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Business

April 1, 2012

Five nations plan to back development bank

THE ASSOCIATED PRESS Associated Press

NEW DELHI (AP) — The leaders of five of the world's fast-rising powers have agreed to move toward creating a new development bank that would improve access to capital for poor nations.

Accusing current international institutions of failing to lift up poor countries, the BRICS group — Brazil, Russia, India, China and South Africa — last week asked their finance ministers to investigate setting up a development bank like the World Bank or Asian Development Bank that they would back. They also agreed to boost business and trade in their own local currencies.

"Institutions of global political and economic governance created more than six decades ago have not kept pace with the changing world," India's Prime Minister Manmohan Singh told the gathering. "Developing countries need access to capital."

The five countries represent 45 percent of the world's population, a quarter of its land mass and a quarter of its economy at $13.5 trillion. World Bank President Robert Zoellick, underscoring the importance of the emerging world's biggest economies with his own trip to India, welcomed the idea of a new development bank.

"We will be looking forward to working with it to see how we can leverage one another's strength," he said, according to the Press Trust of India. "It will complement the type of work we do."

South Africa's President Jacob Zuma said the bank could "help us create good jobs."

The countries will look at the proposal again during next year's summit in South Africa.

Experts have questioned whether the bloc represents no more than just promising markets and financial opportunities. They have no common security platform and vast differences in foreign policy.

But the leaders insisted on the grouping's importance in shifting the global dialogue on international politics and finance.

Within the bloc "we have a place where we feel Africa is treated with respect," Zuma said. "There's no feeling that people are looking down upon the continent."

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