“The
New Development Bank, popularly known as the BRICS bank, established
by Brazil, Russia, India, China and South Africa should start work
before the end of the year. The bank will be based in Shanghai, but
its first chairman is India's Kundapur Vaman Kamath. The importance
India attaches to this post is shown by Kamath's prior post as
chairman of ICICI Bank, India's largest private lender. The NDB will
have US$50 billion in capital and a US$100 billion currency exchange
reserve that members can tap in case of balance of payment crises.
The BRICS bank is important in itself but also because it is the
nucleus of something which, if successfully developed, will be
world-changing.”
“To
understand the sheer scale of BRICS, let us compare it to the G7
group of advanced economies. BRICS countries account for over 40
percent of the world's population compared to the G7's 10 percent.
BRICS contains four of the 10 countries with the world's largest
populations, whereas the G7 contains only one.”
“Because
all BRICS members are developing countries, their market exchange
rates undervalue their economies compared to measurements at
comparable international prices – Parity Purchasing Powers, or
PPPs. But even without correcting for this, the latest IMF projection
is that BRICS economies will increase their combined GDPs by US$7.6
trillion at market exchange rates by 2020, compared to US$6.8
trillion for the G7.”
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