Tuesday June 16, 03:51 PM
Big four new powers hold first summit
By Anna Smolchenko
YEKATERINBURG, Russia (AFP) - Leaders from the world's top emerging economic powers met for their first summit Tuesday to plot a strategy to increase their clout amid the global crisis.
Presidents Dmitry Medvedev of Russia, Hu Jintao of China, Luiz Inacio Lula da Silva of Brazil and Indian Prime Minister Manmohan Singh hailed their first official four-way meeting.
"Coordination of this kind will help us understand each other's positions and work out new, unconventional ways to solve existing problems and reform international financial relations," Medvedev said as he opened the summit in the Russian city of Yekaterinburg.
Dubbed the BRIC (Brazil, Russia, India, China), the group is seeking to show that its ambitions for growth to rival the United States, Japan and other economic powers remains intact despite the global crisis.
The idea for the BRIC grouping was spawned after research by US investment bank Goldman Sachs (NYSE: GS - news) suggested the four economies were developing at such pace they could be amongst the world's strongest by 2050.
It remains to be seen whether the quartet will agree to create a more official format for the grouping.
Russian Deputy Foreign minister Sergei Ryabkov described the group as "a baby (that) has just been born, essentially it's only in a crib yet."
In an apparent reference to the United States, he added the forum was not aimed against any other nation and was "not an attempt to compete with anybody."
The summit began just after Russia ended a meeting of the Shanghai Cooperation Organisation (SCO) -- which is dominated by Moscow and Beijing -- in the same city.
Russia has taken a leading role in promoting BRIC, which remains an economic force despite seeing its high growth of recent years savaged by the worst global economic crisis since the 1930s.
Analysts say that despite the economic crisis, BRIC nations are displaying a growing willingness to coordinate efforts to counter US global domination through the dollar.
Medvedev had earlier reaffirmed his doubts about the US dollar as a global reserve currency but admitted that it would take time for there to be major shifts in the global currency balance.
"The current set of reserve currencies and the main reserve currency -- the US dollar -- have not managed to perform their functions," Medvedev said.
The Kremlin's chief economic aide, Arkady Dvorkovich, said Russia could consider investing its reserves not only in the United States and Europe countries but also in the financial instruments traded by BRIC states.
He cautioned, however, that none of these proposals were targeted at undermining the dollar, which has been hit by noises from Russia about the greenback's status as a reserve currency
"There is an understanding that the last thing we need now is turmoil on financial markets," Dvorkovich said.
In another sign of their capacities, the BRIC states are also expected to be major buyers of the first bonds that the International Monetary Fund (IMF) is working to issue.
This is in line with commitments by developed and developing economies to provide 1.1 trillion dollars to the IMF and other global bodies to help the poor through the crisis.
China has said it is considering buying up to 50 billion dollars' worth of the new instrument, while Russia and Brazil could buy up to 10 billion dollars each.
Russia and China have come out in favour of revamping the global financial system, saying there is a need for a new supra-national currency besides the dollar to prevent a repeat of the global economic crisis.
But among the four economies, China is seen as having the best shot at eclipsing the United States as the world's largest market.
China's Hu flaunted his country's influence at the Shanghai meeting, saying Beijing would extend a 10 billion dollar credit to Central Asian member states help them overcome the financial crisis.
Poorer members Uzbekistan, Kyrgyzstan and Tajikistan have been hit hard by the crisis and analysts believe China is seeking to increase its influence in impoverished but highly strategic region.
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