BRICS pledges USD 75 bln contribution to IMF's bailout fund

Business

oi-Sneha

By Sneha B K

Published: Tuesday, June 19, 2012, 12:34 [IST]

India and four other countries of the five-nation BRICS bloc today gave a big boost to IMF's USD 430 billion bailout fund for the debt-wracked 17 nation Eurozone pledging to contribute USD 75 billion with New Delhi's contribution being USD 10 billion.

The pledge was made at an informal meeting of BRICS Leaders presided by Prime Minister Manmohan Singh ahead of the opening of the seventh G-20 Summit in this Mexican resort town.

Besides India, the other nations in BRICS are China, Russia, Brazil and South Africa. According to Indian officials, China has agreed to contribute USD 43 billion while the contribution from Russia and Brazil will be USD 10 billion each. The South African contribution is USD 2 billion.

All the BRICS Leaders agreed that the Eurozone crisis threatened global financial and economic stability and that it was necessary to find cooperative solutions to resolve this crisis. The BRICS countries have been the new growth poles of the global economy. The pledges for fresh contributions were made after the Leaders agreed to increase resources available with the International Monetary Fund. In this context, they agreed to enhance their own contributions to the IMF. This is with the understanding that these resources will be called upon only after existing resources, including the New Arrangements to Borrow, are substantially utilised, an official statement said.

"This would promote adequate burden sharing amongst IMF creditors. 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 statement said.

PTI