At this month’s BRICS summit in Fortaleza, Brazil, the leaders of Brazil, Russia, China, India and South Africa announced the much-awaited creation of the New Development Bank, also known as the BRICS bank. The newly minted financial institutions has been hailed as an alternative to Western multilaterals such as the International Monetary Fund and World Bank.
Negotiations in Fortaleza finalized several crucial details, including the bank’s leadership and the contributions required of member countries. The location of the bank was also debated, with separate bids by China, South Africa and India to house its new global headquarters. The final agreement, known as the Fortaleza Declaration, stipulates that:
- The bank’s headquarters will be established in Shanghai, China. The New Development Bank will also immediately set up its first regional office in Johannesburg, South Africa. Subsequent regional offices will be established, as needed, in Brazil, Russia and India.
- All founding members will contribute equally to a 50 billion dollar special fund geared towards project development and implementation.
- The BRICS bank will also hold 100 billion dollars in a contingency reserves to provide additional liquidity for emerging markets. China’s 41 billion dollar contribution to this fund is the largest of any member nations’. Brazil, India and Russia will each add 18 billion dollars and South Africa’s share will be 5 billion dollars.
- India will be the first member country to assume presidency of the bank, followed by Brazil, Russia, South Africa and China in that order.
Additional documents from the Fortaleza summit are available below: