| NEW DELHI, July 14
NEW DELHI, July 14 Shanghai looks set to become
the headquarters of a development bank being launched by the
BRICS emerging market nations, despite fears by some members of
the group that China could hijack the bank to serve its
Brazil, China, India, Russia and South Africa are due to
sign off on the new institution on Tuesday, along with an
emergency reserves fund, after two years of negotiations, a
major step for the diverse group known more for its anti-Western
rhetoric than coordinated action.
Russian presidential adviser Yuri Ushakov told Kremlin
reporters late last week that bank would be based in Shanghai,
mainland China's financial capital, citing discussion papers
prepared by the member countries.
Earlier, Russia's finance minister said India was vying with
China to host the new infrastructure lender.
"The bank's headquarters will be located in Shanghai. This
is fixed in the documents," Ushakov said.
In a further sign that an agreement had been reached on the
headquarters, an Indian government official on Monday played
down the debate and said India's top priority was to make sure
members of the institutions all had equal voting rights, unlike
Western-run multilaterals they seek to challenge, such as the
"Equitable shareholding is the principal goal for India,"
the official said. Second on India's list of concerns was giving
the bank a name that would allow non-BRICS nations to join in
future, the official said.
The Chinese Finance Ministry did not immediately respond to
a request for comment.
In a short statement before leaving for the BRICS annual
summit that starts in Brazil on Monday, Indian Prime Minister
Narendra Modi gave his stamp of approval to the name "New
Development Bank" - a name widely circulated in recent days.
India and China have a complex relationship marked by a
border dispute that stretches back decades and an unequal trade
balance that favours Beijing. Modi, who took office in May, is
due to meet bilaterally with China's President Xi Jinping at the
summit for the first time since his election.
The BRICS will pool an initial $50 billion in the bank, with
each country contributing an equal amount, and seek to gain
international influence by offering developing nations
alternative financing to the World Bank and International
Monetary Fund, long dominated by the United States and Europe.
China's economy is larger than that of all the other BRICS
put together. Indian media reported last week that the members
were locked in intense negotiations about the amount of capital
each country would commit to the bank, with India concerned that
China wanted to use financial might to dominate.
Many of the bank's rules of operation, such as investment in
private projects, will be decided after its formal creation at
the summit in the Brazilian city of Fortaleza. The bank is
expected to make its first loan in 2016.
The BRICS will also set up a $100 billion contingency
reserves pool as an alternative to the International Monetary
Fund and that could start operating by 2015 to help any of its
members if they are hit by an exodus of foreign capital.
The BRICS group is at the forefront of a growing chorus of
emerging and developed nations that complain the IMF and World
Bank impose belt-tightening policies in exchange for loans while
giving them little say in deciding terms.
The proposed New Development Bank and the reserves fund are
a response to failed attempts to increase the BRICS' influence
within the IMF, at the centre of the post-war Bretton Woods
monetary order created by the United States and Europe.
(Reporting by Frank Jack Daniel; Additional reporting by Alexei
Anishchuk in Moscow and Gui Qing Koh; Editing by Robert Birsel)