Expert on BRICS financial institutions

Brazil's Fortaleza is set to host the next BRICS summit on July 15-16. Representatives of the body's member-states (Brazil, Russia, India, China and South Africa) are expected to focus on establishing two new financial institutions, which, according to the Guardian, may change the economic structure of the whole world. One of these institutions, the New Development Bank, is intended to operate as the World Bank, financing infrastructural and social projects. The bank is expected to administer a $100 billion fund. The second initiative, the Currencies Reserves Pool, is intended to protect the BRICS member-states from financial turmoil and decrease their dependence on similar western institutions, such as the IMF.

On the eve of the summit Russian President Vladimir Putin told ITAR-TASS in an interview that he was going to discuss the US sanctions against Russia with his counterparts from the BRICS member-states.

"One of the issues we are about to touch on is the mass use of unilateral sanctions," the Russian president said. "Right now Russia is under attack from the United States and its allies." According to Putin, the BRICS should elaborate a certain mechanism, which would prevent "such persecution of those countries whose policies contradict the US political line."

According to the head of the National Committee for BRICS Research, Georgy Toloraya, the idea of establishing a development bank voiced in India a couple of years ago seemed a little extravagant at first. "Why would one need such a bank, if there are the IMF, the World Bank, the European Bank of Reconstruction and Development, the Asian Bank and other institutions? This idea is much more popular now due to political reasons. The BRICS needs an investment institution to support development projects in member-states. The World Bank acts in accordance with the interests of its main shareholders, who are all western powers. The new bank would be able to finance such projects as Russia's GLONASS. The World Bank would never invest in this project," he said.

Even though the expert believes that the establishment of the bank would be favourable for the BRICS, he admits that the actual process of implementation of the project will a long and tough one. "The bank would position itself as an independent and self-sufficient body, if not an actual competitor to the World Bank," the expert said.

"The Currencies Reserves Pool should also be an independent structure able to prevent the BRICS member-states from severe changes on the currency market and total dependence on the US dollar," he said.

One should note that the percentage of the BRICS member-states in Russia's trade turnover is on the increase. In 2013 the BRICS share constituted 12.5 percent in Russia's total trade turnover and topped $300 billion.