The New Development Bank (NDB) was officially launched by the BRICS group yesterday, and many global financial analysts see it as direct competition to the World Bank and the International Monetary Fund (IMF). The BRICS group is made up of the following countries – Brazil, Russia, India, China and South Africa, and its new bank is designed to provide developing companies with large capital loans specifically for internal infrastructure projects. The bank’s first President is Kundapur Vaman Kamath from India (this role will be rotated amongst the group’s members), and he stated the bank’s creation was “to improve and complement the system in our own way” – not as a rival to the World Bank and the IMF. Furthermore, the Russian Foreign Minister, Sergei Lavrov, added the group’s formation demonstrated “a new polycentric system of international relations.”
However, it is China’s role in the new BRICS group and its newly-launched bank that has given analysts most food for thought. The NDB currently has an operating capital of around $50 billion, the majority of which has come from China. That will more than double in future years, with most of the new capital coming again from China. Following the recent launch of another Chinese-led bank, the Asian Infrastructure Investment Bank, it is clear that China is seeking to become the new world financial power, unseating the U.S. in the process.
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