Leaders of the BRICS group (Brazil, Russia, India, China, and South Africa) on Tuesday decided to create a development bank at a summit in the Brazilian city of Fortaleza.
The bank will be based in Shanghai, China, headed by an Indian as president for initial year with the first board chair hailing from Brazil and a Regional Center based in South Africa.
The leaders emerging nations agreed to setup the $100 billion fund bank after settling the dispute between member nations over equal share of bank. The fund will be invested in financing infrastructure projects of developing nations.
The biggest contribution of $41 billion will be by China, followed by $18 billion contribution each from Brazil, India, Russia and $5 billion contribution from South Africa. BRICS countries together have 40 percent of the world population and one-fifth of the global economy.
Brazilian President Dilma Rousseff said that these initiatives show how diverse countries of BRIC are committed to a solid and productive association. Vladimir Putin, Russian President hailed the agreement as a powerful way in preventing new economic difficulties.
The New Development Bank aims to be a mini-IMF, rivaling Washington-based World Bank. Leaders of the BRICS group have pressed for a reform giving more voting rights to developing countries in the International Monetary Fund.