BRICS tackle money, oil, critics
DIGAMBERE ESLAMPURE | Collegio Reporter
The fourth annual summit of the five fastest-growing emerging economies in the world (Brazil, Russia, China, India and South Africa) or BRICS, was held on March 29, at the Taj Mahal hotel in New Delhi, India. The theme for the summit was “BRICS partnership for Global Stability, Security and Prosperity.”
The most important proposal to emerge during the meeting was the creation of a new development bank, which they named “South-South Development Bank,” which lends money to BRICS nations in their local currency.
However, creating such a financial institution is not an easy process. For that reason, the countries asked their respective finance ministers to look into the proposal and create a clear road map for the creation of BRICS development bank.
The main reason for this proposal may be the fluctuations in the value of the dollar. The BRICS countries also seem frustrated by American economic policies.
Financial experts speculate that this kind of parallel international financial institution undermines the International Monetary Fund and World Bank. However, the BRICS nations expect that this development bank will not be a competitor to the IMF or the World Bank. This bank will provide money to development projects that fail to get financing from the IMF or World Bank.
BRICS also put forward another key plan, which is promoting their currencies in local trade between these nations. This may replace the dollar, which is the main currency used in trade among these nations.
The meetings also concluded that there is an urgent need to institute reforms in the United Nations. They called for the immediate execution of the 2010 governance and quota reforms proposal before the International Monetary Fund World Bank annual meeting this year.
The BRICS countries also plan to back an alternative candidate for president of the World Bank. The motive behind this proposal appears to be an increase in the representation of the developing nations in international financial institutions. They set this as an agenda for the upcoming G-20 meeting.
The leaders of the five nations also discussed various political, economic and social issues. Another significant proposal they made was a refusal to completely cut trade relations with Iran. The major reason seems to be the dependency of BRICS nations, especially India and China, on Iran for oil. India currently imports about 12 percent of its oil from Iran while China imports 20 percent of its crude oil from Iran. Rising crude oil prices in the international market puts pressure on these emerging nations’ economies.
These nations also discussed the political, economic and humanitarian situation in Syria. BRICS extended their support for the Kofi Annan team approach to re-establish peace and harmony in Syria. However, China and Russia don’t want to change the leadership in Syria while India didn’t take an official position on the issue.
BRICS nations are also planning to invest more in the United Nations Conference on Trade and Development, which plays a vital role in the development of these countries.
At the summit, India and China declared 2012 to be the “India China Friendship Cooperation” year. Both countries have rapidly developing economies and a large population. There have been some political differences between them that they would like to resolve diplomatically. Both nations want to strengthen their bilateral relationships and would like to work together on joint international issues.
Critics of BRICS say these nations are loosely connected. They are from different continents and they have different economic and political systems. Some are democratic and some are communist, so they don’t have much common ground. Most of the time, these nations have different opinions on international issues, so the relationship between these nations is nothing but an acronym.
In order to rebuff the critics, BRICS nations should work together on international issues, and they should maintain their strong relations with the other member nations. They need to bury their differences to maintain the good relationships they have with each other.