Leaders of the BRICS group of emerging market nations pressed Western powers to cede more voting rights at the IMF this year and flayed the rich world’s reflationary monetary policies for putting global economic stability in jeopardy.
“This dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the Fund,” Brazil, Russia, India, China and South Africa said in a joint declaration after their one-day summit in New Delhi.
“We stress that the ongoing effort to increase the lending capacity of the IMF will only be successful if there is confidence that the entire membership of the institution is truly committed to implement the 2010 Reform faithfully.”
Promised changes to voting rights at the IMF have yet to be ratified by the United States, adding to frustration over reform of the G7 and the U.N. Security Council, where India and Brazil have been angling for years for permanent seats.
The BRICS leaders also accused rich countries of destabilizing the world economy five years into the global financial crisis.
“It is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs,” they said in a joint declaration.
The rich world’s monetary policy “brings enormous trade advantages to developed countries, and results in unfair obstacles for other countries,” Brazil’s President Dilma Rousseff said at the summit.
Security was tight in New Delhi, days 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 grappled with small groups of pro-Tibet protesters.
The declaration said the crises over Iran’s nuclear program should be resolved diplomatically and should not be allowed to escalate. It also recognized the right of Iran to pursue peaceful nuclear energy.
“We agreed that lasting solution to the problems in Syria and Iran can only be found through dialogue,” Indian Prime Minister Manmohan Singh said.
The five BRICS nations, which collectively account for nearly half the world’s population and a fifth of its economic output, signed an agreement to extend credit facilities in their local currencies, a step aimed at reducing the role of the dollar in trade between them.
They also agreed to examine in greater detail an Indian proposal to set up a BRICS-led South-South Development Bank, funded and managed by the BRICS and other developing countries.
“We have directed the finance ministers to examine the proposal and report back at the next summit,” Mr. Singh said.
Other moves to bring their economies closer together include the launch on Friday of benchmark equity index derivatives allowing investors in one BRICS country to bet on the performance of stock markets in the other four members without currency risk. The indexes will be cross-listed on their stock exchanges from Friday.