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Xi confident in BRICS future

Updated: 2014-07-16 11:27
By Wu Jiao in Fortaleza, Brazil, Zhao Shengnan in Beijing, and Chen Weihua in Washington ( China Daily USA)

Leaders ink agreement for better development, more equitable world

Seeking a more powerful voice on the global stage, the world's five major emerging economies signed a declaration in the Brazilian coastal town of Fortaleza on Tuesday, announcing the establishment of a new development bank and contingent reserve, and expressed concerns over a global crisis while calling for faster reform of global governance.

The announcement came as a surprise to many who suspected the five BRICS nations - Brazil, Russia, India, China and South Africa - would continue to haggle for a time over such details as the bank's location and its senior leadership.

While announcing the bank to help build infrastructure and a contingency reserve fund to fend off crises among member countries, the BRICS nations emphasized the importance of inclusive growth and sustainable solutions - the theme of this year's talks.

They pledged their shared views and commitment to international law and multilateralism centered on the United Nations. They vowed renewed openness to engage other countries, particularly developing countries and emerging market economies. The countries also said they will continue to follow the overarching objectives of peace, security, development and cooperation.

Speaking at the BRICS summit, Chinese President Xi Jinping expressed that China will continue to participate in the cooperation among BRICS nations to make further contribution in maintaining global peace and promoting common development.

He called on the BRICS nations for continued promotion of sustainable economic growth, comprehensive economic cooperation, creating a favorable external environment for development and building moral high ground for the BRICS as a whole.

Xi described political and economic issues as interwoven. He said if the BRICS countries want to achieve peace and prosperity for their nation and people, they should "walk on two legs," emphasizing economic cooperation while at the same time strengthening coordination in the political arena.

"(The BRICS nations) should both serve as an "anchor" for the stability of the world economy and a "shield" to ensure global peace," Xi said.

Quoting an ancient Chinese tale that describes the importance of concerted efforts when a big bird flies and a horse gallops, Xi said if the BRICS nations pool their thoughts and efforts towards a common direction, they will spread their wings and fly higher and faster.

"I'm fully confident about this," Xi said, in front of Brazilian President Dilma Rousseff, Russian President Vladimir Putin, Indian Prime Minister Narendra Modi and South African President Jacob Zuma.

The BRICS summit took place at a time when the international community had been trying to address the challenges of a strong economic recovery from the global financial crisis, sustainable development, including climate change while also mapping out a post-2015 development agenda. At the same time, the world is facing persistent political instability and conflict in various global hotspots and non-conventional emerging threats.

The Fortaleza Declaration says that international governance structure designed within a different power configuration show increasingly evident signs of losing legitimacy and effectiveness, as traditional and ad hoc arrangements become increasingly prevalent, often at the expense of multilateralism.

"We believe the BRICS are an important force for incremental change and reform of current institutions towards more representative and equitable governance, capable of generating more inclusive global growth and fostering a stable, peaceful and prosperous world," says the declaration, clearly pointing a finger at the International Monetary Fund and World Bank, which are controlled by Europe and the US.

The BRICS account for 29.6 percent of the world's territory, and more than 42 percent of its population. Despite slowing growth, their economies have still expanded twice as fast as developed countries.

The declaration warns that monetary policy settings in some advanced economies could bring renewed stress and volatility to financial markets and changes in monetary stance need to be carefully calibrated and clearly communicated in order to minimize negative spillovers, clearly a reference to the US Federal Reserve's announcement that it may end its five-year-old stimulus plan, known as quantitative easing (QE), in October.

The group reiterated its call on the IMF to develop options to move ahead with its reform process, and to ensure an increased voice and representation for emerging markets and developing countries.

"We also call on the membership of the IMF to reach a final agreement on a new quota formula together with the 15th General Review of Quotas so as not to further jeopardize the postponed deadline of January 2015," they said.

The five nations condemned unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations, saying "no state should strengthen its security at the expense of the security of others".

The 75-point declaration expressed concerns over the crisis in South Sudan, Syria, Afghanistan, Iraq and Ukraine, as well as climate change.

Fan Yongming, director of a BRICS research center at Fudan University in Shanghai, said the BRICS have made it through a choppy passage and are set for calmer waters.

US tapering of quantitative easing hit growth in some BRICS countries, but their inbuilt advantages - notably population, resources and market size - have enabled them to come through fitter and leaner than before, Fan said

Huang Wei, a researcher from the Institute of World Economics and Politics in the Chinese Academy of Social Sciences, said if the BRICS succeed in structural adjustment and maintain their momentum, the bloc will play a bigger role for world economies and on the global stage.

Kenneth Lieberthal, a senior fellow at the Brookings Institution, believes the kind of relationship building and intensive consultation at the BRICS summit will allow the five nations, all G20 members, to develop their talking points ahead of the G20.

He agreed that the bank and reserve fund are "not to bring down the current system, but in their term, democratize it more".

Contact the writers at wujiao@chinadaily.com.cn, zhaoshengnan@chinadaily.com.cn and chenweihua@chinadailyusa.com

 Xi confident in BRICS future

From left: Russian President Vladimir Putin, Indian Prime Minister Narendra Modi, Brazilian President Dilma Rousseff, Chinese President Xi Jinping and South African President Jacob Zuma join hands at a group photo session during the sixth BRICS summit in Fortaleza on Tuesday. Reuters

 

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