Durban, Mar 28 (ANI): The fifth BRICS Summit concluded at Durban with the leaders of Brazil, Russia, India, China and South Africa announcing the formation of a BRICS Development Bank to finance infrastructure projects and to create a USD 100 billion contingency fund to tackle any financial crisis in emerging economies.
The decision was taken at the BRICS Summit in Durban, which also launched a Business Council to encourage investment and trade in member countries and to expand business cooperation.
"Following the report from our finance ministers, we are satisfied that the establishment of a New Development Bank is feasible and viable. We have agreed to establish the New Development Bank. The initial contribution to the Bank should be substantial and sufficient for the Bank to be effective in financing infrastructure," the 'eThekwini' (Durban) Declaration said at the end the Summit of leaders of the five countries (Brazil, Russia, India, China and South Africa).
"In June 2012, in our meeting in Los Cabos, we tasked our Finance Ministers and Central Bank Governors to explore the construction of a financial safety net through the creation of a Contingent Reserve Arrangement (CRA) amongst BRICS countries. They have concluded that the establishment of a self-managed contingent reserve arrangement would have a positive precautionary effect, help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability," the Declaration added.
"It would also contribute to strengthening the global financial safety net and complement existing international arrangements as an additional line of defence. We are of the view that the establishment of the CRA with an initial size of USD 100 billion is feasible and desirable subject to internal legal frameworks and appropriate safeguards. We direct our Finance Ministers and Central Bank Governors to continue working towards its establishment.
"We are grateful to our Finance Ministers and Central Bank Governors for the work undertaken on the New Development Bank and the Contingent Reserve Arrangement and direct them to negotiate and conclude the agreements which will establish them. We will review progress made in these two initiatives at our next meeting in September 2013," it said.
"We welcome the conclusion between our Export-Import Banks (EXIM) and Development Banks, of both the "Multilateral Agreement on Cooperation and Co-financing for Sustainable Development" and, given the steep growth trajectory of the African continent and the significant infrastructure funding requirements directly emanating from this growth path, the "Multilateral Agreement on Infrastructure Co-Financing for Africa," it added. (ANI)
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