Dipanker De Sarkar/IANS
London, Sep 6: India, China, Russia and Brazil have opposed protectionism, while demanding greater say in the global financial architecture and equitable voting rights for emerging economies in institutions like the International Monetary Fund and the World Bank.
"Protectionism remains a real threat to the global economy and should be avoided, both in direct and indirect forms," said a communique by the four countries, collectively referred to as BRIC economies.
The communique was issued after a meeting among their top economic policymakers here. Finance Minister Pranab Mukherjee led the Indian side, which also participated at a meeting of G20 finance ministers and central bank governors.
The communique said the ongoing regulatory reforms being undertaken in the global financial and trading systems should not impede cross-border flows of capital and investment.
"We believe governments should work toward prompt and successful conclusion of the World Trade Organisation (WTO) Doha round in a way that ensures an ambitious, comprehensive and balanced outcome," the communique said.
Earlier, India formally committed to investing in the IMF, which Prime Minister Manmohan Singh had proposed during the G20 Summit here in April.
"India has decided to invest up to $10 billion of its reserves in notes issued by the IMF," Mukherjee said after the meeting. It marked a major shift in India's economic strature globally as in the early 1990s, it had to seek funds from the IMF.
The Indian pledge is part of a total of $80 billion that the four BRIC countries will invest in the IMF in order to replenish its fund aimed at helping out countries, which are struggling in the current financial crisis.
China alone will account for $50 billion of this amount.
In return, the four countries have sought a greater say in the running of the IMF and other international financial institutions such as the World Bank, including a larger share of quotas and voting, said Brazil's Finance Minister Guido Mantega.
US Treasury Secretary Timothy Geithner had also joined a part of the meeting, Mukherjee described as "an acknowledgement of the group's emergence as a key voice in global economic and financial issues".
"We propose 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," the communique said.
"The next managing director of the IMF and the next president of the World Bank should be elected in such a manner, irrespective of nationality or any geographical preference."
A source privy to a G20 meeting said the US has responded "positively" to the proposal to give India and other leading emerging economies a greater say in the running of international financial architecture.
"The US position paper has mentioned a figure of five percent, which in any case is very close to the BRIC position. It's virtually the same," said the source, referring to the shift demanded in the voting rights in IMF and the World Bank.
Reforms to IMF and World Bank governance emerged as one of the most pressing issues for BRIC countries that showcased their economic growth at the Sep 4-5 gathering here of the world's economic powerhouse - the Group of 20.
"Financial stability has to be included in its mandate to institutionalise the relationship with the Financial Stability Board. This should lead to more even-handed surveillance of all systemically important economies," Mukherjee said.