The heads of all the three other countries saw merit in economist Indian Prime Minster's argument that the issue is too complex to be decided in a summit.

India took a similar line at the G-20 summit in London in April this year to review the global economic developments, and the global view was further concretised at the joint statement issued on June 16 by the BRIC summit. At the G-20 meeting, India pointed out that the issue of looking for a new reserve international currency to replace US dollar can be the ultimate objective; but the existing global financial situation demands that an exhaustive study of the factors be made and a road map worked out with caution so that there is no destabilization of the financial system.

In the BRIC family, three members, China, Russia and Brazil, have been categorical that concrete action be taken on a priority basis for facilitating the process of replacing the US dollar as the international reserve currency. China, in fact, prepared its own proposal on the replacement of US dollar. But, taking into account the enormity of the factors and the risks involved for precipitating a decision, Beijing also softened it stand. And the joint statement only came out with the observation that there is need for a more diversified international monetary system. Dr. Singh himself clarified to the newsmen on his return flight that only discussions took place and no conclusion had emerged.

The BRIC leaders exuded confidence at the combined capacity of the four countries to meet the global financial and economic crisis better compared to the developed west. The four countries have already shown signs of revival much before the recovery in the US economy. The signs are important in restoring global recovery since the BRIC countries have control over 40 per cent of the world's population and output. The stock markets in these four countries rebounded by 40 to 70 per cent between February and early June creating optimism in the global markets. What has given added strength to the clout of the BRIC countries is the possibility of tapping huge untapped resources in these four countries and making use of the huge population to harness the growth process.

The summit, therefore, called for an increased role for the emerging economies like BRIC in the international financial institutions, and demanded that the developing economies should have a greater voice and re[presentation in international financial institutions and their heads and senior leadership should be appointed through an open, transparent and merit-based selection process. BRIC countries have every reason to demand such a change in the power centre of the international financial institutions since they are taking greater responsibilities in organising funds compared to the earlier years.

Their increased economic power was underscored this month when Brazil and Russia joined China to announce that they would shift some US$ 70 billion of reserves into multi-currency bonds issued by the International Monetary Fund. The move was interpreted as an attempt to weaken the dollar. BRIC countries are putting the USA on notice that there has to be a cutback on spending and they need to get their houses in order. The US cannot be allowed to export its own crisis to the emerging economies.

Among BRIC, domestic demand in China and India is increasing because of their huge population. Home appliances in these two economies accounts for a quarter of the world's total. China's automobile sales rose by 15 per cent in May and could cross 10 million units this year. Goldman Sachs has forecast that domestic demands in China and India will increase by 9.8 per cent and 6.1 per cent, higher than their GDP growth of 8.3 per cent and 5.8 per cent.

The rapid recovery of BRIC is helping global capital to flow back to the emerging markets and stimulating the rebound of resources and assets prices.

Invigorated by the recovery of BRIC, the once sluggish capital markets of the US, European Union and Japan have started to rally. From a geopolitical perspective, the BRIC economies, spread over Eurasia and circling the Pacific Ocean and the Indian Ocean, occupy a strategic economic position. Brazil and Russia have abundant resources while China and India have huge population. So these countries have both resources and the market.

Cooperation among the BRIC countries will help devise a mutually complementary new growth model taking into account the challenges of the present global economy. The summit in Russia has helped in facilitating the process of implementing a road map for rapid economic development of this major economic grouping and taking their rightful places in the international financial institutions. (IPA)