The BRICS were hitting Western nations on Thursday, pressing them for more voting rights at the International Monetary Fund this year and assailing them over monetary policies they said put the stability of the global economy in danger.
Reuters reported that the BRICS countries of Brazil, Russia, India, China and South Africa issued a joint declaration after a meeting in New Delhi that said in part, "This dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the fund. We stress that the ongoing effort to increase the lending capacity of the IMF will only be successful if there is confidence that the entire membership of the institution is truly committed to implement the 2010 reform faithfully."
Although voting rights changes have been promised at the IMF, the U.S. has not yet ratified them. BRICS countries have been increasingly frustrated over their lack of influence there and in the U.N. Security Council, where India and Brazil have spent years trying to win permanent seats. In addition, G7 reforms have been slow to satisfy the group.
Criticism of rich nations' fiscal policies was also heavy at the gathering, where leaders accused them of jeopardizing the stability of the global economy. In their declaration, they said, "It is critical for advanced economies to adopt responsible macroeconomic and financial policies, avoid creating excessive global liquidity and undertake structural reforms to lift growth that create jobs."
Brazil's President Dilma Rousseff was quoted saying that the monetary policy used by rich nations "brings enormous trade advantages to developed countries, and results in unfair obstacles for other countries."
The group also said that Iran had the right to proceed with a peaceful nuclear energy program, and took steps to reduce their reliance on the dollar in trade amongst themselves. To that end, they signed an agreement to extend credit facilities in their local currencies. In addition, they agreed to explore an Indian proposal for development of a BRICS-led South-South Development Bank, which would be funded and managed by the BRICS and other developing countries.
Prime Minister Manmohan Singh of India was quoted saying, "We have directed the finance ministers to examine the proposal and report back at the next summit."
As the BRICS increase their economic ties to one another, they will also launch on Friday benchmark equity index derivatives that will be cross-listed on their stock exchanges. The indexes will permit investors in one BRICS country to bet on stock market performance in the other four, without any currency risk.