By Vestnik Kavkaza
The BRICS summit will take place on July 14-16, where an agreement will be signed on establishing a new bank for development with approved capital up to $100 billion. It could be launched next year. The Russian Minister of Finance, Anton Siluanov, stated that “there are no problems with the capital stock; three positions have been agreed: the approved capital is $100 billion; the capital distributed between the members is $50 billion; the paid capital which should be invested by the countries over seven years is $10 billion.” If it is necessary the paid capital could be increased to $40 billion.
The bank is open to new members from UN participants, but BRICS’s share won’t be less than 55%, and the control will be provided by the organization. All decisions are to be made by a special majority, which means the support of four out of five members or two thirds of votes cast.
At the summit the leaders of BRICS should decide on the site of the head office of the bank – Shanghai or New Deli – and who will head the bank.
However, Professor Vladimir Davydov, the director of the Latin America Institute of the RAS, is not euphoric about the event: “The mass media is reporting that it will be at least an alternative to the International Monetary Fund. I think it is early to talk about this. I don’t think Vladimir Putin or President Dilma Rusef want to do it. They want to fulfill the decision of 2010. Redistribution of quotas within the IMF and the World Bank should be completed by 2014, but the IMF and the World Bank are sabotaging the decisions, as they don’t want BRICS to have a controlling stake. Without financial support there will be no progress, obviously.”
The second priority of the BRICS summit is to establish mechanisms of paying in national currencies. “BRICS countries are learning the lessons of the last crisis, when the dollar and the euro began to lose their statuses as universal rubber currencies. And in this situation we shouldn’t rely only on these payment instruments, even though they are strong. We should establish insurance options. That’s why mechanisms are necessary. China, Russia and Brazil have chosen a path. There are bilateral agreements between Russia and China. Multilateral agreements will be signed on their basis. The exchange union of BRICS is very important. It will improve capitalization of corporations of BRICS countries,” Davydov thinks.
According to him, the first summits show that geopolitics interferes in the agenda of BRICS, whether they want it to or not: “And today this is urgent, as all countries of BRICS feel cold in the international arena – in different ways and different senses. I think the feeling should turn into actions.”
