At a meeting in Brazil this week, the leaders of Brazil, Russia, India, China and South Africa announced that they are establishing a development bank to challenge the influence of institutions like the World Bank and the International Monetary Fund. At the sixth annual BRICS 2014 summit in Brazil, this historic announcement was made, creating the New Development Bank, which will be the first institutional manifestation of the BRICS group.

Together with the BRICS-South America Summit, to which the Brazilian government has invited all heads of state in South America, this week’s meeting marks Brazil’s most significant geopolitical summit in recent history. In attendance is Brazil’s President Dilma Rousseff, India’s new Prime Minister Narendra Modi, Russian President Vladimir Putin, South Africa’s President Jacob Zuma , and Chinese President Xi Jinping.

The New Development Bank (NBD), to be based in Shanghai, will open with an initial capitalization of U$50 billion. India will name the first president, according to a statement from the leaders of the BRICS group of nations who have gathered in Fortaleza, and Russia and Brazil will select other top officers.

“The first president of the Bank will be India, the first regional office will be in South Africa, and the headquarters will be in Shanghai,” President Rousseff said.

The five-nation bloc also said it would create a U$100 billion contingency fund of currency reserves for members to use during balance of payments crises. Pointing to concerns that the United States Federal Reserve was stepping back in its aggressive efforts to stimulate the American economy, possibly opening the way for interest rate increases in the United States, Dilma Rousseff said the fund could mitigate the volatility that could emerge from such shifts.

“This provides security, a kind of safety net for BRICS countries and others,” Dilma said. “The bank will represent an alternative for the financing needs of the developing countries … (and) will compensate for the deficiencies in credit” that currently exist in the multinational financial institutions, the Brazilian president added.

Nations like Brazil already have huge development banks that dwarf the World Bank in size. Still, leaders in emerging economic powers chafe at the policy prescriptions coming from the World Bank and the I.M.F., which emerged from the Bretton Woods monetary conference in New Hampshire 70 years ago.

Since the world financial crisis of 2008, global order is undergoing a complex phase of adaptation to resolve the growing tension between economic multi-polarization and international institutions that still reflect a Western-centered order, created after World War II when US GDP made up 50 percent of the global economy.

China is already Brazil’s most important trading partner, and negotiating its trade relationship with China is one of Brazil’s key policy challenges. In this context, understanding China’s vision – how it seeks to placate worries about its rise, how it thinks about the future of its currency in global affairs, and how it envisions dealing with challenges such as climate change and maritime security in the 21st century – is crucial for Brazil to successfully adapt for the future. Being part of the BRICS NBD will allow Brazilian economists to work directly with Chinese specialists, gaining much needed knowledge about Beijing’s views about development. It is also a useful hedging strategy: If the World Bank continues to refuse to provide emerging powers with greater voting rights, Brazil can slowly begin to invest in the NBD – or engage in both.

The BRICS countries face continued challenges today like slowing economic growth. GDP growth in Brazil is currently forecast at only 1.6 percent for this year.

“Due to the weight of their economies and influence in their regions,” the BRICS nations “cannot be unconnected to the great international questions,” Dilma added. “We are among the economies that grew most in recent years” and each member of this forum “has incentivized the mechanisms of economic integration and regional governance,” said Rousseff.

While the BRICS bloc involves countries with varying levels of economic growth, vastly different political systems, and an array of simmering issues like the hostilities between Russia and Ukraine and the territorial disputes between China and its neighbors, analysts caution that its potential clout should not be taken lightly.

“They still have just shy of half the world’s population,” said Kevin P. Gallagher, a professor of international relations at Boston University, emphasizing the influence the countries already have within organizations like I.M.F. and the World Trade Organization. “They are a force regardless of their growth rate, which will remain faster when averaged than the West’s for years to come.”

Additionally, in a meeting in Brasília on Monday, July 14, Dilma and Russia’s Vladimir Putin signed a number of bilateral agreements in the areas of economy, defense, technology, energy, and pharmaceuticals. The key terms of the agreements include expanding bilateral trade to U$10 billion.

Meanwhile, Brazil and India announced that they have signed agreements on environmental protection, satellite data processing, and information exchange, the official news agency Agencia Brasil reported. The agreements were signed by Dilma Rousseff and Indian Prime Minister Narendra Modi at a ceremony in Brasília. Modi was recently elected Prime Minister of India, and this was his first meeting with Brazil’s President.

Many commentators still believe Brazil’s BRICS membership is an anti-American project inspired by left-leaning ideologues. Yet that would be a dangerous, US-centric misinterpretation of global order and of Brazil’s place in it. The BRICS have come together to create something without US or European involvement – yet that does not make them anti-Western per se. For Brazil, the BRICS platform is a useful way to facilitate the diversification of its partnerships and to adapt to a more multi-polar global order. Brazil no longer needs to choose between leaning more towards the United States or the developing world – it must have strong ties to both established and emerging powers alike.

 {Research for this article comes from The New York Times, the Latin American Herald Tribune, and the websites of Post-Western World and GlobalPost.}