Or at least there was the idea of the BRICS bank.
The supranational lender imagined by Russia, China, Brazil, India, and South Africa is, like the AIIB, largely a response to the failure of US-dominated multilateral institutions to meet the needs of modernity and offer representation that’s commensurate with the economic clout of their members.
As Bloomberg points out, the countries’ combined economic output is now roughly equal to that of the US. “Back in 2007, the U.S. economy was double the BRICS,” Bloomberg notes.
On Tuesday, ahead of this year’s summit in Ulfa, the BRICS countries officially launched the new bank along with the reserve currency pool. Here’s WSJ:
Read the entire articleThe group of five major emerging economies known as Brics launched a development bank on Tuesday ahead of a summit in the Russian industrial city of Ufa, where Russia seeks to demonstrate it hasn’t been isolated by Western sanctions.
The long-planned development bank, aimed at financing projects mainly in member countries Brazil, Russia, India, China and South Africa, will select its first projects to finance by the end of the year, Russian Finance Minister Anton Siluanov said on Tuesday. The countries’ national banks also signed a deal Tuesday to create a $100 billion reserve fund by the end of July that can be tapped in financial emergencies.
The Bank of Russia said it signed an “operational agreement” with Brics counterparts to create a $100 billion pool of mutual reserves. The group agreed to create the fund in 2013 as an alternative to the International Monetary Fund, after seeing investors pull money away from emerging economies, causing their currencies to weaken.
The currency pool would be drawn on by the central banks of Brics states whenever they suffered a shortage of dollar liquidity, helping them maintain financial stability, Russia’s central bank said.
China will contribute $41 billion to the currency pool. Brazil, India and Russia will each provide $18 billion, while the remaining $5 billion will come from South Africa.