Power Shift | BRIC Seeks Remake of Global Financial Structure, Adds New Member

Emerging economies face watershed moment at summit


Yahoo!|AP

BRICS summit offers watershed moment for large emerging economies

In approaching G-20 reforms being proposed by France, which holds the body's rotating presidency, the BRICS can already point to China's success in advancing a 6 percent shift in voting rights at the IMF that would give it the third-largest say in decision making after the U.S. and Japan.

SANYA, China (AP) — The leaders of the world’s largest emerging economies gather this week in southern China for what could be a watershed moment in their quest for a bigger say in the global financial architecture.

Thursday’s summit comes at a crucial moment for the expanded five-member bloc known as the BRICS, which groups Brazil, Russia, India, China, and, for the first time, South Africa.

Chinese President Hu Jintao, Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma will attend.

With the G-20 group of major economies seeking to remake parts of the global financial architecture, it’s time for the BRICS to test whether they can overcome internal differences and act as a bloc pursuing common interests.

“The key priority is for the BRICS to put creative ideas on the table rather than just react defensively to proposals put forward by the advanced economies,” said Cornell University economics professor Eswar Prasad, former head of the International Monetary Fund’s China Division.

Though largely an ad-hoc grouping at present, the BRICS have the potential to emerge as a new force in world affairs on the back of their massive share of global population and economic growth. With the inclusion of South Africa, the group accounts for 40 percent of the world’s people, 18 percent of global trade and about 45 percent of current growth, giving them formidable heft when dealing with the developed economies.

Thursday’s one-day meeting in Hainan’s resort city of Sanya marks only the group’s third annual summit, while moves to lend it greater structure, such as establishing a permanent secretariat, remain under discussion.

At bilateral talks Wednesday, Hu and Medvedev pledged to boost economic relations, while Zuma said on arrival that the meeting was “a historic moment for South Africa.”

The five countries are loosely joined by their common status as major fast-growing economies that have been traditionally underrepresented in world economic bodies, such as the International Monetary Fund and the World Bank.

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