BRICS New Development Bank and currency pool to set stage for creating alternatives to WB and IMF - expert

NEW DELHI, July 8. /TASS/. BRICS New Development Bank /Brazil, Russia, India, China, and South Africa/ and reserve currency pool would build the foundation for creating the alternative to the World Bank /WB/ and International Monetary Fund /IMF/, Director of the Eurasian Foundation and a professor at the School of International Studies of Jawaharlal Nehru University in New Delhi Arun Mohanty told TASS Wednesday. The creation of BRICS Development Bank and the agreement of terms for mutual support within the currency reserve pool was an important "step in this direction," he said. "In difference with IMF and WB, BRICS Development Bank would function on the basis of democratic principles. The currency pool with 100 billion dollars would help the member countries at times of hard currency liquidity crisis. It can help the member-countries to resolve issues of balance of payment and neutralize the pressures exerted by the international financial organizations. So these two BRICS banks may not be exact alternative to IMF and WB, but it would build the foundation for creating the much-desired alternative," Arun Mohanty said. However, the expert added that "this is just one step." "There would be efforts to reduce dollar dependency by creating regional reserve currencies, to increase trade in national currencies, create its own SWIFT arrangement in place of current west- led Swift system," he said. "Given that mutual trade is increasing among BRICS nations very fast, accounting nearly for one third of global trade turnover, and BRICS countries hold the largest hard currency reserves, above measures would have far reaching impact on the global financial architecture in coming years," Professor added. "Currently, it is not G-7 but G-20 that rules the roost in the global financial and economic spheres. BRICS countries play a very important role in setting G-20 agenda. They always have a meeting of their own for formulating the agenda before each G-20 summit. BRICS has already got a strong voice. G-20 and its influence within the group would further grow in the coming years to transform the current financial architecture into a true multi-polar financial structure in the interest of majority countries of the world," Arun Mohanty said. According to the expert, one of the key objectives of BRICS is to transform the current unipolar global political and economic order. "It has been found that nearly two decades of unipolar world has witnessed more conflicts and much more threats to world peace than the four decades of bipolar world. The hegemon does not have the resources and power to stabilize the world at its terms. BRICS member-states have been trying to bring changes first of all in the current unfair global financial architecture which was built in the aftermath of the Second World War and does not reflect the reality of the current times," he said. "For example the tiny Benelux countries have substantially more voting rights in the IMF than BRICS member-countries accounting for more than one fourth of global GDP. This is absolutely unfair against which BRICS countries put forward a stiff fight and finally achieved that they will have more voting rights in the IMF. Notwithstanding the fact that this decision was taken several years back, it is not being implemented at the behest of US. But this fight to transform the West-led unipolar global financial architecture would continue as part of the effort to transform the unipolar global order into multipolar world order," the expert said. Read more