NEW YORK, July 14 (RIA Novosti) – A much-anticipated global development bank to rival Western-dominated institutions will top the agenda of this week’s meeting of the BRICS five major emerging economies in Brazil, analysts told RIA Novosti.
“A BRICS development bank can be an alternative to the IMF and is the group’s most important project – but it remains unclear how much capital it will be funded with,” said Michael Shifter, president of the Inter-American Dialogue, a Washington-based think tank.
“The IMF has not performed very effectively, but the BRICS group remains disparate and several members – Brazil, Russia and India – face quite serious economic challenges. Any initiative coming out of Fortaleza will reflect this.”
BRICS members have agreed on the idea of a development bank to help emerging economies borrow cash for major infrastructure projects – everything from power stations to ports, roads and telecommunication systems.
But key details about the scheme – such as whether its total capital sum will be in the region of $100 billion, as is estimated, and how much money each member will pay for start-up costs – has yet to be announced.
“The question remains who has the financial resources for this development bank when so many BRICS members face strong economic headwinds,” said William Pomeranz, a Russia expert at the Woodrow Wilson International Center for Scholars.
“For Russia, working in the BRICS format has been a success. Now that Moscow’s relations with the United States and the European Union have frayed over the crisis in Ukraine, the BRICS has taken on added importance for Russia.”
Russian President Vladimir Putin will meet his counterparts from other BRICS members – Brazil, India, China, and South Africa – in Fortaleza on July 15 for talks on trade and creating alternative bodies to the World Bank and the International Monetary Fund (IMF).
The BRICS meeting marks the end of Putin’s six-day diplomatic mission to Cuba, Argentina and Brazil. On Sunday, he watched Germany defeat Argentina in the World Cup final in Rio de Janeiro and took officially responsibility for hosting the tournament in Russia in 2018.
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