|
|||||||||||
Jim O'Neill, chairman of Goldman Sachs Asset Management who coined the acronym "BRIC" - for the economies of Brazil, Russia, India and China - ten years ago, said that he supports India's proposal for the BRICS countries to create a joint development bank.
Discussions on the BRICS Bank, a multilateral bank that would be exclusively funded by developing nations and finance projects in those countries, was expected to top the agenda at the two-day BRICS Summit which opened in Delhi, India on Wednesday.
"Obviously 'the BRICS bank' would be helpful for further supporting and promoting trade between emerging countries," O'Neill told China Daily in an exclusive interview.
"And as we go through this decade, trade between the BRICS and emerging countries are probably going to be the biggest source of global GDP growth," he added.
O'Neill's remarks came ahead of the summit where leaders from Brazil, Russia, India, China and South Africa discussed ways to increase cooperation, especially seeking a bigger role in the global financial system to match their rising economic heft.
He coined the term BRIC in 2001, and still prefers to use this old acronym even though South Africa has joined the summit last year and it is now known as the BRICS.
The proposal for a BRICS bank builds on a pledge leaders from the five nations made at their last meeting in April 2011 in China, when they promised in a statement to "strengthen financial cooperation among the BRICS Development Banks."
Discussions intensified last month when India circulated a concept note on the BRICS Bank with other members of the bloc at the Group of 20 meeting in Mexico City.
O'Neill said that such a bank could help China further liberalize and grow the use of its currency, the renminbi.
"Growing trade between China and other merging countries means it definitely makes sense for China to extend renminbi loans to other major emerging countries," he said.
In the past few years, Chinese authorities have begun to gradually internationalize the renminbi before fully liberalizing China's capital account.
Much of China's banking system, however, remains regulated, and lending is largely controlled.
O'Neill said that he is disappointed by previous BRICS summits' lack of substantial achievements, but hopes that progress on the BRICS Bank will reinstall confidence.
"The BRICS political group hasn't achieved anything yet, so this BRICS Bank is important as a symbol of whether they can agree on substantive purposes," O'Neill said.
O'Neill said that he is glad that the BRIC leaders meet annually, but believes that different political and financial structures of the BRIC countries make any meaningful agreements difficult.
He cited as an example the BRIC countries' inability to support a single candidate as contender for the World Bank presidency.
"The BRIC countries should try and have a joint view on who the head of World Bank should be. And if they can't agree on simple things like that, then it will be very difficult for others to take them seriously," said O'Neill.
Ngozi Okonjo-Iweala, the Nigerian finance minister, and José Antonio Ocampo, the former finance minister of Colombia, both joined the race for the World Bank presidency nomination on Friday March 23.
O'Neill added that substantial scope for cooperation between the BRIC countries does exist, especially in areas like energy efficiency and global financial reforms.
He also remains optimistic about the BRIC countries' future growth: "This decade the BRIC countries will continue to be the main source of global GDP growth."
Artist flushes out future wife |
Cabinet OKs school bus safety draft |
Japan PM befriends Facebook's Zuckerberg |
NASA visualises global surface currents |
Who's hot, who's not in China Sports (Week 13) |
Bartoli ends Azarenka's winning streak |