Leaders from the BRICS nations pose for photos after concluding their talks Thursday in Sanya, Hainan Province. Photo: Xinhua
The heads of five fast-growing emerging economies made a joint pledge Thursday to reform the world’s financial institutions so as to better reflect their rising clout, a consensus that may shun skepticism over the group’s cohesion.
After a summit meeting in Sanya, Hainan Province, the BRICS nations, namely Brazil, Russia, India, China and South Africa, formed a united front to seek a diplomatic solution to the ongoing crisis in Libya, a move indicative of the group’s ambition to expand their agenda.
The meeting was chaired by Chinese President Hu Jintao and attended by Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma.
The previous two summits had slightly less broad platforms, revolving around economic development models and cooperation among emerging economies.
A Goldman Sachs banker, Jim O’Neill, first coined the term “BRIC” in 2001. Thursday’s annual meeting saw South Africa formally join their ranks for the first time.
The combined territories of the BRICS countries account for nearly 30 percent of the world’s total land area and they are home to 42 percent of the world’s total residents.
In 2010, the group contributed 18 percent of the world’s GDP and 15 percent of global trade.
BRICS nations stated the financial crisis had exposed the inadequacies of the current monetary order, with the dollar as its linchpin.
In a joint communiqué named the Sanya Declaration, they called for the implementation of “a broad-based international reserve currency system providing stability and certainty.”
The management structure of international financial institutions should accurately reflect changes in the world economy and increase the voice and representation of emerging economies as well as developing nations, the document said.
Hu said “The era demands that the BRICS countries strengthen dialogue and cooperation.”
The declaration also stressed more areas of cooperation on international trade, price controls, renewal of energy resources, sustainable development, poverty reduction and climate change.
With all of them being UN Security Council members, the five nations stated that in Libya, “all the parties should resolve their differences through peaceful means and dialogue in which the UN and regional organizations should as appropriate play their role.”
“We also express support for the African Union High-Level Panel Initiative on Libya,” the document read.
Zuma was in Tripoli on Sunday as part of an African Union delegation seeking to mediate between Muammar Gaddafi and the rebels.
Lin Yueqin, a scholar from the Chinese Academy of Social Sciences and the co-author of the Annual Report on BRICS” Social-Economic Development (2011), said that Thursday’s statement on Libya indicated the BRICS” desire to extend their influence beyond the realms of economy and finance.
According to Lin, the summit and forum offer an opportunity for the BRICS to stand together and voice their concerns and appeals, breaking the dominance of the developed world in global policy-making.
“China is now over-dependent on trade with developed countries. Yet, there is great potential for it to develop its economic exchanges with other BRICS nations. The current Chinese trade volume with other BRICS countries stands at $200 billion annually. That is less than its trade volume with South Korea alone,” Lin said.
Lin also noted that compared with the G-7, the BRICS nations are in a fledgling state and had a long way to go to resolve disputes over territorial disputes and political divergences.
BRICS nations have a lot of interests in common, but they also have significant divergences, Patrick Chovanec, an associate professor at Tsinghua University’s School of Economics and Management, told the Global Times Thursday.
“Roughly they are at similar stages of development, but there are also conflicts to be settled. This doesn’t necessarily lead to a consistent agenda being set up within the group,” he said, noting that BRICS is more a discussion forum than an alliances.
Chovanec said the conflicts may be extended to the political arena in the global arena as Brazil and India are vying to become permanent members of the UN Security Council, which could dilute the influence of their BRICS counterparts.