World Bank chief backs launch of BRICS bank

World Bank president Jim Yong Kim welcomed the initiatives of establishing two new multilateral lenders, saying they would not pose a threat to the Washington-based institution and would instead help it fight poverty and spur economic growth.

The world's five key emerging nations of Brazil, Russia, India, China and South Africa have proposed the launch of the BRICS Development Bank. President Xi Jinping also broached the idea in October last year to set up a US$50 billion Asian Infrastructure Investment Bank to finance projects in the region.

The initiatives are expected to boost China's clout, which sparked concerns that the new banks might compete with existing multilateral lenders, such as the World Bank and the Asian Development Bank, in which Washington and Tokyo have the biggest voting rights respectively.

Kim refuted such concerns yesterday during his three-day visit to China, saying the World Bank would not treat the new banks as rivals but would share its expertise with them.

"For us, our competition is poverty. Our enemy is lack of economic growth. Another enemy is growth that is not inclusive," he said. "We have no choice but to welcome any new entrants because every new entrant will help us battle poverty."

He said the need for new investments in infrastructure would be massive, with such funding needs in developing countries estimated at US$1 trillion a year, while the World Bank alone could only offer US$60 billion last year.