Georgetown: Guyana will be looking to broaden relations with the Brazil, Russia, India, China and South Africa (BRICS) trade bloc when it takes part in the Sixth Annual Summit of the growing organization, according to President Donald Ramotar.
President Ramotar further pointed out that “it is important for Guyana to be there as part of the UNASUR and to broaden relations”, noting that the New Development Bank being developed will be of pivotal for Guyana, since it will be another developmental avenue.
“The bank will be very important because it will be an alternate resource.”
Ramotar will be accompanied to the Summit by Finance Minister, Dr Ashni Singh. According to a Wall Street Journal report, the BRICS Development Bank will open by 2016 and create an alternative to the International Monetary Fund to support the bloc’s economies.
The BRICS alliance had decided to create the bank in 2013, as they saw investors pull money away from emerging economies, hurting their currencies, amid expectations that the US would scale back its economic stimulus programme.
The move comes at a time when Moscow is facing antagonism in the West for the annexation of Ukraine’s region of Crimea and is in exile from the Group of Eight leading industrialised economies. Russia’s Finance Minister Anton Siluanov earlier this week said BRICS will make a decision on the creation of the bank at the summit. The entity will be called the “New Development Bank”.
The Bank will focus on BRICS infrastructure projects, but will be also open to new members from the United Nations, Siluanov said. Russia’s Finance Minister said each BRICS country will contribute US$2 billion to the bank’s funds from their budgets over the next seven years. The bank’s maximum size, or so-called authorised capital, will be set at US$100 billion.
The bank’s headquarters will be located either in Shanghai or in New Delhi, Siluanov said, according to the Wall Street Journal article. The bank’s Governor will be re-elected every five years. BRICS will also consider creating a fund, which Siluanov dubbed a “mini IMF”.
China would contribute US$41 billion to this fund; another US$5 billion would come from South Africa, while Russia, Brazil and India would each provide US$18 billion from their foreign exchange reserves. The fund is designed to serve as an emergency coffer for BRICS if a member suffers from capital flight or the risk of currency depreciation. Currency swap operations with the fund could be used as a precautionary measure or as an aid to deal with an economic crisis post-factum, Siluanov said.
Observers says with 43 per cent of the world’s population and total foreign-currency reserves of US$4.4 trillion would provide BRICS the opportunity to reshape the present status quo of the world.
As part of a BRICS outreach strategy for developing economies, an operational session will be held on July 16 between the Heads of States of BRICS and their counterparts from the governments of South American nations, including UNASAR trade bloc, to which Guyana is a signatory. Under the theme, “Inclusive growth: sustainable solutions”, in this summit, BRICS will be placing emphasis on social inclusion and sustainable development.
There will be tangible initiatives launched, including a US$100 billion Contingency Reserve Arrangement (CRA) and the final details of the US$100 billion New Development Bank will also be unveiled. Other South American nations will also be exploring the creation of a communications system to limit US espionage in the South American region, which will include a call for an end on US spying.
