South American nations court BRICS over new bank, stronger ties

Anadolu Agency

BRASÍLIA – South American leaders attending the 6th BRICS Summit in the Brazilian capital, Brasília, on Wednesday hailed the foundation of a new US$100 billion development bank between the BRICS nations, announced on Tuesday.

The eleven South American leaders in attendance also made clear they were firmly behind a new alliance between the BRICS group of leading emerging economies – Brazil, Russia, India, China and South Africa – and the UNASUR bloc of South American nations.

Brazilian President Rousseff ended the last day of the 6th BRICS Summit, which included a working session between the heads of state of the five BRICS nations and the assembled South American leaders, by toasting “the affirmation of a joint path between us” and “permanent links between UNASUR and the BRICS.”

Among the South American leaders intrigued by news of the nascent bank was Colombian President Juan Manuel Santos, who told the Anadolu Agency that while the bank was yet to be seen, “if it’s a new financial option, then the creation of this development bank is welcome.”

“It will be particularly good news if it comes with the right terms and conditions,” Santos told the AA.

The creation of the long-awaited $100 billion bank, dubbed the New Development Bank, and a $100 billion currency reserves pool to help countries prevent short-term liquidity pressures, was announced Tuesday in Fortaleza.

A senior diplomatic source at the Itamaraty, Brazil’s Ministry of External Relations, told the Anadolu Agency that the bank would only be available to BRICS countries at the outset, but that in time it represented an “opportunity for countries in the region” and that Brazil expected serious interest in the bank once it was established.

A ‘shift’ in world order?

Rousseff said the new bank was “extremely relevant” for the BRICS nations, and offered “both financial conditions and a safety net” for the countries.

With the bank set to be headquartered in Shanghai, the Chinese President Xi Jinping – who is also on a state visit to Brazil – addressed the Brazilian Congress and urged deeper, more confident ties despite his country’s long-standing partnership with Brazil:

“Brazil was the first development country to forge a strategic partnership with China,” Xi said, noting that China was Brazil’s biggest trading partner and that their cooperation extends to technology and oil exploration.

“China and Brazil are both influential and giants in the making, and should have stronger trust and more open minds.”

Commentators said the BRICS are keen to create an alternative system to that dominated by advanced Western economies, which came as music to the ears of many South American countries where the perception of U.S. domination in the world economy often prevails.

Venezuela President Nicolás Maduro said he saw a “powerful form of action” in the “face of a new alliance, of a new global geopolitics” emerging from the rapprochement between the BRICS and UNASUR groups.

Maduro said Venezuela had proposed a “working alliance” between the Banco del Sur – a monetary fund and lending organisation established in 2009 between seven South American nations – and the fledgling BRICS bank.

“They have the same objective: the building of a new financial framework that benefits economic development in terms of equity for our countries,” Maduro said.

Argentinian President Cristina Kirchner is also reported to be hopeful that the new development bank could provide a way for her country to climb out of its economic rut, and sources close to the president said Tuesday that the country could be the first to benefit from its creation.

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