The BRICS emerging nations gathered in Ufa, the regional capital of Russia’s Bashkortostan province on Thursday and the summit concluded to promote industrial development as well as protection of economies of the member states in the wake of the volatility of global financial markets and lowering oil prices.
The BRICS is the acronym for an association of five major emerging national markets - Brazil, Russia, India, China and South Africa - which corresponds to almost 42 percent of the world’s population in more than a quarter of the world’s surface area together with 20 percent of the world’s total GDP.
Russian President Vladimir Putin hosted the BRICS leaders as well as the leaders of Shanghai Cooperation Organization (SCO) and Eurasian Economic Union (EEU) in Ufa on Thursday and the parties committed on further economic cooperation among the member countries and the three organisations.
The BRICS countries declared in a statement on Thursday as saying that, "Increasing production and export of high value-added will help BRICS countries enhance their national economies, contribute to their participation in global value chains and improve their competitiveness," according to Russian news agencies.
"We are concerned about the instability of the markets, the high volatility of energy and commodity prices, and the accumulation of sovereign debt by a number of countries," Putin said.
"These imbalances affect the growth rate and our economies. In these circumstances, the BRICS states intend to actively use their own resources and internal resources for development," he added.
The BRICS summit was made immediately after the member states established the New Development Bank (NDP) that will be completed to a goal of $100 billion in capitalisation when the global financial markets have been undergoing a crisis, particularly in the Western realm.
"The New (Development) Bank will help finance joint, large-scale projects in transport and energy infrastructure, industrial development," Putin summarised function of the NDP at the summit.
The NDP project had launched in July 2014 when the leaders of BRICS countries met in Brazil and the Bank will be completely materialised after the other participants ratified the proposed agreement.
China’s top legislature, National People's Congress Standing Committee, approved earlier this month the agreement regarding the establishment of BRICS’ NDP.
China will contribute the biggest financial aid with $41 billion into the BRICS Bank while Brazil, Russia and India have each committed to put $18 billion. South Africa also pledged to contribute $5 billion to the monetary pool.
China is said to put $10 billion into the bank in the very beginning following approval of the agreement which was already approved by both Indian and Russian parliaments in April.
China’s move towards vitalising the BRICS NDP came just two days after its inauguration of Asian Infrastructure and Investment Bank (AIIB), another Chinese-led economic venture which is also regarded as a financial challenger to the Western-backed business and finance institutions.
The BRICS countries aim to decrease their economic dependency on Western international creditors like the International Monetary Fund (IMF) and World Bank through the establishment of those cooperation which also enable them to give loan money to less developed countries.
Russia had taken the BRICS’ rotating presidency in April and pledged to materialise the NDB together with a reserve pool.
One of the main purposes of the reserve pool is to protect national currencies of the BRICS countries from volatility of the global markets which were overwhelmingly controlled by the Western-backed international institutions.
As the relations soured with the West soon after Moscow’s annexation of Crimea and its alleged roles in eastern Ukraine crisis, Russia augmented its military and security ties with China while Beijing has also been accused of its offensive territorial claims in the South China Sea by the regional and Western allies.
Security partnership between Moscow and Beijing had accelerated when the parties signed the military agreement of Shanghai Cooperation Organisation (SCO) in the wider Eurasia region in 2001.
The parties inked 400-billion-dollar worth two mega gas deals last year, which would facilitate China to become the biggest consumer of Russian energy supplies as Beijing received almost 70 billion cubic metres of gas annually after 2018.
For China, Russia’s energy resources constitute a stable market in which China’s increasing energy demands for its booming economy can be securely met.
Both countries appear to become increasingly interdependent as the trade volume reached at 90 billion dollars annually as of the end of 2014.