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Wednesday, 26 September 2012 00:00

Doubt over Brics bank’s economic feasibility

Written by Nick Kotch
THE idea of a Brics development bank is politically driven and could remain just that — an idea — unless some sound reasons for creating it are produced without delay, expert panellists at a seminar in Sandton said last night.
The precise purpose of such a bank is the first tough question that needed to be answered, they said.

"Politically it’s very attractive to have a B rics development bank. But, I haven’t yet found a good economic reason why we need such a bank," Lumkile Mondi, chief economist at South Africa’s Industrial Development Corporation, told the audience at the Johannesburg Stock Exchange. "On this debate, I’m a dissenter," he said.

SA joined a loose existing group made up of Brazil, China, India and Russia to create Brics early last year. Jointly the countries have a population of 3-billion and account for about one quarter of the world’s gross domestic product. SA is dwarfed by the other members, but it wants to host a mooted Brics Development Bank, which its backers believe could eventually rival the World Bank.

[Excerpt from article by Nick Kotch, 26 September 2012]

Read the full article on the Business Day website.

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