September 15th, 2009
BRIC for greater say in global financial system
India, China, Russia and Brazil have opposed protectionism, while demanding a much greater say in the running of global financial institutions like the International Monetary Fund (IMF) and the World Bank. "Protectionism remains a real threat to the global economy and should be avoided, both in direct and indirect forms," said a communique by the four countries, collectively referred to as BRIC economies.
The communique was issued after a two-day meeting of the BRIC Finance Ministers and Central Governors on September 4-5 among their top economic policymakers in London. Finance Minister Pranab Mukherjee had led the Indian side.
The communique said the ongoing regulatory reforms being undertaken in the global financial and trading systems should not impede cross-border flows of capital and investment.
"We believe governments should work towards prompt and successful conclusion of the World Trade Organisation (WTO) Doha round in a way that ensures an ambitious, comprehensive and balanced outcome," it said.
Earlier, India formally committed to investing in the IMF, which Prime Minister Dr. Manmohan Singh had proposed during the G20 Summit in London in April.
"India has decided to invest up to $10 billion of its reserves in notes issued by the IMF," Mukherjee said after the meeting. It marked a major shift in India's economic stature globally as in the early 1990s, it had to seek funds from the IMF.
The Indian pledge is part of a total of $80 billion that the four BRIC countries will invest in the IMF in order to
replenish its fund aimed at helping out countries, which are struggling in the current financial crisis.
In return, the four countries have sought a greater say in the running of the IMF and other international financial institutions such as the World Bank, including a larger share of quotas and voting, said Brazil's Finance Minister Guido Mantega.
U.S. Treasury Secretary Timothy Geithner had also joined a part of the meeting, a move which Mukherjee maintained was "an acknowledgement of the group's emergence as a key voice in global economic and financial issues".
During the meeting, the four economies said a target must be set that will see a shift of 7 percent of the voting rights of the IMF and 6 percent in the World Bank towards emerging economies to ensure their equitable distribution with rich nations.
"The next managing director of the IMF and the next president of the World Bank should also be elected in a manner which is irrespective of nationality or any geographical preference," said the communique.
Following is the text of the Communiqué
"We, the Finance Ministers and Central Bank Governors of Brazil, Russia, India and China met in London on the occasion of the G-20 Finance Ministers and Central Bank Governors Meeting. We discussed the situation of the world economy, as well as fiscal and monetary policy responses in BRIC countries. We exchanged views and proposals regarding the G-20 Ministerial Meeting as well as the forthcoming G- 20 Leaders' Summit agenda and expected outcomes.
(Also see BRIC FMs' Press Statement)
Re-Energising Doha: Talks to move forward
A two-day Ministerial meeting of more than 30 Ministers of World Trade Organisation (WTO) Member countries on "Re- Energising Doha - A Commitment to Development" was held in New Delhi on September 3-4. India's Commerce and Industry Minister, Anand Sharma chaired the meeting.
The British Secretary of State for International Development, Douglas Alexander, represented U.K. at the meeting.
Describing the outcome of the twoday Meeting, as a "breakthrough", Commerce Minister Sharma said top officials of the 153 members of the World Trade Organisation (WTO) would meet in Geneva later this month for further discussions. "We have reached an agreement to intensify negotiations. There has been a breakthrough, If I can use this expression. The impasse has been broken," said Sharma.
Later, Prime Minister Dr. Manmohan Singh applauded the trade ministers during an interaction with them at his residence for the breakthrough reached at the meeting.
"This will uplift the animal spirit of economic agents all over the world. Cooperation in matters of trade in this increasingly interdependent world is inevitable and inescapable," the Prime Minister said.
During the meeting, which was proposed by Dr. Singh during the London Summit of G-20 in April, it was evident some key differences remained in defining a clear path towards concluding the multilateral trade talks.
At the same time, there was also a realisation in all quarters that all such differences needed to be resolved for a healthy multilateral trading system. Besides, the 2010 deadline for the Doha Round was around the corner, diplomats said.
According to WTO Director-General Pascal Lamy, key differences still remain between rich economies like the U.S. and advanced developing nations like India, China and Brazil.
Among other key stakeholders who attended the two-day meet were U.S. Trade Representative Ron Kirk, and Australian Trade Minister Simon Crean, apart from Lamy.
The Doha Development Round was launched in the Qatari capital in 2001. But it went into an impasse over serious differences on a host of issues, which could not be settled during subsequent meetings in Washington, London, Bali, Paris, L'Aquila and Singapore.
In Geneva last year, the talks once again collapsed because of the divergence over the special safeguard mechanism - a provision that would permit developing countries to guard against sudden surges in imports, or when commodity prices decline.
At the meeting, the assembled leaders said a they would give one more push to resume the talks.
"There was unanimous affirmation on the need to conclude the Doha Round within 2010. There was also a clear recognition that differences subsist on issues and intensifying negotiations was the first step towards bridging these gaps," added Sharma.
"Mindful of the fact that the Doha Round has been in progress for eight years, it was agreed that all efforts must be made to bring the Round to an ambitious and development oriented conclusion within 2010 as resolved by world leaders," the Minister pointed out.
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