BRASILIA — The five BRICS nations will likely agree to fund their $100 billion development effort equally, giving them the same rights in a new multilateral bank that could start lending in two years, a senior Brazilian government official told Reuters Thursday.
The new bank would symbolize the growing influence of emerging economies in the global financial architecture long dominated by the United States and Europe through the International Monetary Fund and World Bank.
Leaders of Brazil, Russia, India, China and South Africa are expected to sign a treaty to launch the bank officially when they meet at a BRICS summit in the northern Brazilian city of Fortaleza on July 15.
The bank, which will have start-up capital of $50 billion, will have to be ratified by the countries’ legislatures and could begin lending in two years, said the official, who requested anonymity because he was not authorized to speak publicly.
The new development bank would help cover growing demand for project financing that has not been fully met by global multilaterals, which for years have been heavily criticized for meddling in the domestic policies of sovereign borrowers.
“The bank will look into the finances of borrowers, but never intervene in their economic affairs,” said the official. “Any country can join the bank with a $100,000 share. The idea is to provide them loans at a lower cost than what they would individually get in markets.”
The BRICS will also decide if the bank will be based in New Delhi, Shanghai, Johannesburg or Moscow. Brazil will not offer headquarters because of upcoming presidential elections that could delay negotiations, the official said.
Full article: BRICS Countries Gearing Up to Launch $100Bln Multilateral Bank (The Moscow Times)