BRIC’s Show Of Solidarity

According to a report by the Financial Times, emphasizing the fact that their group is vital for achieving a new world order, the leading emerging powers group, BRIC, on Thursday called for swift reform of international financial institutions, and giving developing countries greater voice. The call from the BRIC countries to have more participation in global financial institutions like World Bank and The International Monetary fund came ahead of G20 finance ministers and IMF’s meeting in Washington.

The leaders of Brazil, Russia, India and China are demanding approval of voting share reforms from IMF meetings, and giving more clout to developing countries. Fixing a deadline, the group demanded that such reforms should be incorporated by the G20 summit in November. Brazilian President Luiz Inacio Lula da Silva after holding talks with his counterparts said, “Brazil, Russia, India and China have a fundamental role in creating a new international order that is more just, representative and safe.” “We support a multi -polar, equitable, democratic and just world order with the [United Nations] playing a central role in tackling global challenges,” said Indian Prime Minister Manmohan Singh.

Arguing against the existing system, which the group believes is unfairly dominated by advanced economies of the world such as the U.S., Japan and Europe, the group demanded a greater say. The group has been pushing for reforms since the global financial crisis of 2008. All Trade protectionism will be resisted by the group and the group would also look at increasing commerce among them in local currency, skirting the dollar, the statement said. However, the group has also stressed the importance of maintaining the stability of major reserve currencies. Especially, China, who is the largest holder of Treasury bonds, would not like to see the value of its investment diminish.

The BRIC summit, held in Brasilia, had to be cut short as Chinese president Hu Jintao had to rush back to China to deal with a major earthquake in the remote western region of China. In a step towards development and regional cooperation, the countries’ national development banks signed an accord which would enable them to fund projects in one another’s countries, the Brazilian National Development Bank’s (BNDES) president, Luciano Coutinho, said. The head of BNDES said that agreement has been reached on infrastructure, energy, sustainability and technology sectors. Meanwhile, Hu and Lula signed a five year “action plan,” aimed at boosting trade and energy cooperation. With the rise of trade and commerce between them, China and Brazil have grown closer in recent years.