Bijoy Patro/OneWorld South Asia
Leaders of Brazil, Russia, India, China and South Africa, or BRICS as the group refers itself to, pressed western powers to cede further voting rights at the IMF this year. In the same breath, they blamed the West’s reflationary monetary policies for jeopardising the economic stability of the world, five years now into the global financial crisis.
A signed joint declaration read: “It is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs.” The statement was cushioned in the an argument put forth by Brazil’s President Dilma Rousseff who said that the well-off western countries’ monetary policy is beset with trade advantages for themselves while forcing unfair trade obstacles for others.
Extending their lobbying for more voting rights at the IMF, the leaders signed a joint declaration necessitating the reform 'to ensure the legitimacy and effectiveness of the Fund'. “We stress that the ongoing effort to increase the lending capacity of the IMF will only be successful if there is confidence that the entire membership of the institution is truly committed to implement the 2010 Reform faithfully,” the statement read. (Changes to voting rights at the IMF have yet to be ratified by the United States. The BASIC countries make a case that this frustrates reform of the G7 and the UN Security Council).
This, however, did not prevent the five-some from taking on another international concern common to them and directly opposed to the Western powers: Iran. India’s Prime Minister, Dr Manmohan Singh, summed it up thus: “We agreed that lasting solution to the problems in Syria and Iran can only be found through dialogue.”
The five countries, collectively accounting for close to half the world’s population, and yet, a fifth of the world’s economy, also signed an agreement to conduct trade among themselves in their respective currencies in place of the dollar.
An India-led proposal for a South-South development bank, led, funded and managed by the BRICS block with other developing countries was sounded as an attempt to bring their economies closer to each other. So also, a proposal to launch a benchmark equity index derivative for investors from the BRICS block of countries for trade in equities. The indexes will be cross-listed on the respective countries’ stock exchanges.
The BRICS countries, being the fastest developing economies of the world are discussing economic challenges common to all the countries. The projections for food, water and energy were also discussed for the leverage these have in funnelling economic growth. Dr Singh sought cooperation on these areas, arguing that “it is clear that constraints such as the availability of energy and food for countries that account for more than 40 per cent of the world’s population can impede the entire story.”
The leaders present at the summit were the Presidents of China, Hu Jintao; South Africa, Jacob Zuma; Russia, Dmitry Medvedev; besides the President of Brazil and India’s Prime Minister.
(The views expressed by the author in the article are his/her own.)