BRIC economies team up and speak with a louder voice
LONDON (Reuters) - Emerging economies gained a promise of more money for the banks that lend to them and a greater say in those banks from G20 finance ministers this weekend, an answer to complaints that the emerging world has little influence in global policy-making.
The 10 emerging economies among the Group of 20 — Brazil, Russia, India, China, Mexico, Indonesia, Saudi Arabia, South Korea, Argentina and Turkey — have suffered from the global downturn, but their growing economic strength in the past few years has given them more clout.
"The resolution to today's global problems is only possible with the participation of emerging countries ... There is a natural evolution of the decision-making process," Brazilian central bank governor Henrique Meirelles told Reuters.
The four largest emerging economies have become central to the growth of the world economy. At the meeting in southeast England ahead of the leaders' summit in London next month, they spoke in a single and noticeably louder voice.
Brazil, India, Russia and China, collectively known as the BRIC countries, issued a joint communique calling for more lending to emerging economies hit by the collapse of private capital and for urgent reforms to improve their representation in the International Monetary Fund.
Funding the IMF has become a pressing concern as it has spent some $50 billion in recent months shoring up crisis-hit economies such as Iceland and Ukraine.
The IMF has asked for an additional $250 billion to double its capital while the United States wants the IMF's arsenal to be raised by $500 billion.
The final G20 finance ministers' statement agreed there would be more money for the IMF and other lenders but did not specify an amount.
The European Union (EU) is keen for some of the IMF funding increase to come from emerging members with large currency reserves such as China and Saudi Arabia.
But emerging economies are resisting raising their contributions until they obtain a greater say — or quota — on the board of the IMF.