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The leaders, including Chinese President Xi Jinping, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, South African President Jacob Zuma and Brazilian President Dilma Rousseff discussed ratifying the newly formed $100 billion BRICS Bank and the $100 billion Contingency Reserve Arrangement (CRA) by parliaments in the five countries.
“They [the BRICS leaders] asked their Finance Ministers to designate the President and the Vice-Presidents of the NDB well in advance of the next BRICS Summit in Russia. The Leaders also announced the setting up of an Interim Board of Directors that will lead the next phase establishing NDB,” said a joint statement issued after the meet.
The BRICS leaders also discussed the $100 billion Contingent Reserve Arrangement (CRA).
“The Leaders asked their Finance Ministers and Central Bank Governors to ensure that, by the next BRICS Summit, the CRA Working Group concludes the procedural rules and operational guidelines of the Governing Council and the Standing Committee of the CRA,” the statement added.
In Brisbane, Brazilian President Dilma Rousseff urged BRICS to “focus on strengthening their domestic markets, in an effort to rebuild their economies”, said a Brazilian government statement.
“Amid difficulties of the global situation, key was that in our last meeting, in Brazil, we had approved the creation of two important tools – the BRICS Development Bank and the contingency reserves to strengthen our economic and financial performance,” said Rousseff.
Amid a fragile global recovery, BRICS discussed ways to strengthen trade and consolidate mechanisms adopted during the 6th BRICS Summit in Brazil earlier this year.
Rousseff, who won a mandate for a second term in office last month, also hit back at policies adopted by developed countries that, she said, are adversely affecting emerging economies like BRICS.
“It is necessary that developed countries revamp their internal demand to pre-crisis levels, rather than trying to solve their problems with the increase of their exports. This situation led to a current account deficit in Brazil of 3.7% of the GDP “, said Rousseff ahead of the official opening of the G20 Summit.
Emerging markets like BRICS have been suffering as the US Federal Reserve recently ended years of aggressive stimulus.
Other BRICS leaders echoed Rousseff, calling on developed countries to adopt “responsible monetary polices” to prevent spillover effect and create sustained growth forces.
Chinese President Xi Jinping also urged the BRICS countries to “raise their voice in global economic governance”.
“The cooperation between the BRICS countries should be driven by the two “wheels” of economy and politics so that the BRICS can act as not only the world’s economic engine, but also a shield for world peace,” said the Chinese President on Saturday.
Earlier on Friday, in Vladivostok, Russian President Vladimir Putin said the GDP of the BRICS countries calculated at the purchasing power parity is greater than that of the G7, the Group of major industrialized nations.
“As far as I know, the GDP of BRICS is $37.4 trillion, while that of the G7 is $34.5 trillion. And if we go and say: ‘No, thank you, we are going to do this and that here on our own, and you can do it the way you want it,’ this will only add to the imbalances. If we are really set to resolve some issues, we should do that together,” he said.
BRICS launched a $100 billion development bank and a currency reserve pool in July this year in their first concrete step toward reshaping the Western-dominated international financial system.
“For the past 15 years, the BRICS have been seen as the world’s best hope for sustainable growth. These five countries, representing 40 per cent of the world’s population and 25 per cent of its GDP in 2013, recorded growth rates 4 to 5 times greater than those of the US, Europe and Japan, and threatened to displace them as the world’s most important economic powers in another 20 years or so,” say Prof. Ingo Walter and Prof. Roy C. Smith of the New York University, writing for The BRICS Post.