Five leaders, meeting informally ahead of summit in Hangzhou, pursue equity for developing countries, emerging economies
Leaders of the ﬁ ve BRICS countries urge the International Monetary Fund to reﬂects the “status of emerging markets and developing countries”.
Leaders of BRICS countries on Sunday urged the International Monetary Fund to reassign quota and voting rights to ensure that the IMF “fairly” reflects the “status of emergingmarkets and developing countries”.
The leaders — representing Brazil, Russia, India, China and South Africa, made the call during an informal meeting ahead of the G20 Summit. The five countries are also members of the G20.
Indian Prime Minister Narendra Modi presided over the meeting. India holds the rotating chairmanship of the BRICS organization.
“The leaders stressed … that the current quota of the IMF failed to reflect the global economic situation,” according to a statement issued after the meeting.
The leaders “expect members of the G20 and the IMF to work together to increase quota sources of the IMF, and reevaluate quota and voting rights to ensure that they fairly reflect the status of emerging markets and developing countries.”
They called for the IMF to finish its 15th general review of quotas before the annual conference in 2017 and present a new formula for quotas. The quota formula is a weighted average of GDP and other factors, such as openness and reserves.
The IMF decided in 2010 to divert 6 percentage points of quotas to emerging markets and developing nations. After the reassignment, the top 10 IMF members, by quota, are the US, Japan, China, Germany, France, Britain, Italy, India, Russia and Brazil. The plan took effect in January.
However, Ruan Zongze, executive vice-president of the China Institute of International Studies, said the adjustment is not enough. “For example, Japan holds the second biggest quota,” Ruan said. “But last year, China’s GDP doubled that of Japan.”
President Xi Jinping said BRICS members should enhance coordination to have emerging-market economies and developing countries play a bigger role in international affairs.
The five countries should also work to safeguard the position of multilateral trade as the key channel, jointly build an open world economy and oppose all kinds of protectionism and exclusionism, to ensure that all countries will be equal in their development rights, opportunities and rules, Xi said.
He also called on members to drive the BRICS’ New Development Bank to implement the first batch of projects and boost the bank’s management and financing capabilities.
The bank should promote research on the BRICS’ contingent reserve arrangement, a provision for support in case of short-term balance-of-payment pressures, to enhance financial security for BRICS countries, he said.
During Sunday’s meeting, the leaders also strongly condemned recent terrorist attacks around the globe. They vowed to consolidate international anti-terror cooperation and called on the United Nations to play a central role in the fight.
The meeting came days after a suicide car bomb attack on China’s embassy in Bishkek on Tuesday, which injured three people and killed the attacker.
The informal meeting gave BRICS leaders a chance to discuss and fine-tune major decisions before they are announced at the 8th BRICS Summit in mid-October in Goa, India, according to Swaran Singh, a professor at Jawaharlal Nehru University in New Delhi.