at 5:37 am
                    I want o ask u what logic can we give to china for not havingf HQ at shanghai, given that we have taken fist presidency and also held the main issue of equal share. Is china a fool that it will leave presidency for two decades and also agee fo equal shareholding. Imagine the clout that India can build in two decades, who knows after 20 years china will still enjoy this much clout.
                    Reply
                    1. K
                      kalhan bhat
                      Jul 16, 2014 at 5:34 am
                      It is 6 year presidency
                      Reply
                      1. K
                        kalhan bhat
                        Jul 16, 2014 at 5:55 am
                        It is 6 year presidency with 5 years each for Brazil, Russia and SA to follow before China gets its term
                        Reply
                        1. B
                          Balu
                          Jul 15, 2014 at 2:43 pm
                          This is not a good idea.. We should have opted for heardquarters in india - and the presidency can always come later.. We missed an opportunity i guess..
                          Reply
                          1. M
                            Manish
                            Jul 15, 2014 at 4:42 pm
                            Good move! China headquarter makes strategic sense because if ever pro-US Rahul/Congress comes to power, they could try to undermine the bank. Since China has one party rule, the Bank can never be manited. After the BRICS Bank, the next logical step would be to establish an alternative to the United Nations. The UN is a puppet of US and its NATO cronies, and has been hijacked by the "West". BRICS should invite countries from Latin America, Africa and Asia to join the UN-alternative and leave aside US-lackeys like UK, Europe, Australia and New Zealand. We must democratise world partition in the "new world order".
                            Reply
                            1. M
                              mango man
                              Jul 15, 2014 at 2:53 pm
                              India is the weakest among BRIC nations .... U KhanChris guys have sold the nation and could not stand up against even Mauritius. Modi is the best thing that has happened to India in last 60 years. India will grow sensibly and steadily under his able leadership.
                              Reply
                              1. M
                                modibhakt
                                Jul 16, 2014 at 5:30 am
                                China is using the BRICS to cover its covert support for terrorist and unstable states such as stan , North Korea , Sri Lanka, Venezuella et al . India under Modi is satisfied with crumbs , This Bank will lend to stan , North Korea , Iran , ISIS , Sri Lanka for repression and PLA projects , our 10 billion will be wasted , some IAS will be the new Krishna Menon of 2014 , whereas we could have developed 400 nuclear war heads on Agni 6 to ensure total annhilation of the Han if they try to attack us . Gujju gubbara AKA Modi will shown up soon as bad as the Italian Au Par Sonia Maino , god save the country from both !
                                Reply
                                1. M
                                  Mohanlal Com
                                  Jul 15, 2014 at 3:45 pm
                                  India should not partite if the bank is not headquartered in India.
                                  Reply
                                  1. A
                                    Archana Newcomb
                                    Jul 16, 2014 at 5:35 pm
                                    A couple of points:1. Presidency comes and goes, headquarters remain. Also, HQ brings many jobs and infrastructure development. Unfortunately, presidency is just one job.2. Has anybody considered potential for Chinese spying when the bank will be based in Shanghai.
                                    Reply
                                    1. P
                                      Purush
                                      Jul 15, 2014 at 1:34 pm
                                      Good and bad. We must recognise that Presidency is a 'Tenure based' position and can go to anyone after the tenure is over. The location is a fixed thing and does not change with page of time.
                                      Reply
                                      1. R
                                        Reghu Varma
                                        Jul 15, 2014 at 6:36 pm
                                        What matters is that India could go ahead in giving concrete shape and life to the establishing the bank. Hoe the new bank will be used by India that really matters more than having its H.Q. in India.
                                        Reply
                                        1. C
                                          ccc
                                          Jul 15, 2014 at 4:38 pm
                                          India is a weak country, temporary presidency vs permanent headquarters and even then India had to fight for presidency "We fought hard for the presidency. We will get it" NO ACHIEVEMENT THERE. this makes be feel inferior and ashamed of my ideny as a Indian.
                                          Reply
                                          1. C
                                            ccc
                                            Jul 15, 2014 at 4:30 pm
                                            Modi has got a weak India thanks to visionless congress led by sonia & chamchas, negotiations were in the last stage what could Modi do now ? maybe in the next tenure china will get presidency and headquarters is already there. The strong China will never cede an inch in any sphere to weak India, that's reality.
                                            Reply
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