BRIC to discuss crisis response, IMF reform at summit

Leaders of Russia, China, India and Brazil will discuss the reform of international financial institutions at their debut summit on Tuesday in the Russian city of Yekaterinburg, the Kremlin said on Monday.

It said in a statement that the four countries, known by the BRIC acronym, would discuss "prospects for dialogue between the Group of Eight and traditional partners" on reform ahead of the G8 summit in Italy in early July.

BRIC countries want to increase their representation in the IMF, where the majority of quotas are currently controlled by developed nations. They are aiming for an agreement on IMF reforms by January 2011.

Russia currently has 2.7 percent of IMF votes, and is unlikely to see its quota increased even under a proposed reform. China holds 3.7 percent, Brazil 1.4 percent and India 1.9 percent.

BRIC states are trying to strengthen their clout as the producers of 15 percent of global gross domestic product by building up the grouping into a powerful world player. The Kremlin said the four will issue a communique after the summit.

The four are also among the world's seven biggest holders of international reserves. They have expressed worries about the economic stimulus programs in developed nations, fearing they may threaten their savings by driving up future inflation.

Kremlin foreign policy adviser Sergei Prikhodko said on Sunday that BRIC countries were unlikely to discuss a new reserve currency but the reform of the IMF is closely linked to the currency discussion.

China said it is willing to contribute up to $50 billion to the IMF through a purchase of IMF bonds, non-tradable securities which will likely be denominated in the IMF's Special Drawing Rights (SDRs).

Brazil and Russia said they will buy $10 billion each. The debt issue will boost the role of SDRs in international finance.

The statement said the four will also discuss a response to the economic crisis and exchange views on international policy issues, including regional crises, the fight against terrorism, energy and food security.

BRIC will also discuss further steps aimed at "strengthening collective and legal foundations in global policy." The Kremlin said the communique will "reflect common vision of the current stage of global development."

The Kremlin said the four also plan to make a statement on global food security.

[Source: By Gleb Bryanski, Reuters, Yeka Terinburg, Rus, 15Jun09]

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