Reuters reported that the BRICS group of emerging market powers kept up the pressure for a revamped global monetary system that relies less on the dollar and for a louder voice in international financial institutions.
The leaders of Brazil, Russia, India, China and South Africa also called for stronger regulation of commodity derivatives to dampen excessive volatility in food and energy prices, which they said posed new risks for the recovery of the world economy.
Meeting on the southern Chinese island of Hainan, they said the recent financial crisis had exposed the inadequacies of the current monetary order, which has the dollar as its linchpin.
What was needed, they said in a statement, was a broad based international reserve currency system providing stability and certainty, thinly veiled criticism of what the BRICS see as Washington's neglect of its global monetary responsibilities.
The BRICS are worried that America's large trade and budget deficits will eventually debase the dollar. They also begrudge the financial and political privileges that come with being the leading reserve currency.
In another dig at the dollar, the development banks of the five BRICS nations agreed to establish mutual credit lines denominated in their local currencies, not the US currency.
Mr Hu Jintao president of China said that "The world economy is undergoing profound and complex changes. The era demands that the BRICS countries strengthen dialogue and cooperation."
Dr Manmohan Singh Prime Minister of India said that "The quality and the durability of the global economic recovery process depends to a great measure on how the BRICS economies perform. The developments in west Asia and north Africa, and the aftermath of the huge tragedy that befell Japan, have introduced fresh uncertainties in the global recovery process."
Mr Jacob Zuma President of South Africa said that "We agreed on the need for the reform of international financial institutions in order to promote a just economic order."
The International Monetary fund forecast that burdened by heavy debt, the United States, the euro zone and Japan are struggling to shake off the lingering effects of the 2008 global financial crisis. Rich countries will grow 2.4% in 2011 and 2.6% in 2012. By contrast, less well off countries have emerged relatively unscathed. The IMF is forecasting that emerging and developing countries will grow 6.5% both in 2011 and 2012.
The leaders reviewed the global role of the Special Drawing Right, the IMF's accounting unit and reserve asset, which some experts believe could grow into a partial substitute for the dollar. But they stepped around the issue of whether the yuan should join the SDR, saying only that they welcomed discussion of the composition of the SDR's basket of currencies. The SDR now comprises the dollar, the euro, the Japanese yen and the British pound.
Emerging economies have already won more say in the way the IMF is run, but the BRICS leaders said they were still under represented.
The main aim of the BRICS is to forge a common emerging-market negotiating stance on issues from climate change to world trade and to act as a counterweight to the West in settings such as the Group of 20 forum of advanced and developing economies.
(Sourced from www.reuters.com)
