While the EU is still overwhelmed by Greek sovereign debt woes, a new financial endeavor 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. 

In the long run, 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, let alone in the rest of the developing world. 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 fact is 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.

NDB President Kundapur Vaman Kamath said at the opening ceremony, "our objective is not to challenge the existing system as it is but to improve and complement the system in our own way." BRICS nations have been urging the World Bank and the IMF to reform for years in terms of the quota systems. The current financial mechanism cannot effectively direct funds to where it is needed or protect the interests of developing countries.

But reform does not lead to a rewriting of the rules. 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.

Fulfillment of such purposes will not come by itself, therefore 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 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 Clinging to the dominance of outdated financial systems will not contribute to the greater good.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.