Indian PM Highlights Capital Needs of Developing Countries

Posted March 29th, 2012 at 6:45 am (UTC-5)
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India's prime minister has highlighted the need in developing countries to find funding at the summit of the so-called BRICS nations — the world's five largest emerging economies.

Speaking in New Delhi, Thursday at the conclusion of the one-day summit, Prime Minister Manmohan Singh said the leaders and delegates discussed how to expand the World Bank's capital base, as well as a proposal to create a new development bank, funded and led by the five BRICS nations: Brazil, Russia, India, China and South Africa.

The BRICS countries represent 40 percent of the world's population. The bank would provide mutual credit and investment opportunities for members and other developing nations without having to depend on Western institutions.

Rajiv Biswas, chief economist for IHS Global Insight in Singapore, told VOA Thursday such a bank could help offset some of the impact of the European debt crisis.

“I don't think it necessarily has to be competing with the World Bank. I think, at the moment, the issue is having sufficient funding for the rapid growth in developing countries in terms of trade and investment at a time when most of the concerns about the deleveraging going on in the European banking system.”

He says creating a development bank would be a significant accomplishment for a group that has previously stopped short of tangible action.

“I think for the first time that's creating some kind of action plan that's implementable, whereas in the past many of these meetings have been talk shops without any tangible outcomes.”

In their joint declaration at the end of the summit, the BRICS leaders also strongly criticize monetary policy in Western countries. The leaders say the policies — slashing interest rates and infusing cash into the banking system — may revitalize developed economies, but they said the policies create problems for emerging economies.

The leaders also addressed the Iran nuclear crisis, calling for a diplomatic resolution to avoid further escalation.

Meanwhile, protests against Chinese-rule in Tibet are creating a shadow over the meeting, the group's fourth annual summit.

Tibetans who live in India along with their exiled spiritual leader, the Dalai Lama, took to the streets of New Delhi this week to air their grievances against Chinese rule. The issue is one that India and China pointedly avoid in all their public discussions, and analysts say they remain unlikely to address it as they meet in New Delhi.