BRICS Bank Creation May Take Five Years -Russia Deputy Fin Min

[Aarush]

MOSCOW--The creation of a development bank of five nations--Brazil, Russia, India, China and South Africa--may take around five years, Russia's Deputy Finance Minister Sergei Storchak said Tuesday.

BRICS finance and foreign ministries have already held four meetings on the creation of the bank but haven't agreed yet on the amount of funds each state will contribute to the bank's capital, Mr. Storchak said, speaking to Russia's upper house of parliament.

BRICS decided in 2013 to create a development bank and a foreign-exchange rescue fund.

Russia has proposed that each of the five countries contribute 20% of the development bank's capital of $100 billion, Mr. Storchak said. Other parties have expressed a view that the amount they contribute should depend on the actual size of each economy.

There has also been no final agreement on the BRICS bank location.

When agreement is reached, it will take around two years to complete bureaucratic procedures and solve issues, and another three years to gather funds to build the bank's capital.

"In the first two years we can save national budgets. Plus we bet on the pace of economic growth improving so budgets will be better replenished and we will get a more favorable pattern for countries to be really engaged in the banks' operation," Mr. Storchak said.

BRICS representatives are also considering creating a pool of reserve currencies and setting up a mutual insurance fund.

BRICS Bank Creation May Take Five Years -Russia Deputy Fin Min - WSJ.com

 

[Abu Zolfiqar]

the whole BRICS thing on paper sounds (or sounded) good but they are all headed for economic hardship and testing times ahead

It was 12 years ago that Jim O'Neill had his innovative idea. He believed that developing countries such as China, India, Brazil and Russia could profit immensely from globalization and become the new locomotives of the global economy.

Growth rates are on decline; Same applies to EU but the BRICS are still seen as industrializing so therefore its more alarming to see records of growth being slashed in half as is the case with Brazil which has gone from 6% GDP to 3% GDP growth and india from 10% to below 5% now

to offset the increasing inflation rates some of these countries are increasing their interest rates and that will woo away investors and make them nervous...the speculators seem to have pushed investments in sovereign bonds in BRICS countries to be re-shored to United States; obviously theres no crowding out so there arent any suddden changes or disturbances but more money is being invested by developed and developing world back to USA which is trying to market itself as "in successful recovery" (how true that is with its debt ceiling issues-- we dont know)

furthermore as some of these countries see industrialization and more skill-based labor requirements then the wages demanded will go up which obviously means that they will be slightly less cost competitive (this especially applies to PRC where already there is a steady demand for higher wages)

to China's credit - b/c of their exports led growth and visionary fiscal policies they are sitting on roughly 4 trillionn dollars of reserves in their central bank.....and everyone knows that on a macro level that is a critical indicator investors look at when chosing to do short term or long term investments in countries whether they be high or low risk

Russia quite frankly - theyre population is aging considerably meaning their work force is shrinking; bearacracy and corruption and mafia-like culture in governance still exists and they dont enjoy the most diversified economy....their industrial output is modest...most of the growth they've seen under Putin leadership is attributed to the oil prices and they arent any higher now than they were like 2 years ago

 

[Arya Desa]

BRICS? I lay those in the morning.

Seriously speaking, the differences between these countries is larger than their similarities, hence it is destined to fail. I don't understand why South Africa is included also, is it do say Africa is included in the coalition of the 3rd world?

 

[Beidou2020]

Never trust anything from western media regarding anything like BRICS (which is established to challenge western dominated organisations).

 

[tranquilium]

BRICS? I lay those in the morning.

Seriously speaking, the differences between these countries is larger than their similarities, hence it is destined to fail. I don't understand why South Africa is included also, is it do say Africa is included in the coalition of the 3rd world?

No. South Africa is inducted into BRIC meeting by China for several reasons----it is a resource exporter, its biggest trading partner is China and it is a major exchange platform with Africa.

To be honest, while a BRICS bank is difficult to setup, a BRCS bank isn't that farfetched. Currently, the main challenge in setting up a BRICS bank is actually India. Out of the five BRICS nations, Brazil, Russia and South Africa are resource exporters. Brazil and South Africa on raw material and Russia on energy products. These three's biggest trading partner is China because China is a gigantic manufacturing nation. It is large enough to absorb any export from Brazil, Russia and South Africa and it produce enough stuff and in sufficient variety that it can supply these three country's needs.

India, on the other hand, doesn't really have a clear niche within the group. India does export a lot of stuff, but it is not a resource exporter and what it does export primarily goes to southeast Asia and Middle East. India also import a lot of stuff and quite a bit of them are from China, but it doesn't really have the manufacturing capacity to prop up economies like Brazil, Russia and South Africa. Furthermore, India's trade tie is stronger with Middle East and Southeast Asia than the other BRICS nations.

To make matter worse, India and China are also the only BRICS nations that have political conflicts. Basically, if India wants to extend its influence outside South Asia subcontinent, it will have to go through China. This create quite a bit conflict while affects economic cooperation.

Basically, within the BRICS group, India is like a gigantic fifth wheel. Its economy is too large to ignore completely, but you also have difficulty fitting it with the other four nations. Unless this can be resolved, a BRICS bank is going to difficult to setup.

 

[Beidou2020]

No. South Africa is inducted into BRIC meeting by China for several reasons----it is a resource exporter, its biggest trading partner is China and it is a major exchange platform with Africa.

To be honest, while a BRICS bank is difficult to setup, a BRCS bank isn't that farfetched. Currently, the main challenge in setting up a BRICS bank is actually India. Out of the five BRICS nations, Brazil, Russia and South Africa are resource exporters. Brazil and South Africa on raw material and Russia on energy products. These three's biggest trading partner is China because China is a gigantic manufacturing nations. It is large enough to absorb any export from Brazil, Russia and South Africa and it produce enough stuff and in sufficient variety that it can supply these three country's needs.

India, on the other hand, doesn't really have a clear niche within the group. India does export a lot of stuff, but it is not a resource exporter and what it does export primarily goes to southeast Asia and Middle East. India also import a lot of stuff and quite a bit of them are from China, but it doesn't really have the manufacturing capacity to prop up economies like Brazil, Russia and South Africa. Furthermore, India's trade tie is stronger with Middle East and Southeast Asia than the other BRICS nations.

To make matter worse, India and China are also the only BRICS nations that have political conflicts. Basically, if India wants to extend its influence outside South Asia subcontinent, it will have to go through China. This create quite a bit conflict while affects economic cooperation.

Basically, within the BRICS group, India is like a gigantic fifth wheel. Its economy is too large to ignore completely, but you also have a difficulty fitting it with the other four nations. Unless this can be resolved, a BRICS bank is going to difficult to setup.

India is always a major problem in these groups. They are overly protectionist and very inefficient with their corrupt and slow political system. They also want to be a stooge to the west by trying to please the west. In addition the Indians are very jealous of China's power and success which is one of the biggest problems. I think it would have been much better if Indonesia takes the place of India. India is always a problem child. That's why they should never get into SCO or get a permanent seat at the UNSC.

We don't really need a BRICS bank to loan out our forex reserves because we will be the biggest contributor to the reserve pool anyway. We can do it ourselves without a BRICS bank. India wants to limit our influence in BRICS but want us to contribute the most. The thing is that without our presence, no one would give two seconds to BRICS. We are the major player.

Seriously, nothing can get done whenever India is involved in anything. They are jingoistic, paranoid and jealous.

 

[Arya Desa]

No. South Africa is inducted into BRIC meeting by China for several reasons----it is a resource exporter, its biggest trading partner is China and it is a major exchange platform with Africa.

To be honest, while a BRICS bank is difficult to setup, a BRCS bank isn't that farfetched. Currently, the main challenge in setting up a BRICS bank is actually India. Out of the five BRICS nations, Brazil, Russia and South Africa are resource exporters. Brazil and South Africa on raw material and Russia on energy products. These three's biggest trading partner is China because China is a gigantic manufacturing nations. It is large enough to absorb any export from Brazil, Russia and South Africa and it produce enough stuff and in sufficient variety that it can supply these three country's needs.

India, on the other hand, doesn't really have a clear niche within the group. India does export a lot of stuff, but it is not a resource exporter and what it does export primarily goes to southeast Asia and Middle East. India also import a lot of stuff and quite a bit of them are from China, but it doesn't really have the manufacturing capacity to prop up economies like Brazil, Russia and South Africa. Furthermore, India's trade tie is stronger with Middle East and Southeast Asia than the other BRICS nations.

To make matter worse, India and China are also the only BRICS nations that have political conflicts. Basically, if India wants to extend its influence outside South Asia subcontinent, it will have to go through China. This create quite a bit conflict while affects economic cooperation.

Basically, within the BRICS group, India is like a gigantic fifth wheel. Its economy is too large to ignore completely, but you also have a difficulty fitting it with the other four nations. Unless this can be resolved, a BRICS bank is going to difficult to setup.

ICIC that makes sense. India should be ejected from BRICS then as it has no clear role.