Will the emerging powers launch their own development bank?

The Moscow Times reports that Russian prime minister Dmitry Medvedev wants the Shanghai Cooperation Organization to finance projects jointly: Prime Minister Dmitry Medvedev on Wednesday called for the countries of the Shanghai Cooperation Organization to speed up work to create mechanisms to finance joint projects. The organization, which comprises Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, is considering various financing options, including ones ...

By , a professor at Indiana University’s Hamilton Lugar School of Global and International Studies.

The Moscow Times reports that Russian prime minister Dmitry Medvedev wants the Shanghai Cooperation Organization to finance projects jointly:

The Moscow Times reports that Russian prime minister Dmitry Medvedev wants the Shanghai Cooperation Organization to finance projects jointly:

Prime Minister Dmitry Medvedev on Wednesday called for the countries of the Shanghai Cooperation Organization to speed up work to create mechanisms to finance joint projects.

The organization, which comprises Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, is considering various financing options, including ones involving existing banking institutions as well as new mechanisms, he said, Interfax reported.

Medvedev, who met with his SCO counterparts in the Kyrgyz capital, Bishkek, said that "this would allow for more effective investment in joint economic projects," according to the news agency.

This gambit is just one of several suggesting alternative, emerging-power-led multilateral mechanisms for international finance. There are continuing rumblings about a possible BRICS Development Bank that could serve as an alternative to the World Bank. 

It’s not likely either mechanism will take off soon. For both possible projects, China’s wishes will be decisive. And how keen Beijing is to set up new multilateral mechanisms remains unclear. In October, The Hindu reported that Chinese officials have real doubts about a BRICS bank:

[T]he Chinese government brought together officials, economists and members of think-tanks from the five countries to hear concrete proposals about setting up the development bank, at a recent conclave in the south-western municipality of Chongqing. The five governments had tasked think-tanks to come up with ideas following the decision at the Delhi Summit in March to examine the feasibility of a development bank.

Xu Qinghong, section chief of the Banking Supervision Department at the China Banking Regulatory Commission, said he had some concerns about getting all countries on the same page and “non-economic factors” that might pose obstacles. “There are vast differences between us,” Mr. Xu said. “Looking at the history of other multilateral institutions, I think such a feasibility study will take a long time and it may test our patience. Since the Delhi Summit, so far in China there have been a lot of doubts about a proposal.”

David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist

More from Foreign Policy

An illustration shows the Statue of Liberty holding a torch with other hands alongside hers as she lifts the flame, also resembling laurel, into place on the edge of the United Nations laurel logo.
An illustration shows the Statue of Liberty holding a torch with other hands alongside hers as she lifts the flame, also resembling laurel, into place on the edge of the United Nations laurel logo.

A New Multilateralism

How the United States can rejuvenate the global institutions it created.

A view from the cockpit shows backlit control panels and two pilots inside a KC-130J aerial refueler en route from Williamtown to Darwin as the sun sets on the horizon.
A view from the cockpit shows backlit control panels and two pilots inside a KC-130J aerial refueler en route from Williamtown to Darwin as the sun sets on the horizon.

America Prepares for a Pacific War With China It Doesn’t Want

Embedded with U.S. forces in the Pacific, I saw the dilemmas of deterrence firsthand.

Chinese Foreign Minister Wang Yi, seen in a suit and tie and in profile, walks outside the venue at the Belt and Road Forum for International Cooperation. Behind him is a sculptural tree in a larger planter that appears to be leaning away from him.
Chinese Foreign Minister Wang Yi, seen in a suit and tie and in profile, walks outside the venue at the Belt and Road Forum for International Cooperation. Behind him is a sculptural tree in a larger planter that appears to be leaning away from him.

The Endless Frustration of Chinese Diplomacy

Beijing’s representatives are always scared they could be the next to vanish.

Turkey's President Recep Tayyip Erdogan welcomes Crown Prince of Saudi Arabia Mohammed bin Salman during an official ceremony at the Presidential Complex in Ankara, on June 22, 2022.
Turkey's President Recep Tayyip Erdogan welcomes Crown Prince of Saudi Arabia Mohammed bin Salman during an official ceremony at the Presidential Complex in Ankara, on June 22, 2022.

The End of America’s Middle East

The region’s four major countries have all forfeited Washington’s trust.