Brics Development Bank a done deal

It would be the first formal institution of the Brics group, which consists of Brazil, Russia, India, China and South Africa.

"We have agreed to establish the New Development Bank. The initial capital contribution to the bank should be substantial and sufficient for the bank to be effective in financing infrastructure," Zuma said.

While certain issues still needed to be ironed out, such as the bank's location, initial start-up funds and voting rights, Zuma said that following the report from Finance Ministers, the bloc was satisfied that the establishment of the New Development Bank to fund infrastructure was feasible and viable.

South Africa's Finance Minister Pravin Gordhan was optimistic on Tuesday night when he told media that the talks for the bank were on track, but urged reporters to wait for the leaders' formal announcement.

Ahead of the summit, officials had said the Brics countries were considering injecting an initial $50 billion into the bank, with each nation contributing $10 billion.

The idea of a Brics Development Bank was first proposed at the 4th Brics summit in New Delhi, India, last year.

While Russia was cautiously optimistic about the idea this week, its President Vladimir Putin on Wednesday signalled his country's support for the institution.

Putin further proposed an establishment of a permanent secretariat to lead the group's day-to-day operations.

Discussions about the Brics bank, which will spearhead infrastructure development in Brics member states and other developing nations, have dominated the meeting of Brics countries.

In another development, Brics leaders have further endorsed the idea of creating a safety net in the form of a contingent reserve arrangement (CRA) amongst Brics countries.

Zuma, who has assumed the leadership of Brics for the next year, told reporters that the bloc's leaders had concluded that the establishment of a self-managed contingent reserve arrangement would have a positive precautionary effect.

It would help Brics countries forestall short-term liquidity pressures, provide mutual support and further strengthen financial stability.

"It would also contribute to strengthening the global financial safety net and complement existing international arrangements as an additional line of defence.

"We are of the view that the establishment of the CRA, with an initial size of US$100 billion is feasible and desirable, subject to internal legal frameworks and appropriate safeguards. We direct our Finance Ministers and Central Bank Governors to continue working towards its establishment," Zuma said.

The summit also commended the launch of the Brics Think Tanks Council to assist members with innovation and hosting of the Fifth Brics Academic Forum.

In his speech delivered earlier to the summit plenary, Zuma emphasised the importance of promoting knowledge economy among Brics members.

"In South Africa, we need to upgrade the skills of at least 3.2 million youths who are neither in employment, education nor training, so as to ensure that they are employable and can be absorbed into productive labour market economy."

He said South Africa was working on overhauling its post-school education and training system, as well as the skills development environment in order to address this challenge.

"Our government has classified education as an apex priority and thus, naturally has a bigger share of our national budget. We are keen to learn from the experiences of other Brics countries on how they are dealing with similar challenges."