Rising powers to back new bank

New Delhi:  Five of the world's emerging economic powerhouses yesterday endorsed plans for a new development bank and signed pacts to boost trade ties in steps aimed at raising the group's econ-omic clout.

Accusing current international institutions of failing to lift up poor countries, the Brics group — Brazil, Russia, India, China and South Africa — asked their finance ministers to investigate setting up a development bank like the World Bank or Asian Development Bank that they would back. The also agreed to boost business and trade in their own local currencies.

Indian Premier Manmohan Singh, Chinese President Hu Jintao, Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev and South African President Jacob Zuma held talks in New Delhi at the fourth annual Brics summit.

‘Access needed'

The five countries represent 45 per cent of the world's population, a quarter of its land mass and a quarter of its economy at $13.5 trillion (Dh49.5 trillion).

Singh said international institutions were failing to support development of emerging and developing economies, and that the Brics countries were working towards a development bank, funded and managed by them.

"Institutions of global political and economic governance created more than six decades ago have not kept pace with the changing world. We have directed our finance ministers to examine the proposal and report back at the next summit," Singh said. "Developing countries need access to capital."

World Bank President Robert Zoellick, underscoring the importance of the emerging world's biggest economies with his own trip to India, welcomed the idea of a new development bank. "We will be looking forward to working with it to see how we can leverage one another's strength," he said while travelling in the eastern state of Orissa, according to the Press Trust of India. "It will complement the type of work we do."

South Africa's President Jacob Zuma said the bank could "help us create good jobs." The countries will again look at the proposal at their next summit in South Africa next year.

‘Greater interaction'

Two pacts for enhancing intra-Brics trade in the national currencies of Brics countries were also signed. The accords would enable credit facilities in local currencies for businesses and allow development banks to extend lines of credit to each other. The pacts could help boost intra-Brics trade from $230 billion in 2011 to the $500 billion target for 2015 set by industry leaders.

The countries also resolved to promote "greater interaction" among business communities and easier visa facilities for businessmen. The initiatives were described by Medvedev as among the steps that would "transform the future of Brics into a strong and powerful organisation."

Hu said Brics nations should deepen political trust and intensify coordination in international economic, financial, trade and development fields.