NEW DELHI--The world’s top emerging economies are charting a new course in development assistance to counter the World Bank and other systems led by industrialized countries.
At a summit in New Delhi on March 29, Brazil, Russia, India, China and South Africa (BRICS) agreed to consider setting up a new development bank for emerging economies and developing nations.
Indian Prime Minister Manmohan Singh said developing countries need funds for infrastructure development and that such projects will help recovery of the global economy.
BRICS are seeking a share of say commensurate with their economic clout in the international community.
Last year, the five countries had a combined gross domestic product of $13.7 trillion (1,130 trillion yen), or 19.5 percent of the world, up from $2.8 trillion, or 8.7 percent, in 2001. They had a combined population of 2.97 billion people, or 42.7 percent of the world, in 2011.
The plan for a new development bank was included in the Delhi Declaration issued after the meeting on March 29.
Finance ministers of the five countries will discuss whether a development bank should be formed and report their conclusion at a summit next year.
BRICS started an annual summit in 2009, with South Africa joining from last year.
The development bank would be the first full-fledged multilateral institution to be set up by BRICS.
But observers doubt that it would come into being smoothly because BRICS’ political systems vary from one another and some nations have conflicting interests, such as the border dispute between China and India.
A researcher at an Indian think tank said there is a concern that China’s influence might dominate the new development bank because its economic strength stands out from the rest.
The United States and European nations have long taken the lead in the world economy since World War II.
U.S. officials have monopolized the presidency of the World Bank, which is responsible for assistance to developing countries, and Europeans have been sent as the managing director of the International Monetary Fund, which is in charge of stabilizing foreign exchange.
But the leading industrialized countries alone failed to pull the world economy out of a financial crisis set off by the collapse of U.S. investment bank Lehman Brothers in 2008.
The forum for discussions on the global economy was expanded to the Group of 20 countries, including BRICS.
Developing countries have often criticized the IMF for enforcing strict economic reforms on countries that fell into a currency crisis in return for its support.
Now, the IMF is counting on emerging economies to put up funds for creating a safety net to prevent the expansion of the sovereign debt crisis in Europe.
BRICS want a greater say in the IMF in exchange for accepting the request for more contributions.
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