5 years ago256 views
At the annual BRICS summit t s week in South Africa, Chinese leader Xi Jinping gave his blessing to the start of a new BRICS development bank.
The group of BRICS nations is made up of Brazil, Russia, India, China and South Africa, all economic powerhouses shaping the world's economy.
The question now is what type of role will BRICS countries play in the world economy and what is the place of this new bank?
An economist at Columbia University thinks the development bank will serve a niche not filled by existing institutions like the International Monetary Fund and the World Bank.
[Graciela Chichilnisky, Economics Professor, Columbia University]
"Particularly for the developing nations, particularly for Latin America and Africa, who depend very strongly and unhappily on the IMF and the World Bank. This now becomes an alternative."
But she says the role that China is playing in developing nations has set a bad precedent. Something she hopes the new bank will not follow.
[Graciela Chichilnisky,Economics Professor, Columbia University]
"China is starting to play a colonialist power role in Africa and Latin America, Seventy percent of exports of Latin America are raw materials -- in the year 2012. Ninety or more in Africa. And guess who is the biggest trading partner, the biggest importer of natural resources from Latin America--China."
Some rights groups are wary that the new bank will provide funding but not require stipulations on things like better human rights and environmental protection.
One researcher at the Overseas Development Institute says that strings-free funding is not necessarily a bad thing, as long as the money is used in a responsible way.
[Romilly Greenhill, Research Fellow on Aid, ODI]
"Countries end up doing things because the donors are telling them to because they feel they need to jump through the hoops to get the cash but what they really need is development that suits their own strategies and their own priorities, because we know that that's the best way to use aid successfully in the long run."
The World Bank said in a statement that it is supportive of the new bank and looks forward to working with it to alleviate poverty and raise prosperity in the developing world.
The IMF was less enthusiastic, saying it was watching the development of the new BRICS bank with interest.
Holly Kellum, NTD News.
For more news and videos visit ➡ http://english.ntdtv.com
Follow us on Twitter ➡ http://twitter.com/NTDTelevision
Add us on Facebook ➡ http://on.fb.me/s5KV2C