BRICS leaders meet South American Presidents

Brasilia, July 17: Leaders of the

countries, including Prime Minister Narendra Modi, on Wednesday met with South American presidents as they defended their move to set up a development bank aimed at reshaping the international financial system dominated by the West.

Brazilian President Dilma Rousseff, who was the host of this year's BRICS summit, invited leaders from South America including those from Argentina, Venezuela, Ecuador, Colombia, Argentina, Peru, Uruguay, Paraguay on the lines of President Jacob Zuma inviting those from Africa during the last year's summit in Durban.

The leaders of Brazil, Russia, India, China and South Africa met with South American leaders in the Brazilian capital of Brasilia.

The meeting came after a BRICS Summit yesterday in the seaside city of Fortaleza, where the five nations decided to establish the New Development Bank with an initial authorised capital of USD 100 billion and a Contingency Reserve Fund intended to head off global economic volatility linked to the US Federal Reserve's stimulus exit policy.

BRICS leaders discussed about BRICS Bank and its role

However, Rousseff made it clear that the BRICS countries do not want to distance themselves from the Washington-based International Monetary Fund.

"On the contrary, we wish to democratise it and make it as representative as possible," she told reporters. Her comments came after her first bilateral meeting with Modi over breakfast. Announcing the setting up of the bank, Rousseff had said, "It will help contain the volatility faced by diverse economies as a result of the tapering of the United States' policy of monetary expansion."

According to the Fortaleza Declaration, the purpose of the bank was to mobilise resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies.

The BRICS bank will be lending money from the common fund to developing countries who are otherwise completely dependent on funding agencies like the IMF and the World Bank. This fund then can be used for long term projects or to overcome short term crises without being subjected to the Bretton Woods System.

PTI