Following the visit of the chair of the BRICS development Bank to Iran

According to Negaheno report the most significant goals of the development bank are:

– Promoting sustainable development projects and infrastructures with special emphasis on the member countries

– Establish a broad network of global cooperation with other multilateral development institutions and national development banks

– Creating a platform for developing projects that help balance economies in the member countries

 – Allocate appropriate funds with regards to the geographical position, the volume and the amount of the economy of the member countries

– Maintaining efficient funding for the member countries and the new emerging economies

Why is BRICS Development Bank so important?

For 3 reasons:

Creating a new BRICS Development Bank indicates the viability and the dynamism of BRICS despite all doubts and criticisms in recent years.

BRICS has shown that China’s international leadership is happening but what is important for China is to keep a balance between its influence over the bank and its impact on other members of the bank. China is working hard to prevent China’s dominance over other members of BRICS bank (the doctrine of no- intervention).

BRICS Development Bank is a global challenge for the West’s financial system and is the one thing that can be used as a response to the defeated reforms of the international monetary fund and the international bank therefore, it appears a new institutional order with a new architecture is taking place within the international financial structure at international economic and financial spheres.

How could BRICS Development Bank paralyze the US economy?

BRICS Development Bank could threaten the US dominance over the international financial system in two ways:

1) This group and in particular China are already leading those financial institutions that are active in the most dynamic parts of the world.

2) The formation of BRICS Development Bank means that this economic coalition can easily benefit from the option of exiting the dollar- based financial institutions; in other words, by establishing a bank, BRICS would be able to threaten to exit from the financial institutions that are led by the Burton Woods system in case their demands for having a larger share and a bigger role to play in the said institutions are neglected as part of its agenda in a very serious method.

This is the very challenge that the senior leaders of the US have also acknowledged. Former chair of US federal reserve, Ben Bernanke, has reminded that the congress failing to approve an increase in China’s share in the International monetary fund has made Beijing to establish the BRICS Development Bank with the member countries of this economic coalition.