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India and four other countries of the five-nation BRICS bloc today gave a big boost to the International Monetary Fund’s $430-billion bailout fund for the debt-wracked 17 nation Euro Zone, pledging to contribute $75 billion with New Delhi’s contribution being $10 billion.
The pledge was made at an informal meeting of BRICS leaders presided by the Prime Minister, Dr Manmohan Singh, ahead of the opening of the seventh G20 Summit in this Mexican resort town. Besides India, the other nations in BRICS are China, Russia, Brazil and South Africa.
According to Indian officials, China has agreed to contribute $ 43 billion while the contribution from Russia and Brazil will be $10 billion each. The South African contribution is $2 billion.
Euro Zone crisis
All the BRICS leaders agreed that the Euro Zone crisis threatened global financial and economic stability and that it was necessary to find cooperative solutions to resolve this crisis. The BRICS countries have been the new growth poles of the global economy.
The pledges for fresh contributions were made after the leaders agreed to increase the resources available with the International Monetary Fund. In this context, they agreed to enhance their own contributions to the IMF.
This is with the understanding that these resources will be called upon only after existing resources, including the New Arrangements to Borrow, are substantially utilised, an official statement said.
“This would promote adequate burden sharing among IMF creditors. These new contributions are being made in anticipation that all the reforms agreed upon in 2010 will be fully implemented in a timely manner, including a comprehensive reform of voting power and reform of quota shares,” the statement said.
The leaders discussed swap arrangements among national currencies as well as reserve pooling. They agreed to ask their finance ministers and central bank governors to work on this important issue, in a manner compatible with internal legal frameworks, and report back to the leaders at the 2013 BRICS Summit.
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