BRICS Information Centre
|
BRICS Information Centre |
|
The BRICS at the G20 Cannes Summit
Cannes, France, November 3, 2011
Prepared by Aleksandra Susak, BRICS Information Centre, November 30, 2011
The BRICS countries of Brazil, Russia, India, China and South Africa met ahead of the G20 Summit in Cannes, France, on November 3, 2011, to discuss issues facing the current economic crisis. The rising power of the emerging economies increased their role within the global arena, promising to pledge financial support only after the Europeans made a clear strategy in dealing with the problems in Greece and threatening the economies of Italy, Spain and Portugal. Well aware of the risks associated with a potential spill over of the Greek crisis to the rest of Europe, the BRICS would provide support, although only through the International Monetary Fund.
Brazilian President Rouseff reiterated the position agreed upon with the rest of the BRICS countries, stating at the conclusion of the summit that Europeans need more time to determine their own actions; namely the recapitalization of European banks and the Greek crisis. "Restoring global stability is our goal," she said, including the resumption of growth in the world economies.
At her concluding news conference at Cannes on November 4, 2011, Rouseff discussed:
Russian President Dmitry Medvedev advised G20 countries to cut their spending. "States whose debt burden is excessive must launch fiscal consolidation immediately" (Ria Novosti, November 3, 2011). He also opposed the Greek referendum and called on the rest of the BRICS to work out a joint position on the euro crisis but maintained that it was ready to support troubled EU states.
Prime Minister Singh expected a "strong and coordinated approach" to put the global economy back on track. Finance Minister Pranab Mukherjee said "our assessment of the situation is to let them (eurozone) make a credible assessment of [the] solvency issue, try to sort out those problems and then supplementary financing could be considered. Let us see first what the leaders decide" (First Post, November 3, 2011).
The general Indian recommendation was to let the Europeans sort out the problem on their own, while allowing IMF surveillance and funding in the process. Indian Prime Minister Singh said, "If the financial and banking systems of Europe are not in good shape, then trade flows, capital flows get disrupted and if that happens, that will be some cost to the economy" (Reuters, November 4, 2011).
Chinese President Hu Jintao made a number of proposals, including ensuring growth while paying to attention to balance, to pursue beneficial outcomes through cooperation, to improve governance in the course of reform, to strive for progress through innovation, and to improve common prosperity through development. "At this critical moment, the G20 must work to address the key problems, boost market confidence, defuse risks and meet challenges, and promote global economic growth and financial stability," President Jintao said (Xinhuanet, November 4, 2011). He called for a larger role for emerging countries in "a more equal and balanced global partnership" (Atlanta Journal-Constitution, November 5, 2011).
According to a transcript released by the Chinese government, Hu Jintao also stated "we should further unleash the development potential of emerging markets and developing countries and boost the economic growth of developing countries" (Atlanta Journal-Constitution, November 5, 2011).
On the issue of financial support for the EU countries in crisis, some argued that China maintains that it would implement "certain controls" over how the money is used. Li Dakoui, an economics professor and member of a central bank policy committee, maintained "if we (China) inject money, we must have certain controls. We cannot say that we give you money and you spend the money at will. You are the rich, you borrow money from the poor. It's not right for you to continue to lead a luxurious life" (Toronto Star, November 4, 2011). China is closely monitoring the evolving European crisis as the European region is its largest trading partner.
South African President Jacob Zuma attended the G20 Summit in Cannes with the main goal of attracting attention to the African continent which he believes requires much needed aid. "The least developed countries are innocent bystanders, who have been caught up in the economic turmoil" in relation to the financial crisis (Daily Maverick, November 4, 2011). Zuma has insisted on IMF reform to better serve the African continent, highlighting the need for global governance reforms as well as enhanced growth, jobs and infrastructure development.
Mac Maharaj, a spokesman for Zuma said "the key issue is not to allow the G20 to be overwhelmed by the crisis in Europe. Instead, it should attempt to come up with a plan that incorporates bringing about growth in developing countries" (Atlantic Journal-Constitution, November 4, 2011).