Recently VIth BRICS Summit 2014 was held in Fortaleza, Brazil with the aim of future development of BRICS nations. Prime Minister Narendra Modi visited Brazil to attend the BRICS Summit accompanied by leaders of other BRICS(Brazil, Russia, India, China & South Africa) nations. It was India’s Prime Minister Narendra Modi’s first multilateral meet with the international leaders. Along with BRICS Summit, BRICS-UNASUR Summit was held at the same time.
In this article we will discuss important highlights, agreements of the VIth BRICS Summit.
About BRICS Summit 2014
The 6th BRICS Summit was held in Fortaleza,Brazil during the period between 14th July to 16th July, just after the hosting of FIFA World Cup in which Brazil stood 4th. The host nation, Brazil invited all the leaders of BRICS nation for the second cycle of BRICS Summit to discuss the agendas, agreement, future development of BRICS nations etc. The main agenda of this BRICS Summit is to establish BRICS Development Bank with emergency reserve fund. The theme of this BRICS Summit is- ” Inclusive Growth : Sustainable Solutions”. Although the stepping stone for the development Bank was laid down earlier in Vth Summit held at Durban, South Africa but officially it got green signal in this Summit.
Highlights & Features of BRICS Summit 2014
First we will discuss the Key points of Fortaleza Declaration made during BRICS Summit :
1. Theme : The theme of 6th BRICS Summit is- “Inclusive Growth : Sustainable Solutions”. Under this theme, a joint session was held between BRICS and UNASUR(Union of South American Nations) to promote peace, harmony, sustainable development along with poverty eradication among BRICS Nations and South American Nations.
2. Development Agendas: Post 2015, Development Agendas were made for sustainable development in terms of Climate Change.
3. Institutional Collaboration: For Inclusive Growth, National Statistical Institutes along with Ministry of Health and Education of each BRICS Nation will work jointly and provide relevant input which would be incorporated in the BRICS joint Statistical Publication.
4.National Development Bank : In order to foster financial stability among developing nations of BRICS, EMDC’s(Emerging Market Economies and Developing Countries) will work in proper coordination to ensure global growth. To deal with significant financial constraints, BRICS nations signed an agreement to open a New Development Bank(NDB) with a purpose of fostering infrastructure development, financial sustainability among the BRICS nations and other emerging developing nations.
5. CRA : BRICS nations also signed a Treaty for establishment of BRICS Contingent Reserve Arrangement(CRA) which will aid in preventing short term liquidity pressure, strengthen economic viability among the developing BRICS nations.
6. Trade Relations: In order to promote trade relations among nations, a MOU(Memorandum of Understanding) on Cooperation has been signed among Export Credit and Guarantee Agencies of BRICS nations.
Agreements made during BRICS Summit 2014
Three major agreements were made during the summit:
1. MOU on Cooperation among BRICS Export Credit Insurance Agencies :
In this agreement, BRICS nations contribute towards the projects associated with the supply of goods and services to the third nation. Moreover information related to claims and settlement issues associated with goods and services shall be shared and provided between each of them.
2. Treaty for establishment of BRICS Contingent Reserve Arrangement :
As the name suggest, the main aim of this treaty is to provide BRICS nation a gentle monetary support in terms of short term balance of payment pressures. The initial funding of CRA would be one hundred billion dollars(USD 100 Billion).
China- 41 Billion Dollars
Brazil- 18 Billion Dollars
Russia- 18 Billion Dollars
India- 18 Billion Dollars
South Africa- 5 Billion Dollars
3.Formation of New Development Bank ( BRICS Development Bank)
BRICS leader has approved the formation of New Development Bank which would be at par for existing World Bank and International Monetary Fund. This bank would cater the long term investment needs and sustainable development of the five BRICS nations. The headquarter of this bank would be in Shanghai, China and regional office would be in Johannesburg, South Africa. The first CEO of the bank would be from India while the inaugural Chairman of Board of Directors would be from Brazil and Inaugural chairman of Board of Governors will be from Russia. New Development Bank will start its operations with the initial developmental capital of 50 Billion Dollars. Each BRICS nation would contribute 10 Billion Dollars.
This article has been written by Deepika Gupta.