Beijing, July 22 (IANS): The current global financial architecture and mechanisms need to be improved to help safeguard the interests of poorer countries, a state-run Chinese daily said on Wednesday.
The Global Times said in an editorial that a new financial endeavour from emerging countries is "meeting suspicion from the West".
The New Development Bank (NDB) promoted by BRICS nations started operations in Shanghai on Tuesday. Starting out with $50 billion in capital, the NDB aims at financing infrastructure and development projects in Brazil, Russia, India, China and South Africa.
The NDB is expected to meet the developing world's enormous needs for infrastructure.
According to an estimate by the Asian Development Bank (ADB), $8.22 trillion of infrastructure investment is needed across Asia alone in the next decade.
"The NDB is clearly regarded by some in the West as a rival to the IMF, the World Bank and the ADB, and a challenger of the established financial framework," the daily said.
It added that "...even combined, all these financial institutions, including the proposed Asian Infrastructure Investment Bank (AIIB) which is set to have $100 billion in capital, will still leave a lot of the infrastructure gap unfilled".
The daily went on to say that the "current global financial architecture and mechanisms need to be improved to help safeguard the interests of poorer countries".
"Since emerging economies are increasingly driving the global economy, the old groups of vested interests, especially the US, should not hold back the tendency for an improved financial system," it added.
The editorial said that "the BRICS bloc is willing to do some pioneer work and leverage its growing influence in this undertaking".
"Other than competition, cooperation between these different financial institutions should be explored and established as soon as possible. The NDB has made a good start by deciding to set up a hotline with the AIIB to coordinate their operations," it said.
The daily added: "It is time that the old and new banks should consider the possibility of co-development as well. Clinging to the dominance of outdated financial systems will not contribute to the greater good. It will require joint administration of a governing body to improve global financial architecture."