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BEIJING: Sounding upbeat about the future of BRICS, China today acknowledged differences among member countries over the ratio of funding to the block’s Development Bank but said efforts are under way to reach a deal at this month’s summit in Brazil.
Stating that BRICS comprising of Brazil, Russia, India, China and South Africa would prove skeptics wrong, Chinese Vice Foreign Minister Li Baodong told a media briefing here that the economic slowdown was due to external reasons than that of the internal issues.

Chinese President Xi Jinping will attend the summit of the leaders of BRICS which is taking place on July 15-16 in Brazil during which he will hold his first meeting with Prime Minister Narendra Modi.

About setting up of the BRICS Development Bank, he said “there is consensus about the bank but there are some differences regarding technical issues”.

Replying to questions about the probability of the summit giving a green signal to the Bank, Li said all the parties are making full use of financial channel to intensify consultations.

“Whether this summit will reach and agreement about the establishment of the Bank, we are fully confident about that,” he said.

The bank was mooted in 2012 to fund the infrastructure projects and approved during last year’s summit in South Africa.

Seen as an attempt by the emerging economies to come up with their own bank to rival the World Bank and IMF, the BRICS Bank however was bogged down over difference on issues like start-up capital as well as its headquarters.

Plush with over USD 3.94 trillion foreign exchange reserves, China wants the bank to begin function with a start capital of USD 100 billion and offered to contribute USD 41 billion with rest from other members.

This however raised concerns that it may vest China with excessive influence. Beijing also reportedly wants the Bank’s headquarters to be in Shanghai.

In view of this BRICS members reportedly discussed a proposal to have start-up capital of USD 50 billion with equal contributions from all the five countries.

Li said total size of the BRICS Bank is technical issue.

It needs to be worked out through consultations among all the BRICS countries. “We have always believed such issues should be managed through consensus and consultation among members. We hope to achieve that and discussions are continuing. There are all kinds of ideas. But there is goal to put in place this development bank so that it is up running at an early date.

We have full confidence in achieving that,” Li said.

“We believe the time has come to make announcement,” he said.

Talking about slowdown in BRICS, Li said the external business environment has deteriorated and the slowdown is also due to macro regulations of the BRICS countries themselves to cope with the crisis.

“So the slowdown in BRICS countries is different in nature from the liquidity difficulties, debt crisis and lack of demand of the advanced economies,” he said.

“The fundamentals of BRICS countries remain sound and a good shape and we still have ample macro policy tools and their potential is still huge,” he said, adding that cooperation in various fields is deepening.

The economic growth rate of BRICS is still higher than global average, twice as high as the advanced economies.

In the last decade BRICS contributed over 50 per cent to global economic growth, he said.–PTI

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