Emerging economies gained a promise of more money for the banks that lend to them and a greater say in those banks from G20 finance ministers this weekend, an answer to complaints that the emerging world has little influence in global policy-making, according to Reuters.
The 10 emerging economies among the Group of 20 -- Brazil, Russia, India, China, Mexico, Indonesia, Saudi Arabia, South Korea, Argentina and Turkey -- have suffered from the global downturn, but their growing economic strength in the past few years has given them more clout.
"The resolution to today`s global problems is only possible with the participation of emerging countries ... There is a natural evolution of the decision-making process," Brazilian central bank governor Henrique Meirelles told Reuters.
The four largest emerging economies have become central to the growth of the world economy.
At the meeting in southeast England ahead of the leaders` summit in London next month, they spoke in a single and noticeably louder voice.
Brazil, India, Russia and China, collectively known as the BRIC countries, issued a joint communique calling for more lending to emerging economies hit by the collapse of private capital and for urgent reforms to improve their representation in the International Monetary Fund.
"COLLEGIALITY"
Funding the IMF has become a pressing concern as it has spent some $50 billion in recent months shoring up crisis-hit economies such as Iceland and Ukraine.
The IMF has asked for an additional $250 billion to double its capital while the United States wants the IMF`s arsenal to be raised by $500 billion.
The final G20 finance ministers` statement agreed there would be more money for the IMF and other lenders but did not specify an amount.
The European Union (EU) is keen for some of the IMF funding increase to come from emerging members with large currency reserves such as China and Saudi Arabia.
But emerging economies are resisting raising their contributions until they obtain a greater say -- or quota -- on the board of the IMF.
Acknowledging these aspirations, G20 finance ministers agreed to bring forward the next IMF quota review and complete it by January 2011, rather than 2013.
Russian Finance Minister Alexei Kudrin said he would have liked to see an immediate rebalancing of the quotas, but was glad a compromise had been found.
"We have increased our influence in the global financial decision-making," he said.
The G20 ministers` statement also appeared to herald an end to the U.S.-European dominance of multilateral lenders such as the IMF, an increasingly sore point for emerging economies.
Traditionally, the United States names the president of the World Bank while a European heads the IMF. But G20 finance ministers said for the first time this weekend that the heads of international financial institutions should be appointed through open, merit-based selection processes.
"It`s less about the amount of money pumped into the system. It`s (about) a sense of responsibility and collegiality about how you deal with these issues going forward," South African Finance Minister Trevor Manuel told Reuters.
CLOSER BRIC COORDINATION
Brazil`s Meirelles said the joint approach by the BRIC countries at this meeting marked a "consolidation" of a process that started last year.
The four countries met as a group for the first time at the G20 finance ministers` annual meeting in Brazil last November to call for a greater say in world affairs and the global economy.
These ties are likely to deepen as the four economies complement each other -- Brazil and Russia are major commodities producers while large manufacturing operations make China and India leading consumers of raw materials.
Still, their combined influence remains curtailed by the fact that they are more dependent on external markets than the developed world is.
The IMF has revised down its 2009 growth forecast for emerging economies to 3.3 percent from an initial 5.1 percent, though that compares with a forecast of a 2 percent contraction in advanced economies.
