BRICS Information Centre
The BRICS Big Boost for the G20 Los Cabos Summit Success
John Kirton and Caroline Bracht, BRICS Research Group
June 18, 2012
Just before the G20 leaders began their summit in Los Cabos on June 18, 2012, those of the BRICS of Brazil, Russia, India, China and South Africa met among themselves to give the broader G20 and the entire global community a big boost. It was only the second time they had done so at a G20 summit, and the first at which they issue a statement (see Appendix).
They showed solidarity with a crisis-afflicted Europe, promising to help "find co-operative solutions to resolve this crisis." To back their bold words with real money they “agreed to enhance their own contributions” to the International Monetary Fund (IMF), thus building a global firewall as a second line of defence should the rich Europeans prove unwilling or unable to take care of their own European Union family members. They further bolstered global financial stability by agreeing to ask their finance ministers and central bank governors to consider intra-BRICS swap arrangements and reserve pooling and report back to them at their regularly scheduled stand alone summit in 2013.
In their short 349-word statement, BRICS leaders addressed most of the key issues at the G20 summit – the Eurocrisis, global economic growth, IMF resources and reform, and development, including investment in infrastructure and in the social sphere. They made three clear commitments with regard to the Eurocrisis, IMF reform and resources, and intra-BRICS swaps. They also developed global governance institutions both inside the BRICS through swaps and rescue pooling, and outside, by lending support to the eurozone, the IMF, the multilateral development banks and the G20 itself, while giving guidance to the IMF’s New Arrangements to Borrow.
However, the BRICS did not specify how much collectively or individually they would give to the IMF. But once again they gave the G20, the IMF and global community the benefit of the doubt by agreeing, at least in principle, to give their money first, before the others delivered the reforms that they had promised but that would not arrive by the time they should.
In concluding their brief statement, the BRICS leaders declared that “this process of informal consultations on the sidelines of multilateral events was valuable and contributed to closer coordination on issues of mutual interest to BRICS economies. This statement is correct but incomplete, for such meetings also benefit the G20 itself and the broader world beyond.
|2012 Los Cabos|
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