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BRICS finance ministers meet in Washington
October 11, 2013, 8:25 am

The role of emerging markets will grow stronger says the UN General Assembly [AP]

The ministers tried to downplay recent concerns over a slowdown in emerging markets [AP]

BRICS finance ministers have met in Washington on the sidelines of the annual meetings of the International Monetary Fund (IMF) and World Bank to discuss developments on the BRICS Bank and the $100 billion dollar Contingency Reserve Arrangement.

The ministers also tried to downplay recent concerns over a slowdown in emerging markets.

“We don’t see justification for such a level of pessimism,” Brazil’s Deputy Finance Minister Carlos Cozendey told reporters in Washington.

“Even the IMF in its report says that despite everything that is happening emerging nations continue to support the global economy,” added Cozendey.

The IMF slashed its forecast for global developing economies by 0.5 per cent to 4.5 per cent this year in its latest World Economic Outlook, and by 0.4 per cent to 5.1 per cent next year.

Indian Finance Minister Palaniappan Chidambaram has also said that he does not agree with the IMF projections.

“I know that the World Economic Outlook report does not share my optimism, but I may tell you that we do not share their pessimism,” he said in Washington.

A massive capital flight from emerging markets has weakened domestic currencies amid worries that the US Federal Reserve will halt its stimulus programme.

“Our concern is that emerging markets are being called all sorts of names, fragile, etc when in fact that is not the case,” South Africa’s Finance Minister Pravin Gordhan told Reuters.

“Our fundamentals are pretty sound, although some of them (emerging nations) face particular vulnerabilities, but so do European countries,” said Gordhan.

Meanwhile, the IMF has warned EU leaders to deliver on earlier pledges and that it does not rule out a recurrence of debt problems for the eurozone.

“Unemployment rates would stay at record highs for many years in the euro area periphery, and concerns about debt sustainability would return to the fore,” said the IMF report.

In an exclusive interview with The BRICS Post earlier this week, the South African finance minister had said that ”we are at the very early stages of an exciting project.”

“There are a couple of very concrete things we are working on. The BRICS business council, the development bank, the CRA [Contingency Reserve Arrangement] and the investment and trade opportunities that flow from the business sectors that are beginning to understand each other,” Gordhan said.

Gordhan also said that work was still underway on the BRICS development bank and that more details will be finalised by the 2014 BRICS Summit in Brazil.

“We have passed the first important stage of clearing almost half the issues and getting agreement on them and now we are [at] the second stage and hopefully by March next year we will have a story to tell.”

With inputs from Agencies 

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