M A I N   N E W S

BRICS reach deal on development bank
To focus on infra projects
Business Council set up to boost intra-BRICS business
Raj Chengappa in Durban

Meeting a day before the fifth summit of the heads of state is to formally begin, finance ministers of the five countries, including India’s P. Chidambaram, thrashed out an agreement to establish a BRICS Development Bank on the lines of the World Bank.

Manmohan at BRICS Summit

Prime Minister Manmohan Singh with Brazil's President Dilma Rousseff during a bilateral meeting ahead of the BRICS Summit in Durban on Tuesday. — PTI

“It’s finally done,” South Africa’s Finance Minister Pravin Gordhan announced to the media after a bruising meeting with his counterparts from the other four countries. The details of the bank, including the resolution on contentious issues such as seed capital, membership of its board and the rules of governance, are to be announced by the heads of state at their summit meeting tomorrow.

While details of the development bank are to be finalised on Wednesday, it is learnt that member countries are veering towards setting it up with a seed capital of $50 billion with each member nation contributing $10 billion. The bank is also likely to focus on funding infrastructure projects that would challenge established institutions such as the World Bank.

Prime Minsiter Manmohan Singh with Russian President Vladimir Putin during a bilateral meeting ahead of the BRICS Summit in Durban on Tuesday. — PTI

Meanwhile, as commerce ministers of BRICS countries including India’s Anand Sharma met to work out how best to boost trade, top business leaders from these countries attending the BRICS Business Forum meeting announced the setting up of a Business Council to ensure a systematic effort to deepen the business and economic engagement between member countries.

The structure of the Business Council is also expected to be announced by the heads of state at the summit meeting, but it is learnt that each country would have five representatives on the Council. It would meet twice a year and the chair would be by rotation and would go to the host country of the annual summit.

“The Council is a big step to boost intra-BRICS business and we would like it to be a lot more BRICS within BRICS before expanding it,” said Naina Lal Kidwai, FICCI president and country manager of HSBC, who headed the Indian delegation at the Forum.

These developments are significant as the five BRICS countries together account for 26 per cent of the world’s geographic area, 43 per cent of the world’s population, 17 per cent of international trade and 25 per cent of global GDP in terms of purchasing power parity. The decision on the trade, business and financial fronts will see for the first time after the grouping was formed in 2009, a more time-bound and result-oriented agenda on the economic front.