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BRICS agree to capitalize development bank at $100bn

Published time: September 05, 2013 14:19
(RIA Novosti/
Igor Russak)

(RIA Novosti/ Igor Russak)

The BRICS nations have decided to fund their development bank with $100 billion. The reserves are aimed at financing joint development ventures, and are set to rival the dominance of the World Bank and the IMF.

“At the final stage of realization - the initiative to create a BRICS forex reserve pool – the size of its capital has been agreed at $100 billion,” Russian President Vladimir Putin said while opening the G20 Summit in St. Petersburg.

Russia, Brazil and India will contribute $18 billion to the BRICS currency reserve pool, while China $41 billion and South Africa $5 billion, according to a press release issued by the BRICS on Thursday.

Earlier this week Russia’s Finance Minister Sergei Storchak said that there were still a lot of “difficult details” to sort out.

“These are systematic themes, complicated [and] negotiationsare difficult. We must assume the bank will not start functioning as fast as one could imagine. It will take months, maybe a year,” said Storchak.

In June Storchak said the project would be up and running by 2015. The scheme was approved in Durban South Africa at the BRICS summit in 2013.

The bank is designed to help finance infrastructure and development projects in the BRICS countries and will pool foreign currencies to fend off any future financial crisis.

Russian Foreign Minister Sergei Lavrov said the bank will “help avoid the negative impacts that fluctuations in currency markets may have on our economies.”

The creation of the reserves pool may help the BRICS nations in their drive to reform votes and quotas in the International Monetary Fund (IMF).

An IMF quota represents a countries contribution to the fund’s capital as well as its clout in the IMF’s decision making. It can also decide the size of any loan that country receives from the IMF. Currently the US has the highest quota of any country at 17.08%, allowing it to veto any decision as any initiative is only passed if it receives 85% of the vote.

The BRICS countries represent a considerable force in terms of the world’s finances. Trade within the group amounted to 16.8% of global commerce at $6.1 billion. 

“The strength of the BRICS is amplified by the fact that BRICS countries account for 43% of the world’s population, around 18% of its GDP and 40% of its currency reserves, estimated at around a trillion US dollars,” said Jacob Zuma, the South African President, at the Durban summit.

Increased economic muscle among the BRICS has been matched by a louder voice across all areas of global affairs.

The Russian Foreign Ministry Ambassador Vadim Lukov said Thursday that the BRICS countries will have an informal meeting at the G20, “at which they will discuss interaction and coordination of the G20 positions.”

The BRICS are determined to create a full-scale mechanism of coordination on an increasingly broader range of political and economic issues, Lukov added


Comments (22)

 

David Martens 04.07.2014 14:08

I fail to understand why Russia would want to deal with an all Marxist black racist government like the South African government. Wouth Africa has now the worlds worst statistics for Murder, Genocide, Rape, Government Corruption, total alienation and exclusion of whites from the workplace in draconic laws signed by Jacob Zuma.

And especially with a president that sings songs of killing South Africa's farmers (pertaining to white farmers only) and Boers.

All these aspects are headlong with President Vladimir Putin's (visible) policies of removing corruption and atrocities against the people of the world.

 

WorkTogether 07.10.2013 14:25

Putin & Xi Jinping have the political & economic experience combined with diplomatic genius to make BRICS a force to be reckoned with in a world greatly in need of routing out the evil global rot besetting it. Along with India, Brazil & South Africa, these five countries represent all the necessary innovation & technical capability to destroy what ails the world, without firing a single shot PEACEFULLY. BRICS was not created to feed war, hunger, murder & mayhem & starvation, but to build a world where everyone's human rights are respected & all have a future. Is that not what we all desire the world to become?

 

WorkTogether 07.10.2013 14:07

Reinforcing its name, the BRICS will surprise a world which already recognize the balance of power has changed. If the Western Allies change their self serving strategies & outdated Zionist imperialism mixed with Satanic overtones & join BRICS, it will result in the growth of a stable global economy, where the sovereignty of countries are not threatened by war or broken apart by invaders stealing their resources for tuppence. The $US is collapsing. Product of a never ending printing machine. The US could not even repay China a portion of their debt in gold as it requested, which a scandal, was quickly covered up.

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