BRICS to open own development bank

MOSCOW, July 9 (AFP): The BRICS group of emerging giants are expected to sign a deal next week to open their own development bank by 2016, Russia's finance minister said Wednesday.
The entity would be called "New Development Bank", with each BRICS member to contribute $2 billion to its capital, Anton Siluanov said, according to Russian news agencies.
The bank would have a maximum capital of $100 billion and be headquartered in Shanghai or New Delhi.
Brazil, Russia, India, China and South Africa unveiled in 2013 their plans to create the bank, which aims to rival Western-dominated institutions like the World Bank.
"During the summit, we should decide on the creation of the bank and a currency fund," said Siluanov.
He added that member states would have to make their contributions to the bank's capital within seven years but that the bank should effectively be created by 2016.
Membership in the bank, which would specialise in financing infrastructure works, would be open to other UN states but the five BRICS nations would hold a controlling share of above 55 per cent.
Siluanov said the BRICS would also sign a framework deal for a fund during the summit.
The fund -- dubbed a "mini-IMF" -- would amount to $100 billion, with $41 billion from China, $18 billion each from India, Brazil and Russia and five billion from South Africa.
Another Xinhua report adds: World Bank President Jim Yong Kim said on Tuesday that the proposed Asian Infrastructure Development Bank (AIIB) and the BRICS Development Bank are new forces for battling poverty and bringing shared prosperity globally.
Speaking at a press conference during his visit to Beijing, Kim said the banks will cater to the need for infrastructure investment in developing countries, and are welcomed by the World Bank.
All current investments will not meet the needs for infrastructure investment in developing nations. Such investment needs are estimated at US$1.0 trillion in developing countries every year.
The World Bank provided $60 billion last year. When combined with investment from private sectors, it added up to around $150 billion, far short of real demand.
"We have actually no choice but to welcome any newcomers because every new entrance will help us battle poverty and help us share prosperity," Kim said.
"We welcome any new organisations, BRICS bank or AIIB. We think the need for new investment in infrastructure is massive. We think we can work very well in cooperation with the new banks once they become a reality," Kim said.
"Our competition is poverty. Our enemies are lack of economic growth and growth that is not inclusive," he said, adding that the World Bank will provide the new banks with knowledge and solutions based on its experience.
BRICS is the acronym for five major emerging economies, namely Brazil, Russia, India, China and South Africa.