The BRICS group of emerging world powerhouses – Brazil, Russia, India, China and South Africa – is set to outline plans at a summit this week for a joint development bank, while the five countries’ stock exchanges will also move closer together.
Officials say details of the initiatives still need to be agreed, but they herald a new level of ambition for a bloc that brings together about half the world’s people but which has been criticized as an empty acronym.
The Middle East, including oil imports from Iran, will also be discussed at Thursday’s meeting in India, officials say.
BRICS leaders held their first summit in 2009 and have sought to increase their global influence to reflect their growing economic clout. But with radically different economies and systems of government, and competing priorities, the countries from four different continents have often struggled to find common cause.
A significant announcement at this week’s meeting is likely to be the plan for a joint development bank in the mould of the World Bank. Such an initiative would allow the countries to pool resources for infrastructure improvements and could eventually serve as a vehicle for lending during global financial crises such as the one in Europe, officials say.
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 capitalized. Such an ambitious project would take time, he said.
“We don’t set up a bank every ordinary day,” he said.
The leaders are also expected to sign agreements allowing their individual development banks to extend credit to other members in their local currencies, a step towards replacing the dollar as the main unit of trade between them, Reuters reported.
In addition, benchmark equity index derivatives allowing investors in one BRICS country to bet on the performance of stock markets in the other four members without currency risk will be cross-listed on their stock exchanges from Friday, the exchanges said earlier this month.