BRICS nations gird to pressure West over imbalances
NEW DELHI: The BRICS group of emerging market nations will look at ways of pressuring the West to redress global economic imbalances amid growing frustration at the pace of change in institutions such as the IMF at a meeting in Delhi on Thursday.
Brazil’s Trade and Industry Minister Fernando Pimentel told Reuters on the eve of the meeting his country hopes for a summit communique denouncing what it sees as unfair monetary policies by Europe and the United States.
Other trade ministers from the BRICS group – Brazil, Russia, India, China and South Africa – struck a defiant tone, saying they are not bound by unilateral sanctions against Iran.
The five nations, who collectively account for nearly half the world’s population and a fifth of economic output, are expected to announce steps to bring their economies closer together, including linking their stock exchanges and plans for a joint development fund in the mold of the World Bank.
“We would look to see promises of reforms at multilateral institutions like the World Bank and IMF getting translated into action,” a senior Indian official with knowledge of the matter said, adding that India would consult with other BRICS countries during the summit.
The group is often criticised for being too diverse to be effective, but Jim O’Neill, the Goldman Sachs economist who coined the acronym in 2001, said the very fact they meet is a message to the world.
“It is a very powerful reminder to the G7 and the Western powers that they need to get their act together in giving up more space and room in the G20, IMF and World Bank. It serves a really good purpose in that sense,” said O’Neill.
Security was tight in Delhi 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 stopped and questioned people they suspected of being Tibetan, while restrictions on movement in Tibetan areas of the city meant residents were effectively under house arrest, activists said.
India and Brazil have for years been angling for permanent seats on the U.N. Security Council, while promised changes to give the emerging powers greater voting rights at the International Monetary Fund have yet to be ratified by the United States.
The BRICS group has so far not come out in support of any of the three candidates hoping to replace U.S. official Robert Zoellick at the head of the World Bank – possibly reflecting fatigue with what they see as resistance to change in multilateral bodies.
IRAN’S NUCLEAR RIGHTS
The draft statement said the crisis over Iran’s nuclear programme should be resolved diplomatically and should not be allowed to escalate. The draft declaration recognised the right of Iran to pursue peaceful nuclear energy.
The five BRICS nations, who collectively account for nearly half the world’s population and a fifth of economic output, were also expected to announce steps to bring their economies closer together, including linking their stock exchanges and plans for a joint development fund in the mould of the World Bank.
The chairman of Russia’s largest state development bank said Moscow and New Delhi will switch to trading in domestic currencies in three years.
“With China it took us three years to (evolve) from initial conversations to trading in local currencies,” chairman of VEB state bank Vladimir Dmitriev told reporters on the sidelines of the summit.
“I think we will meet similar terms with India,” he said.