PM Narendra Modi to press for equal shareholding in proposed BRICS bank

Written by PTI | Fortaleza, Brazil | Updated: Jul 14 2014, 23:52pm hrs
Narendra ModiPrime Minister Narendra Modi, enroute to BRICS meeting in Brazil, arrives at Tegel Military Airport in Berlin, Germany. PTI
Prime Minister Narendra Modi will launch his first multilateral engagement in this seaside city of Brazil, meeting Russian President Vladimir Putin and Chinese President Xi Jinping ahead of tomorrow's BRICS Summit at which India will press for equal shareholding for its five member countries in the proposed USD 50 billion BRICS Development Bank so that no shareholder dominates.

As the football World Cup fever recedes in this soccer crazy nation, Modi will join Putin, Xi, South African President Jacob Zuma and the host President Dilma Rousseff in deliberations over the proposed bank, international financial architecture and other issues at Fortaleza, one of the host cities of the World Cup which ended yesterday with Germany emerging the world champions.

India is keen on the issue of equal share holding since it does not want a repeat of the distortions that have crept into Bretton Woods institutions like International Monetary Fund, World Bank and the Asian Development Bank in which rich countries like the US and Japan have a strangle hold.

Modi will also discuss the possible outcomes of the two- day summit on other issues like reforms of the UN Security Council and international financial architecture.

Sources said India's primary goal is equal shareholding for all the members -- Brazil, Russia, India, China and South Africa.

The BRICS Development bank, an idea which was conceived in Delhi in 2012 and approved in Durban last year, is to be set up with an initial corpus of USD 50 billion, with scope for expansion up to USD 100 billion when new members are added.

For the initial USD 50 billion, India wants equal contribution by all the five members of USD 10 billion. This is because India doesn't want the development bank to fall into the ownership pattern of IMF and World Bank, with a distorted share holding.

The other priority for India are about the presidency of the bank and the name to be given for it. Apparently, India would like it to be called the New Development Bank, an expression used by Modi in his departure statement yesterday.

"I also look forward to our discussions to further advance intra-BRICS economic cooperation and our collective efforts to advance global economic stability and prosperity," the Prime Minister had said.

In particular, I look forward to the successful conclusion of major BRICS initiatives like the New Development Bank and the Contingent Reserve Arrangement, which have seen significant progress since their launch in New Delhi in 2012," Modi said.

"These initiatives will support growth and stability in BRICS and also benefit other developing countries," he said.

India wants the modalities for the establishment of the bank through a simple route and not a complicated one.

It wants to avoid the pitfalls of the Bretton Woods institution of one who pays more calls the tune.

During his meetings with Chinese and Russian presidents, bilateral issues may also come up but no big-ticket items are likely to be decided since it would be a get to know meeting.

Both Xi and Putin are likely to visit India in September and November-December respectively this year.

While with Xi it will be Modi's first meeting, he has already met Putin on earlier occasions.

With China, Modi may discuss the need for maintaining peace and tranquility along the border so that bilateral problems can be resolved in an amicable manner.

Bilateral trade will also come up for discussion with the Chinese leader as India is keen that the present imbalance in trade should be resolved. Modi is also keen on Chinese investment in India.

In the meeting with Putin, Modi is expected to press for the continuance of good relations between the two countries be maintained.

Russia would like India to continue the good trend in ties that was established by earlier governments.

Russia is also keen to provide technology and is looking for a new site in India for setting up a civil nuclear plant because Haripur in West Bengal is not working out.

The two sides have resolved the nuclear liability issues over Kudankulam plant 3 and 4 units.

The BRICS summit theme, "Inclusive Growth; Sustainable Development", will enable India to shape the post-2015 Development Agenda being discussed in the United Nations.

The Prime Minister is accompanied by a high-level delegation that includes Minister of State for Finance Nirmala Sitharaman, National Security Adviser A K Doval, Foreign Secretary Sujatha Singh and Finance Secretary Arvind Mayaram.