New Delhi: With 40 percent of the world market driven by emerging economies in the BRICS nations, including India, there is need for financial cooperation in the five-nation bloc and setting up of a common development bank, experts said Wednesday.
According to speakers from New Delhi, Moscow and Beijing, at a video conference on "BRICS: Anti Crisis Measures in Future", the BRICS Development Bank would help in promoting growth as well as boost trade between the five countries - Brazil, Russia, India, China and South Africa.
Vyacheslav Trubnikov, former Russian envoy to India, said via video link from Moscow that once the BRICS Development Bank is set up it should be ensured that the proceeds are not "bureaucratised" and it "works without any red tape".
The European economic slowdown can impact BRICS countries, but the joint development bank would give money for R&D and support to students, he added.
According to Nandan Unnikrishnan, vice president, Observer Research Foundation, while setting up the bank was a "good idea", there were "philosophical and logistical problems" that needed to be looked into.
"What will the bank do?...Will it supplant or supplement the World Bank and International Monetary Fund (IMF)?" Unnikrishnan asked.
He said the "biggest problem" would be to decide where to locate it. "We will need to have a headquarters and staff...these are ticklish issues. The bank should also be commercially viable," he added.
H.H.S. Viswanathan, distinguished fellow of the foundation, said intra-BRICS trade had grown 15 times from 2001, when South Africa was not a member, to 2011.
"BRICS aims to reform the global financial institutions, the World Bank and the IMF. Setting up the BRICS Development Bank, an idea propounded by Prime Minister Manmohan Singh, would help us in using the huge savings of the countries of the bloc," he said.
Viswanathan also said that cooperation between the five countries was continuing in the field of health, energy, food security and people to people. "There is a lot of progress," he said.
Chinese speaker Xu Tsiyuan, an expert in world finance from the Chinese Academy of Social Sciences, said Beijing has USD 3 trillion in forex reserves.
"We are thinking what to do with so much forex reserves. China has a lot of expertise in infrastructure building, like railways, highways, airports. Maybe we can have cooperation with BRICS countries to do projects in these areas," Xu said.
With the West, including the US, hit by an economic slowdown and China also suffering, Beijing was looking for newer markets. "BRICS is very important, its volume in world market is 40 percent," Xu said.