ministers of Brazil, Russia, India, China and South Africa are
expected to agree on setting up a BRICS bank when they meet here
Tuesday on the margins of the larger Summit among the leaders.
Their recommendation to this effect may also be endorsed in
principle by the leaders of the five-nation bloc a day later,
where India is being led by Prime Minister Manmohan Singh, who
arrived here Monday.
The proposal for a bank, with a collective foreign exchange
reserve and a fund for financing developmental projects, was
mooted as an alternative to the World Bank and the International
Monetary Fund (IMF).
Following that, an expert committee was set up, which has since
given its report. The meeting Tuesday, where Finance Minister P.
Chidambaram is leading India, is expected to endorse the
suggestions, sources said.
But the sources were also quick to add that the modalities were
yet to be firmed up and that the process could take at least two
years. Differences also remain on some key issues, notably the
size of the corpus.
Also remaining for resolution is the nature and role of the bank,
whether it will fund infrastructure, the private sector or
government schemes, as also if the loans will call for
concessional or market-driven rates.
"China wants a corpus of $100 billion. Some others are speaking
about $50 billion. This has to be reconciled. Then there is voting
rights and the key issue of governance. They all remain to be
resolved," an official said.
The five countries are otherwise clear that there has to be an
alternate mechanism to the Bretton Woods twins, comprising the
World Bank and the IMF, since they are more tuned to pursuing
policies set by the West.
At the same time, some countries within BRICS also do not want the
bank to end up being dominated by China.
(Arvind Padmanabhan can be contacted at email@example.com)