Maasdorp on BRICS bank's 'openness' and unique place in the MDB world

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Devex

The New Development Bank — a financial institution founded by the so-called BRICS emerging economies, Brazil, Russia, India, China and South Africa — will open its membership to other countries in the next few years, the bank’s vice president and chief financial officer told Devex in an exclusive interview.

Leslie Maasdorp said that while the bank has focused on its five founding members since its operational launch exactly a year ago, the future is open to all member countries of the United Nations.

“The articles of agreement of the bank — a lot of people don't know this so it's important to highlight — says the bank is open. It is only the starting point that we are five countries,” Maasdorp, a former investment banker and government official in South Africa, told Devex on the sidelines of the inaugural annual meeting of the Asian Infrastructure Investment Bank in Beijing, China last week.

“We're now operationalizing, getting staff, putting our project pipeline, getting ourselves organized, but the bank will, over time, open up for membership. So that's going to happen in the future,” he added.

The opening of membership, likely to happen in the next three years or earlier, will also see the shareholding of the five member countries of the $100 billion institution significantly reduced. That could help placate some critics, who have argued that the Shanghai-based bank is a dedicated political and economic tool of the five countries currently involved. The bank has so far approved around $811 million in loans.

Shareholdings of the BRICS countries cannot go down below 55 percent, according to its operational documents, to maintain a controlling stake in the financial institution. Maasdorp told Devex that of the remaining 45 percent, 20 percent will be open to nonborrowing countries, while another 25 percent will be allocated for other emerging markets.

“So 80 percent will be for emerging markets,” including the BRICS themselves, he said. “This bank, in terms of its vision, will become the bank for emerging markets.”

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