The five BRICS nations agreed to speed up formation of a development bank and raised concerns over the pace of the global economic recovery.
The leaders of Brazil, Russia, India, China and South Africa, who met on the sidelines of a G20 summit in Brisbane, Australia, instructed their finance ministers to name the bank’s president by the time they next meet in Russia, according to a statement from the Brazilian government.
The global economic situation has not improved since the group last met in July, Brazil President Dilma Rousseff told the other leaders, according to a transcript from Rouseff’s office.
At that meeting in Fortaleza, Brazil, the BRICS agreed on the structure of a US$50 billion development bank, which will have its headquarters in China and with India set to be the first member to hold the rotating presidency.
They also agreed on the creation of a US$100 billion currency exchange reserve.
Both measures, which need approval from legislatures in each country, are aimed at providing an financing alternative to the IMF and the World Bank, in which BRICS countries have been seeking more say.
“The advanced countries haven’t managed a consistent recovery and international trade isn’t growing enough to stimulate emerging markets,” Rousseff said.
“Advanced economies need to boost their internal demand to pre-crisis levels instead of trying to solve their problems by increasing their exports,” she said.
Indian Prime Minister Narendra Modi told the meeting that he expects to ratify the agreement by the end of this year, according to a statement from his office.
“BRICS decisions on making their own financial institutions have been successfully implemented,” Russian President Vladimir Putin said at the BRICS meeting, according to a recording of his comments.
The total volume of capital in the development bank and currency reserves would enable the group to get joint mechanisms that can stabilize national capital markets in case of a world economic crisis, he said.
The group also said delays in changes at the IMF to give emerging economies more equal representation were “unjustifiable” and urged the G20 to consider alternatives, according to the statement from Brazil’s government.
Chinese President Xi Jinping (習近平) urged the group to quickly establish the development bank and called for a bigger voice for BRICS nations in global economic governance, according to Xinhua news agency.
The BRICS economies grew 5.7 percent last year, a rate that is forecast to slow to 5.3 percent by next year, according to economists surveyed by Bloomberg.
The IMF last month cut its forecast for advanced economies’ output by 0.1 percent to 2.3 percent next year.
The Washington-based fund cut its projection for world economic growth next year to 3.8 percent
Australian Treasurer Joe Hockey said that G20 finance ministers were confident of reaching their goal of lifting collective GDP by an additional 2 percent, or more, over five years.
“BRICS countries represent a new and rising power, and they are playing an increasingly important role in the international economy,” Chinese Vice Finance Minister Zhu Guangyao (朱光耀) told reporters in Brisbane on Saturday.
“We support the improvement of the current international economic and political order, and based upon that, we demand a greater voice for emerging economies in global governance,” Zhu said.
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