MOSCOW: The leaders of the world’s biggest emerging markets – Brazil, Russia, India and China – meet this week for their first formal summit, seeking a louder voice on the global stage.
Leaders of the so-called BRIC countries will discuss ways to reshape the global financial system after the worst economic crisis for decades and ideas for a new reserve currency to reduce dependency on the US dollar may be on the agenda.
“The good news is that rich countries are in crisis and emerging countries are making a huge contribution to save the economy and, consequently, save the rich countries,” Brazil’s President Luiz Inacio Lula da Silva told Reuters on Wednesday.
“Wealthy countries are no longer the only ones that account for the world’s production capacity and consumption,” he added, saying the BRICs should work together to “change the political and trade geography of the world”.
Today’s summit in the Russian Urals city of Yekaterinburg marks a step toward co-operation as a group.
BRIC countries account for 15% of the US$60.7 trillion global economy but Goldman Sachs predicts that in 20 years, the four countries could together dwarf the G7 and China’s economy will overtake the United States in total size.
“BRIC is a myth but a myth that is slowly becoming a reality,” said Alexei Pushkov, a professor of international relations and a leading Russian journalist. “This summit shows there is a tentative community taking root. The question is whether it can become a political institution or whether it will be dormant.”
China’s President Hu Jintao brings as much gross domestic product (GDP) to the table in Yekaterinburg as the three other BRIC countries combined and Beijing is wary of being seen to confront the United States.
It is Russia and Brazil – arguably the weakest BRIC members – that have been most vocal about pushing for discussions on reducing dollar dependence. China, the world’s largest holder of US Treasuries, says the dollar will retain its dominant role and analysts said there was unlikely to be substantial agreement on major issues at the summit.
“This meeting shows the growing influence and voice of the emerging world, something that the Obama administration is also paying attention to,” said Qin Yaqing, vice-president of China Foreign Affairs University in Beijing.
“But there are also big differences between them. So complete co-operation betwee n them would be extremely difficult, but partial co-operation is possible, and a meeting like this will help amplify their shared voice,” Qin said.
Russia’s President Dmitry Medvedev has made proposals on giving a greater role to the International Monetary Fund’s Special Drawing Rights that echo ideas from China’s central bank chief Zhou Xiaochuan. — Reuters
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