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BRICS

New Development Bank launched as leaders meet for BRICS summit

The 2015 BRICS summit is being held in Ufa, Russia.
The 2015 BRICS summit is being held in Ufa, Russia. Reuters

Russian President Vladimir Putin is meeting world leaders today including China's Xi Jingping and India's Narendra Modi ahead of the start of a summit of emerging economies.

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Representatives of the BRICS countries   that’s Brazil, Russia, India, China and South Africa   are in the Russian city of Ufa after signing a deal on Tuesday to form a development bank.

The theme of the summit is 'Partnership: A powerful factor for global development', with a firm emphasis on economic cooperation.

BRICS countries hold 40 per cent of the world’s population and a quarter of all economic output.

The development bank is expected to be operational by the end of the year from its headquarters in Shanghai and predicts it will have up to 100 billion dollars in capital to finance infrastructure projects in developing countries.

Dumisani Hlophe, the Director of the Kunjalo Centre for Development Research in Johannesburg, told RFI that the new bank may be met with suspicion from South Africans. He is sceptical that South Africa needs to belong to another foreign development investment bank.

“What remains to be seen is whether it is going to remain one of those diplomatic points that the country scores without necessarily speaking to the needs of society,” he said.

For President Putin, hosting of the seventh BRICS summit comes at a great time. The sanctions imposed by the European Union and the United States over the country’s involvement in the conflict in Ukraine continue to bite, and Russia is looking to strengthen its economic ties elsewhere.

Andrew Foxall, the director of the Russia Studies Centre at London-based thinktank the Henry Jackson Society, believes Putin is using the opportunity to show the West that the country isn’t isolated economically. Foxall told RFI that “the dynamics within the BRICS has changed a lot” over the period that the bloc has been in existence, and the “shining star” of Russia has been waning.

The summit runs Thursday and Friday.

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