The BRICS grouping of emerging powers reached a scaled-back deal on Tuesday to establish a development bank that had been seen as a rival Western-backed institutions.
“It’s done,” South African finance minister Pravin Gordhan told AFP after talks with his counterparts from Brazil, Russia, India and China.
“We made very good progress, the leaders will announce the details,” he added, shortly before a summit in the South African port city of Durban began.
The bank is likely to focus on infrastructure financing, a direct challenge to seven decades of dominance by the World Bank.
Together the BRICS economies account for 25 percent of global output and 40 percent of the world’s population.
Members say institutions like the World Bank, the International Monetary Fund and the United Nations Security Council are not changing fast enough reflect their new-found clout.
BRICS negotiators had been under pressure to come up with an agreement that proves the grouping is relevant and sends a strong message to the United States and Europe that the current balance of power is untenable.
But as leaders opened the summit, it appeared that a wide ranging agreement would have to wait and that a push for $50 billion in starting capital for the bank may be scaled back.
South Africa’s trade minister Rob Davies admitted the details were “being hammered out.”
“There’ll obviously be a process to put in place the remainder of the details,” he told AFP.
The bank is not likely to be up and running for years.
An Indian diplomat involved in the talks said many of the details are likely to be left for another day, but leaders would announce a deal, however vague.
Defining the scope of the bank, and how projects would be distributed and where the bank would be based remained key sticking points.
Many emerging nations both inside and outside BRICS hope the bank will be a way to tap China’s vast financial resources.
Brazil’s central bank chief told AFP progress was also being made on a deal to establish currency swap lines that would encourage trade, which is likely to be worth in the region of $100 billion.
Members could also draw on the funds during a liquidity crunch or other crises.
“We are working on it,” said Alexandre Tombini.
The currency swaps would also open the door for BRICS countries to tap some of China’s massive $3.31 trillion foreign reserves, the world’s largest.
Securing both deals is meant as a thumb in the eye to those who argue the BRICS is little more than a talking shop.
Xi Jinping has underscored the growing importance of the group by making Durban his first summit destination as China’s president.
Meanwhile host President Jacob Zuma has lauded the summit as a means of addressing his country’s chronic economic problems, such as unemployment, poverty and unemployment.
“BRICS provides an opportunity for South Africa to promote its competitiveness” Zuma said on the eve of the summit.
But the BRICS nay-sayers are unlikely to be dissuaded and stress differences dividing members instead of common interests.
With Syria’s two-year long civil war escalating through the suspected use of chemical weapons, BRICS leaders will also have to weigh a call from President Bashar al-Assad to intervene.
Speaking ahead of the opening of the summit, Russian President Vladimir Putin said the group would try to act in concert.
“We will coordinate our activities to find a peaceful solution for the Syrian crisis.
In a message to the summit leaders Assad asked “for intervention by the BRICS to stop the violence in his country and encourage the opening of a dialogue, which he wishes to start,” said his senior adviser Bouthaina Shaaban after he delivered the message to South African President Jacob Zuma.