Even before the two-day Sixth BRICS Summit begins on Tuesday, Prime Minister Narendra Modi, who arrived here on Monday afternoon, faced a packed schedule with back-to-back meetings, first with President Xi Jinping of China and then with President Vladimir Putin of Russia, within a few hours of his arrival.
Modi’s first meeting with Xi since taking over as the PM is significant as India is keen to engage with its Asian neighbour, not just economically to boost trade and investment, but strategically too, with a number of border issues still outstanding. The meeting is scheduled to last 40 minutes and will take place at the Gran Marquise, the hotel where Xi is staying.
Modi will later meet Putin for an hour at the Marina Park hotel where the latter is staying.
Senior government officials said while the broad contours of the BRICS Bank, originally conceived in the Fourth BRICS Summit in New Delhi, have been agreed upon, four critical issues are still open for dialogue. These are: shareholding, location, name and presidency. India is pressing for equal shareholding, given that other Bretton Woods institutions such as the World Bank and the International Monetary Fund (IMF) have remained mostly under Western influence.
“We want equal contribution by the five countries and equal shareholding. That’s central to the idea of setting up an institution that can be an alternate to the Bank and the Fund,” said a senior government official who is part of Modi’s delegation. While the draft agreement states that each country will contribute $10 billion over the next seven-eight years, China has evinced interest in contributing much more. Brazil, on the other hand, wants economic weight to determine shareholding.
“Every country wants to take away something from the Summit. South Africa is also keen to have the bank headquartered in its country,” said the official. Modi already endorsed the name of the BRICS Bank as “New Development Bank” in his departure statement. He has not, however, indicated any preference over the location. If the new bank is not headquartered in India, the government will certainly push for the presidency or key managerial positions.
Another official said the five countries will contribute $ 2 billion each in the next three-four years. It will be fully capitalised over a fairly long period of time. Ultimately, the bank will be fully capitalised at $ 100 billion, with other developing countries too being roped in as shareholders.
The modalities of the contingency reserve arrangement (CRA) are more or less decided and this may be reflected in the Fortaleza Declaration of the Summit. The $ 100 billion CRA will work like a swap arrangement between the continued…