QUOTE
NATIONAL ASSEMBLY
FOR ORAL REPLY
QUESTION NO: 231 (NO2420E)
PUBLISHED IN QUESTION PAPER NO: 7-2013 OF 21 AUGUST2013
MRS J B NGUBENI-MALULEKA (ANC) TO ASK THE MINISTER OF INTERNATIONAL
RELATIONS AND COOPERATION:
How has South Africaâs membership of BRICS strengthened the countryâs
influence in endeavours to (a) reform structures of global governance and
(b) render global structures equitable and representative?
REPLY:
(a) BRICS Leaders meet annually at Summits and pronounce on issues
pertaining to global governance and related reforms, notably in the
Summit Declarations. Since the first Summit held in 2009 right up to
the Fifth Summit which President Zuma recently hosted on 27 March
2013, BRICS Leaders have called for global governance reforms. BRICS
Leaders stated for example at the Sanya Summit held in 2010 in China,
âWe affirm that the BRICS and other emerging countries have played an
important role in contributing to world peace, security and stability,
boosting global economic growth, enhancing multilateralism and
promoting greater democracy in international relationsâ (Sanya
Declaration, para 5). BRICS Leaders call pertinently for reform of the
global financial and economic architecture, and specifically for âa
quick achievement of the targets for the reform of the International
Monetary Fund agreed to, at previous G20 Summits and reiterate that
the governing structure of the international financial institutions
should reflect the changes in the world economy, increasing the voice
and representation of emerging economies and developing countriesâ
(Sanya Declaration, para 15).
At the Fifth BRICS Summit, BRICS Leaders amplified these calls for
reforms to benefit the poorest members of the IMF, including Sub-
Saharan Africa as well as raised the issue pertaining to the
leadership of International Financial Institutions to be open to
candidates from developing countries, which is indicative of South
Africaâs influence in this regard:
Quote
âWe call for the reform of International Financial Institutions to
make them more representative and to reflect the growing weight of
BRICS and other developing countries. We remain concerned with the
slow pace of the reform of the IMF. We see an urgent need to
implement, as agreed, the 2010 International Monetary Fund (IMF)
Governance and Quota Reform. We urge all members to take all necessary
steps to achieve an agreement on the quota formula and complete the
next general quota review by January 2014. The reform of the IMF
should strengthen the voice and representation of the poorest members
of the IMF, including Sub-Saharan Africa⦠The leadership selection of
IFIs should be through an open, transparent and merit-based process
and truly open to candidates from the emerging market economies and
developing countries (eThekwini Declaration, para 13).â
Unquote
BRICS Leaders also now meet on the margins of the G20 Summits where
they coordinate positions in respect of global governance issues and
then jointly articulate such positions, as agreed. BRICS countries
have collaborated to increase the share of emerging and developing
countries, including the poorest countries to increase their decision
making in key global public institutions such as the IMF, and have
also made very significant financial contributions in support of the
IMFâs mandate to ensure global financial stability and increased
economic growth.
At the informal meeting of BRICS Leaders held on 18 June 2012 on the
margins of the G20 Summit in Los Cabos, Mexico, India in its capacity
as the then BRICS Chairperson issued a media note on the outcomes of
this meeting. The BRICS Leaders were among the first Leaders to agree
to increase resources available with the International Monetary Fund
and to enhance their own contributions to the IMF, with the
understanding that these resources will be called upon only after
existing resources, including the New Arrangements to Borrow, are
substantially utilized. The BRICS contributions amounted to USD 75
billion (China contributed USD 43bn; Russia, India and Brazil
contributed USD 10 bn each and South Africa contributed USD 2 bn).
This would promote adequate burden sharing amongst IMF creditors.
Importantly, BRICS Leaders stated that their contributions to the IMF
would be contingent on the implementation of previous reforms agreed
to, in a timely manner, including a comprehensive reform of voting
power and reform of quota shares.
b) The BRICS Leaders further considered the challenges that developing
countries face in respect of infrastructure development, due to
insufficient long-term financing and Foreign Direct Investment (FDI),
especially investment in capital stock. It was felt that BRICS
cooperation towards the more productive use of global financial
resources can make a positive contribution to addressing this problem.
Two significant outcomes of the eThekwini Summit were the decisions of
BRICS Leaders to launch a new Development Bank and Contingent Reserve
Arrangement. Leaders emphasised that the initial capital contribution
to the bank should be substantial and sufficient for the bank to be
effective in financing infrastructure.
These initiatives also relate directly to the increasing need for
reform of global governance structures. South Africa together with
India is currently co-chairing the formal negotiations to establish
the new Development Bank. A progress report on the implementation of
these decisions will be tabled by Finance Ministers to the BRICS
Leaders at their next meeting on the margins of the G20 Summit in St
Petersburg in September 2013.
UNQUOTE