Commentary: BRICS becomes important building block of world economy

BRICS countries, namely Brazil, Russia, India, China and South Africa, are playing an increasingly important role on the global stage amid a slow recovery of the world economy.

Under the agreement they signed last year during the sixth BRICS summit, the bloc will establish a New Development Bank (NDB) and a Contingent Reserve Arrangement (CRA).

On Tuesday, the board of governors of the NDB is expected to hold the first meeting in Moscow to appoint members of the board of directors and the president and vice presidents.

The Shanghai-based NDB will have an initial authorized capital of 100 billion U.S. dollars, with the initial subscribed capital of 50 billion dollars equally shared by the founding members.

Also on Tuesday, governors of the central banks of BRICS countries will sign an operating agreement on the CRA to set up a 100-billion-dollar fund, which will be used to help BRICS countries when they have difficulties.

Of the CRA, China will contribute 41 billion dollars to the capital stock; India, Brazil and Russia each pay in 18 billion dollars, and South Africa's share was 5 billion dollars.

Committing to the common prosperity and development of all the countries in the world, the BRICS has become an increasingly important building block of the global economy.

Firstly, the establishment of the NDB -- expected to be launched late this year or early next year -- and the CRA will inject dynamism into the cooperation among BRICS countries and set an example for the South-South cooperation.

The bank and the fund will enhance the economic autonomy of BRICS countries. They also have great significance for helping BRICS nations and even more developing countries to obtain funds for infrastructure projects as well as to counter emergent solvency crisis or liquidity crisis.

The cooperative mechanism of BRICS countries has become a paradigm and important platform for the South-South cooperation.

The NDB will have a regional center in South Africa, which holds the rotating presidency of the Group of 77 this year and has an important role in promoting the pragmatic cooperation between BRICS and African countries.

Secondly, the setup of the NDB and the CRA shows that BRICS countries have enough confidence and strength as they have great market potential and policy space.

The difficulties and setbacks BRICS economies have encountered in recent years are periodic rather than structural, and their slowdown has been mainly caused by a deteriorating international economic environment.

Meanwhile, BRICS countries are regulating and controlling their macro-economy as well as upgrading their economic structure at the cost of rapid economic growth.

Though BRICS economies witnessed a decelerated growth compared with their previous performance, it is still at a high level especially compared with some developed countries.

Data from the International Monetary Fund (IMF) showed that the contribution BRICS countries have made to the global economic growth in the past decade has exceeded 50 percent and the BRICS economic growth will be higher than that of developed countries and other emerging economies by 2030.

Last but not least, the NDB and the CRA, which will offer alternative options for many developing countries besides the World Bank and the IMF, are necessary amendments to the current international economic order and will promote the reform of the global financial system.

In a word, the advancement of the BRICS group will only be conducive to both the developed and developing economies. Endi