BRICS nations concerned over pace of IMF reforms

NEW DELHI - Reuters

Leaders of Brazil, Russia, India, China and South Africa (from L to R) attend a session of the BRICS 2012 Summit in New Delhi. AP photo

The BRICS group of emerging market nations voiced concern about the slow pace of reforms within the International Monetary Fund (IMF) in a draft summit declaration that also called for a transparent process to select the next World Bank president.

The leaders of the so-called BRICS nations - Brazil, Russia, India, China and South Africa - were meeting in the Indian capital Delhi on yesterday.

Promised changes to give the emerging powers greater voting rights at the IMF have yet to be ratified by the United States, adding to frustration over reform of the G7 and the U.N. Security Council, where India and Brazil have been angling for years for permanent seats. The draft statement, a copy of which was seen by Reuters, called on developed nations to avoid creating excess liquidity in the global financial system, a common complaint of developing nations whose economies have been buffeted by rapidly changing capital flows in recent years.

The BRICS group so far has not come out in support of any of the three candidates hoping to replace U.S. official Robert Zoellick at the head of the World Bank.

The five BRICS nations, who collectively account for nearly half the world’s population and a fifth of economic output, were also expected to announce steps to bring their economies closer together, including linking their stock exchanges and plans for a joint development fund in the mould of the World Bank.

The chairman of Russia’s largest state development bank said Moscow and New Delhi will switch to trading in domestic currencies in three years. “With China it took us three years to (evolve) from initial conversations to trading in local currencies,” chairman of VEB state bank Vladimir Dmitriev told reporters on the sidelines of the summit.

“I think we will meet similar terms with India,” he said.