BRICS flay West over IMF reform, monetary policy

NEW DELHI Thu Mar 29, 2012 3:08pm IST

(From L-R) Brazil's President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma wave during a group photo for the BRICS Summit in New Delhi March 29, 2012. REUTERS/B Mathur

(From L-R) Brazil's President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma wave during a group photo for the BRICS Summit in New Delhi March 29, 2012.

Credit: Reuters/B Mathur

A statue of Ganesh, the deity of prosperity, is carried in a taxi to a place of worship on the first day of the ten-day-long Ganesh Chaturthi festival in Mumbai August 29, 2014. REUTERS/Danish Siddiqui

Ganesh Chaturthi Festival

During Ganesh Chaturthi idols will be taken through the streets in a procession accompanied by dancing and singing, and will be immersed in a river or the sea in accordance with Hindu faith.  Slideshow 

NEW DELHI (Reuters) - Leaders of the BRICS group of emerging market nations pressed Western powers to cede more voting rights at the IMF this year and flayed the rich world's reflationary monetary policies for putting global economic stability in jeopardy.

"This dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the Fund," Brazil, Russia, India, China and South Africa said in a joint declaration after their one-day summit in New Delhi.

"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."

Promised changes to voting rights at the IMF have yet to be ratified by the United States, adding to frustration over reform of the G7 and the U.N. Security Council, where India and Brazil have been angling for years for permanent seats.

The BRICS leaders also accused rich countries of destabilizing the world economy five years into the global financial crisis.

"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," they said in a joint declaration.

The rich world's monetary policy "brings enormous trade advantages to developed countries, and results in unfair obstacles for other countries," Brazil's President Dilma Rousseff said at the summit.

(For a graphic on the BRICS economies, click link.reuters.com/hez27s

For a video about the BRICS' economic woes, click link.reuters.com/fet27s)

Security was tight in New Delhi, days after an activist set himself on fire in protest at Chinese rule in Tibet, dying from his injuries just hours before China's President Hu Jintao arrived. Police grappled with small groups of pro-Tibet protesters.

IRAN'S NUCLEAR RIGHTS

The declaration said the crises over Iran's nuclear programme should be resolved diplomatically and should not be allowed to escalate. It also recognised the right of Iran to pursue peaceful nuclear energy.

"We agreed that lasting solution to the problems in Syria and Iran can only be found through dialogue," Indian Prime Minister Manmohan Singh said.

The five BRICS nations, which collectively account for nearly half the world's population and a fifth of its economic output, signed an agreement to extend credit facilities in their local currencies, a step aimed at reducing the role of the dollar in trade between them.

They also agreed to examine in greater detail an Indian proposal to set up a BRICS-led South-South Development Bank, funded and managed by the BRICS and other developing countries.

"We have directed the finance ministers to examine the proposal and report back at the next summit," Singh said.

Other moves to bring their economies closer together include the launch on Friday of benchmark equity index derivatives allowing investors in one BRICS country to bet on the performance of stock markets in the other four members without currency risk. The indexes will be cross-listed on their stock exchanges from Friday.

(Additional reporting by Matthias Williams, Brian Winter and Alexei Anishchuk; Editing by John Chalmers and Jonathan Thatcher)

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Comments (2)
John_Darling wrote:
This will be the only way in which the selfish, self-destructed and disastrous policies of the greedy West nations will ever be counter-acted. Go BRICS!

Mar 29, 2012 7:48pm IST  --  Report as abuse
fcvnycnl wrote:
Why should the BRICS group rather than flaying the IMF and WB not take a grand leap forward by suggesting a transformation of the international monetary system rather than changing it at its fringes? Why should the BRICS group which is very strongly impact by the climate crisis not take the bold step of basing the dysfunctional international monetary system on a carbon standard to combat the climate crisis and advance low carbon and climate-resilient development? Proposing this carbon-based international monetary system at the Rio 2012 Earth Summit would make nations discuss the real issues of global governance where such transformed international monetary system could be usefully considered a real alternative to integrate the three pillars of sustainable development. The BRICS could start by cosponsoring the Global Governance Group of 55 nations’ General Assembly Resolution for having a Global Governance in 2013. Details of the above carbon-based international monetary system can found in the forthcoming The Tierra Solution: Resolving the Climate Crisis through Monetary Transformation and on www.timun.net.

Mar 29, 2012 8:09pm IST  --  Report as abuse
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