M A I N   N E W S

BRICS nations to promote trade in local currencies
Ashok Tuteja
Tribune News Service

New Delhi, March 29
Determined to end the hegemony of rich Western nations in navigating global economic policies, the BRICS nations today signed two key accords to promote trade among them in their local currencies and explore the possibility of setting up a development bank for mobilising resources for infrastructure and sustainable development projects.

(L-R): Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao and South African President Jacob Zuma hold copies of the BRICS report after its release during a plenary session of the summit in New Delhi on Thursday. Tribune photo: Mukesh Aggarwal

In a clear attempt to seek democratisation of multilateral financial institutions, they reaffirmed that the heads of the International Monetary Fund (IMF) and the World Bank be selected through an open and merit-based process.

“Furthermore, the new World Bank leadership must commit to transform the bank into a multilateral institution that truly reflects the vision of all its members, including the governance structure that reflects the current economic and political reality,’’ the BRICS (Brazil, Russia, India, China and South Africa) leaders said in the ‘Delhi Declaration’ adopted at the end of their day-long summit.

“The agreements signed today by development banks of BRICS countries will boost trade by offering credit in our local currency," Prime Minister Manmohan Singh said in a media statement at the end of the meet, attended by the Presidents of Presidents of Brazil, Russia, China and South Africa.

The Master Agreement on Extending Credit Facility in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement are being seen as a major step towards replacing the dollar as the main currency for trading amongst the five nations.

On the political side, there were hardly any surprises in the declaration as, contrary to apprehensions, the leaders of the five emerging economies arrived at common formulations on Syria, Iran and Afghanistan after a brief debate during their closed-door meeting. The BRICS’ stand on Syria and Iran will obviously not go down well with the Western nations which have been on a collision course with these two countries.

“We express our deep concern at the current situation in Syria and call for an immediate end to all violence and violations of human rights in that country. Our objective is to facilitate a Syrian-led inclusive political process, and we welcome the joint efforts of the UN and the Arab League to this end,’’ the declaration said.

China and Russia had vetoed the US and the Arab League supported resolution against Syria at the UN Security Council last month on the grounds that it amounted to a regime change. India had, however, backed the resolution.

Russian President Dmitry Medevedev warned against interference in the internal affairs of any nation, saying it has the potential to destroy the dialogue process.

On Iran, the declaration said the BRICS countries felt that the situation in the Islamic republic could not be allowed to escalate into a conflict, the disastrous consequences of which would be in no one’s interest. At the same time, they felt that Iran has a crucial role to play for the peaceful development and prosperity of a region of high political and economic relevance.

On Afghanistan, the BRICS countries supported the global community’s commitment to the war-ravaged nation, enunciated at the Bonn International Conference in December last year, to remain engaged over the transformation decade from 2015-2024.

The emphasis at the BRICS meet, however, was on economic and commercial cooperation among the five member-nations.

There was a pressing need for enhancing the flow of development finance to emerging and developing countries. The World Bank should give greater priority to mobilising resources and meeting the needs of development finance while reducing lending costs and adopting innovative lending tools, the declaration said.

The BRICS countries also welcomed the candidatures from the developing world for the position of the President of the World Bank.

Development bank

• Reaffirm that the IMF and World Bank heads be selected through an open and merit based process
• Explore the possibility of setting up a development bank for mobilising resources for infrastructure
• Arrive at common formulations on Syria, Iran and Afghanistan
• Support the global community’s commitment to the war-ravaged nation, enunciated at the Bonn International Conference