Econintersect (reported by Sanjeev Kulkarni): The April BRIC conference, which included South Africa in addition to Brazil, Russia, India and China, released an official declaration after the conference. The full 32 point declaration of objectives and 23 point list of action items reveal broad agreement on principles among the five countries but only a long list of procedural items and no specific action proposals to develop specific actions.
One specifc item from the conference did raise eyebrows in Europe. According to The Times of India, the participants expressed disapproval of the military action against Libya .During the conference it was clear that the organization was continuing to question the role of the dollar as a world currency. From Shanghai Daily of April 15:
The BRICS group of emerging-market powers yesterday 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 sees as Washington’s neglect of its global monetary responsibilities.
The BRICS is 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.
“The world economy is undergoing profound and complex changes,” President Hu Jintao said. “The era demands that the BRICS countries strengthen dialogue and cooperation.”
In another dig at the dollar, the development banks of the five nations agreed to establish mutual credit lines denominated in their local currencies, not the US currency.
A summary of the full declaration has been provided by the Beijing Review which wrote that the declaration included:
– A welcome for South Africa as it became the fifth member nation. The group now looks forward to strengthening dialogue and cooperation with South Africa within the forum
– Vows to strengthen BRICS cooperation as well as promote coordination on international and regional issues
– Continued reinforcement of the BRICS partnership for common development and non-confrontational cooperation reflecting the principles of openness, solidarity and mutual assistance
– Appeals to strengthen global economic governance, promote democracy in international relations, and enhance the voice of emerging and developing countries in international affairs
– Reaffirmations of the need for a comprehensive reform of the UN, including its Security Council, to make it more effective, efficient and representative
– Condemning terrorism and stressing there can be no justification, whatsoever, for any acts of terrorism
– Calls for major economies to enhance coordination of their macroeconomic policies and work together to achieve – strong, sustainable and balanced growth
– Support for reforming the international monetary system with a broad-based international reserve currency system. BRICS welcomes discussions about the role of Special Drawing Rights (SDR) in the existing international monetary system including the composition of the SDR basket of currencies
Sanjeev Kulkarni is an entrepreneur based in Pune, India. He worked for large organizations in board level position before venturing on his own. He is currently involved as an investor in health care software company and as an investor, mentor in an automation company. Very widely traveled, he has experience of working in different geographical areas with people of varying nationalities. He did his BS from Indian Institute of Technology, Delhi.