Leaders of the BRICS countries expressed their frustration yesterday over the slow pace of reforms to give emerging markets better representation in global banks, saying reforms had not lived up to the expectations of the developing world.
In a declaration released at the conclusion of a summit meeting of the leaders of Brazil, Russia, India, China and South Africa, the five countries also accused the West of destabilising the world economy and endorsed the establishment of a new development bank, but fell short of concrete details on how the bank should be run.
President Hu Jintao said co-operation among the BRICS countries had reached a new starting point, and called for the group to push for global governance reform and co-ordination on international issues.
The fourth BRICS summit was held in the Indian capital amid concerns that the group is not as influential as it appears to be due to differences in government systems and trade and territorial disputes. But the leaders joined hands in calling for the speeding up of reform of the International Monetary Fund.
'We are, however, concerned at the slow pace of quota and governance reforms in the IMF,' the joint declaration said, adding there was an 'urgent need' to implement two-year-old governance and quota reform before the IMF and World Bank annual meeting this year.
The emerging markets have been calling for better representation in the IMF and World Bank, and their heads to be chosen on merit. An American has always headed the World Bank, with a European in charge of the IMF. However, proposed changes to IMF voting rights have yet to be ratified by the US.
'We stress that the ongoing effort to increase the lending capacity of the IMF will only be successful if there is confidence that the entire membership of the institution is truly committed to implement the 2010 reform faithfully,' the joint declaration said.
The BRICS leaders also said the excessive liquidity from aggressive actions taken by central banks in the developed world to stabilise their domestic economies had been spilling over into emerging markets, fostering excessive volatility in capital flows and commodity prices.
'Institutions of global political and economic governance created more than six decades ago have not kept pace with the changing world,' Indian Prime Minister Dr Manmohan Singh told the summit.
In response, the leaders said they would look into setting up a development bank, to be run by them for infrastructure and development projects in emerging economies.
But no details were released on how the bank should be operated, with the declaration only saying that the countries' finance ministers would examine the feasibility and viability of the initiative, and set up a joint working group for further study.
South African President Jacob Zuma said the setting up of a BRICS development bank brought hope to Africa, which he said had been 'excluded from the mainstream of the development of the world'.