Global Economic Governance Must Be Democratised, BRICS

“The BRIC members have not injected nearly $100 billion into the IMF just to leave everything as it was before.”

Statement from the Summit of Brazil, Russia, India and China at their Summit in Brasilia on April 14, 2010

From Huffington Post, 14/4/2010

BRASILIA - The term "BRIC" was coined only ten years ago as an acronym meant to capture the new reality that Brazil, Russia, India and China together had come to account for 15 per cent of the world's GDP.

We are countries where everything happens on a large scale. We represent nearly one half of the world population, 20 per cent of its land surface and are rich in natural resources.

Today, the BRICs have become essential players in major international decision-making. As such we are acutely aware of our potential as agents of change in making global governance both more transparent and democratic.

This is the message Brazil offered at the second BRIC Summit, held here in Brasilia, where the leaders of Brazil, Russia, India and China gathered on April 15. We are committed to building a joint diplomatic and creative approach with our BRIC partners in order to tackle such global challenges as food security and energy production in the context of climate change.

The real baptism by fire of the group occurred during the financial crisis of the past two years. Far from diminishing our weight, our collective strategies enabled us to hold our own. In fact, the sound response of the four countries to the crisis of the developed world opened up new alternatives to the shabby dogma inherited from the past.

The collapse of financial markets revealed the failure of paradigms previously considered to be unquestionable. Truths about market deregulation collapsed. The ideal of a minimal state also collapsed. The easing of labor rights is no longer a mantra to fight unemployment.

When all these orthodoxies collapsed, the visible hand of the state protected the economic system from the failure created by the invisible hand of the market.

While some of the major countries let speculative excesses flourish, BRIC countries promoted growth focused on work and prudence. In Brazil, we never lost sight of the need to tackle social inequality, lifting 20 million Brazilians out of poverty since 2003 and making them full citizens.

At the G-20, we proposed anti-cyclical policies, market regulation, curbing tax havens and renewal of the Bretton Woods institutions. On this last score, we are determined not to let the incipient signs of recovery in the global economy serve as an excuse for abandoning a democratic remodel of these organizations. The BRIC members have not injected nearly $100 billion into the IMF just to leave everything as it was before.

As a group, we will continue to advocate the democratization of the multilateral process of decision making. Developing countries have the right to be heard. Bridging the gap that separates them from the rich countries is not only a matter of justice. The world's economic, social and political stability depends on this. It is our best contribution to peace.

From our perspective as emerging economies, the resources that are needed to overcome hunger and poverty may be considerable, but are quite modest when compared to the cost of rescuing failed banks and financial institutions that are victims of their own speculative greed.

At the same time, there is no use offering food and charity if the distortion in world agricultural trade still persists. Unfair subsidies in rich countries discourage local production, foster dependency and divert resources which would be better used in development programs. For this reason, the conclusion of the Doha Round is critical.

The negotiating impasse on global issues is nowhere as serious as on climate change. In line with this, the BRIC countries are committed to helping close the deal that was elusive in Copenhagen. Reducing greenhouse gas emissions while maintaining robust growth in developing countries requires that everyone do their part -- as the BRIC countries have been demonstrating with ambitious initiatives to mitigate their emissions.

For that reason, the large traditional polluters have a special charge. The balance established by the Kyoto Protocol is essential for us to move forward together.

The international scene is cluttered with old problems, even as new ones emerge. Neither the BRIC members nor any other countries are able to face them alone. In the past, unilateralism has led to impasses, if not human catastrophes, such as Iraq.

In today's world we must therefore rely increasingly on each other. For that to happen we must forge a more representative and transparent system of global governance that can both inspire unity of purpose and revitalize the collective will to seek consensual solutions. In this journey toward a new world, the BRIC countries are committed to working together to fulfill our responsibilities.

Published courtesy of the Global Viewpoint Network