Bangladesh may join BRICS bank

Bangladesh is likely to join the US$50 billion development bank launched by the BRICS nations as the government is actively weighing the possibility of becoming a part of the new initiative, officials said Wednesday.
The Ministry of Finance (MoF) officials said the government had already directed the relevant agency to know details about the framework and operation procedures of the new development bank of the BRICS grouping that comprises Brazil, Russia, India, China and South Africa.
"We will ask the Bangladeshi ambassadors to the BRICS countries to know details about the proposed global bank. After getting details we will decide on our joining in the framework," an additional secretary of the MoF told The Financial Express.
He adds: "If the details are found favourable, Bangladesh might consider becoming a proud founding-member with a good amount of fund contribution."
The heads of government of the five BRICS nations agreed on July 16 in Brazil on the structure of a US$50 billion development bank by granting China its headquarters and India its first rotating presidency.
Brazil, Russia and South Africa were also granted posts or units in the new bank, emerging as an alternative source of development funding other than the twin Bretton Woods institutions--the IMF and the World Bank--and the Asian Development Bank (ADB).
The leaders of the countries considered as new economic powerhouses also formalised the creation of a US$100 billion currency-exchange reserve, which member-states can tap in case of any balance-of-payments crisis, according to a statement issued at the BRICS summit meet in Fortaleza, Brazil, on July 16.
The MoF additional secretary said Finance Minister AMA Muhith had directed them to collect information about the operation, framework of the proposed bank and how best the bank could secure for the low-income countries.
"Since Bangladesh needs huge sums of investment for developing its infrastructure and poverty alleviation, we would welcome the BRICS's initiative for the upcoming strong footprint on the global financial market," the official added.
He pointed out that the existing lenders, including the International Monetary Fund, the World Bank, the Asian Development Bank and the Islamic Development Bank, tag lots of conditions with their funds.
"If the BRICS initiative succeeds, we are hopeful of getting more soft and concessional loans in addition to the continuous support from the existing global and regional lenders," said another high official at the MoF.
Bangladesh now borrows from the IMF, World Bank, ADB, IDB and other bilateral and multilateral lenders for bankrolling its development projects. Bangladesh is one of the shareholders of the global lenders World Bank and IDB and the regional lender ADB. Its shares in these multilateral lending agencies are not significant.
According to the sources, Bangladesh has had 0.022 percent share in the 188-member World Bank, 1.0 percent in the 67-member Manila-based ADB and 1.01 percent in the 56-member IDB.
Member of the General Economics Division of the Planning Commission Professor Shamsul Alam said the government decision of joining in the proposed banks of the BRICS is really laudable.
If the Bank is established and Bangladesh joins with a strong footprint there, it will have a new option for getting more concessional investments for developing the country's infrastructure and for cutting poverty, he told the FE.
Development Analyst Dr Zaid Bakht said Bangladesh should join the proposed New Development Bank of the BRICS nation.
"As Bangladesh needs billions of dollars in investment every year to develop its infrastructure, the proposed bank could have a good option for the country," said Mr Bakht, also researcher at the Bangladesh Institute of Development Studies (BIDS).
Meanwhile, many experts in their positive appraisals of the move of the new bloc said both initiatives of the BRICS are designed to provide an alternative to financing from the International Monetary Fund and the World Bank, where the five developing nations have been seeking more say.
BRICS represents 42 percent of world population and roughly 20 percent of the world's economy based on GDP, and 30 percent of the world's GDP based on PPP--a more accurate reading of the real economy.  Total trade among the countries accounts for $6.14 trillion, or nearly 17 percent of the global total.