BRICS nations launch new bank, currency pool
Source: Deutsche Welle
cjc/pad (Reuters, AFP)
Leaders of BRICS emerging nations have managed to present a unified front at a summit in Russia, expressing concern over the world economy. They also finally launched two of the group's largest initiatives to date.
At a summit in the Russian city of Ufa on Thursday, heads of state from Brazil, Russia, India, China and South Africa said a new development bank with an estimated start capital of $50 billion (45 billion euros) would begin financing projects as early as next year.
The initiative has taken three years to cobble together, with protracted negotiations on funding, the location of the bank's headquarters and personnel issues.
Russian President Vladimir Putin said he saw the bank - dubbed the New Development Bank - as an alternative to international financing institutions like the World Bank and the International Monetary Fund, both of which are dominated by the United States.
Read more: http://www.dw.com/en/brics-nations-launch-new-bank-currency-pool/a-18574402
... The BRICS bloc noted the fragile recovery of global growth and also said they were concerned about potential spillover effects from the unconventional monetary policies of the advanced economies.
BRICS accounted for over 17 percent of global trade, 13 percent of the global services market and 45 percent of the worlds agricultural output in 2014. The combined GDP (purchasing power parity) of the five BRICS countries surged from $10 trillion in 2001 to $32.5 trillion in 2014.
... We emphasize the need for universal adherence to principles and rules of international law in their interrelation and integrity, discarding the resort to double standards and avoiding placing interests of some countries above others, said the document.
... We condemn unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations. Bearing this in mind, we emphasize the unique importance of the indivisible nature of security, and that no State should strengthen its security at the expense of the security of others, added the Ufa communiqué.
http://thebricspost.com/brics-adopts-ufa-declaration/#.VZ6v3GCwn6Y
KamaAina
(78,249 posts)instead of adopting the damned euro which is presently strangling Greece?!
Comrade Grumpy
(13,184 posts)cosmicone
(11,014 posts)and American exceptionalism.
Amishman
(5,559 posts)Brazil is in recession and fighting corruption
Russia is being strangled by low oil prices
China faces a stock market crash and housing bubble
South Africa is also struggling, with consumer and business confidence at lowest levels in a decade
India is the only one that is moderately healthy
Demeter
(85,373 posts)This was first proposed in 2013:
The New Development Bank was agreed to by BRICS leaders at the 5th BRICS summit held in Durban, South Africa on 27 March 2013.
On 15 July 2014, the first day of the 6th BRICS summit held in Fortaleza, Brazil, the group of emerging economies signed the long-anticipated document to create the $100 billion BRICS Development Bank and a reserve currency pool worth over another $100 billion. Both will counter the influence of Western-based lending institutions and the dollar. Documents on cooperation between BRICS export credit agencies and an agreement of cooperation on innovation were also signed.
Shanghai was selected as the headquarters after competition from New Delhi and Johannesburg. An African regional center will be set up in Johannesburg.
The first president will be from India, the inaugural Chairman of the Board of directors will come from Brazil and the inaugural chairman of the Board of Governors will be Russian.
On 11 May 2015, K. V. Kamath was appointed as President of the Bank.
Structure and objectives
Development capital
The bank's primary focus of lending will be infrastructure projects with authorized lending of up to $34 billion annually. South Africa will be the African Headquarters of the Bank named the "New Development Bank Africa Regional Centre". The bank will have starting capital of $50 billion, with capital increased to $100 billion over time. Brazil, Russia, India, China and South Africa will initially contribute $10 billion each to bring the total to $50 billion. Each member cannot increase its share of capital without all other 4 members agreeing. This was a primary requirement of India. The bank will allow new members to join but the BRICS capital share cannot fall below 55%.
Contingent Reserve Arrangement (CRA)
The CRA is a framework for the provision of support through liquidity and precautionary instruments in response to actual or potential short-term balance of payments pressures.
The objective of this reserve is to provide protection against global liquidity pressures. This includes currency issues where members' national currencies are being adversely affected by global financial pressures.
The Bank would also provide assistance to other countries suffering from the economic volatility in the wake of the United States' exit from its expansionary monetary policy.
This fund will consist of $10 billion of "paid-in capital" ($2 billion from each member to be provided over seven years) and an additional $40 billion to be "paid upon request". Out of the total initial capital of $100 billion, China will contribute $41 billion, Brazil, Russia and India would give $18 billion each, and South Africa would contribute $5 billion. It is scheduled to start lending in 2016.
Members
There are 5 members as of 1 July 2015.
Founding Members
Country/Region Date of Accession
Brazil 2014
Russia 2014
India 2014
China 2014
South Africa 2014
I'd like to see any Western NGO move that fast.
libdem4life
(13,877 posts)their own Trade Pact. Perhaps this is why Obama was/is so insistent on this current trade bill. Maybe why Germany "blinked" on Greece. Then, there is all of the disaffected Southern European nations. One needs not to be an economist to not that economic events are moving very fast.
Bernie is the ONLY US politician mentioning it, let alone have suggestions about the behemoth banks, which will affect the IMF, which wil affect .....
45% of the world's agricultural output now under BRICS. That's sobering. Wonder about water and how this affects it's global rights...because that's going to be one of, if not the last piece in the global puzzle.
newthinking
(3,982 posts)to threaten the global banking monopoly (and thus the western corporate financial oligarchy).
In reality this will just mean "competition" (which does not mean anyone has to lose), but many have benefited from a monopoly on world currency and financial institutions and we have relied so heavily on being able to print massive money without dealing with the consequences; that we are not in a good position to move to a competitive financial system.
The threat of a rising Asian financial system is the real reasoning behind what is happening Ukraine. The US is too tied to China to go after it's economy. It seems that the hope is to weaken BRICS northern front. Unfortunately, so far that has backfired and BRICS countries are exhibiting extraordinary cooperation.
This paragraph shows what has been motivating these countries to accelerate their efforts:
"We condemn unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations. Bearing this in mind, we emphasize the unique importance of the indivisible nature of security, and that no State should strengthen its security at the expense of the security of others"