BRICS say ready to help IMF fight global crisis

Reuters

By Walter Brandimarte

WASHINGTON (Reuters) - Major emerging nations on Thursday said they are considering providing money to the International Monetary Fund or other global financial bodies to increase their firepower for fighting financial crises.

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Finance ministers of the so-called BRICS nations -- Brazil, Russia, India, China and South Africa -- called for the G20 nations to act swiftly and decisively to ease the euro zone debt crisis, the same way they fought the global financial crisis in 2008.

Their statement underscores a growing concern of major emerging economies about the escalating economic crisis in the developed world. It also highlights a dramatic change of fortune between the two groups of nations, with developing countries offering financial help that could be used to ease the economic crisis of traditional powers.

Failure to act now could turn the debt problems of the euro zone into another global financial crisis that would engulf emerging economies, Brazil's Finance Minister Guido Mantega warned.

"There is a risk that the sovereign debt crisis of some countries becomes another financial crisis," Mantega told reporters in a joint news conference with other BRICS finance ministers and central bank chiefs.

"We eased the 2008 crisis by fast and coordinated actions within the G20. We need to do the same now."

It is not clear how much money the BRICS would provide to multilateral institutions, however. Earlier this month, sources in the Brazilian government told Reuters Mantega would propose the group make billions of dollars available to the IMF.

In a statement issued after the meeting, the ministers said financial support would depend on individual country circumstances.

"There is (an) enormous amount of demand for resources at home for poverty reduction, so there is going to be a big, big tension between giving money to a multilateral institution for the purpose of restoring global stability and meeting our own aspirations at home," said India's central bank governor Duvvuri Subbarao.

Another idea vented by Brazil in the past few days, that the BRICS could offer direct aid to crisis-gripped European countries through the purchase of bonds, appears to have gotten little traction in the meeting.

"It didn't go that far," South Africa's Finance Minister Pravin Gordhan told Reuters in an interview.

(Additional reporting by Pedro da Costa, Jason Lange, Lesley Wroughton, Randall Palmer, Editing by Andrea Ricci)