In the New Delhi summit, leaders of the BRICS group today [Thursday, 29 March 2012] pressed Western powers to cede more voting rights at the IMF this year and flayed the rich world’s reflationary monetary policies for putting global economic stability in jeopardy.

Promised changes to voting rights at the IMF have yet to be ratified by the United States, adding to frustration over reform of the G7 and the U.N. Security Council, where India and Brazil have been angling for years for permanent seats. The BRICS leaders also accused rich countries of destabilizing the world economy five years into the global financial crisis by creating excessive global liquidity. It also recognised the right of Iran to pursue peaceful nuclear energy. They said that the crises over Iran’s nuclear programme should be resolved diplomatically and should not be allowed to escalate.

The five BRICS nations signed an agreement to extend credit facilities in their local currencies, a step aimed at reducing the role of the dollar in trade between them. They also agreed to examine in greater detail an Indian proposal to set up a BRICS-led South-South Development Bank, funded and managed by the BRICS and other developing countries. This will be in the line of Asian Development Bank. The Finance Ministers will be examining the proposal and it will be discussed in the next summit.

Other moves to bring their economies closer together include the launch on Friday of benchmark equity index derivatives allowing investors in one BRICS country to bet on the performance of stock markets in the other four members without currency risk. The indexes will be cross-listed on their stock exchanges from Friday.

However, it is utmost necessary that BRICS members first develop mutual trust and confidence among themselves to emerge as a powerful bloc in the global arena. Also, they should not allow the West to play any damaging game for maintaining their hegemony over the world affairs.