The BRICS nations have formally agreed on a development bank in the wake of their Sixth summit in Brazil, they announced Thursday.
The New Development Bank (NDB) is to provide financial assistance to developing nations, primarily for infrastructural projects.
The BRICS group – comprising Brazil, Russia, India, China and South Africa – will contribute equal shares to the starting capital, totaling $100 billion. A reserve currency pool of the same amount will be created.
In an interview with Democracy Now, Nobel laurate in economics Joseph Stiglits said the initiative indicates a ''fundamental change in global economic and political power.'' He praised the NDB for its potential to ''get more resources to the developing countries in ways that are consistent with their interests and needs.''
The initiative is hailed as an important step to breaking the dominance of the Western-dominated IMF and World Bank over global finance. The IMF and World Bank have been firmly criticized for imposing policies that maintain global poverty to the advantage of wealthy nations.
The NDB will have its headquarters in Shanghai, China.