On Tuesday, the eyes of the world were fixed firmly on Shanghai. After months of negotiations, and following on the heels of the BRICS Summit in Russia, the New Development Bank was finally opened. The bank was created to support infrastructure projects for the countries of Brazil, Russia, India, China and South Africa, and it has a staggering $100bn as initial authorised capital. Of this, half is subscribed capital, which will be divided equally between the 5 members. The opening ceremony was attended by the Chinese Minister of Finance, Lou Jiwei, the Mayor of Shanghai, Yang Xiong, and the Indian chairman of the New Development Bank, KV Kamath.
Negotiations for the establishment of the bank began in 2014, at the BRICS Summit in Brazil. An agreement was signed, and the bank is due to begin operations later this year, or at the latest, the beginning of 2016.
The New Development Bank is firmly a BRIC institution.
The bank is head-quartered in China, the president is Indian, the organisation’s authority is based in Russia, and South Africa will be home to a regional branch. With the new bank, the full force of the financial power of the BRIC countries will soon be felt.
