The finance ministers and central bank governors of Brazil, Russia, India and China -- the so-called BRIC countries -- gathered in London on Friday to called on the G20 countries to maintain stimulus measures to promote financial stability and economic growth.

The BRIC-countries meeting was held on the sidelines of the G20 finance ministers and central bank governors meeting, to be held here this weekend.

The BRIC officials agreed that emerging market economies have shown resilience and helped the world economy absorb the impact of the deterioration of trade, credit flows and demand.

According to a communique, they called for more help to many small middle-income and low-income countries to deal with the economic crisis, reform of international financial institutions, enhancing and consolidating the role of the Group of 20 major developed and developing countries.

More help for middle-income & low-income countries

The BRIC countries said more needs to be done to address the threat that many small middle-income countries and low-income countries will lag further behind in the development process due to their lesser capacity to respond to the severity of the crisis and to adapt to the new world economic landscape.

"We realize that reducing the development gap between advanced and developing countries is of great importance to achieving a sustainable and more balanced global growth. Providing an inclusive process of growth in the world economy is a matter not only of fundamental fairness, but also of strategic importance to the economic and political stability of the world," they said in a communique.

The four countries stressed that protectionism remains a real threat to the global economy and should be avoided, both in direct and indirect forms. Ongoing regulatory reforms in the financial sector should not impede cross-border capital flows and investments. Failure to do so would risk compromising the expected recovery of the world economy.

"We believe that governments should work towards prompt and successful conclusion of the WTO Doha round in a way that ensures an ambitious, comprehensive and balanced outcome," they said.

In addition, the BRIC countries said they realize that permanent, sustainable reforms must still be implemented on multiple fronts, adding that the world needs a fair, equitable, inclusive and well-managed financial and economic architecture.

"We cannot miss the opportunity to change international practices, rules and governance structures to make the global economy more resilient to future crises. We also believe that there is a great need for a stable and predictable international monetary system," they said.

Reform of international financial institutions

The BRIC officials also called for a substantial shift of quotas and shares in the international financial institutions in favor of emerging market and developing countries.

The communique from the BRIC meeting said the reform is crucial to ensuring a stable and balanced global economy.

For the International Monetary Fund (IMF) and the World Bank Group, the main governance problem, which severely undermines their legitimacy, is the unfair distribution of quotas, shares and voting power.

The BRIC countries also proposed the setting of a target for that shift of the order of 7 percent in the IMF and 6 percent in the World Bank Group, so as to reach an equitable distribution of voting power between advanced and developing countries. This would lead the overall share of emerging market and developing countries in the IMF and the World Bank Group to correspond roughly to their share in world GDP.

The four countries stressed that they welcome the progress that had been made in strengthening the IMF's lending capacity. They thought IMF notes or bonds are the best option to provide immediate resources to the IMF without undermining the quota reform process.

The BRIC countries are together contributing US$80 billion to supplement the resources of the IMF.

For the reform of the World Bank, the BRIC countries believed that the World Bank Group also requires a review of its capital base in order to be able to fulfill an effective countercyclical role, especially in trade finance, and to deliver its development mandate over the long term.

Furthermore, they stressed the need to both expand the capital base and improve the efficiency and transparency of the governance structure at the World Bank.

Consolidation of G20

During the meeting, the BRIC countries noted the key role that the G20 has played as the focal point in the coordination of international responses to the global crisis

They underlined the great importance of consolidating the G20, saying that the group, now transformed into a leaders' forum, is establishing itself as an effective mechanism for international deliberation and decision on global economic and financial affairs.

"We believe this role should be enhanced and consolidated by improving the internal governance of the G20 and establishing clearer rules and working procedures, moving forward only on those issues on which there is clear consensus," they said.

In addition, they vowed to commit themselves to pursuing these objectives and strengthening the dialogue and cooperation among the four countries.

Although there are some positive signs, it is too early to declare the end of the crisis. The global economy still faces great uncertainty, and significant risks remain to economic and financial stability, they observed.

The BRIC countries called on the G20 countries to continue to implement countercyclical fiscal and monetary policies in a sustainable and internationally-coordinated manner, and take effective measures to guard against potential economic risks while respecting the particular conditions of each country.

(Xinhua News Agency September 5, 2009)