Data provided by McGregor BFA
All data is delayed
Loading...
See More

Brics scale back development bank plans

Mar 27 2013 08:23 AFP
brics

President Jacob Zuma and Chinese President Xi Jinping talk business ahead of the two-day Brics summit in Durban. (GCIS) View Brics slidehow

Related Articles

Motsepe to chair Brics council

Get the facts on Brics

Brics face 'new imperialists' charge

China pumps $5bn into SA rail upgrades

China, Brazil sign currency deal

Brics bank not a done deal yet

 

Durban - Leaders from the Brics group of emerging powers were to announce a scaled-back plan on Wednesday to establish a development bank seen as a potential rival to Western-backed institutions.

They will also consider a direct appeal from Syria's embattled President Bashar al-Assad to mediate in the conflict there.

Leaders from Brazil, Russia, India, China and hosts South Africa were expected to put flesh on the bones of efforts to gain more global clout by establishing a rival to the World Bank.

"It's done," Finance Minister Pravin Gordhan said after talks with his counterparts on Tuesday.

"We made very good progress, the leaders will announce the details," he added shortly before a summit in the South African port city of Durban.

Together the Brics economies account for 25% of global output and 40% of the world's population.

But members say institutions such as the World Bank, the International Monetary Fund and the United Nations Security Council are not changing fast enough reflect their new-found clout.

"We are witnessing the dawn of a new era in the global arena which is characterised by the rise of emerging markets and developing economies," President Jacob Zuma said at a dinner to open the summit.

He described Brics as "a new paradigm for establishing a more equitable global governance model".

Brics negotiators had been under pressure to come up with an agreement to send a strong message to the United States and Europe that the current balance of power is untenable.

But as leaders opened the summit, it appeared that a wide ranging agreement would have to wait - and that a push for $50bn in starting capital for the bank might be scaled back.

The details were "being hammered out", Trade and Industry Minister Rob Davies admitted.

"There'll obviously be a process to put in place the remainder of the details," he said.

The bank is not likely to be up and running for years.

An Indian diplomat involved in the talks said many of the details were likely to be left for another day, but leaders would announce an outline deal.

The key sticking points were defining the scope of the bank, how projects would be distributed and where it would be based.

Many emerging nations both inside and outside Brics hope the bank will be a way to tap China's vast financial resources.

The World Bank said on Tuesday it was ready to support the new development bank.

But "establishing a development bank is a significant undertaking", it warned.

"We await the details related to the new bank's financing, governance, and location and stand ready to assist this newest player in global development any way we can," it said.

Brazil's central bank chief Alexandre Tombini said progress was also being made on a deal to establish currency swap lines to encourage trade likely to be worth around $100bn.

Members could also draw on the funds during a liquidity crunch or other crises, he added.

The currency swaps would also open the door for Brics countries to tap some of China's massive $3.31 trillion foreign reserves, the world's largest.

Securing both deals is meant to counter those critics who have dismissed the Brics summit as little more than a talking shop.

Chinese President Xi Jinping underscored the growing importance his country attached to the group by making Durban his first summit destination in his new role as head of state.

Brics leaders will also consider an appeal from Syria's Assad.

Assad's senior advisor Bouthaina Shaaban said the president had appealed to the summit's leaders to intervene "to stop the violence in his country and encourage the opening of a dialogue, which he wishes to start".

Shaaban was speaking after she delivered Assad's message to South Africa's Zuma.

Speaking ahead of the opening of the summit, Russian President Vladimir Putin said the group would try to act in concert.

"We will coordinate our activities to find a peaceful solution for the Syrian crisis," he said.

Russia and China have repeatedly blocked moves at the UN Security Council to impose sanctions against the Assad regime.

Slideshow: Higher investment for Brics - UN

Video: Brics wrangle over new development bank

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

brics
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
5 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're Talking About: Small Business

Standard Bank is looking for 12 entrepreneurs to participate in a 10-part TV series. They could win a R1m investment into their dream.
 
 

Zille: DA will provide real, sustainable jobs

The DA says it has a policy package in place which will lead to 6m real, sustainable jobs being created. Watch Helen Zille explain.

 
 

Latest elections multimedia

11 Julius Malema quotes you'll never forget
DA won't get 30% - Zille
The EFF's ad was banned, see why
Why Jack Parow wants you to vote on 7 May

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...