BRICS leaders to make decision on joint bank at South Africa summit

The leaders of the BRICS countries - Brazil, Russia, India, China and South Africa - will make a final decision at their summit in Durban on March 26-27 on whether to set up a joint development bank, Deputy Finance Minister Sergei Storchak told reporters at the State Duma on Wednesday.

Participation in the equity of this organization and each country's contribution has not been discussed yet, he said.

"We expect that in South Africa the BRICS leaders will finally put to rest the issue of the political advisability of the emergence of such a development institution," Storchak said.

He said negotiations on this issue will be conducted by authorized delegations, and they will concern two aspects: agreements between the five countries on the creation of the bank and the charter of this institution.

Agreements have not been reached yet and the issue of how voting procedures will be conducted has not been discussed, Storchak said. Russia has various experience of participation in international financial organizations. For example, at the banks of the former Comecon, Russia only has one vote, although it owns 50 percent stakes in almost all such banks.

Other modern multilateral development banks actively use the classic principle of a joint-stock company, with the number of votes being proportional to equity participation, Storchak said.

He said the BRICS countries have not yet discussed the issue of participation, distribution of stakes and votes in the joint bank. "This has not been discussed. I don't even know the positions of our colleagues yet, how we will decide this issue. That Russia will advocate the principle of weight in equity is clear," Storchak said.

He could not say whether the amount of the joint bank's capital would be set at the summit. "I don't know whether this will be $50 billion, $100 billion or $150 billion. Both $50 billion and $100 billion have been mentioned. We need to hold negotiations, because in the end these are substantial expenditures," Storchak said, stressing that the countries had not yet discussed this issue in detail.

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