Mar. 25 – The BRICS nations of Brazil, Russia, India, China and South Africa are expected to establish a development bank to pool funds to capitalize an infrastructure-focused lender at their communal meeting in Durban tomorrow. It is argued that the established players in this field – the World Bank, International Monetary Fund and the UN Security Council – are simply not changing their policies fast enough to keep pace with the emergence of the BRICS nations new economic clout.
Details have not yet been released, yet diplomats have suggested an initial capitalization of US$10 billion may be injected as seed money from each country.
The infrastructure concept is to recycle national budget surpluses into investment in other developing countries. Many smaller and emerging nations will see hope that this may be a way to tap into China’s huge foreign reserves. Meanwhile, China would like to see the bank invest in trade-supplying projects. Africa is also poised to be a major recipient of funding, as is Latin America.
Collectively, the BRICS nations account for 25 percent of global GDP and make up 40 percent of the world’s population.
Further details will be revealed in the coming days as the annual BRICS Summit gets underway in South Africa from March 26-27.