MercoPress. South Atlantic News Agency

BRICS leaders’ summit takes off in India with a project for a development bank

The five leaders during the traditional ‘family’ picture

Leaders of the emerging world met in India on Thursday to discuss creating a new development bank, at a summit in which the bloc will seek to convert its economic might into collective diplomatic clout.

The leaders of the BRICS countries -- Brazil, Russia, India, China and South Africa -- are attending the fourth meeting of the bloc, a key non-Western alliance that is looking to extend its influence.

Top of the agenda was the creation of the grouping's first institution, a so-called “BRICS Bank” that would fund development projects and infrastructure in developing nations.

Though it remains in the planning stages, the leaders are expected to signal their commitment to setting it up as potential counterweight to other multilateral lenders such as the World Bank and the Asian Development Bank.

“It would be a very powerful financial tool to improve trade opportunities,” Brazil's Trade Minister Fernando Pimentel told a session on Wednesday ahead of the summit.

However the rivalry between the world's two most populous nations (China and India) is seen by critics as one of the main problems for the BRICS bloc, as well as the vast distances between members and their different political and economic systems.

While trade between them is booming, it still represents a small fraction of world commerce and they struggle to come together on global economic issues such as ongoing world trade talks or the leadership of the IMF and World Bank.

“Aside from impressive economic growth over the past decade and an individual desire for a greater say in the institutions of global economic governance, these disparate countries have little in common,” Walter Ladwig from the British think-tank the Royal United Services Institute wrote recently.

“The major emerging economies gathering in New Delhi will certainly shape global governance in the future,” Ladwig wrote in an editorial in the New York Times. “But it will be as individual nations, not as an artificial bloc founded on a Goldman Sachs' catchphrase”.

India's Commerce Minister Anand Sharma presented a contrasting view on Wednesday, saying that the relationship “aspires to create a new global architecture”.

With members often holding divergent views on global political developments, the Delhi summit is expected to focus on increasing intra-BRICS trade, which expanded by 28% last year to 230 billion dollars.

Two agreements to simplify processes and provide credit facilities for exporters are expected to be signed, the Indian foreign ministry has said.

The leaders -- presidents Dilma Rousseff of Brazil, Dmitry Medvedev of Russia, Hu Jintao of China and Jacob Zuma of South Africa, as well as Indian Prime Minister Manmohan Singh -- will also hold private talks.

These will conclude with a “Delhi Declaration” in which Rousseff is expected to push for a collective criticism of US and EU monetary policy, which she says has unleashed a global “tsunami” of cheap money, driving up the currencies of countries like Brazil and making their exports less competitive.

“We must have our say in confronting the serious economic and financial crisis, which is still worrying because of its impact on the outlook for global growth,” Rousseff said in a speech Wednesday at New Delhi University.