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‘BRICS bank will play a major role, but much work lies ahead’

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Johannesburg , July 07: The BRICS-backed New Development Bank will play a major role in multilateral development of financial institutions, but there are still many unanswered questions at this stage, the bank’s newly- appointed vice president Leslie Maasdorp has said.

As leaders of the bloc meet in the Russian city of Ufa for the 7th summit of the organisation, Maasdorp told the daily Star here that the unanswered questions were because of the fact that the bank was still at ground zero in terms of its establishment.

“The Treasury in South Africa together with the other treasuries in the BRICS countries have done considerable work over the past few years as part of the feasibility studies for the bank,” said Maasdorp, a South African banker.

“We will naturally leverage off that work as a significant resource base to steer the establishment of the bank,” Maasdorp said.

Maasdorp said he could not comment further on how this would pan out as the president and three other vice presidents had just been appointed to finalise these matters over the next few weeks in Shanghai.

“Our role as the founding core management team is to build the institution into a formidable new player in the infrastructure finance space.”

BRICS account for a fifth of the world’s economic output and 40 per cent of its population. The New Development Bank will be operationalised at the Ufa summit.

Maasdorp said while the NDB will obviously be a major addition to multilateral development of financial institutions it should be seen as complementary rather than a competitor.

He said the NDP was in some ways part of the strategy to continue the resurgence of Asia and China in particular over the past few decades.

“In no way should this be seen as a fundamental shift though as South Africa has and will continue to enjoy important economic relationships with the West,” Maasdorp said, adding that BRICS should be seen as an addition to existing South African economic relationships.

Maasdorp was optimistic about partnering with national and regional development banks: “Local institutions in general always have superior knowledge of national projects and local regulations, better understanding of the risks and so on.

“So when it comes to the design, engineering and financial packaging of new projects I suspect we will work very closely with (institutions such as) the African Development Bank, the World Bank and others.

“This is not about reinventing the wheel but complementing existing efforts to fast-track infrastructure development in developing countries,” Maasdorp told the daily.

Maasdorp has 13 years of global investment banking experience, including a stint as president of the Bank of America-Merrill Lynch franchise for southern Africa.

He is one of two nominations approved by the South African government to serve on the NDP.