Russian President Vladimir Putin appears to be having more success hosting the seventh annual BRICS summit than he did hosting the Olympics.
Leaders of the BRICS (Brazil, Russia, India, China and South Africa) are meeting this week in Ufa, Russia. Already, the group can count two successes, its largest initiatives to date.
It launched the BRICS New Development Bank, which has taken three years of negotiations to bring to fruition. With about $50 billion in starting capital, the bank is expected to start issuing debt to fund infrastructure projects next year. They also launched a foreign-exchange currency fund of $100 billion.
The two new endeavors are statements that the five largest emerging markets are both looking out for each other and, simultaneously, moving away from the western financing institutions of the World Bank and International Monetary Fund.
“The BRICS states intend to actively use their own resources and internal resources for development,” Putin said, according to Reuters. “The New (Development) Bank will help finance joint, large-scale projects in transport and energy infrastructure, industrial development.”
Birthing the two initiatives in Russia had been Putin’s top priorities.
Russia has been hurting economically in the wake of Western sanctions over its role in the Ukraine crisis and a sharp drop in its chief export, oil. These new signs of cooperation come at a very good time for a Russia needing to find new markets to make up for its loss of Europe.
And they appear to be working. “On Thursday its finance minister said China had bought around $1 billion worth of Russian domestic bonds this year,” reported Reuters.
Chinese President Xi Jinping said he looked forward to more cooperation among the BRICS, while avoiding talk of the stock market decline on the mainland.
In other developments, India’s Prime Minister Narendra Modi proposed a 10-point initiative to promote greater coordination among the five countries. Among the initiatives, Modi suggested an annual trade fair that India would host next year. Other initiatives include “a Railway Research Centre, cooperation among supreme audit institutions, a Digital Initiative and an Agricultural Research Centre,” reported NDTV.
The group also collectively commented on the Iran nuclear situation. In a summit declaration, the BRICS asked “for a swift permanent agreement on curbing Iran’s nuclear program in exchange for relief from economic sanctions. The language of the statement was careful, and devoid of finger-pointing,” reported Reuters.
The BRICS called for “the normalization of trade and investment with Iran” and said any deal should “provide for the comprehensive lifting of sanctions imposed on Iran”, reported Reuters.
Together, the BRICS hold 40% of the world’s population and produce about 20% of its economic output.