"The argument that the creation of the BRICS Bank could
make a significant difference to the global financial architecture should not
be pushed too far. In the final analysis development banks are instruments of
state capitalist development. Such specialised institutions are needed because
of the shortfalls in the availability of long-term finance for
capital-intensive projects in market economies, resulting from the maturity and
liquidity mismatches involved. Resources mobilised are from those wanting shorter
maturities and greater liquidity, and sums lent are to projects that are large
and illiquid with long gestations lags and long-term profit profiles."
"Whether even this
difference would be material depends on three factors. The first is the degree to which the
emergence of the NDB alters the global financial architecture and perhaps,
therefore, the behaviour of the institutions currently populating it. The
second is the degree to which the BRICS bank can differ in its lending
practices from the institutions that currently dominate the global
development-banking infrastructure. And, the third is the degree to which a
development bank set up as a tool of state-guided development by governments in
countries pursuing capitalist and even neoliberal development trajectories can
indeed contribute to furthering goals of more equitable and sustainable
development."
