|
|
BRICS Summit to Establish Potential Rival to IMF and World Bank
6 July 2014
At the Sixth Summit of BRICS (Brazil, Russia, India, China and South Africa) to be held July 14, 15 and 16 in Brazil,a new financial architecture is scheduled to be established. A monetary stabilization fund called Contingent Reserve Arrangement (CRA) and a development bank called BRICS Bank will begin to operate after the summit de facto in opposition to the IMF and World Bank. The CRA will have 100 billion, with contributions from China of 41 billion dollars; Brazil, India and Russia, with 18 billion each and South Africa with 5 billion. The BRICS Development Bank will begin operation with a capital of 50 billion dollars with contributions of 10 billion and guarantees of 40 billion from each of its members and will be able to expand to 100 billion dollars within two years, and to 200 billion in five years; it will have a capacity of financing up to 350 billion. According to the Financial Times, China also plans to create an Asian infrastructure bank that will rival the Asian Development Bank, which is dominated by the US and Japan. Russia Today reports that Shanghai is considered to be the front runner to become home of the new BRICS bank. China, Russia, India and South Africa are putting forward cities to be the host of the new bank. The choice of city is expected to be made on July 15. The leadership of the bank will be decided in July and will likely be rotated every five years. |