BRICS countries the organization launched into its Monetary Fund worth 100 bln. Dollars with which to help each other in case of financial problems. This week, members of the group Brazil, Russia, India, China and South Africa held a meeting in the Russian city of Ufa.
According to the request of the governor of the Russian Central Bank Elvira Nibulina quoted by Bloomberg, the Fund constitutes a “security tool” for five countries and will enter into force on 30 July China will have the largest capital – 41 billion. Dollars. Brazil, Russia and India will uschastvat with 18 billion. Dollars, and South Africa – 5 billion. Money will not be moved from currency reserves of countries until the need arises. China, Russia and India have already ratified and BRICS bank whose capital is also expected to reach 100 billion. Dollars. According to the head of the Russian bank VTB Andrey Kostin has a “growing interest” BRICS countries to start using local currencies in trade relations.
According to Nibulina fund is designed to solve “short-term liquidity problems and balance of payments.” She gives the example of when it may be needed buffer similar crisis of 1998, when Russia collapsed on its debt in local currency. Nibulina however, assures that the country sees no need and no intention to use the new fund soon. Last year, Russia consumes nearly 90 billion. Dollars from its reserves to curb the sharp devaluation of the ruble. In recent months, however, the central bank reserves grew.
BRICS represents over one-fifth of the entire global economy. Their combined GDP is the size of the US economy, while in 2007 was twice as small. “Despite some disappointments in the economic performance of the BRIC countries (excluding South Africa), their total weight in world GDP continues to grow, which increases their importance,” said Jim O’Neill, the former chief economist of Goldman Sachs, which for the first time used akrionima BRIC in 2001
Beijing institutions BRICS are one way to support the growing role of the country worldwide. China has recently established Asian Bank for infrastructure investments, which is a direct competitor of the US-dominated international financial institutions. Beijing is also working on an ambitious initiative “New Silk Road”, which should facilitate economic relations between Asia and Europe.
“Western countries often lead policy” with us or against us “against China. China is neither with nor against the Western powers,” says Zhu Zhiezhin, sprecialist Brix in Shanghai University “Fudan”. “China accepts existing frameworks, while trying to implement changes. The country is better doing it with BRICS instead of alone,” he says.
Parallel to the meeting of the BRICS in the city of Ufa is held meeting of the Shanghai Cooperation Organization. It marks the beginning of the process of accession of India to the organization, which will help the implementation of major energy projects jointly with China and Pakistan.