World Bulletin/News Desk
The BRICS, the group of fast-growing emerging markets, meets for the first time on African soil in the South African city of Durban. At their fifth summit, they are to discuss the setup of a development bank to overhaul the global financial system.
BRICS emerging powers sought a deal on setting up a development bank that would rival Western-backed institutions, trying to iron out significant differences ahead of a leaders' summit in Durban.
The grouping of Brazil, Russia, India, China and hosts South Africa are racing to elaborate on proposals for an infrastructure-focused lender that would challenge seven decades of dominance by the World Bank.
The umbrella theme for the two-day summit is called “BRICS and Africa - Partnership for integration and Industrialization."
Economic data shows that the grouping of Brazil, China, India, Russia and South Africa now account for 25 percent of global GDP and 40 percent of the world's population.
The major outcome of this year’s summit is expected to be the announcement of the formation of the BRICS Development Bank (BDB). Originally proposed as an institution at last year’s New Delhi summit, the organization’s “strategic goal is to transform the aging international financial architecture,” Mikhail Margelov, President Putin’s envoy to Africa was quoted by Bloomberg.
If the leaders succeed it would be the first time since the inaugural BRICS summit four years ago that the group matches rhetorical demands for a more equitable global order with concrete steps.
That would send a loud message to the US and European nations that the current global balance of power is unworkable.
Diplomats say it could start with $10bn seed money from each country, but the exact role of the bank is up for debate, according to Al Jazeera.
China, Brazil sign deal to trade in own currencies
Meanwhile, BRICS members China and Brazil agreed on Tuesday to trade in their own currencies the equivalent of up to $30 billion per year, moving to take almost half of their trade exchanges out of the U.S. dollar zone.
The agreement, due to last three years and signed hours before the start of a BRICS summit in Durban, South Africa, marked a step by the two largest economies of the emerging powers group to make real changes to global trade flows long dominated by the United States and Europe.
"Our interest is not to establish new relations with China, but to expand relations to be used in the case of turbulence in financial markets," Brazilian Central Bank Governor Alexandre Tombini told reporters after the signing.
Trade between the two countries totalled around $75 billion in 2012. Brazilian officials have said they hope to have the trade and currency deal operating in the second half of 2013.
At the summit, Brazil, Russia, India, China and South Africa are widely expected to endorse plans to create a joint foreign exchange reserves pool. They are also due to discuss trade and investment relations with Africa.
Japanese banks are to lend $500M to Petrobras to build oil platforms.
Economists warn that without a quick solution the economy will sour.
This is part of the Lamu Port and South Sudan - Ethiopia Transport (LAPSSET) corridor project.
War damage and EU sanctions result in near decimation of industry.
Ecuador, Egypt, Pakistan, Venezuela, Belize, Cuba, Cyprus, Greece, Jamaica and Ukraine are all on the verge of a default, according to Moody's ratings.
A World Trade Organisation pact to ease worldwide customs rules collapsed late on Thursday over India's demands for concessions on agricultural stockpiling.
India's new nationalist government has insisted that a permanent agreement on its subsidised food stockpiling must be in place at the same time as the trade facilitation deal
Chemicals firm LyondellBasell has emerged as the mystery American buyer of Kurdish crude oil this year, but said it will not be buying any more
Some EU member states remain nervous about the impact on their own fragile economies. The sanctions deal was agreed only after initial proposals were narrowed.
Bankers in Singapore say Russians looking for a new Cyprus have come to the wrong place.
The default could get much messier and take longer to clear up if creditors force an "acceleration" for early payment on their bonds.
The ban came a day after the European Union and United States imposed their first sanctions aimed at hitting broad sectors of the Russian economy
Russia called new U.S. sanctions "destructive and short-sighted"
While the default will obviously hurt the economy, it will not be as severe as in 2001, economists say
The Czechs, who supported the action, have been against sweeping sanctions, worried about trade relations with Russia
The trade program has been criticized for disproportionately benefiting certain industries and a handful of countries, including Nigeria, South Africa and Angola.