BRICS countries to have self funded monetary structures.
The BRICS (Brazil, Russia, India, China, South Africa) group of countries flexed their might at the ongoing BRICS summit in Fortaleza, Brazil. The four countries – on Tuesday July 15, 2014 – finalized a joint plan to create a Shangahi-based development bank and a reserve fund.
The leaders of Brazil, Russia, India, China and South Africa have agreed to launch the institutions to finance infrastructural projects and tackle the problems of economic crisis.
Dilma Rouseff, the Brazilian President said, “We took the historic decision to create the BRICS bank and the reserve agreement — an important contribution to reconfigure the system of international economic governance”. Even the Russian Vladimir Putin has called the agreement as very powerful way to prevent new economic difficulties.
The creation of these new structures is also being seen as a move to find indigenous alternatives to western-led institutions such as the IMF (International Monetary Fund) and World Bank.
The five emerging nations had revealed their plans to create this bank and reserve fund back in 2013. The new Development Bank will be inspired by the Washington based World Bank and the reserve will be seen as a mini IMF.
Xi Jinping, the Chinese President said that they need to improve economic governance at a global level and increase representations and voice of the developing countries.
The new bank will have a capital of $50 billion which could rise to $100 billion and will be funded equally by every nation so as to avoid any hegemonic power dynamic.
Photo Credits: Encyclopedia dramatica