The BRICS Bank. A Shift in Finance?
The New BRICS Banks-A New Paradigm?
In July 2015 Brazil, Russia, India, China and South Africa (BRICS) launched a new development finance institution focused on emerging economies-the New Development Bank. The launch of the bank marked an important shift in the global development finance sector as emerging and developing countries begin to assert their growing economic power. The bank is seen by many as a response to developing country critiques of global developing finance institutions such as the World Bank and the International Monetary Fund. The bank is based in Shanghai China. The bank’s initial operations with be focused on the five founding countries prior to expanding its activities to other emerging and developing countries around the world. The founding countries have committed to committing an equal amount of capital contribution in order to promote power sharing among the founding countries. The bank has also signalled an early commitment to ease lending restrictions by not requiring prescriptive reforms or conditionalities as part of the requirements of providing financing support to borrowing countries. The Bank’s investment strategy will focus on projects that I priority sectors such as infrastructure, power, and energy.
South Africa’s Leslie Massdorp is one of the Bank’s Vice Presidents and is in charge of the banks African regional centre in South Africa. Prior to his appointment Leslie has worked banking and economic planning. One his recent positions include a stint as an international advisor to Goldman Sachs, the US investment banking giant. As Leslie has been getting reading to take the helms of the bank’s operations in Africa, he has taken time to quiet concerns that the bank will seek to go into direct competition with global development finance players such as the World Bank and the International Finance Corporation. Leslie has been quick to point out that the New Development Bank will seek to collaborate with the other global players in development finance while pursuing its specific mandates that have motivated its founding.