Beijing (AsiaNews) - The BRICS group of emerging nations plans to set up a new joint bank at their annual meeting to oppose the World Bank and the International Monetary Fund, deemed "Western" structures that "do not reflect changes in the modern world." A BRICS bank could start with US$ 10 billion seed money from each of the BRICS countries (Brazil, Russia, India, China and South Africa).
The project is expected tomorrow when the heads of state concerned meet in Durban, South Africa. China's new leader Xi Jinping, recently "crowned" by the National People's Congress as president of China, chose South Africa as his first trip abroad at the start of his mandate. According to analysts, it is a "clear signal" of the importance Beijing places in the group.
If emerging countries can agree, the monopoly of international aid will be removed after 70 years from the hands of the World Bank. According to an unwritten agreement, the top post in the World Bank goes to an American whilst that at the IMF goes to a European.
Together, BRICS nations account for 25 per cent of global Gross Domestic Product and 40 per cent of the world's population.
In any case, the project, as it now stands, would be dramatically scaled back from initial, more ambitious proposals made last year for funding of US$ 50 billion from each individual country.
In addition, there are differences of opinion within the group on the purpose of the new bank.
"The bank will help BRICS sustain financial risks and provide support for the development of African countries," Chinese Foreign Ministry spokesman Ma Zhaoxu said.
For Oliver Stuenkel, BRICS expert at the Getulio Vargas Foundation in Sao Paulo, the development bank is in part a reaction to these countries' dimmed economic outlook.
"Now Brazil is growing at an anaemic rate, South Africa is not doing so well and India's growth is stalling, so the BRICS need to prove they can survive and prosper in challenging economic times," he explained.
China plans to push as hard as possible for a quick agreement, and the presence of Xi Jinping is evidence of that.
China's Communist Party general secretary left Tanzania today for Durban. He is scheduled to end his Africa trip in the Congo.
All these countries have strong trade relations with China, which provides investments for infrastructure in exchange for the rights to exploit energy resources.