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BRIC seeks global voice at first summit

(Agencies)
Updated: 2009-06-15 16:52

MOSCOW - The leaders of the world's biggest emerging markets - Brazil, Russia, India and China - meet this Tuesday for their first formal summit, seeking a louder voice on the global stage.

Leaders of the so-called BRIC nations will discuss ways to reshape the global financial system after the worst economic crisis for decades and ideas for a new reserve currency to reduce dependency on the US dollar may be on the agenda.

"The good news is that rich countries are in crisis and that emerging countries are making a huge contribution to save the economy and, consequently, save the rich countries," Brazilian President Luiz Inacio Lula da Silva told Reuters on June 17.

"Wealthy countries are no longer the only ones that account for the world's production capacity and consumption," he added, saying the BRICs should work together to "change the political and trade geography of the world.

Special coverage: SCO & BRIC Summits Related readings:  Hu in Yekaterinburg for SCO, BRIC summits BRIC to grow faster after global crisis  BRIC club of emerging powers  Crisis speeds BRIC rise to power: Goldman's O'Neill

The BRIC term was coined by Goldman Sachs economist Jim O'Neill in 2001 to describe the growing power of emerging market economies. The June 16 summit in the Russian Urals city of Yekaterinburg marks a step toward cooperation as a group.

BRIC countries account for 15 percent of the $60.7 trillion global economy but Goldman Sachs predicts that in 20 years time, the four countries could together dwarf the G7 and China's economy will overtake the United States in total size.

"BRIC is a myth but a myth that is slowly becoming a reality," said Alexei Pushkov, a professor of international relations and a leading Russian journalist.

"This summit shows there is a tentative community taking root. The question is whether it can become a political institution or whether it will be dormant."

Behind the bluster, divisions abound.

Chinese President Hu Jintao brings as much GDP to the table in Yekaterinburg as the three other BRIC countries combined and Beijing is wary of being seen to confront the United States.

It is Russia and Brazil - arguably the weakest BRIC members - that have been most vocal about pushing for discussions on reducing dollar dependence.

China, the world's largest holder of US Treasuries, says the dollar will retain its dominant role and analysts said there is unlikely to be substantial agreement on major issues at the summit.

"This meeting shows the growing influence and voice of the emerging world, something that the Obama administration is also paying attention to," said Qin Yaqing, vice president of China Foreign Affairs University in Beijing.

"But there are also big differences between them. So complete cooperation between them would be extremely difficult, but partial cooperation is possible, and a meeting like this will help amplify their shared voice," said Qin.

Russian President Dmitry Medvedev has made proposals on giving a greater role to the International Monetary Fund's Special Drawing Rights that echo ideas from Chinese central bank chief Zhou Xiaochuan.

Russia said it would reduce the share of US Treasuries in its $400 billion reserves and buy IMF bonds. China, Russia and Brazil have pledged to help capitalize the IMF as they seek more influence at the fund.