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“Following the report from our finance ministers, we are satisfied that the establishment of a New Development Bank is feasible and viable. We have agreed to establish the New Development Bank,” said a joint statement of the five BRICS heads of state at the conclusion of the BRICS Summit in Durban.
The construction of a financial safety net through the creation of a Contingent Reserve Arrangement (CRA) among BRICS countries was also announced in the joint communiqué.
“In June 2012, in our meeting in Los Cabos, we tasked our finance ministers and Central Bank governors to explore the construction of a financial safety net through the creation of a Contingent Reserve Arrangement (CRA) amongst BRICS countries.
“They have concluded that the establishment of a self-managed contingent reserve arrangement would have a positive precautionary effect, help BRICS countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability,” says the statement.
The leaders also agreed that the establishment of the CRA with an initial size of $100 billion is “feasible and desirable”.
BRICS cooperation towards more productive use of global financial resources can make a positive contribution to addressing the problem of insufficient investment for infrastructure development, observed the statement.
China’s finance minister Lou Jiwei told the State-run Xinhua news agency that the establishment of the bank “is necessary”, adding that “the nations have great demand for fund to boost infrastructure construction”.
The Indian Prime Minister Manmohan Singh agrees.
“BRICS Bank initiative has opened doors to new possibilities of cooperation.”
Claude Colart for The BRICS Post