BRICs to demand a bigger say at G20 meet
31 Mar 2009
As the traditionally wealthy western economies continue to reel under recession, the fast-developing BRIC nations - Brazil, Russia, India and China - are likely to repeat their demand for a bigger say in the affairs of G20, the group of the world's 20 economically most important nations, at the summit to be held in London from 2 April.
Other emerging economies will join BRIC in insisting on a bigger role in multilateral financial discussion and relevant policy-making. According to reports, foreign minister Pranab Mukherjee in particular is likely to lead the calls for developed countries to avoid resorting to protectionism.
Currently, for instance, the International Monetary Fund's voting structure is dominated by Europeans and Americans, with the United States alone holding 17 per cent voting power, a quota big enough to veto any major decision in the IMF.
In a joint statement issued on 14 March by the finance ministers of Brazil, Russia, India and China in London, they welcomed the expansion of the Basle Committee on banking supervision and said the International Accounting Standards Board and other standard-setting bodies also need to become more representative.
The BRIC nations agreed that stabilisation of the international financial system through recapitalisation, liquidity support and cleaning of bank balance sheets is a priority, adding that the BRIC countries are taking measures to promote domestic demand in their national economies and will continue to do so.
The four countries firmly supported suggestions discussed within the G20 working groups to intensify supervision of hedge funds and private pools of capital that had inflicted a significant impact on global markets.
Earlier this month, Chinese financial minister Xie Xuren called for substantial and overall reforms of the international financial system, while Brazilian finance minister Guido Mantega suggested emerging economies be given more voting rights in international financial institutions.
In order to form a more potent bloc, Mexico has said , President Felipe Calderon would join hands with his colleagues from Argentina and Brazil at the G20 summit in boosting Latin America's voice and asking more aid from international financial institutions for developing nations.
Chinese Central Bank governor Zhou Xiaochuan has called for a new ''super sovereign'' reserve currency to replace national reserve currencies as the backbone of the global monetary system.
Zhou's idea was echoed by Brazilian President Luiz Inacio Lula da Silva, who pointed out that trade between Brazil and Argentina is already settled in local currency, indicating Zhou's proposal has been proved to be realistic.
Similar proposals were also presented by Russian President Dmitry Medvedev, who called for the widening of the reserve currency basket. Medvedev said the existing currency system has not coped with existing challenges.
If parties concerned can reach an agreement on reforming the system, "in the future we could talk about creating a kind of a super currency," he said.
Earlier this month, Lula made it clear that Brazil is ready to cooperate with other developing countries to reopen the 'Doha round' of world trade talks to safeguard developing countries' interests, while finance minister Guido Mantega asked G20 nations to contribute more to the IMF global fund to aid developing nations.
Argentine finance minister Carlos Fernandez has meanwhile demanded international strategies which will place greater emphasis on developing countries' needs, and urged the IMF and World Bank to adopt more flexible lending policies.
The BRIC nations will be joined in their call for significant financial reforms by other emerging economies like Mexico, Indonesia and South Africa.
