Leaders from the BRICS group of leading emerging market economies yesterday failed to launch their eagerly awaited development bank to rival Western-dominated institutions such as the World Bank.
After holding talks in Durban, leaders from Brazil, Russia, India, China and hosts South Africa agreed in principle to create a joint infrastructure lender but said further talks were necessary to finalise the plan.
"We are satisfied that the establishment of a new development bank is feasible," said host President Jacob Zuma, in remarks that hint at little progress beyond an agreement reached in New Delhi a year ago. "We have decided to enter formal negotiations to establish a BRICS-led new development bank."
The lacklustre outcome of the summit is likely to do little to counter claims that the BRICS, whose gatherings are sometimes dismissed as talking shops, struggle to take concrete action.
The BRICS had hoped to launch a US$50 billion infrastructure fund at the summit, but negotiators stumbled over the scope of the institution.
Key sticking points included how much cash would be injected, how projects would be distributed and where the bank would be based, diplomats said.
It is unclear how much seed money each of the countries will now put into the bank, with Zuma saying only that the BRICS had agreed that "the initial capital contribution should be substantial and sufficient for the bank to be effective".
President Xi Jinping said: "The potential of BRICS development is infinite." But he added: "The real potential of BRICS co-operation is yet to be realised."
Any new institution is unlikely to achieve much in the near term, said Andrew Kenningham, an economist at Capital Economics in London. "It will not be easy to reach agreement on the bank's capital contributions and governance structure."
Finance Minister Lou Jiwei said on Tuesday after meeting his BRICS counterparts: "What we have now is just a general picture." They would see whether the final results would be settled next year.
BRIC leaders expressed their opposition to the threat of military action against Tehran, amid US and Israeli warnings they will not tolerate a nuclear-armed Iran. "We are concerned about threats of military action as well as unilateral sanctions," said the group, two of whose members - China and Russia - are veto-wielding members of the UN Security Council.
Agence France-Presse, Bloomberg, Xinhua