Emerging nations seek stronger voice at G20 summit
Brazil, Russia, India, China and South Africa are seeking greater representation and voting rights at the International Monetary Fund (IMF) and the World Bank to reflect their growing economic clout.business Updated: Sep 20, 2009 10:46 IST
Emerging nations heading to the G20 summit in Pittsburgh will push for a stronger voice in major world bodies and fight their corner in a looming showdown over who should foot the bill to combat climate change.
Brazil, Russia, India, China -- the so-called BRIC countries -- and South Africa are seeking greater representation and voting rights at the International Monetary Fund (IMF) and the World Bank to reflect their growing economic clout.
At a London meeting earlier this month, BRIC finance ministers said they were seeking a seven per cent shift of IMF quotas toward developing countries and emerging markets after lending their support to G20 plans to triple the institution's lending capacity to $750 billion.
The ministers urged counterparts from the Group of 20 largest and fastest-emerging economies to rid the world's economic architecture of systemic weaknesses that helped trigger the global crisis.
"The key issue is the reorganisation of the chairs and shares at the IMF and the World Bank, more space for the emerging countries," John Hopkins University professor Riordan Roett told AFP.
"Brazil is certainly pushing for that; the European Union is not in favor because they would lose chairs, but inevitably it is going to happen."
Brazil, India and South Africa, which are set to hold a summit in Brasilia on October 8, have said they want to see trade between their nations top $25 billion by 2015, up from $10 billion currently.
They have also backed negotiations aimed at sealing a free trade agreement between India, the South American trade bloc Mercosur and the Southern Africa Customs Union.
On trade, deadlock between the major trading blocs has dashed repeated attempts to forge a new free trade pact that would boost global commerce to help developing countries.
The G20 summit in Pittsburgh on September 24-25 is expected to issue fresh calls to complete next year the Doha round of World Trade Organization negotiations that began in 2001.
As the United States remains in the grips of its worst recession in decades, Brazil has increasingly pushed for greater participation of the main emerging economies in world political discussions.
"We could have another meeting and no decisions. Brazil decided to put money into the Fund and I want to know if others will also contribute," Brazilian President Luiz Inacio Lula da Silva said in an interview earlier this month.
The South American giant, which won a modest but symbolic increase in share power in the IMF last year, has bought up $10 billion of new bonds from the lending institution this year.
"What I fear is that as the crisis begins to end, all will act in line with the status quo," added Lula, who is also seeking a seat for his country on the UN Security Council.
That's an ambition that remains out of reach for Argentina and Mexico, the other two Latin American members of the G20, analysts said.
"Brazil already represents 57 per cent of the South American economy," said Paulo Sotero, head of the Brazil Institute at the Woodrow Wilson International Center for Scholars, "and is expected to continue to grow more."
With Brasilia's growing weight comes more responsibilities, according to Charles Dallara, managing director of the Institute of International Finance. "Emerging countries like Brazil have shown leadership, but we lack more sense of responsibility, coordination on macroeconomics and avoidance of protectionism," he said.
Climate change will also loom large at the summit of the world's 19 largest economies and the European Union ahead of a key UN environment summit in Copenhagen in December set to hammer out a new climate treaty to replace the Kyoto Protocol when it expires in 2012.
Emerging countries agree that money is a key sticking point, with rich economies expected to find funds to help poorer nations buy clean technology and cope with increased droughts, floods and rising seas.
The EU has called on the United States and other rich nations to provide at least $seven billion (five billion euros) of "fast-start" money next year to help poor nations tackle climate change.