World Bank alone cannot meet the huge infrastructure fund requirements of the emerging nations, its President Jim Young Kim has said while welcoming the decision of Brazil, Russia, India, China and South Africa to establish the BRICS Bank.
Kim, who recently visited all of the BRICS countries, said in each of them there are huge needs for infrastructure in the short term, medium term and long term.
"So, for example, just in India, one country, the Prime Minister and the Minister of Finance said to me that over the next five years they have a $1 trillion infrastructure deficit.
"About half of it, they think, can be met with public resources, but then half of it will also have to be met through private sources," he told reporters at the World Bank headquarters.
"So, every single one of the BRICS countries has an enormous infrastructure deficit that simply can't be met by a single institution, certainly not the World Bank in and of itself," Kim said.
"For us, the BRICS Bank is quite a natural extension of the need for more investment in infrastructure, and so we would welcome it," he said.
The World Bank President said during his visit to BRICS countries he did not experience even slightly a diminishing of demand for its services.
"It is true that the BRICS countries, many of them are extremely well financed and have money, but they continue to come to us for very specific reasons. For example, the Chinese came to us and asked us to help with urbanisation," he said.
"In other words, they appreciate that we have been involved in building cities for 66 years, and I think there's still no question that the quality of our experience, the quality of our knowledge, our ability to help them actually deliver on their promises to their people is what keeps them coming back to the World Bank Group," he said.
"We have very specific comparative advantages. Knowledge is one of them. We have knowledge that cuts across all that have been developed to working with all 188 member countries.
"So our sense is that whatever other banks are built, one, there is plenty of infrastructure that needs to go around, and our sense is that they would want to take advantage of the knowledge that we have."
Kim said everyone was disappointed at the lower projections in China.
"But we have worked with China on a 2030 report that looks very specifically at the strategy going forward, and our own sense is that the Chinese leadership is laser focused on doing those things that will build the foundations of their future growth," he said.
China, he argued, needs to move towards consumption oriented growth rather than export driven one.
Image: World Bank President Jim Young Kim