Following BRICS development bank initiative with great interest: IMF

The International Monetary Fund has said that it is following with “great interest” the recent announcement by the leaders of Brazil, Russia, India, China and South Africa (known as BRICS) to establish a development bank.

Unlike World Bank, the IMF, however, stopped short of welcoming the plan.

“On the development bank, we’re following this initiative with great interest,” IMF spokesperson Gerry Rice said at his weekly news conference at the IMF headquarters in Washington.

Infrastructure gap

“The issue it seeks to address, which is the infrastructure gap in developing countries, is indeed a key constraint to sustainable growth, especially in Africa, and hence of direct concern to us,” he said.

Rice said efforts to mobilise resources for infrastructure and sustainable development in developing countries are important steps.

Earlier over the week-end, the World Bank had welcomed the BRICS announcement in Durban.

“We welcome the announcement of the establishment of a BRICS Development Bank and stand ready to work closely with the new bank to end poverty and build shared prosperity throughout the developing world,” the Bank had said.

The World Bank Group already works with all the BRICS countries sharing its knowledge and making available financial resources, a spokesperson of the bank had said.

“A major part of the World Bank’s strategy is to partner with the regional development banks, NGOs, civil society groups, and national development banks to enhance the effectiveness our collective work,” he said.

“We anticipate that the new BRICS bank will be an invaluable partner in this effort,” he said.

The official noted that BRICS countries have a key role to play in helping to promote global growth.

Infrastructure investment

“One of the driving forces behind the development of the BRICS bank is the desire to increase investment in infrastructure. The World Bank shares this concern,” he said.

Noting that establishing a development bank is a significant undertaking, the official said the World Bank awaits the details related to the new bank’s financing, governance, and location and stands ready to assist this newest player in global development any way it can.

Quota reform process

Meanwhile the IMF spokesperson said the international body is close to finishing the quote reform process.

“We’re very close to the finishing line, to the completion of that, and we’re urging all our member countries to implement that as speedily as possible,” Rice said.

“The US has indicated its support for moving forward with the reform as expeditiously as possible, and we welcome that indication,” he said.

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