It wasn't just the World Cup taking place in Brazil this month. Also gathered in Brazil were senior representative of the BRICS countries, Brazil, Russia, India, China and South Africa, who met in Fortaleza and Brasília for talks about closer cooperation.
The BRICS countries have set up the New Development Bank (NDB), which is a kind of mirror to the World Bank, and the Contingent Reserve Arrangement (CRA).
BRICS is an acronym invented by former Goldman Sachs economist Jim O´Neill to describe the world’s largest fast-growing emerging markets.
Reaching a deal last week on the bank and the reserve arrangement took five years of talks, which shows how difficult it is to find consensus among these countries.
Until now, the BRICS meetings were generally seen as big on ambition but low on action, so the establishment of a bank is a real step forward.
Although it is not yet operational, once it starts lending it has the potential to match the role of multilateral development banks, while offering the BRICS a tool to counterbalance Western influence in international finance.
China has been pushing for a separate multilateral financial institution in Asia to rival the Asian Development Bank, which Beijing believes is, along with the World Bank, overly influenced by the US and its allies.
According to a statement, the BRICS countries "remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund (IMF) reforms, which negatively impacts on the IMF's legitimacy, credibility and effectiveness".
The first chairman of the bank's board of governors will be Russian, while the first chairman of the board of directors will be Brazilian, the bank's first president Indian, the first regional officer of the Bank will be in South Africa, and the bank's headquarters will be located in Shanghai.
The role of the bank will probably be fairly modest initially, especially given the different levels of development between the five economies. There is also likely to be a certain lack of clarity on how decisions get made.
"The BRICS are essential to the prosperity of the planet. We have been responsible for mitigating the effects of the global financial crisis and the sustained growth of the world economy since then," Brazil's president Dilma Rousseff said at the sixth BRICS Summit in Fortaleza.
The bank looks set to become an additional source for infrastructure funding, with Brazil and India poised to be the main initial beneficiaries.
The New Development Bank will have an initial authorised capital of $100 billion (€73.42 billion), with an initial subscribed capital of $50 billion (€36.71 billion), distributed equally among its founding members.
Other areas of co-operation will include greater coordination between the BRICS nations’ statistics institutes and health and education ministries to develop joint methodologies for social indicators to be incorporated in the BRICS Joint Statistical Publication.
"The marked disparity between the five economies in terms of economic structure, political institutions, and even demographic profiles poses significant constraints for the launch of the NBD," said Carlos Caicedo, principal Latin America analyst at IHS.
India is seeking $1 trillion (€730 billion) in five years, and total infrastructure plans for the period up to 2020 are around $4 trillion (€294 billion).
Even if the NDB doubles its $100 billion (€73 billion) capital and lends four times this by 2020, it will only cover 10 percent of infrastructure needs.
“It is likely to represent a positive factor, and could be crucial for specific projects or countries, once its priorities are determined more clearly,” said Caicedo.
