New Delhi - The Brics group of emerging world powerhouses -
Brazil, Russia, India, China and South Africa - is expected to launch plans
this week for a joint development bank and measures to bring their stock
exchanges closer together.
Officials say the initiatives will take time as they need to
sort out details. But they herald a new level of ambition for a bloc that
brings together about half the world’s people. The Middle East and energy
security will also be discussed, officials say.
The Bric acronym was coined in 2001 by Goldman Sachs
economist Jim O’Neill, who was searching for a catchy way to encapsulate the
broader shift in global economic growth towards emerging markets. South Africa
joined the grouping in 2010 so that it became Brics.
The countries held their first summit in 2009 and have been
criticised since as nothing more than an empty acronym as they struggle to find
common cause from four different continents with radically different economies,
systems of government and competing priorities.
The most relevant announcement from this week’s meeting in
India of the countries’ leaders is likely to be plans for a joint development
bank in the mould of the World Bank.
The initiative would allow the countries to pool resources
for infrastructure improvements, and could also be used in the longer term as a
vehicle for lending during global financial crises such as the one in Europe,
Brazilian Trade Minister Fernando Pimentel told reporters in
Brasilia last week that the countries would sign a deal at the summit to study
the creation of the bank.
Sudhir Vyas, a senior Indian foreign ministry official, told
reporters on Monday that the Brics would have to determine how the bank would
be structured and capitalised. Such an ambitious project would take time, he
“We don’t set up a bank every ordinary day,” he said.
Five-nation stock index
A benchmark equity index derivative shared by the stock
exchanges of the five Brics nations will be launched on Friday, the exchanges
involved said earlier this month. They would be cross-listed, so can be bought
in local currencies.
The leaders are also expected to sign agreements allowing
their individual development banks to extend credit to other members in local currency,
a step towards replacing the dollar as the main unit of trade between them.
A senior Indian government source said the Middle East and
energy security will be high on the agenda, including Iran. The Russian
ambassador in New Delhi said this week that a discussion on Syria would be
among his country’s top priorities.
While the plenary session on Thursday is likely to focus on
common ground, bilateral meetings could touch on more sensitive issues.
The exchange rate of China's currency has sparked protests
from countries, including Brazilian manufacturers, for being undervalued. Most
member countries also face a slowdown in their economies.
“For different reasons, each of the (countries) has got some
serious policy issues to deal with here that will determine whether they
continue down the path we got everybody so excited about,” O’Neill said.
Despite the problems, the growth outlook is still better
than in most of the developed world, meaning the Brics' clout will likely keep
growing. O’Neill predicts the bloc’s total gross domestic product will be larger than the United
States within three years and China’s economy alone will overtake the United
States by 2027.