Victory for emerging BRICs?

March 16, 2009

Emerging market ministers, particularly those from the BRIC economies — Brazil, Russia, India and China — are painting this weekend’s G20 meeting as a victory in dragging them out of the shadows of global policy-making.

The finance ministers’ statement included the promise of more money for the International Monetary Fund and regional development banks, on whom struggling emerging economies rely for support.

It accelerated a review of IMF quotas by two years to 2011, which should give emerging economies more say in the running of the multilateral lender. It also suggested that the headship of IFIs — international financial institutions — would no longer be guaranteed to Americans or Europeans. 

BRIC countries even issued their own communique, ahead of the final statement. “There is a conclusion that has been reached in recent years, which is that the resolution to today’s global problems is only possible with the participation of emerging countries,” Brazil’s central bank governor Henrique Meirelles told MacroScope.

 “There is a natural evolution of the decision-making process, which many important countries agree on, that decisions move from the G7 to the G20.”

But were there actually any major concessions?  Tim Ash,  head of emerging Europe, Middle East and Africa research at RBS thinks not.

“Clearly they would like things to change, but I’m not sure that much has actually changed,” he says.


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The BRIC countries may emerge from this economic crisis because all other countries will look for cheaper services and goods with them. However, India is already supplying the world with outsourcing and China is still supplying the world with cheap goods and will continue to do so. Russia has oil and gas supplies for Europe and access to new deposits in Central Asian countries via its territory. Fianlly Brazil will supply biofuels to all who have become so conscience of the environment.

Posted by bulletfish | Report as abusive

It would be in the best interest of the US and the EU to accept the proposals of the BRIC communique ahead of the Summit that: (1) the voting quotas at IMF and World Bank be increased and redistributed to reflect the economic and external balance muscle of the G20 membership and the non-G20 as two or three regional groups; (2) the Headship of the IFIs (not just IMF and World Bank, but also Bank for International Settlements and World Trade Organisation) rotate among at least the US, EU, East Asia (including Japan) as a group, Latin America as a group, the Greater Middle East (Arab countries plus Iran plus Pakistan); (3) the adoption of an extended-SDR type of currency that would be an actual currency instead of a unit of account, that currency becoming one of four or five reserve currencies (the extended-SDR, the Yuan, the US dollar, the Euro, and maybe anIran-augmented Gulf Coopearion Council common currency yet to be created.

These will be in addition to the increase in IMF Borrowing Powers to US$ 500 billion.

Posted by Mohamed MALLECK | Report as abusive