FE@CAMPUS MASTERMIND: Response by Kapil Jain to question for April 1-7

Development of BRICS development Bank will help these developing countries to put forth an image to IMF and World Development Bank,which will clearly indicate end to autocracy of US-European solidarity. In past,World Development Bank and IMF has applied lot many conditions on infrastructure financing to underprivileged/poor countries and always held high-handed attitude while dealing with them. “Medicine provided by IMF and WDB was creating more harm than disease”. After the incident of Asian Crisis and its (IMF and WDB) performance in Latin America,it faced mixed feeling and criticism worldwide.

Now is the time when BRICS development Bank,which constitutes of five nations (Brazil,Russia,India,China and South Africa) representing 43% of world population and has a combined GDP of US$ 14.9 trillion to tout an answer to WDB and IMF.

Main motive of implementation of BRICS development Bank is to supplement efforts of other financial institutes for worldwide growth and development. Due to insufficient long term financing and FDI in Capital Goods,infrastructure development remains a big challenge to developing nations. BRICS bank can address this problem with an initial capital funding of US $100 billion (proposed figure). Bank would also help to forestall short-term liquidity pressure,provide mutual support and strengthening financial stability among each other. Being the developing nations,BRICS also attract 20% of total FDI flows and is also playing an important role in common annual economic growth of 4%,in contrast to 0.7% of financial growth of seven (biggest) financial countries.

Kapil Jain

kapil.jpgp12@spm.pdpu.ac.in