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.
After U.S. Federal Reserve Chair Janet Yellen indicated that the central bank was poised to raise interest rates, European stock markets fall.
Italian company Enel will invest 18 billion euro for renewable energy sources in Africa.
Azerbaijani president said in a statement that Southern Gas Corridor project will supply neighboring and European countries for a 100 years
Oil prices rose above $60 due to Iran's call for oil production cut
Economic growth in the Euro-Zone is not at desired levels.
Director and Global Head of Islamic Finance at Standard & Poor's says that growing market for sukuk and new players mark 'significant interest' in Islamic finance.
The Ministry of Finance said that Denmark has written to China to "announce its intention to apply to be a founding member" of the AIIB.
Experts state that the crisis poses risks to the region, which is significant for oil production and exports in the world.
Federal Reserve removes word 'patient;' interest rate increase expected within months. Yellen says timing of rate rise 'not decided,' but will come anytime after April; holds current rates at 0 to 0.25 pct.
Many emerging-market currencies have fallen against the dollar in recent weeks
Anticipated Federal Reserve interest rate hikes making dollar strong against most emerging market currencies, Deputy Prime Minister Ali Babacan says.
European Statistical Agency says slight decline fuelled by drop in production of durable consumer goods.
EU will use all its foreign policy instruments to establish strategic energy partnerships with producing and transit countries.
Dollar strength and waning investor confidence are driving the lira lower
Greece has already received two bailouts totalling 240 billion euros but fellow euro zone member Ireland said last week that it would have to negotiate a third programme.
The Ukraine crisis has tested the loyalties of Bulgaria, a Balkan country with historical ties to Moscow and heavily dependent on Russian energy supplies.