PRETORIA, February 13. /TASS/. The economic might of BRICS (Brazil, Russia, India, China and South Africa) has not been duly reflected in the global financial architecture, however, the balance of power worldwide is quickly shifting in favor of the group and can result in the emergence of a new global financial market structure, Professor Theodor Neethling of South Africa’s University of the Free State told TASS on Monday.
"The BRICS share of world GDP measured in Purchasing Power Parity (PPP) terms rose from about 18% in 2000 to about 31% by 2020, a share double that of member states of the European Union," he emphasized, adding that the profile and voice of the BRICS countries in the global financial architecture do not yet reflect this changing economic landscape.
Neethling noted that Western countries still have the majority of votes in global financial institutions such as the International Monetary Fund. "Western countries also have a stronger voice in terms of the running and functioning of global financial institutions. In view of the above, the New Development Bank, formerly referred to as the BRICS Development Bank, resulted from political and economic dissatisfaction relating to the disparity between the share of the BRICS countries in the world economy on the one hand, and their actual representation in the global financial institutions on the other," he asserted.
According to the South African scholar, the New Development Bank is supposed to impact the global financial market and alter its architecture in order to be more representative of the growing economic profile of BRICS in particular and of developing countries in general. "Through the New Development Bank, the BRICS countries have the potential to make a greater impact on the global financial system," he asserted.
Neethling added that the gradual strengthening of BRICS’ positions is underway not only in the global economy but in politics as well. "There is no doubt that BRICS has become an important political entity in international politics in the past decade. After all, BRICS is an organization that comprises the major emerging economies with more than 40% of the world population, almost a quarter of global GDP, more than 16% share in the world trade, and 25% of foreign investment. Also, all BRICS countries are members of the G20 and it is known that all BRICS countries have a significant influence on their regional political affairs," he explained.
The New Development Bank was founded by the BRICS countries based on an intergovernmental agreement in the summer of 2014. It is headquartered in Shanghai. The bank’s goal is financing infrastructure and sustainable development projects in BRICS and developing countries.