July 9 (Bloomberg) -- The BRICS emerging nations will have seven years to pay $2 billion each to buy into a new development bank in their push to have more sway in the global financial system, according to Russian Finance Minister Anton Siluanov.
The New Development Bank, approved at a summit in Durban, South Africa last year, will help the BRICS nations -- Brazil, Russia, India, China and South Africa -- finance infrastructure projects. Each country will have an equal stake, and the bank will be open to all members in the United Nations, Siluanov told reporters in Moscow today.
The lender’s headquarters will probably be in New Delhi or Shanghai, Siluanov said. Russia didn’t push to base it in Moscow and will seek management posts instead, he said. The bank’s head will be elected for five years without a chance for re-election, Siluanov said.
BRICS leaders also plan to sign framework agreement on a contingent reserves pool that countries may use during market volatility and significant currency depreciation.
“We agreed that in the current situation of capital volatility it’s important for our countries to have this kind of a backstop, a mini-IMF for BRICS,” Siluanov said.
The BRICS states say the World Bank and International Monetary Fund don’t do enough to address global growth and say governments in developed countries exert too much control over the way less developed nations are managed. A summit of the BRICS countries is scheduled in Brazil July 15-16.
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