This summer, in Fortaleza, Brasil, the members of the new BRIC agreement established a New Development Bank. BRICS, standing for: Brasil, Russia, India, China, and South Africa, is starting off with a $50 billion basis, each signatory contributing $10 billion.
According to the Washington Post, “The capital base is to be used to finance infrastructure and ‘sustainable development’ projects in the BRICS countries initially, but other low- and middle-income countries will be able [to] buy in and apply for funding.”
The BRICS countries have also created a Contingency Reserve Arrangement (CRA) of $100 billion, which will provide extra economic protection to members when payment problems arise.
“The CRA—unlike the pool of contributed capital to the BRICS bank, which is equally shared—is being funded 41 percent by China, 18 percent from Brazil, India, and Russia, and 5 percent from South Africa,” noted by Raj M. Desai and James Raymond Vreeland of the Washington Post.
With organizations like the World Bank and International Monetary fund, why was the New Development Bank created, and furthermore, why between these specific countries?