Moscow will push for BRICS to uphold its primary function for which the alliance was forged, to safeguard economic interests of the five nations, Russian Foreign Minister Sergey Lavrov has stressed.
“It was formed to uphold the interests of these “new countries” in the framework of international financial relations, including the IMF and the World Bank. It’s not some whim but a reflection of objective reality,” Lavrov told an audience at a Russian University in Moscow on Tuesday.
The New Development Bank and a monetary fund, launched by the BRICS “will be backed by one hundred billion dollars each, which will allow BRICS to act more independently and effectively in implementing the projects that are deemed mutually beneficial by its association members” said Lavrov.
“Since 1990, the share of the United States, the EU, and Japan in the global GDP has decreased sharply, whereas the share of the BRICS economies, if I’m not mistaken, has grown from 7.7 percent to 22 percent – that is, it has tripled. The share of BRICS in the global GDP has grown at the expense of a comparable reduction in the share of the United States, the EU and Japan,” Lavrov claimed.
The BRICS bloc is “actively pushing” for IMF reforms while “these decisions are now being blocked exclusively by the United States” charged the Russian Foreign Minister.
As the BRICS countries launched new financial institutions like the $100 billion BRICS Bank, the China-led Asia Infrastructure Investment Bank, and a $100 billion BRICS currency reserve fund, the IMF has once again delayed voting reforms to give emerging countries greater say.
“Reforming the international monetary and financial system to make it more equitable remains high on our list of priorities within BRICS,” Lavrov said on Tuesday.
A statement from the International Monetary Fund in June said the board has postponed the discussion on how to move forward without Washington. The board will now take stock of the situation in September.
IMF Chief Christine Lagarde had last year hinted at a “Plan B” if the US failed to endorse the reforms by the end of 2014.
Both the China-led AIIB and the BRICS Bank have been gaining popularity and are seen as a counterbalance to the IMF and World Bank. The US and Japan have not applied for the membership in either of the new development banks.
The IMF reforms will hand more IMF voting powers to BRICS, a long-standing demand of the group and will also reduce the concentration of representative power of Western Europe at the IMF board.
China and other emerging economies, including BRICS, have long protested against their limited voice at global financial platforms, including the World Bank, International Monetary Fund and Asian Development Bank.
The IMF quota reform calls for a 6 per cent shift in quota share to emerging economies. It will lift China, which still has less voting power than the Benelux countries ( Belgium, Holland and Luxemburg), to the third largest shareholder. Shares for Russia, India and Brazil will also see hefty rise.
Meanwhile, the BRICS foreign Ministers will meet on the sidelines of the United Nations General Assembly in September in New York.
Russian Foreign Minister Lavrov confirmed that documents will be adopted at the BRICS ministerial meet in New York that “reinforce our common approaches to key international policy issues, including with regard to the Middle East, and certainly, our negative attitude toward unilateral sanctions”.