PREVIEW: Emerging giants focus on financial reforms

By Bill Smith Apr 13, 2011, 11:52 GMT

Beijing - Leaders of five major emerging nations plan to focus on global financial reform and economic cooperation at a summit in China on Thursday, officials and analysts said.

'China hopes the large developing nations will have a bigger voice in the global economy,' Shi Yinhong, an international relations expert at People's University in Beijing, told the German Press Agency dpa on Wednesday.

'At the same time, the five countries are very concerned about the financial situation in Europe and the global political situation,' Shi said of his expectations for the BRICS meeting of the leaders of Brazil, India, China and South Africa.

'They will also talk about the political situation in Libya and about how it can be mitigated through negotiation and dialogue,' he said.

'Actually, this is not only China's expectation, all five countries are closely linked to the economy of Europe and the political situation in Libya,' Shi said.

Chinese President Hu Jintao will deliver a keynote speech to 'elaborate on China's views of the current global economic situation and major issues', Assitant Foreign Minister Wu Hailong told reporters earlier this month.

The joint statement at the close will summarize the five nations' 'consensus on the global economy, international financial issues and developmental affairs,' he said.

'We have a substantive agenda for the summit,' Indian Prime Minister Manmohan Singh told China's state-run Xinhua news agency in New Delhi on Tuesday.

'That includes discussions on the international situation, international economic and financial issues, development and sectoral cooperation,' Singh said.

South African President Jacob Zuma arrived on Wednesday for the meeting in the southern resort of Sanya and hailed the 'historic moment' of his country's first BRICS leaders' summit.

South Africa officially joined the group in December, and Wu said China was 'open to the enlargement of the BRICS mechanism' by including more nations.

BRICS is 'open, transparent and inclusive,' he said, but admission of new members must be decided by consensus among the five nations.

Shi said the bloc could emerge as a louder voice in international affairs, but was unlikely to rival global institutions led by developed nations.

'If these five countries make their own claims and these claims are different from those of developed nations, then of course [BRICS] will be important,' he said.

'But now BRICS is not an international alliance, it is only an institution for negotiations between five big developing countries,' Shi said. 'So I think the Western nations need not worry too much.'

The five nations accounted for about 18 per cent of global gross domestic product last year and have about 42 per cent of the world's population, Wu said.

He said their trade volume soared by an annual average of 28 per cent over the past decade, hitting a combined 230 billion dollars last year.

'With same or similar concerns and standpoints on important global issues in economics, finance and development, the BRICS countries have the basis for broadening cooperation,' Wu said.

The BRICS leaders were also expected to sign an inter-bank agreement to allow the five nations to offer credit or grants to each other in their own currencies instead of US dollars.

'The agreement on BRICS inter-bank cooperation to be signed during the summit will facilitate capital flow and trade financing,' Vladimir Dmitriev, the head of Vnesheconombank, or the Russian Development Bank, told Xinhua.

Dmitriev said inter-bank cooperation would be a first step towards the use of national currencies between BRICS nations and would help them jointly finance projects in high technology, innovation and energy saving.

At a pre-summit meeting of trade and finance officials on Wednesday, Chen Yuan, head of the China Development Bank, said expanding local currency settlement and lending would boost trade and investment between the five nations

It would also promote a 'diversified development of the global monetary system,' Chen said.

dpa bs Author: Bill Smith Sent via WebAccess by Smith MEZ 13-04-2011_15:18

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