BRIC SHOULD CREATE CONDITIONS FOR FAIRER WORLD ORDER
Siddharth Varadarajan
Brazil, Russia, India, China stress financial, agricultural and strategic aspect of new grouping.
Presidents Luis Inacio Lula da Silva (Brazil), Dmitri Medvedev (Russia), Hu Jintao (China) and Prime Minister Manmohan Singh in Yekaterinburg, Russia, on Tuesday at the BRIC leaders’ summit. Yekaterinburg: Unveiling a collective agenda ranging from food security and reform of international financial institutions to the creation of a “more diversified international monetary system” and “more democratic and just multipolar world order,” Brazil, Russia, India and China launched a new strategic vector that is likely to influence global affairs in the years ahead.
Short affair: The first-ever summit of the BRIC countries was a short affair, conducted behind closed doors with the world’s media given the briefest of glimpses when President Dmitri Medvedev of Russia took the stage with Prime Minister Manmohan Singh, Chinese president Hu Jintao and Brazil’s president Luis Inacio Lula da Silva to term the outcome of what he described as a “historic event.” The four leaders met first in a restricted and then expanded format with aides on Tuesday evening, formally approving a joint statement that officials said was only finalised at 4 a.m. that morning.
The 16-point statement said the BRIC countries were committed to advance the reform of international financial institutions so as to reflect changes in the world economy. In a more or less direct attack on the Western domination of Bretton Woods institutions like the IMF and the World Bank, the statement said emerging and developing economies must have greater voice and representation and the “heads and senior leadership” of these bodies “should be appointed through an open, transparent and merit-based selection process. “The statement also contained a veiled attack on the dollar, whose role as the primary international reserve currency Russia, China and, to a lesser extent, Brazil have questioned. “We also believe there is a strong need for a stable, predictable and more diversified international monetary system,” the four leaders noted.
Among the other goals flagged: opposition to protectionism, the need for a “comprehensive and balanced” outcome to the WTO’s Doha Development Round, cooperation in the energy field “including amongst producers and consumers of energy and transit states,” and food security, for which a separate declaration was issued.
On India’s initiative, the statement strongly condemned terrorism in all its forms and manifestations and reiterated “that there can be no justification for any act of terrorism anywhere or for whatever reasons.” Calling for “comprehensive reform” of the United Nations, the BRIC quartet reiterated “the importance we attach to the status of India and Brazil in international affairs, and understand and support their aspirations to play a greater role in the U.N.”
The BRIC nations, said Mr. Medvedev, want to have a fair world order and ensure the safety and security of our countries and people. “All the decisions important for the international community -economic, security and political – should be taken on fairer basis,” he said. “And this fairness is the key word for our interaction. The BRIC nations should create conditions for a fairer world order.”
Summit format: Officials said Russia favoured an annual summit format, something the Chinese side opposed. Brazil was keen to host the next summit in 2010, during the tenure of President Lula. India then came up with a flexible solution: the summits will be “periodic,” allowing for annual or less frequent meetings. Mr. Medvedev also stressed the need for interaction at other levels such as foreign, agriculture and trade ministers.
BRIC debut puts the “political” back into economy
YEKATERINBURG: If the Shanghai Cooperation Organisation, whose meeting an Indian Prime Minister is attending for the first time, is a body with an essentially Asian, security-centric footprint, the Brazil, Russia, India, China summit being held here the same day is being seen globally as a grouping whose political interactions could help to alter the shape of the international financial system and the global economy that it underpins.
Writing exclusively in The Hindu today, Brazil’s president Luis Inacio Lula da Silva says the BRIC summit “marks a major turning point in how our countries engage in a world undergoing profound change and … [beset by] broken paradigms and failing multilateral institutions.”
With 40 per cent of the world’s population and output (in purchasing power parity terms), “the BRIC grouping has the potential to lead global economic growth,” Prime Minister Manmohan Singh said in a statement before leaving New Delhi. But if Dr. Singh spoke coyly of the BRIC “coordinating international efforts to overcome the ongoing financial and economic slowdown,” Mr. Lula was more blunt about the political economy of the quartet’s first summit agenda. “Are rich countries willing to accept supranational oversight and control of the international financial system, so as to avoid the risk of another global economic meltdown? Are they willing to forfeit their stranglehold on decision-making at the World Bank and the IMF? Will they agree to cover the costs of technological adaptation required for people in developing countries to also benefit from scientific progress, without harming the global environment? Will they eliminate protectionist subsidies that make modern agriculture in many developing countries unviable, leaving poor farmers at the mercy of commodity speculators and generous donors?” Declaring that “the time for politics” has come, he said these are “the questions that the BRICs want answered.”
Indian officials said the summit would also focus on the emerging challenges the financial crisis posed, adding that the National Security Advisors or equivalent officials from the four countries met recently to review the issue. “Supranational” currency: Among the four members, Russia has been the most forthright about the need for the world’s rising economies to push for the creation of a new “supranational” currency to replace the dollar as the primary international unit of account for foreign reserves. China and Brazil favour an expansion of the IMF’s Special Drawing Rights (SDRs), with Brasilia recently offering the IMF a $10-billion loan towards this end. India remains noncommittal, with Foreign Secretary Shiv Shankar Menon describing these discussions as “academic” and “premature.” Senior officials told The Hindu that Russia had since clarified that it did not intend to use the BRIC forum to press the debate on a shift away from the dollar.
(The Hindu, June 17, 2009)