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Leaders of Brazil,Russia,India,China and South Africa meeting on Thursday for the 4th BRICS Summit are likely to sign a framework agreement for setting up a development bank on the lines of multilateral institutions such as World Bank. The proposed BRICS Development Bank will extend credit to member nations during crisis and for infrastructure development at lower costs.
While a joint statement after a meeting of the trade ministers of the five countries does not refer to the proposal,government officials present in the meeting said a joint working group will be announced to draft the contours of the proposed bank. They said it would not be binding on member nations.
Also,stock exchanges of the five nations are likely to launch a benchmark equity index derivative this week. They would be cross-listed so that they can be traded in local currencies.
Yu Ping,vice-chairman of China Council of Promotion for International Trade,who is part of the Chinese delegation here,said that the BRICS Business Forum has made a case for setting up of the development bank for enhancing trade activities among the members. The member nations plan to take the total trade to $500 billion over the next three years from $230 billion now,commerce and industry minister Anand Sharma said.
The delegates recommended that the five BRICS countries have lot of business opportunities and for the companies to engage in cooperation and have business activities they need financing services. Therefore,there should be an institutional guarantee for financial services…So,the delegates put forward the idea of establishing a development bank to finance the business activity, Yu said.
BRICS account for 45 per cent of the worlds population and a quarter of world economy at $13.5 trillion. The five nations will meet here on Thursday for the annual summit and are likely to discuss a host of issues including the Middle East and energy security,especially Iran along with global slowdown.
In a joint statement issued today after the business forum,the member nations expressed concerns over rising protectionism,especially subsidies in agriculture by few developed countries. They said that such protectionism continue to distort trade and undermine the food security and development prospects of developing countries.
Reviewing the global economic situation,the members also urged that international trade should be promoted as an engine of the economic growth and development.
The BRICS nations also discussed the impasse in Doha rounds of WTO and reiterated that they remain fully committed to an early conclusion of the negotiations. In fact they said they were willing to explore outcomes in specific areas where progress is possible while preserving the centrality of development in the Doha mandate.
The BRICS ministers are meeting in Mexico for G20 trade ministers meet and they will also attend Unctad next month in Doha.
The ministers directed their officials to explore ways and means for enhancing and furthering intra-BRICS cooperation especially in the areas of customs cooperation,exchange of experiences in trade facilitation,investment promotion SME cooperation and trade data collection and harmonisation,e-commerce cooperation and intellectual property rights cooperation, the statement said.
