Wednesday, October 19, 2011

Fifth IBSA Summit

The fifth India-Brazil-South Africa (IBSA) Summit, which was held in Pretoria on 18 October, has come out with a declaration on major global issues with focus on reforms of multilateral organisations, including the UN Security Council (UNSC), the IMF and the World Bank to give greater voice to emerging countries like India.
The Summit came out with the Tshwane Declaration following the discussions between the leaders of India, Prime Minister Manmohan Singh, President Jacob Zuma of South Africa and President Dilma Rousseff of Brazil.
On global governance reform, the three leaders reaffirmed their commitment to increase the participation of developing countries in the decision-making bodies of multilateral institutions.
UN and IMF Reforms
They underscored the need for urgent reform of the United Nations (UN) to render it more democratic and consistent with the current geopolitical reality. They particularly emphasized that no reform of the United Nations will be complete without a reform of the UNSC, including an expansion in both the permanent and non-permanent categories of its membership, with increased participation of developing countries in both.
IBSA, as like-minded countries, will continue to strive to contribute to a new world order whose political, economic and financial architecture is more inclusive, representative and legitimate, the declaration stated.
It also called for the early implementation of the targets for the reform of the International Monetary Fund (IMF) in order to ensure that the body is democratic, responsive and accountable. The leaders reiterated that the governing structure of the Fund should reflect the changed realities of the global economy in the 21st century, through the increased voice and representation of emerging economies and developing countries.
Global Economic Growth
The leaders agreed that the Heads and senior leadership of all international institutions should be appointed through an open, transparent and merit-based process beginning with the selection of the next President of the World Bank in 2012.
The declaration expressed concern at the ongoing deterioration of the global economic scenario, which presents particular challenges for the economic policy and growth prospects of developing and low-income countries. Downside risks have increased substantially in recent weeks. They stressed the importance of the implementation of a credible plan of macro-economic and financial policies and structural reforms by the Eurozone countries, as a necessary step to prevent further negative shocks to the world economy. They also highlighted the importance of complementary measures by other key developed economies to boost recovery and help the global economy as a whole.
The leaders stressed on the need to increase policy coordination among G20 nations, with a view to avert a new recession and to promote a robust recovery in order to ensure strong, sustainable and balanced growth of the global economy in the medium term.
The current impasse in the World Trade Organization (WTO) negotiations is a source of serious concern, the declaration said.
At the Summit of three leading economies, Manmohan Singh, joined by Zuma and Rousseff, cautioned that economic crisis in developed countries could affect developing nations and pressed for urgent steps by Europe and other advanced economies to prevent “double-dip” recession.
The three leaders also demanded reform of global institutions of governance, including the United Nations and financial bodies, to address current international challenges.
India’s Stand
The Indian prime minister said that the world financial and capital markets were showing signs of “acute distress” due to the negative signals sent by the sovereign debt crisis in Europe and recessionary trends in the “traditional engines” of global economy - the United States, Europe and Japan.
Dr Singh, Zuma and Rousseff, who represent the fast developing economies, discussed the crisis being faced by the advanced countries at their day-long trilateral Summit and were in agreement that the situation needs to be prevented from spiralling out of hand.
The Indian prime minister voiced his hope that effective and early steps will be taken by Europe and other advanced economies to calm the capital and financial markets and prevent the global economy from slipping into a double-dip recession.
Manmohan Singh said that there has been steady growth in the three economies despite the global economic slowdown and intra-IBSA trade has almost touched the $20 billion dollar mark, the Indian prime minister said. The IBSA countries have set a target of $25 billion by 2015.
India will host the next IBSA summit in 2013.

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