People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


Vol. XXXIII

No. 25

June 21, 2009

 

BRIC Countries Demand More Say In World Financial Institutions

 

G Mamatha

 

THE first ever summit meeting of the BRIC countries --- comprising Brazil, Russia, India and China --- took place on June 16, 2009 in the Ural city of Yekaterinburg in Russia. Yekaterinburg is a historical place which played a very important role during the Great Patriotic War against fascism (during the Second World War); here the whole of the city's industry and economy was geared to serve the needs of the front — leading enterprises of the city were converted to military production. Sverdlovsk (as it was called during the Soviet period) was the core of the Soviet military programme. Many military plants were evacuated from the European part of the Soviet Union here and they began manufacturing weapons elsewhere very quickly. During the war, half of all Soviet tanks were built in Sverdlovsk. The people worked 16 to 20 hours a day in the plants and factories of the city, where each third shell and missile and each second tank of the Soviet Army was manufactured. Only time has to tell whether this historic city would once again provide ammunition to check unilateralism and for democratising the world.

 

The BRIC summit ended with a vigorous call seeking greater voice for developing economies to create a more democratic world order and a bold agenda for mitigating the financial meltdown. Russian president Dmitry Medvedev, Indian prime minister Manmohan Singh, Chinese president Hu Jintao and Brazil’s president Lula da Silva discussed a range of global issues, including the financial crisis, food and energy security, climate change and international terrorism.

 

The BRIC meeting is an important step forward in world politics. It was held amidst a global economic crisis that began in the United States and then spread around the world. This summit, along with that of the Shanghai Cooperation Organisation (SCO) that took place earlier on the same day, would help in forging a united effort and a multilateral coordination to face the challenges of the global financial crisis and promote the recovery of world economy. To achieve this goal better, the BRIC should be strengthened into BRICS by including South Africa into the grouping.

 

The BRIC countries are all important developing nations and the driving forces for the world's common development with their big populations and vast territories. With 42 per cent of the global population, the four BRIC countries currently turn out 15 per cent of the world's gross domestic product (GDP) and 12.8 per cent of the global trade volume, and they contributed more than 50 per cent of the world’s economic growth in 2008. They account for more than a quarter (25.9 per cent) of the world’s territory. In addition, they have huge natural resources and large industrial potential.

 

In a pointed message to the world’s established powers and the G7 grouping of wealthy countries, the BRIC backed “a more democratic and just multipolar world order based on the rule of international law, equality, mutual respect and collective decision-making” and pressed for the central role of the UN and multilateral diplomacy in dealing with global challenges. The joint document at the end of the summit took note of the status of Brazil and India in international affairs and backed their aspirations to play a greater role in the UN.

 

“The BRIC countries should create conditions for a fairer world order and create an international order that is conducive to their prosperity,” Medvedev, the chair of the BRIC, said addressing a press conference at the end of the summit. The summit focussed on mapping a new global economic order based on greater representation for emerging and developing economies in international financial institutions. Russia currently has 2.7 per cent of IMF votes; China holds 3.7 per cent, Brazil 1.4 per cent and India 1.9 per cent.

 

“We are committed to advance reform of international financial institutions so as to reflect changes in the world economy… The emerging and developing economies must have greater voice and representation in international financial institutions, and their heads and leaderships should be appointed through an open, transparent and merit-based selection process,” the joint statement said.

 

The summit called for speedy implementation of decisions taken at the G20 summits in Washington and London in dealing with the financial crisis and agreed to take the process forward at the next G20 summit to be held in Pittsburg in the US in September.

 

The leaders of BRIC countries took a slew of important decisions and initiatives that included (1) dealing with global food security on a priority basis (2) stepping up efforts to provide liquidity to poorest countries which have been hit hardest by financial crisis (3) promoting sustainable development (4) strengthening coordination in the field of energy security (5) more cooperation in the field of science and technology and (6) intensifying efforts for international humanitarian assistance. The joint statement issued by Brazil, Russia, India and China called for deeper international economic reform, to keep the multilateral trading system stable and curb trade protectionism.

 

This is the time all the developing countries get together and join hands to forge a broad front to face the challenges unitedly and, surely, the BRIC summit is a step forward in this endeavour.