India and Russia boost IMF crisis firewall

India and Russia each pledged $10 billion for an IMF firewall meant to prevent future crises, marking a new level of commitment by emerging economies as they seek a greater voice.

At the summit of the Group of 20 major economies in Mexico, Indian Prime Minister Manmohan Singh hoped that all nations would open their wallets to the fund meant to support nations at risk from the global crisis.

"There is concern that the firewall available may not be adequate to deal with contagion," Singh, an Oxford-educated economist, told the summit in the resort of Los Cabos.

"The global economic situation is deeply worrying. Economic recovery is faltering and even fast growing emerging markets are slowing down," he said.

Singh voiced confidence that India would return to growth of between eight and nine percent annually as concerns mount that once-booming emerging nations will no longer provide a lift to the global economy.

Russian President Vladimir Putin also announced a $10 billion contribution, a spokesman said. Putin criticized the response to woes in the eurozone, saying that nations were pumping liquidity rather than seeking a "systematic solution."

The International Monetary Fund, hoping to prevent a worsening of the global economic turmoil, called last year for $500 billion in an emergency firewall. But the money has fallen short and it lowered its goal to $430 billion.

Singh and Putin earlier met with the leaders of Brazil, China and South Africa -- the other members of the so-called BRICS group of emerging economies.

In a joint statement, the BRICS said they were ready to step up contributions to the new fund but expected their money only to be used after current resources "are substantially utilized."

The five leaders also renewed calls for a greater say at the IMF and World Bank, which have historically been dominated by the United States and Europe.

"These new contributions are being made in anticipation that all the reforms agreed upon in 2010 will be fully implemented in a timely manner, including a comprehensive reform of voting power and reform of quota shares," the BRICS said.

The emerging economies' willingness to contribute comes even though the United States, the world's largest economy, has refused to take part.

President Barack Obama is eager to fix the woes of the eurozone, which are clouding over the US economy and his own re-election hopes, but faces intense political resistance at home to new financial commitments.

China did not immediately announce a commitment. He Jianxiong, a senior central bank official, told reporters that China's contribution to the IMF was tied to its quota within the international lender.

"China is still a developing country, not an advanced economy, so we will do what we can to pitch in," said He, the director general of the international department at the People's Bank of China.

After Group of 20 finance ministers and central bankers met in Washington in April, the IMF said it had come up with only $340 billion of the $430 billion it had aimed for the firewall.

The eurozone is by far the largest contributor, promising some $200 billion, raising concerns by some potential contributors that the firewall would eventually turn into a new European bailout fund.

In a draft copy of the G20 summit's statement obtained by AFP, the leaders promised the $430 billion firewall "will be available to the whole membership of the IMF and not earmarked for any particular region."

The G20 draft also recommitted to reforms of the Washington-based lender, saying that they were "crucial to enhancing the IMF's legitimacy."

Japan has contributed $60 billion, while Britain, South Korea and Saudi Arabia have each pledged $15 billion. Singapore and other European governments have also contributed smaller amounts.

Japan, speaking ahead of the BRICS statement, said that it made its contribution with the hope that other countries would follow suit.

"We also expect other countries, like our good neighbor China, to express its will to enlarge its credit line," Japanese foreign ministry spokesman Yutaka Yokoi told reporters.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Halt Indonesia drug executions until graft claims probed: Australia
    Halt Indonesia drug executions until graft claims probed: Australia

    Australia urged Indonesia Monday to delay the execution of two men for drug offences until a corruption probe into their case is complete, after a report that judges sought tens of thousands of dollars in bribes. "Bali Nine" drug traffickers Myuran Sukumaran and Andrew Chan could face the firing squad within days, along with others from Brazil, Nigeria, the Philippines and an Indonesian prisoner. "I should point out that Mr Chan and Mr Sukumaran's lawyers are pursuing action before the …

  • Pacquiao pleads for Indonesia to spare death row Filipina
    Pacquiao pleads for Indonesia to spare death row Filipina

    World boxing superstar Manny Pacquiao took time out Monday from final preparations for his $400 million megafight with Floyd Mayweather to plead for the life of a Filipina on death row in Indonesia. Pacquiao, a national hero in the Philippines, added his voice to a chorus of global opposition led by United Nations Secretary General Ban Ki-moon to the executions of a group of eight foreign drug convicts, including compatriot Mary Jane Veloso. The eight-division world champion, who will face …

  • FordPH Launches the All-New Mustang
    FordPH Launches the All-New Mustang

    Ford Philippines launched the all-new Mustang in a rock concert held at Bonifacio Global City, Taguig, last week .  The All-New Mustang is the sixth generation since Ford  launched the first model in April 17, 1964. “The all-new Mustang represents the very best of Ford and its arrival marks the latest chapter of the iconic muscle car’s rich legacy, crafted with a more contemporary look and feel.  With a history spanning more than 50 years, this iconic car is at the heart and soul of Ford and …

  • China maritime tensions dominate Southeast Asia summit
    China maritime tensions dominate Southeast Asia summit

    By Manuel Mogato and Praveen Menon KUALA LUMPUR (Reuters) - Southeast Asian leaders edged closer to open criticism of China's land reclamation in the disputed South China Sea at a regional summit on Monday, as the Philippines drew the ire of Beijing which called its objections to the work "unreasonable". The Association of Southeast Asian Nations (ASEAN) Summit in Kuala Lumpur, which was supposed to showcase the 10-member bloc's progress towards economic integration, was overshadowed by the …

  • The ‘All You Need’ 2015 Isuzu D-MAX launched
    The ‘All You Need’ 2015 Isuzu D-MAX launched

    Isuzu Philippines Corporation (IPC) just recently introduced the 2015 Isuzu D-MAX pick-up truck at the Clark International Raceway to show that their pick-up model can conquer any kind of terrain.The high-end LS variant and standard LT 4x4 is now equipped with a more powerful engine, the 4JK1-TC (Hi) 2.5-liter engine which with Common Rail Direct Injection and an intercooled Variable Geometry System (VGS) turbocharger. IPC also introduced a new standard ride variant, the LT-X 4x2 manual …

  • Limited Edition Honda CR-V and Jazz now available
    Limited Edition Honda CR-V and Jazz now available

    If you’ve always wanted to be part of an exclusive group of car owners, now might be the time for you to consider getting a Honda CR-V or Jazz.  Honda Cars Philippines Inc. (HCPI) just came out with their limited edition All New Jazz and New CR-V. …

  • ToyotaPH hit its highest monthly sales last March
    ToyotaPH hit its highest monthly sales last March

    Toyota Motors Philippines hit its highest monthly sales to date last March, registering 10,237 units sold.  This recent CAMPI report puts Toyota’s market share at 43.5% last month. …

  • VolkswagenPH launches Child Safety Initiative
    VolkswagenPH launches Child Safety Initiative

    Volkswagen Philippines just  launched the VW Child Safety Initiative (CSI) campaign which aims to support child safety on Philippine roads at the just concluded Manila International Auto Show (MIAS). The World Health Organization’s road safety facts show about 1.24 million die each year globally as a result of vehicle related accidents. Child restraint systems like child seats and booster seats also reduce risk for children by about 70% for infants and upto 80% for small children. This …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options