The G-24 countries have welcomed the decision of the BRICS nations (Brazil, Russia, India, China and South Africa) to establish a new development bank.
In a communique issued yesterday at the end of the meeting of the ministers of intergovernmental group of 24 on the International Monetary Fund, the G-24 said international financial institutions, including the World Bank Group, have a key role to play towards this end, but given the magnitude of the needs and financing gap, alternative, complementary mechanisms will also be important.
“In this context, we welcome the agreement among the BRICS to establish a new development bank and look forward to further elaboration of the bank’s engagement with other MDCs (Millennium Development Countries) and relevant financial institutions,” the communique said.
Later at a news conference, Luis Videgarary, Secretary of Finance and Public Credit, told reporters that the South African Finance Minister briefed the group on the progress made on the BRICS decision to establish a new developmental bank.
“It is still in its initial stages of creation,” Videgarary said.
Long-term financing
The scale of the infrastructure financing needs, and the deficiencies in the existing development financing architecture, necessitate the strengthening and reorientation of all pillars of long-term financing, it said.
G-24 countries also called for the need of reform of the IMF. “We recognise that the short-comings of the variability measure must be addressed in order to adequately reflect the need for IMF resources if it is to be maintained in the formula and ask that any compensation with respect to variability must take into account its primary goal of enhancing the quota shares of vulnerable countries, including the poor,” it said.
IMF’s 2010 quota
Reiterating the importance of meeting the commitments made as part of the IMF’s 2010 quota and governance reform to give credibility to the ongoing efforts to enhance the legitimacy and effectiveness of the IMF, G-24 regretted that the October 2012 deadline for entry into force of the 2010 quota and governance reform was missed and that there was no agreement for a new quota formula by the review deadline of January 2013.
Millennium development goals
With the deadline for the Millennium Development Goals approaching, G24 stressed the critical importance of accelerated efforts to meet internationally agreed targets, especially for those countries that are lagging behind.
It welcomed the work initiated and coordinated by the UN towards developing a framework for the post-2015 development agenda, and encouraged the World Bank Group to continue to support the UN-led efforts.
“We call for an ambitious set of goals, with a clear plan and solid commitment to mobilise the necessary resources, and to strengthen partnerships and enable conditions for development, including financial system strengthening, recognition of countries’ special needs, and improved aid delivery,” the communique said.