The Brics nations of Brazil, Russia, India, China and South Africa are aiming to establish a new development bank during the annual conference which began yesterday in Durban. The leaders of each of the five developing countries will discuss bringing together foreign currency reserves to ward off balance of payments or currency crises.

Martyn Davies, Chief Executive Officer of Johannesburg-based research firm, Frontier Advisory said:

The deepest rationale for the BRICS is almost certainly the creation of new Bretton Woods-type institutions that are inclined toward the developing world.

There’s a shift in power from the traditional to the emerging world. There is a lot of geo-political concern about this shift in the western world.

Brazil, Russia, India, China and South Africa have combined foreign-currency reserves of $4,4 trillion (R408 trillion), and account for 43% of the world’s population. The nations are seeking greater global finance to match their rising economic power.

South African International Relations Minister, Maite Nkoana-Mashabane, at a speech made in Johannesburg said:

We need to change the way business is conducted in the international financial institutions. They need to be reformed.

Brics is seeking an overhaul of management of the World Bank and International Monetary Fund (IMF), and the nations oppose the practice of respective presidents of those institutions being drawn from the United States and Europe.

The proposed development bank by Brics is approved by member states in principle, details on funding and operations may take longer to finalise.

Simon Freemantle, analyst at Standard Bank Group Ltd told reporters in Durban yesterday:

It will be some time before it will be feasible for this bank to start financing say, a railway project. That is some way out.