Xiamen : Prime Minister Narendra Modi Monday strongly pitched for setting up of a BRICS credit rating agency to counter western rating institutions and cater to the financial needs of sovereign and corporate entities of developing nations. In an address at the plenary session of the BRICS (Brazil-Russia-India-China-South Africa) Summit here, Modi said a separate rating agency would help the economies of the member countries as well as other developing nations. “Last year we discussed pooling our efforts to create a BRICS rating agency. An Expert Group has since been studying the viability of such an agency. I would urge that the roadmap for its creation should be finalised at the earliest,” the prime minister said. Modi also called for stepping up cooperation among BRICS countries in the financial sector.
“Our Central Banks must further strengthen their capabilities and promote cooperation between the Contingent Reserve Arrangement and the IMF (International Monetary Fund),” the prime minister said. He said India has found that technology and digital resources are powerful tools in fighting poverty and corruption, adding that his government has stepped up the fight against black money and corruption. Modi said a strong BRICS partnership on innovation and digital economy can help spur growth, promote transparency and support the sustainable development goals. In this context, he suggested considering a collaborative pilot project under the BRICS framework, including private entrepreneurship. India had first mooted the idea of having such an agency for the BRICS grouping which can solve impediments for the emerging market economies posed by the present CRA market, which is dominated by S&P, Moody’s and Fitch. These three western rating agencies hold over 90 per cent of the sovereign ratings market now. Indian officials were at the forefront at last year’s BRICS Summit in Goa in pointing out the shortcomings and the need for having an alternative credit rating agency.
BRICS for conclusion of IMF quota reforms by 2019
The 5-nation BRICS economic bloc Monday pitched for concluding the long-pending IMF quota reforms by 2019 to give more say to developing nations in the multilateral lending agency. The quota reforms will increase the voting rights of emerging economies like India in the 188-member International Monetary Fund. India has voting rights of 2.64 per cent at the IMF. In terms of quota, India has a share of 2.76 per cent. China’s voting rights and quota are, 6.09 per cent and 6.41 per cent, respectively. Others in the top 10 largest members of the IMF are the US, Japan, France, Germany, Italy and the UK. As per IMF, a member’s quota determines that country’s financial and organisational relationship.
BRICS nations sign four pacts
To boost cooperation in different areas, including economy and trade, BRICS member states on Monday signed four agreements at the 9th Summit of the five-nation bloc here.
The four documents are: BRICS (Brazil, Russia, India, China, South Africa) Action Agenda on Economic and Trade Cooperation; BRICS Action Plan for Innovation Cooperation (2017-20); Strategic Framework
of BRICS Customs Cooperation; and Memorandum of Under-standing between the BRICS Business Council and the New Development Bank on Strategic Cooperation (NDB). NDB is a multilateral development bank set up by BRICS.