BY
Ana Swanson,
Shrey Verma JULY 11, 2014
On
July 15,
the action in Fortaleza will shift from the football pitch to the
political high table. The seaside city that has hosted many of this
year’s FIFA World Cup games is scheduled to hold
the
2014 BRICS Summit, where leaders from Brazil, Russia, India, China,
and South Africa will meet to establish a long-awaited development bank
that aims to balance the influence of the IMF and World Bank.
Called
“New Development Bank,” the BRICS Bank is expected to foster greater financial
and development cooperation between emerging markets. The plans have yet to be
finalized, but
reports say each of the BRICS countries may contribute $10 billion in initial
capital to the entity, which will have a maximum value of $100 billion. The bank
will also establish a $100 billion reserve fund, with China contributing $41 billion,
Brazil, Russia and India giving $18 billion each, and South Africa contributing
$5 billion.
The term “BRIC” was coined in 2001, essentially as a
marketing term for Goldman Sachs,
and the group has long been derided for its lack of a coherent stance
on major economic and political issues. But the establishment of the
development bank, a historic challenge to the Western-dominated
international system, shows the five emerging economies are taking their
partnership seriously. The accomplishment appears that much more
significant when viewed against the backdrop of the United States’
continued failure to endorse IMF reforms.
