“Because this is a ground-breaking initiative by the developing world, the first of its kind,” he told MPs in his reply to debate on his budget vote the day before.
Brics, comprising Brazil, Russia, India, China, and South Africa, announced the establishment of the New Development Bank — with its headquarters to be in Shanghai — earlier this month.
Zuma expressed disappointment about the focus by some members on where the money for South Africa’s share in the bank’s establishment was going to come from.
“I thought that members would look at the establishment of the bank differently than from where we get the money from.”
South Africa’s initial contribution was US150 million.
“The capital contribution to the new bank will come from the fiscus.
“Initially, South Africa’s contribution is in the form, paid in capital, US150m. This amount is part of the schedule of instalments agreed to among all members.”
The bank would have authorised capital of US100 billion, with US50bn subscribed. All countries would contribute equal capital to the bank.
“These capital contributions are similar to the ones we make to other multilateral institutions, such as the African Development Bank and the World Bank, where we are members.”
Zuma said it was important to note that the benefits of participating in the new development bank “by far outweighs the cost of establishing the bank itself”.
The bank would complement existing sources of financing to cater for the ever-increasing development needs in areas of energy, rail and road, and other economic infrastructure.
“I thought that members would look at the establishment of the bank differently than from where we get the money from,” he said.
The bank would operate differently to institutions such as the International Monetary Fund or World Bank, with a focus on the developing world and a different way of doing things.
“You know that in the banks that we have, if you ask for help, you end up in more difficulty. That has been the history of countries, particularly developing countries.
“I would have thought we would have seen this as part of the developing countries beginning to stand on their own, and do their own thing. To finance their own operations, rather than depend on [other] banks.”
Zuma said all African heads of state were excited about the bank.
“They see this as an opportunity where we can develop Africa without too many strings attached, which has been with us in our history.
“We should be excited about this… it’s not a backward movement, it’s a forward movement,” he said.