By Nitya Chakraborty
BRICS summit in New Delhi on March 28 and 29, 2012 will be very business like this time and India will like to get some concrete proposals approved for working on a joint strategy in dealing with the issues of trade and business cooperation among the five partner countries-Brazil,Russia,China, India and South Africa. India also will like a joint move to ensure more powers for the emerging economies as also the BRICS members in the international financial institutions, especially the International Monetary Fund.
India will support the proposal of setting up a common development fund for the BRICS group of countries. India , however will like joint control of this proposed bank and it sees it as a separate move outside the China’s bid to sign an MoU with the development banks of the other four countries for extending loans .China might use this MoU as its first open attempt in any international forum to introduce its currency renminbi as the alternate one against US dollar in the long term, but the Indian position is that the MoU is a small step of collaboration among the banks of the five countries and it is in no way vindicative of the Chinese position on its currency.
India is of the view that the time has not yet come for working for an alternative reserve currency against US dollar and it is no use for China to force the issue. However, Indian sources feel that a common development bank will be of good use to China as China has big trade with Brazil, Russia and also South Africa apart from India and the plan to lend renminbi is expected to give a big boost to China’s trade and business with these countries. According to a leading foreign bank, only 13 per cent of China’s trade in Asia is presently conducted in renminbi but this could rise to 50 per cent by 2015 and that is a major development in trade relations. Similarly, for Brazil whose development bank has a balance sheet four times the size of the World Bank, a common institution for the grouping could provide a way of opening further trade links, particularly with Russia and China.
BRICS this time will demand the selection of a non western for the presidentship of World Bank and a major say for the emerging economies in the running of the IMF. The IMF board has already approved a set of quota reforms which include a shift of over 6 per cent voting rights from overrepresented to underrepresented members.Indiahas a voting right of 2.34 per cent.China has told India that it is interested in having a common approach on the selection of the next World Bank head and there should be a joint call to the IMF for speeding up the process of reforming the quotas so that both China and India get their due representative share.
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