A meeting of leaders of the BRICS nations (Brazil, Russia, India, China and South Africa) have reportedly discussed setting up a new development bank that would fund infrastructure projects in the five countries.
Such a bank would be the first formal institution to be launched jointly by the BRICS nations, and is being referred to in some media reports as a potential alternative to the World Bank. However, talks are said to be continuing into where the bank should be based and how much capital it should have.
“We are satisfied that the establishment of a new development bank is feasible,” South African President Jacob Zuma told the BBC. “We have decided to enter formal negotiations to establish a BRICS-led new development bank.”
He added that the bank would cooperate with other emerging markets and developing countries outside of the BRICS grouping in the future.
Media reports suggest the five nations are aiming to capitalise the bank with around $50 billion, with each country contributing $10 billion to the pot.
Speaking prior to the fifth BRICS Summit in Durban, South Africa, Russian President Vladimir Putin highlighted that the average economic growth rate of the BRICS countries in 2012 was 4 percent, while that for the seven countries with the largest financial sectors was 0.7 percent.
The BRICS represent some 40 percent of world population and 17 percent of global trade.