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March 28, 2012

BRICS Nations Inch Toward Development Bank

by Kurt Achin

Key facts about BRICS:

  • BRICS is the world's five largest emerging economies - Brazil, Russia, India, China and South Africa.
  • BRICS accounts for 42 percent of the global population.
  • BRICS accounted for 20 percent of global GDP in 2010.
  • Intra-BRICS trade is $230 billion.
  • This is the fourth BRICS summit. The first was held in 2009.

Leaders from some of the world's largest developing economies -- Brazil, Russia, India, China, and South Africa, the so-called BRICS -- called Thursday for a more representative international financial structure.

Wrapping up a summit Thursday in New Delhi, the five-nation bloc proposed the formation of a shared development bank. The "BRICS bank” would help shield the developing world from financial crises emanating from richer nations.

"It will support our priority infrastructure projects as well as trade and investment opportunities with our BRICS partners," said South African President Jacob Zuma, explaining that African leaders welcome the proposal. "Such a bank has great potential to help us create good jobs in developing countries."

Indian Prime Minister Manmohan Singh, who hosted the summit, said the countries are moving closer to a key step in promoting mutual investment.

"We have agreed to examine in greater detail a proposal to set up a BRICS-led South-South development bank funded and managed by the BRICS and other developing countries," he said.

A quarter of world trade

BRICS nations have nearly half the world's population and account for more than a quarter of world trade.

Export-import banks from the five nations signed a separate deal Thursday making it easier for the countries to trade with each other in their own local currencies.

Russian President Dmitry Medvedev said the BRICS nations will play a key role in reforming global governance in coming years.

"The world financial system is outdated and needs to be reformed," he said. "It does not take into account the significant role played by BRICS countries."

BRICS leaders spoke in one voice on Syria Thursday, saying the crisis there should be resolved through “broad national dialogues” and with respect for the country's independence and sovereignty.

On Iran, the group said it recognizes Teheran's right to peaceful use of nuclear energy and warned “disastrous consequences” would result if the dispute about alleged nuclear weapons programs escalates into violence.

The one-day summit here in the Indian capital took place under extraordinary security, following the self-immolation protest of a Tibetan exile earlier in the week. The protester died of his burns Wednesday

Indian police have taken dozens of Tibetan exiles into protective custody in the city, declared many areas off limits, and set up numerous checkpoints along roads near the summit venues.

One small group of Tibetan exiles did manage briefly to unfurl a Tibetan flag Thursday near the hotel where Chinese President Hu Jintao is staying. They were arrested.