Les Echos , March 30, 2012

Developed countries would do well to pull themselves together and not to continue to increase global financial instability. This is the weak message made yesterday by the five leaders of the major emerging countries of the world gathered in New Delhi for the fourth BRICS summit (Brazil, Russia, India, China, South Africa). As if the contrast between the deep economic crisis affecting the Western countries and the much stronger growth enjoyed by the BRICS now allowed the latter to give lessons.

“We believe it is essential that developed economies adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and launch structural reforms to stimulate growth and create jobs”Brazilian President Dilma Rousseff, Russian Presidents Dimitri Medvedev, Chinese President Hu Jintao, South African President Jacob Zuma and Indian Prime Minister Manmohan Singh spoke yesterday in the final communiqué Summit. The Brazilian President stressed during the plenary session that the massive injections of liquidity by Western central banks “create serious imbalances. The depreciation of the dollar and the euro provides an enormous benefit to these economies, “she added, and Brazil is” particularly penalized “.

It is the new economic power of the major emerging countries that allows them to make their voices heard. The BRICS are “the most important driving force of the world economy”, added Dilma Rousseff. But the international community is slow to adapt to this new reality, say the major emerging countries that denounced “the slowness of the quota reform and the governance of the IMF”. The five countries also welcomed “candidatures from emerging countries” for the presidency of the World Bank … without going so far as to vote in favor of a common candidate, thus showing the limits of their diplomatic collaboration.

The five heads of state and government wanted to show their willingness to bring their economies closer together. The five countries “must find ways to exploit their complementarities”, the Prime Minister of India said. In order to stimulate trade within the group, two agreements have been signed between the development banks of the 5 countries to facilitate the use of the national currencies and avoid passing by the dollar. This in principle simplifies transactions and eliminates the cost of hedges against currency fluctuations.

Desiring to “transform itself into a strong organization”, in the words of the Russian president, the BRICS also adopted the principle of setting up their first permanent institution: a development bank to finance major infrastructure projects among the five And in other emerging countries. “This bank is a very good idea, it will distribute more credits at lower rates,” said Bipal Chatterjee, deputy general manager of the Indian think tank Cuts International specializing in international relations. But, a concrete achievement is not expected before several years.

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