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Zuma leads SA delegation to BRICS Summit
July 14, 2014, 9:29 am

Although a Kremlin aide said last week that Shanghai has been finalized as the headquarters for the new Development Bank, South Africa is lobbying hard to locate it in Johannesburg [AP]

Although a Kremlin aide said last week that Shanghai has been finalized as the headquarters for the new Development Bank, South Africa is lobbying hard to locate it in Johannesburg [AP]

Accompanied by five cabinet ministers, as well as a strong business delegation, South African President Jacob Zuma reached Brazil to attend the BRICS leaders Summit, in which the five economies are expected to sign off on two new institutions after two years of tough negotiations.

BRICS are setting up a $100 billion development bank and a $100 billion emergency reserve fund, challenging the existing western-run global financial framework.

The BRICS will pool an initial $50 billion dollars for the bank, with each country contributing an equal amount.

The BRICS nations will also set up a $100 billion contingency pool, which could be available by 2015 to help any of its members if they are hit by a sudden loss of foreign capital. China will fund $41 billion, South Africa $5 billion and the rest of the countries $18 billion each of the CRA.

Although a Kremlin aide said last week that Shanghai has been finalized as the headquarters for the new Development Bank, South Africa is lobbying hard to locate it in Johannesburg.

“We think that from a point of view of the functioning of the institution, with some of its key roles, funding infrastructure and investing in the African continent, the bank being located in South Africa is going to be a huge advantage from the point of view of the advocacy of the bank,” said South African Trade and Industry Minister Rob Davies.

Both Beijing and New Delhi would be willing to support South Africa’s bid if Shanghai was opposed, sources said.

Meanwhile, the BRICS Business Council, which was launched at the Durban summit last year, would table its own report on Monday on how the five governments could make it easier for Brics business people to do business with each other.

The BRICS Business Council, headed by South African billionaire businessman Patrice Motsepe, will meet today in Fortaleza. The council will discuss trade opportunities that BRICS businesses can bolster.

BRICS currently account for about 20 per cent of global GDP. Goldman Sachs economist Jim O’Neill predicts BRICS will collectively represent 31 per cent of global trade by 2020.

 

 Helmo Preuss in Fortaleza, Brazil for The BRICS Post