At the recently concluded BRICS summit in Durban,
Brazil, Russia, India, China and South Africa decided to set up a development bank to finance infrastructure projects in these countries.
But the countries have not decided the size of the proposed bank, leaving it to finance ministers to negotiate this and other issues before September. There are differences among the members over capital contribution with South Africa and Brazil expressing their reservations.
The proposal to set up such a bank was mooted by India at last year's summit in Delhi. It was originally proposed to be started with a capital of $50 billion, with $10 billion from each member.
The BRICS countries feel that developing countries faced challenges of infrastructure development owing to insufficient long-term financing and foreign direct investment, especially investment in capital stock.
BRICS cooperation towards more productive use of global financial resources can make a positive contribution to addressing this problem.
Also, this year's summit decided to create a $100-billion Contingency Reserve Arrangement to tackle any financial crisis in emerging economies.
Further, the BRICS countries would launch a business council to encourage investment and trade in member countries and to expand business cooperation.