BRICS interests differ over joint bank: Zoellick

A plan to form a joint development bank by the BRICS group of the world’s most powerful emerging economies will have a hard time getting off the ground and could struggle to match the World Bank’s expertise,World Bank President Robert Zoellick said

Written by Reuters | Bhitarkanika Sanctuary,orissa | Published: March 30, 2012 12:50 am

A plan to form a joint development bank by the BRICS group of the world’s most powerful emerging economies will have a hard time getting off the ground and could struggle to match the World Bank’s expertise,World Bank President Robert Zoellick said.

Deflecting criticism that the World Bank is too dominated by the United States,Zoellick said it had changed dramatically in his term,with a managing team now made up of many more figures from the emerging world.

Leaders from Brazil,Russia,India,China and South Africa were meeting in New Delhi on Thursday to outline plans for a new bank which will help fund infrastructure and act as alternative lender to the World Bank and other finance bodies.

Zoellick told Reuters in an interview late on Wednesday that there are already a series of regional development banks and many countries have their own such banks,but if a BRICS bank was formed,the World Bank would work closely with it.

“I think the interests of India may be more in terms of bringing capital in,the interests of China may be more in terms of internationalising the Renminbi. I think Russia is a little uncertain and Brazil has a very big development bank,” he said.

“The World Bank works with private sector funders,development banks,regional banks and we’d work with a BRICS bank,but it would probably be difficult for it to replicate the knowledge and expertise that we fund.”

Zoellick,who was visiting a bank-funded coastal conservation project in east India’s Orissa state,told reporters later that setting up a new bank was “a complicated venture” which would present challenges such as getting capital and a good rating from international financial agencies.

The head of the global money lender is ending his five-year term in June and the job is now one of the most hotly contested,with a United States candidate for the first time being challenged by two contenders from the developing world.

Under a so-called “gentleman’s agreement” between the United States and Europe,Washington has claimed the top post at the World Bank since its founding after World War Two,while a European has always led the International Monetary Fund (IMF),its sister Bretton Woods institution.

There have been calls by BRICS and other developing nations that these top positions should better reflect the growing power and influence of emerging economies,which are now responsible for more than half of global economic growth.

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