Indian to Head New Development Bank; Taliban Commander Killed in Karachi; Kabul Airport Attacked With Rockets
Bonus Read: "Move Over, IMF: BRICS Bank Aims to Rewrite the Rules of Development," Ana Swanson and Shrey Verma (South Asia)
Indian to head new development bank
Leaders of the BRICS nations launched on Tuesday a development bank with an initial capital of $50 billion and a $100 billion currency reserve pool at the Brazilian resort city of Fortaleza at the sixth annual BRICS summit (Livemint, Economic Times, NDTV). The economies of BRICS -- a grouping acronym of the five emerging economies of Brazil, Russia, India, China, and South Africa -- together represent a fifth of the global economy and 40 percent of the world population.
The summit declaration said the bank will assist emerging and developing nations mobilize resources for sustainable development and infrastructure projects. The declaration said further the bank's headquarters will be in Shanghai, the first president will be Indian, and the first Board of Directors will be from Brazil. The first chairperson of the Board of Governors will be from Russia and an Africa Regional Center will be based in South Africa. China is expected to make the largest contribution with $41 billion, followed by $18 billion each from Brazil, India, and Russia, and $5 billion from South Africa.
Negotiations continued until the last hour over who would host the bank and shareholding. China argued that the economic strength of a member nation should be the criteria for contribution to the bank, whereas India stated that each member have an equal share. For two years, through intense negotiations, India and Brazil fought China's attempts to get a bigger share as the lender compared to the other member nations.
The bank will be called the New Development Bank, a name suggested by Prime Minister Narendra Modi. "The agreement towards setting up the BRICS New Development Bank is a significant step," Modi said. "I am happy the initiative announced in 2012 in Delhi has become a reality." Chinese President Xi Jinping said: "We need to work to improve economic governance at a global level, increase the representations and voice of developing countries."
This is the first concrete step of the BRICS toward reshaping the Western-dominated international financial system. "The plans of the emerging-market bloc of Brics to establish a development bank usher in a long-awaited and helpful alternative to the Western-dominated institutes in global finance," China's official news agency Xinhua said in an editorial (Livemint).
Modi meets Vladimir Putin, discusses strategic partnership
Prime Minister Narendra Modi met Russian President Vladimir Putin on Tuesday on the sidelines of the BRICS Summit, where he discussed broadening the strategic partnership with Russia in the nuclear, defense, and energy sectors (Indian Express, Business Standard, Livemint). Putin congratulated Modi on his great victory in the recent elections. Modi invited Putin to visit the Kudankulam Nuclear Power Plant (KNPP) in the southern state of Tamil Nadu during Putin's visit to India in December for the annual India-Russia bilateral summit. Two units of KNPP have been set up by Russia and the first unit has already been made operational.
Modi expressed appreciation for Russia's friendship and international support for India. Speaking in Hindi, Modi said: "Even a child in India if asked to say who is India's best friend will reply it is Russia because Russia has been with India in times of crisis."
India's Central Bank eases norms for infrastructure lending
The Reserve Bank of India (RBI) issued instructions to banks on Tuesday that specified operational guidelines for flexible structuring and refinancing of new project loans in the infrastructure sector (Economic Times, Livemint, Business Standard). This was a move to encourage more infrastructure development and affordable housing. RBI also exempted long-term bonds from mandatory regulatory norms like cash reserves ratio (CRR), statutory reserves ratio (SLR), and Priority Sector Lending (PSL). RBI said further that banks can structure loans for up to 25 years where the loan is refinanced every 5-7 years on fresh terms. Also, the refinancing can be done by the existing bank, a new set of banks or even through the bond markets.
These instructions intend to mitigate the Asset-Liability Management (ALM) problems banks face when they extend project loans to infrastructure and other industries, and "ease the way for banks to raise long term resources to finance their long term loans to infrastructure as well as affordable housing." In his budget speech on July 10, Finance Minister Arun Jaitley had said: "Long term financing for infrastructure has been a major constraint in encouraging larger private sector participation in this sector."
-- Neeli Shah and Jameel Khan
Taliban commander killed in Karachi
A raid by security forces in Karachi killed a Pakistani Taliban commander and four other militants on Tuesday (ET). According to Rao Anwar, the district police chief, Javed Mehsud -- the Taliban commander -- had been operating in the city for years, and his network was responsible for more than 50 targeted killings and an attack on a polio vaccination team. Police also found explosives and arms with the militants. Karachi has seen a wave of violence in recent years. In addition, the province of Sindh has seen an expansion of extremist groups, according to a report by former New America Carnegie Fellow Saba Imtiaz and Declan Walsh in the New York Times (NYT).
U.S. drone strike kills at least 15 in North Waziristan
A U.S. drone strike reportedly killed at least 15 militants in a compound and vehicle in North Waziristan on Wednesday (AP, ET, Dawn). The strike allegedly occurred in the Saidgai area of Dattakhel. Competing counts for the death toll range from 15 to 20. Somewhere between an estimated 2,116 and 3,475 people have been killed in drone strikes in Pakistan since the strikes began according to data collected by the New America Foundation (NAF). Bonus Read: "The Return of the Drones," Emily Schneider and Bailey Cahall (South Asia).
Pakistani players to play in Indian kabaddi league
At least six Pakistanis will participate in India's first professional kabaddi league in games occurring between July 25 and September 1 (Dawn). Kabaddi is a type of wrestling common in India. Mohammad Sarwar, the secretary of Pakistan's Kabaddi Federation, told Dawn that four of the players had large contracts ranging from 800,000 to 1 million Indian rupees ($13,000 - $16,626). When asked about visas, Sarwar said: "I think there will be no visa issue and players will leave for India next week."
Bonus Read: "The Iran Factor in Afghanistan," Michael Kugelman (South Asia)
Kabul airport attacked with rocket fire
Two rockets struck Kabul airport on Wednesday morning, but no casualties were reported (TOLO News, Pajhwok). According to Nawaz Haqiar, the commander of the Afghan border police forces at the Kabul Airport, and Kabul airport Chief Yaqub Rassouli, the rockets were fired from the Deh Sabz district. The Taliban have claimed the attack.
MoD announces revised death toll in car bomb attack
Afghanistan's Ministry of Defense announced a revised death toll on Wednesday for Tuesday's car bombing in a crowded market in Paktika province, placing the number of those killed at 42 and the number of those wounded at 67 (Pajhwok). A previous statement had placed the death toll at 89. Mukhlis Afghan, a spokesman for the provincial governor, said a delegation had been established to survey the losses.
Also on Tuesday, Afghan Special Forces foiled a similar attack in Paktia province, according to Ahmad Jawed Salim, a spokesman for the Afghan army (TOLO News). Nineteen Taliban insurgents were killed in the operation.
Modi calls for international support for Afghan's counter-terrorism fight at BRICS
At the BRICS Summit in Brazil, Indian Prime Minister Narenda Modi called, on Tuesday, for international support for Afghanistan's fight against terrorism (Pajhwok). Modi stated: "We must help Afghanistan fight the forces of terrorism. This is important for it to preserve the progress it has made in the last decade." He also committed to continued Indian assistance in building Afghan capacity.
Nimroz livestock sector grows
According to statements by Afghan officials on Wednesday, the number of livestock in western Nimroz province has grown by 30 percent so far this year (Pajhwok). The growth followed the death of more than 5,000 animals in 2013 largely due to a lack of water, according to Muhammad Akbar Sharifi, the director of agriculture, irrigation, and livestock. Officials placed the number of livestock this year at 150,000.
Edited by Peter Bergen
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