The BRICS emerging-market nations on Tuesday vowed closer economic cooperation as they announced plans to establish a development bank and a contingent reserve arrangement (CRA).
The group’s five members — Brazil, Russia, India, China and South Africa — laid out the blueprint for the New Development Bank (NDB) in a declaration released after a summit in Fortaleza in Brazil.
The bank, to be headquartered in Shanghai, will have an initial subscribed capital of US$50 billion, which will be contributed equally by the five nations, Xinhua news agency reported.
The group decided that the first chair of the Board of Governors would be from Russia, the first chair of the Board of Directors from Brazil, and the first president of the bank from India.
The bank, said the declaration, is aimed at “mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies.”
“Based on sound banking principles, the NDB will strengthen the cooperation among our countries and will supplement the efforts of multilateral and regional financial institutions for global development, thus contributing to our collective commitments for achieving the goal of strong, sustainable and balanced growth,” the statement said.
The CRA, with an initial size of US$100 billion, “will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements,” it added.
The five nations pledged to further facilitate trade, enhance financial ties, tackle tax-related challenges and tap the cooperation potential in insurance and reinsurance markets.
Chinese President Xi Jinping attended the summit along with Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and South African President Jacob Zuma.
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