CRI听力:BRICS Bank to Complement World Financial Mechanisms

The newly established New Development Bank, known as the BRICS Bank, will be on top of the agenda at the BRICS summit.

The bank, initialized last year at the sixth summit in Brazil, endeavors to help financing infrastructure and sustainability in the bloc and other developing countries.

Subir Gokarn, director of Brookings India, believes that BRICS bank will play an important role in India's infrastructure funding needs.

"Firstly it is the first concrete institution manifestation of the BRICS. So far, the BRICS has only been a grouping but it has not had anything concrete emerging from it. And this reflects the strongest bond, commonality between these countries because they are all basically strong, large economies who have very specific needs in terms of infrastructure development and so on. And the BRICS bank actually is going to provide an alternative channel for funding to be provided for these purposes."

The Shanghai-based Bank will have initial authorized capital of 100 billion U.S. dollars, and its initial subscribed capital of 50 billion U.S. dollars will be equally shared among the founding members.

In addition, the bank has set up a contingency fund of 100 billion US dollars to help BRICS countries to cushion short-term liquidity pressure.

Of the fund, China will provide 41 billion US dollars to the capital stock; India, Brazil and Russia each pay in 18 billion, and South Africa 5 billion.

Gao Fei, a professor at China Foreign Affairs University, says the bank and the fund will complement the existing global financial mechanisms.

"The current global financial system is a legacy of WWII, and reflects the post-war economic situation. But now 70 years has passed. The situation has changed dramatically with the increasing growth of emerging economies and developing countries. The western-led system has lagged behind the world financial and economic development. I think the BRICS bank and the contingency fund will add new impetus to the long-term, stable and continued growth of the world economy. "

The board of governors of the NDB has held its first meeting in Moscow during which members of the board of directors were appointed.

In addition, 68-year-old K.V Kamath, former Indian private banker, has been named as the first president of the BRICS bank.

Russian Finance Minister Anton Siluanov says the BRICS New Development Bank will work with other international financial institutions to promote infrastructure construction of the member countries.

"The initiation of a new bank will bring new funds and programs. This BRICS New Development Bank will benefit not only Russia but also all the other member countries. More projects will have funding with such international financial organizations. It will stimulate the development of the world economy."

The BRICS nations, accounting for about one fifth of the world GDP, have committed to making the bank a more inclusive, democratic and transparent international financial agency.

The bank will soon be open to all UN member nations besides its founding countries.

It will start operating at Lujiazui, Shanghai's financial hub, at the end of this year.

The BRICS leaders are expected to map out the first five-year plan during the Summit for the bank in Ufa.

For CRI, this is Qian Shanming.