The decision by Brics leaders on Wednesday to establish a Brics development bank was a sign of how much the Brics forum had matured, Finance Minister Pravin Gordhan said after the summit.
The establishment of the “New Development Bank” was identified before the summit as a key concrete outcome necessary to demonstrate that Brics was more than just a talk shop.
The five Brics leaders just managed to achieve this by agreeing to establish the bank , though they have not yet been able to agree on any of the fundamental decisions on how it will operate – such as how much capital they would put into it, where it would be based and how it would make its decisions.
Gordhan said these issues would be discussed by finance ministers and the bank would be established some time after the next summit in Brazil next year.
President Jacob Zuma said at the summit that the bank would help meet the considerable infrastructure needs of the Brics countries which amounted to about $4.5 trillion over the next five years.
“We have firmly established Brics as a credible and constructive grouping in our quest to forge a new paradigm of global relations and co-operation,” he said. The other Brics leaders, Brazilian President Dilma Rousseff, Russian President Vladmir Putin, Indian Prime Minister Manmohan Singh and Chinese President Xi Jinping, also hailed the decision to establish the bank as a concrete expression of the growing Brics co-operation.
Although South African officials had suggested before that South Africa was the only country bidding to host the bank, the leaders made no decision on the location.
The initial capitalisation of the bank also remained to be decided.
The Brics leaders also agreed on another concrete outcome from the summit, the establishment of a financial safety net for Brics countries in the form of a Continent Reserve Arrangement (CRA) among themselves. This would help them deal with short-term liquidity crises and would also help strengthen the global financial safety net, they said in the Ethekwini Declaration at the close of the summit.
They decided CRA should have an initial size of $100 billion and directed the finance ministers and Central Bank governors to continue to work towards its establishment.
The three other “deliverables” which the South African government had wanted were the launch of a Brics Business Council and a Brics Think Tank Council and the holding of an outreach among the Brics leaders and about 15 African leaders.
All these were achieved. The five Brics leaders met after the summit at Fairmont Zimbali with the chairperson of the African Union, Ethiopian Prime Minister Hailemariam Desalegn, the leaders of the AU’s eight regional economic communities and some others leaders to discuss development co-operation between the Brics and Africa.
Though the meeting was entirely closed, Senegalese President Macky Sall, as current head of the presidential committee supervising Africa’s main development programme, Nepad, presented 10 Nepad projects which the Africans most wanted investment for.
Guinean President Alpha Conde said that he had asked Chinese President Xi Jinping and Russian President Vladimire Putin to use their clout as permanent members of the UN Security Council to push for a UN peacekeeping mission in Mali with a robust “Chapter 7” mandate that would authorise them “ to attack the terrorists to end the war”.
He said Xi and Putin had agreed. The Brics leaders also expressed frustration that the IMF governance and quota reforms agreed to in 2010 to give greater representation to developing countries had still not been implemented.
Once again Russia and China – the two Brics countries with permanent seats on the UN Security Council – supported the aspiration of Brazil, India and South Africa “to play a greater role in the UN”, but did not specifically offer their support for their three fellow-Brics members to be given permanent seats on an expanded Security Council.
The Brics leaders opposed further militarisation of the Syrian conflict, called for inclusive Syrian-led peace talks and for full humanitarian access to the victims of the war.
The leaders also welcomed the admission of Palestine as an Observer State to the UN.
On Iran they said there was no alternative to a negotiated solution to the Iran nuclear issue and expressed concerns about threats of military action as well as “unilateral” sanctions.
They expressed “grave” concern about the deterioration of the situation in the Central African Republic and said they were ready to work with the international community to help ensure humanitarian access to the country and to help restore peace.