In Durban, BRICS countries have launched their own infrastructure lender to rival the World Bank, but it will be years before the new financial institution starts doing business.
"It's done," declared South African finance minister, Pravin Gordhan, even before the official opening of the summit on Tuesday. Later, Gordhan and his counterparts from Brazil, Russia, India and China scaled back their plans. The final communiqué mentions the bank, but details such as capitalization, scope of the bank's activities, how projects would be distributed and where the bank would be based are left unresolved. So the club of five has once again missed an opportunity to dispatch a clear signal to the World Bank and the International Monetary Fund.
Before the summit, Oliver Stuenkel, professor of international relations in Sao Paulo, had described the successful founding of the new bank as a "litmus test" for the BRICS states.
South Africa had applied to be the seat of the new bank, which would have $50 billion (39 billion euros) in starting capital and would make funds available for infrastructure projects within BRICS countries. There will be a fresh attempt to get the bank off the ground at the 2014 BRICS summit in Brazil.
The new lender will seek to challenge what is perceived as US dominance at the World Bank. But the World Bank itself responded positively to news of a potential rival offering "every possible support, as soon as financing, management and location have been clarified."
Russia's finance minister Anton Siluanov said late on Tuesday plans for the infrastructure lender would be discussed on the fringes of the next G20 summit in April.
China and Brazil are to intensify use of their own respective currencies, rather than the US dollar, in bilateral trade in future. 30 billion dollars worth of business annually could then be conducted in yuan or real. South African President Jacob Zuma said the summit had agreed on the formation of a 25 member economic council "which would accelerate economic cooperation and partnerships between enterprises and member nations." Plans for a joint fund that would protect members of the bloc from financial turbulence were postponed.
Security policy was also on the agenda in Durban. Before the conference, Syrian President Bashar al-Assad had appealed to the BRICS group to mediate in the conflict in his country. With China and Russia wielding their powers of veto in the UN Security Council, BRICS had blocked several attempts to impose sanctions on Assad. In their final communiqué, the five BRICS leaders expressed backing for a "Syrian-led" transitional process with "broad national dialogue" that respected "Syrian independence, territorial integrity and sovereignty."
China needs African raw materials
The new Chinese president Xi Jinping was under the spotlight. His first trip abroad since taking office had brought him to Africa, and he visited Tanzania, promising it a credit line of $15 billion, before attending the Durban summit. Xi also tried to assuage African fears of Chinese domination. His African trip was seen by many as a new sign of China's strategic interests in Africa.
After the disappointing outcome to the summit, analysts and experts are calling for tangible progress. BRICS expert Ruchir Sharma from Morgan Stanley said he feared a remarkable degree of complacency among some of the policy makers. " I don't see any sense of urgency, the need to really get growth going again," he said.
Jabu Mabusa, Business Unity South Africa (Busa) president, said it was necessary "to turn what is currently referred to as potential into real development and commercial opportunities."
Glenn Ho from the consultancy KPMG urged BRICS, especially China, to use their large reserves "to actually fund small, medium enterprise development."
What could this mean in practice? There is the case of an ostrich farm in the north of South Africa. It was hit by a European Union import ban on ostrich products, imposed in 2011 because of a bird flu epidemic. The South African government then established contact with Indian importers, much to the ostrich farm's benefit. The ostrich famer, Felicity Fillies, told the South African broadcaster SABC that her Indian business partners "have ties in other countries where our birds are allowed" so she can export to those countries as well. Top of the list is BRICS partner Brazil.