Brics nations likely to offer US, UK stake in development bank
The Brics group of emerging nations is likely to offer to countries such as the U.S. and the U.K. a stake of up to 45 percent in a development bank they are planning to set up.
Washington: The Brics group of emerging nations is likely to offer to countries such as the U.S. and the U.K. a stake of up to 45 percent in a development bank they are planning to set up.
Two Indian government officials with knowledge of the matter said that getting developed countries to be shareholders will help the proposed bank get a high credit rating and reduce its fundraising costs.
According to the Wall Street Journal, among the five Brics nations, Brazil, Russia, India, China and South Africa, all but China is rated just a notch above junk by global credit-rating firms.
China’s rating is several levels higher than its partners in the group. The U.S. and U.K. are among countries with highest ratings.
The officials said that the Brics nations plan to announce the road map for setting up the bank at the group's annual summit in Durban between March 25 and March 27.
According to the report, setting up of the development bank was first suggested by India in early 2012.
One of its targets is to guarantee emergency funding for the Brics nations and their trading partners at the time of global economic turbulence.
As per the current proposal, the bank will initially lend to infrastructure and development projects in the Brics countries, the officials said. It may later expand its offering to other developing countries.
If non-Brics members become shareholders, they may too get some voting rights in the proposed bank.
The Brics bloc represents 40 percent of the world’s population, with some estimating that it contributes about a fifth to the world economy, it added.