Russian President Vladimir Putin said on Thursday that a new BRICS bank would become fully operational and finance energy projects next year as emerging markets attempt to challenge the Western-dominated financial system. BRICS nations -- Brazil, Russia, India, China and South Africa -- which represent 40% of the world's population, agreed in 2013 to establish their own development bank, with estimated capital of $100 billion.
Crucial to their efforts to undermine Western hegemony is also a $100-billion pool of currency reserves.
Russia, which has suffered huge currency fluctuations and struggled to attract investors since the outbreak of the crisis in Ukraine, sees the bank and the currency reserve pool as an alternative to international financial institutions like the IMF and World Bank that are dominated by the United States.
The New Development Bank will be financing large-scale transport and energy projects and industrial development, Putin said after talks with the leaders of China, India, Brazil and South Africa in the city of Ufa in the Urals.
Putin said the first projects would be launched next year, adding that Russia would by the end of the year put together a blueprint mapping out investment cooperation between the BRICS nations.
We've conducted consultations with our business circles and have already put some 50 projects and business initiatives onto the roadmap, Putin said, noting these included proposals to establish an energy association and an energy research centre.
Russia and China have agreed to use each others' currencies to promote bilateral trade and investment, with Putin saying on Thursday that Russia would be keen to expand the use of national currencies with other BRICS countries.
I think that such development with India, Brazil and South Africa would be interesting and could no doubt lift the level of trade turnover, Putin said.
A pool of nominal currency reserves, with capital of $100 billion, will give us an opportunity to react to financial market fluctuations in a timely and appropriate manner, he added.