30 March 2012
Dialogue was the only answer to the crises in Syria and Iran, the BRICS group of influential emerging powers said on Thursday, warning of the “disastrous consequences” of allowing the Iran standoff to escalate into conflict.
The leaders of Brazil, Russia, India, China and South Africa, meeting for the 4th BRICS Summit in New Delhi, made a number of criticisms of the developed world, including over reform at the IMF, while announcing plans for their first joint institution, a development bank.
Warning against intervention in Iran, Syria
The leaders from the five members also issued a pre-emptive warning against any military action by the West or Israel to end the unrest in Syria or the dispute over Iran’s nuclear programme.
“We agreed that a lasting solution in Syria and Iran can only be found through dialogue,” Indian Prime Minister Manmohan Singh said in a closing statement at the one-day summit in New Delhi.
Alongside the statements on the need for dialogue in Syria and Iran, the BRICS also voiced their support for a Syrian peace process promoted by international envoy Kofi Annan.
Russia and China – which both wield vetoes on the UN Security Council – have stridently opposed using force or outside intervention to resolve the Syrian crisis or defuse Iran’s nuclear drive.
The United States and its allies have been frustrated by a Sino-Russian veto in the Security Council on condemning Syria in stronger terms.
BRICS Development Bank plan
Much of the final summit declaration dwelt on how the BRICS alliance would coordinate their positions while lobbying collectively for a greater say in world affairs.
“In the future the BRICS agenda will be a step-by-step transformation of this forum into a strong and powerful organisation,” Russian President Dmitry Medvedev said.
Though it remains in the planning stages, the newly proposed BRICS development bank is an attempt to cement the countries.
BRICS finance ministers will examine the “feasibility and viability” of the proposal and report back before the grouping’s next summit, in South Africa in 2013.
South African President Jacob Zuma said the bank would fund infrastructure and was an idea welcomed by other leaders on his continent. “Such a bank has great potential to help us create good jobs,” he said.
Two other agreements were signed aimed at simplifying credit facilities for exporters and increasing the use of each others’ currencies – and not the US dollar – in trade deals.
IMF reform ‘too slow’
The leaders also pushed for the reform of international financial and economic institutions – a cornerstone of the BRICS agenda – and criticised the “slow pace” of reforms at the International Monetary Fund.
But there was no common ground on who should become the new president of the World Bank, the IMF’s sister organisation.
The leaders said they “welcome the candidatures from the developing world” for the new head of the Washington-based body – to be announced by April – but they did not throw their weight behind either of them.
Colombian university professor Jose Antonio Ocampo and Nigerian finance minister Ngozi Okonjo-Iweala are attempting to break the US monopoly on the position.
This lack of unity, says critics, underlines the problems of the BRICS bloc, which brings together five geographically dispersed countries with different political systems, economies and priorities.
Differences and strengths
“BRICS countries have different national conditions and development models,” Chinese President Hu Jintao conceded. “We should see the differences as an opportunity to draw on each others’ strengths.”
Their strengths currently lie in their booming economies, which have largely withstood the problems in the rich world stemming from the 2008 crisis in the US banking sector.
The policies introduced by Europe and Washington since – zero interest rates and repeated cash infusions into the banking sector – are a cause of concern for emerging markets.
“Excessive liquidity from the aggressive policy actions taken by central banks to stabilise their domestic economies have been spilling over into emerging market economies,” the BRICS declaration said.
An excess of cash flowing from the rich world into emerging markets could cause asset bubbles and result in volatile changes in exchange rates.