UK new special relationship. Mervyn King calls for IMF, G20 merger
Bank of England Governor Mervyn King wants to merge the IMF and G20, in hopes of creating a governing council that would encourage countries with high-savings rates to spend more at home.
UK jumps into the G20 bandwagon and then tries to exercise control of the nerged thing by doing what they excel: DIVIDE AND RULE
They aim to exercise power by playing Brazil against China. India against China.
Brazil against India and so on...
Lack of common interests hampers joint policy
By Alan Beattie
Published: January 18 2010 02:00 | Last updated: January 18 2010 02:00
In the scales of global governance, the Brics are becoming increasingly heavy. As the countries' economic heft has increased, they have become bolder in throwing their weight around in policy tussles.
But though that may be good for the political legitimacy of the institutions involved, particularly the International Monetary Fund, it does not necessarily lend itself to smooth and rapid decision-making.
The Bric heads of government met first in Yekaterinburg, Russia, last year and will gather again in Brazil later this year. Ministers and senior officials have been meeting on the fringes of other gatherings, such as the IMF and Group of 20 conferences, since 2008.
"Every time there is a big meeting there will now be a Bric meeting first," says one official from a Bric country. Requests from the US Treasury for high-level meetings with the Bric ministers confirm the grouping's significance, the official says.
Yet aside from the long-running debate about giving developing countries more votes in the IMF, it has proved hard to hammer out a substantive set of subjects on which the disparate Bric countries have the same interests.
They have already had to drop the subject of exchange rates. There is a common view in Brazil - as in the US - that China's undervalued currency is in effect stealing export markets from Brazilian companies. "We are being affected by China's exchange rate policy, not just in third markets but inside our own economy," says Roberto Abdenur, former Brazilian deputy foreign minister and ambassador to China.
Nor is there a single model of economic management that the Brics espouse and want to propagate. Indeed, there are wide and growing contrasts between, say, the moves towards a social democratic market economy in Brazil, buttressed by fiscal orthodoxy, and the increasingly authoritarian politicised intervention in Russia.
Similar groupings of developing countries in other contexts have often struggled to raise their position beyond a low common denominator, or prevent one particularly powerful member from setting the tone.
In the so-called Doha round of WTO global trade talks, where India and Brazil have been in a core negotiating group, they have battled to put together a comprehensive negotiating position. Brazil's interests as a highly competitive agricultural exporter have clashed with India's wish to protect its small farmers.
In the Copenhagen climate talks last December, China was widely accused of blocking a deal that would have been in the interests of many developing nations.
Pradeep Mehta, secretary-general of Cuts International, a think-tank based in Jaipur, says: "It is increasingly obvious that the main divisions are going to be between developed and developing, and that China will be the leader of the developing world."
In diplomacy, as in economics, the power wielded by the Bric countries may end up being distinctly weighted towards the wishes of Beijing.
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