BRICS members to trade in local currencies; pitch for close coordination to meet challenges

New Delhi, Mar 29 (PTI) Taking note of uncertainty in global political and economic situation, India, China, Russia, Brazil and South Africa today took the first step towards mutual trade in local currency and voiced strong opposition to any military action or rhetoric with regard to Syria and Iran. At their Summit meeting here, Indian Prime Minister Manmohan Singh, Chinese President Hu Jintao, Russian President Dmitry Medvedev, Brazilian President Dilma Rousseff and South African President Jacob Zuma pitched for close coordination among the five leading economies to meet the challenges being witnessed in the global scenario. After the Brazil-Russia-India-China-South Africa (BRICS) Summit, an agreement was signed under which credits would be extended in local currencies under the BRICS Interbank Cooperation Mechanism. Another pact signed was the Multilateral Letter of Credit Confirmation Facility Agreement between BRICS countries' Exim/Development Banks. The agreements mark the initial steps for intra-BRICS trade in local currency. Singh said the agreements would boost trade among the BRICS countries. At the same time, he pressed for easing of business visas to facilitate increase in intra-grouping trade and investment. A suggestion was made to set up a BRICS Development Bank, the Prime Minister said, adding the leaders directed finance ministers to examine the proposal and report back at the next Summit. Summing up the sense of the meeting, Singh said all the five countries were affected by the global economic slowdown, volatility in food and energy prices, political uncertainty in West Asia and the rise of terrorism and extremism. After the Summit during which the BRICS Action Plan was unveiled, Singh said the leaders discussed the turmoil in West Asia and "agreed to work together for a peaceful resolution of the crisis. We must avoid political disruptions that create volatilities in global energy markets and affect trade flows." Noting that the global situation today presented "a mixed picture", the Prime Minister said that emerging market economies were growing at a healthy pace and increasing their share in global trade and output. Talking about the challenges in the shape of global economic crisis, political uncertainty in West Asia and rise in terrorism and extremism, he said, "Our responses to these challenges may be different, but there is much common interest that binds us together." Singh underlined the need for BRICS countries, which have 25 per cent share in the world GDP, to work together to address deficiencies in global governance. "Institutions of global political and economic governance created more than six decades ago have not kept pace with the changing world. While some progress has been made in international financial institutions, there is lack of movement on the political side," he said. BRICS should speak with one voice on important issues such as the reform of the UN Security Council, he said. India, Brazil and South Africa are aspirants for permanent membership of the UNSC. While Russia categorically has expressed its support for India's bid, China is yet to come out with clear support, only saying that it backs its aspiration to play a greater role in the UN. The Chinese President said the world was going through major development changes with regional and international "hotspot" issues affecting world peace and the economic situation being unstable. A Joint Delhi Declaration said the meeting took place "against the backdrop of developments and changes of contemporary global and regional importance" and, in that regard cited the examples of "faltering global recovery made complex by the situation in the Eurozone" and "developing political scenario in the Middle East and North Africa that we view with increasing concern". Expressing deep concern over the situation in Syria, the leaders called for an immediate end to all violence and violations of human rights. "Global interests would best be served by dealing with the crisis through peaceful means that encourage broad national dialogues that reflect legitimate aspirations of all sections," the declaration said. The Russian President underlined that there should be no foreign intervention in Syrian affairs and the perception that the issue could be addressed militarily only is "doomed to fail". Rousseff also opposed any unilateral military action against Syria. On Iran, the BRICS leaders voiced concern over the situation emerging around its nuclear programme and said it cannot be allowed to "escalate into conflict" as it could have "disastrous consequences" which will be in no one's interest. "We recognise Iran's right to peaceful uses of nuclear energy consistent with its international obligations, and support resolution of issues involved through political and diplomatic means and dialogue between parties concerned," it said. In an apparent reference to the US which has been threatening military action against Iran, Rouseff stressed the need for giving up "rhetoric" that could lead to violence. PTI