Modi to launch 1st multilateral engagement with BRICS leaders

Prime Minister Narendra Modi will launch his first multilateral engagement with BRICS leaders, giving top priority for the establishment of the BRICS development bank with equal share holding for all the five members.

India is keen on the issue of equal share holding since it does not want a repeat of the distortions that have crept into Bretton Woods institutions like IMF, World Bank and the Asian Development Bank in which rich countries like the US and Japan have a strangle hold.

Ahead of the BRICS Summit tomorrow in this north eastern coastal city, Modi will meet Chinese President Xi Jinping and Russian President Vladimir Putin on the sidelines to discuss the issue relating to the New Development Bank.

He will also discuss the possible outcomes of the summit on other issues like reforms of the UN Security Council and international financial architecture.

Sources said India’s primary goal is equal shareholding for all the members – Brazil, Russia, India, China and South Africa.

BRICS development bank

The BRICS Development Bank, an idea which was conceived in Delhi in 2012 and approved in Durban last year, is to be set up with an initial corpus of $50 billion, with scope for expansion upto $100 billion when new members are added.

For the initial $50 billion, India wants equal contribution by all the five members of $10 billion. This is because India does not want the development bank to fall into the ownership pattern of IMF and World Bank, with a distorted shareholding.

The other priority for India is about the presidency of the bank and the name to be given for it. Apparently, India would like it to be called the New Development Bank, an expression used by Modi in his departure statement yesterday.

“I also look forward to our discussions to further advance intra-BRICS economic cooperation and our collective efforts to advance global economic stability and prosperity.

In particular, I look forward to the successful conclusion of major BRICS initiatives like the New Development Bank and the Contingent Reserve Arrangement, which have seen significant progress since their launch in New Delhi in 2012,” Modi said in the statement.

“These initiatives will support growth and stability in BRICS and also benefit other developing countries,” he said.

India wants the modalities for the establishment of the bank through a simple route and not a complicated one.

It wants to avoid the pitfalls of the Bretton Woods institution of one who pays more calls the tune.

Talks with China, Russia

During his meetings with Chinese and Russian presidents, bilateral issues may also come up but no big ticket items are likely to be decided since it would be a get to know meeting.

Both Xi and Putin are likely to visit India in September and November-December respectively this year.

While with Xi it will be Modi’s first meeting, he has already met Putin on earlier occasions.

With China, Modi may discuss the need for maintaining peace and tranquillity along the border so that bilateral problems can be resolved in an amicable manner.

Bilateral trade will also come up for discussion with the Chinese leader and India is keen that the present imbalance in trade should be resolved. Modi is also keen on Chinese investment in India.

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