BRICS formalize New Development Bank
Presidents Dilma Rousseff and Vladimir Putin at the 7th Brics Summitt in Russia 
Brazil, Russia, India, China, and South Africa (BRICS) leaders signed Thursday (July 9) in Ufa, Russia, during the 7th BRICS Summit, the memorandum marking the entry into force of the New Development Bank (NDB), or BRICS bank, which will be based in Shanghai, China, with a start-up capital of $50 billion.
The bank is expected to start operations as of 2016, providing funds for infrastructure and sustainable development projects for the bloc's countries and later to other interested developing countries.
President Dilma Rousseff emphasized the global importance of BRICS, noting that the bloc's countries “have accounted for 40% of global growth.” She mentioned the new UN Sustainable Development agenda, pointing out BRICS initiatives will be a welcome contribution to a new stage in international relations that is more focused on sustainable development.
Rousseff noted that by 2020, developing countries will require infrastructure investment in excess of $1 trillion a year. “Achieving this figure will be no easy task. The global foreign investment has dropped nearly 50% over past five years. It's against this backdrop that the new BRICS development bank will play an important role in channeling funds for infrastructure and sustainable development projects in our countries, and later, in other developing countries,” she said.
Russian President Vladimir Putin said the global economic situation was discussed in detail during the BRICS Summit, which runs until Friday (10). “We are concerned about the instability of the markets, with the high volatility of oil and commodity prices and the sovereign debt build-up in a number of major countries. All these imbalances directly impact the growth momentum of our economies. Under these conditions, the BRICS countries intend to actively use their own resources for internal development,” he said.
Putin went on to talk about the $100 billion NDB Contingent Reserve Arrangement (CRA) “which will give BRICS the opportunity to respond to financial market movements promptly and in an appropriate way.” Out of the total funds, $41 billion will come from China. Brazil, Russia, and India will contribute $18 billion each, and South Africa will provide $5 billion.
During the summit, President Rousseff had bilateral meetings with heads of government from BRICS countries, as well as leaders of other countries invited to the event. She noted the agreements for creating the NDB and Contingent Reserve Arrangement were ratified at the previous BRICS Summit in Fortaleza, Brazil, in 2014.
The BRICS Business Council reported more than 40 projects of interest to member countries in such areas as industry, energy, transport, logistics, and information technology. “It's an important set of initiatives that will be considered very carefully by our governments, which will rely on support from NDB,” Rousseff said.
The BRICS development bank will be chaired by Indian banker K.V. Kamath, with Brazilian economist Paulo Nogueira Batista Junior as deputy. With the bank, BRICs hope to counterbalance the IMF and World Bank hegemony over the global financial system and open up doors for other currencies than dollars in international trade.
Translated by Mayra Borges
Fonte: BRICS formalize New Development Bank
