Leslie Maasdorp is on his way to Moscow to hammer out the details of the new Brics bank. The creation of the New Development Bank to finance the roll-out of infrastructure in developing countries was announced by the five member nations, Brazil, Russia, India, China and South Africa, at a summit in Fortaleza, Brazil, last year.They've each put in $10-billion (R122-billion), although how cash-strapped South Africa managed to drum up this amount when it can't even pay Eskom to keep the lights on is something even seasoned investment banker Maasdorp is unable to answer off the cuff, referring me to the National Treasury.A further $50-billion will be added at some point to make for total initial authorised capital of $100-billion. What sort of impact this will make on what Maasdorp says is a $1-trillion shortfall in financing for developing market infrastructure remains to be seen.mini_story_image_vleft1The appointment of Maasdorp as vice-president, and former Reserve Bank governor Tito Mboweni as nonexecutive director to the board, was announced by the Treasury last week. They're highly experienced, very capable bankers, but, given South Africa's junior status in Brics, the question is how meaningful their roles will be. And how much weight will be attached to their opinions when the inevitable disagreements arise?Maasdorp, who only months ago was CEO of private-school company Advtech, bridles at the suggestion that when push comes to shove he will lack executive clout because South Africa is such a lightweight."We are an important partner in the Brics formation," he says. "We're not just South Africa, we're broadly representative of an entire continent that will be an important part of the future of this institution."After all, he adds, "South Africa is the gateway to Africa".He concedes that the "gateway" concept is "a bit exaggerated"."But South Africa is a very developed, highly sophisticated, world-class financial system with deep capital markets and well respected globally for everything from its regulatory oversight to its accounting."In terms of its financial institutions, if little else, South Africa is regarded as a developed market, he says."So as a country South Africa has a lot to offer in the development of capital markets within the Brics countries."block_quotes_start The potential capital that could flow from the New Development Bank would be much bigger than the Development Bank could ever provide block_quotes_endHe is optimistic that his background in infrastructure finance will lead to him getting a meaningful portfolio, although "we're still working that out".A graduate of the University of the Western Cape and the University of London, Maasdorp, 49, has had plenty of involvement with global financial institutions. He was Southern Africa president of Bank of America Merrill Lynch and an international adviser for Goldman Sachs. He attended annual meetings of the World Bank and IMF for 13 years.So it is no surprise that he feels "very comfortable operating in that environment".Developing countries have been frustrated for years that their significant contribution to the world's GDP has not led to more clout at the IMF and World Bank. Brics countries, mainly China and India, contribute 20% of the global economy but wield only 11% of the votes at the IMF, for example.story_article_right1There's been great unhappiness about the punishing clauses the IMF and World Bank attach to the loans they extend to developing countries. And the loans they do agree to come nowhere close to meeting the need for infrastructural funding in these countries.Maasdorp says the New Development Bank reflects the growing importance of emerging markets in the global economy. "This is a demonstration of the resurgence of emerging markets like Brazil, India in the global GDP."But far from being an alternative to the IMF and World Bank, the Brics bank will work in a "complementary fashion" with them and other development finance institutions."You've got to draw on the strengths of these institutions," he says.Obviously the idea is to make it easier for developing countries to access funding from the new bank than from the IMF and World Bank, or there'd be little need for it.It signals a recognition by the Brics countries of the need for considerably more investment in infrastructure than has been forthcoming."There is a massive deficit in financing for infrastructure development," he says. "Maybe $1-trillion."story_article_left2He agrees it would be extremely optimistic to expect this new bank with capital of $100-billion to fill that gap."It is only one of many institutions playing in that space, and we will have to work very closely with them."One of these is the Development Bank of Southern Africa. Why does South Africa need to invest such a huge amount of money in the Brics bank when we already have our own development bank?Its initial $10-billion investment is a third of the capital in South Africa's entire commercial banking system, substantially more than the paid-up capital of the African Development Bank and only slightly less than the capital held by our largest domestic development player, the Industrial Development Corporation."The potential capital that could flow to South Africa from the New Development Bank would be much bigger than the Development Bank of Southern Africa could ever provide," says Maasdorp.And the Development Bank of Southern Africa has a mandate that is focused only on Southern Africa. The Brics bank has a much broader mandate and will have access to much larger capital flows."Because we have co-operation agreements with some of the largest global institutions, we'll be able to mobilise more funding," he says.Most of these institutions are Chinese. If China provides most of the funding, won't it use the new bank as a vehicle for its own interests in Africa? Demand that its own companies build the infrastructure projects with predominantly Chinese labour, and that loan recipients repay China by handing over their raw materials to them for the foreseeable future?story_article_right3In other words, won't developing countries such as South Africa simply be exchanging World Bank and IMF domination for Chinese domination?"China obviously has economic interests in the continent, but there's a need to construct mutually beneficial economic relationships from these investments," says Maasdorp."China is a large economy and a dominant global player. Whether you like it or not, you've got to accept it and configure within that how you're going to position yourself to optimise on your partnership with China. But by no means do we see the bank as just an extension of China's influence."Maasdorp downplays the chances of disagreements between Brics partners derailing the bank. But how realistic, or honest, is he being?After all, the incentives of those lending the money and those borrowing it will be very different.A look at how squabbles between participating partners brought the late Venezuelan president Hugo Chavez's Bank of the South to its knees should act as a warning that the hardest part by far lies ahead."This is not Hugo Chavez," he says. "We're talking about an institution representing 20% of global GDP, more than 40% of the world's population."What Hugo Chavez was doing doesn't quite compare with what is being built here. It's in a different league altogether."sub_head_start Questions still dog his old school tie sub_head_endMaasdorp still won't say why he left private-school company Advtech so suddenly this year, only seven months after being appointed CEO.Previously, he had been the chairman for five years. When he became CEO, he expressed complete confidence in the company and its growth path.His hasty departure shocked the market but came with no explanation other than vague noises about a disagreement with the board.He refuses to elaborate, citing a confidentiality clause he signed.Don't shareholders have a right to know why the CEO decided to leave?"Sure," he says. The board undertook to brief large institutional shareholders after he left "to give them a measure of comfort. So there is nothing untoward about it."story_article_left4So minority shareholders have no rights?"No, that's not correct at all."Speculation is that there was disagreement about taking the company into lower-fee private education."I've been talking about moving out of the premium education space for a very long time," he says.So why didn't he do it?"That's what we undertook to do."Did they leave it too late? Because by the time they woke up, PSG-controlled private education business Curro had made that space its own."That's only partially true. The private-education space is a huge market. The low- and mid-fee range, moving away from the premium end, is just unfolding as we speak, not just in South Africa but in the region and the continent. It's one of the biggest investment opportunities. I'm very bullish on the sector."Curro is said to be making covetous moves on Advtech.Maasdorp implies that he would have fought any attempted acquisition."The competitive landscape in education is going to unfold over the next few years. I don't think we need to create one big player. There's room for a lot more players and I anticipate there'll be new entrants in the market. Global players will come into South Africa."..