Brazil's President, Luiz Inácio Lula da Silva, said during his visit to India that emerging countries, such as Brazil, India and South Africa, must operate in tandem or "be dragged down" by the international financial crisis.
In his opening address at the 3rd Summit of the Ibsa (a political group comprised of India, Brazil and South Africa), in New Delhi, he stated that isolated measures by each country are not going to suffice for safeguarding national interests.
Lula said it is "unacceptable" that developing countries should "pay for the irresponsibility of financial speculators." "We are at risk of falling victims to a financial crisis generated in wealthy countries. This is not fair. Our countries have rebuilt their economies with great effort.
"Thanks to that, these countries are experiencing an exceptional phase of expansion and macroeconomic balance. Thus, it is intolerable that we should pay for the irresponsibility of speculators who turned the world into a giant casino," he stated.
To the president, Brazil, India and South Africa should engage more actively in a coordinated international effort to fight the financial crisis. Problems in the world economy were also mentioned in the addresses of the prime minister of India, Manmohan Singh, and of the South African president, Kgalema Motlanthe.
Manmohan Singh also underscored the need for reforming international decision-making frameworks, such as the United Nations (UN). "We must also work to conclude the Doha Round with an emphasis on promotion of development and inclusive growth," he said.
The heads of state of the Ibsa countries have decided to summon an urgent meeting of ministers of Finance and Trade, and of presidents at the three countries' Central Banks, in order to discuss joint measures that may prevent the international financial crisis from affecting them more intensely.
"Can the crisis get to emerging countries? In case there is a deep recession in the European Union and the United States, it can, because they are buyers and we are sellers. That is why we must diversify our trade relations. Brazil and India are still tapping less than 10% of their potential. Brazil and South Africa are far from realizing their potential as well," he asserted.
Lula stated that there is a need for strengthening the domestic market, not interrupting any ongoing infrastructure work, and wait for the "money that is hiding away to appear, so as to ensure liquidity in the international financial system."
The president once again called for greater regulation in the financial system of wealthy nations. He said that he expects, for example, the International Monetary Fund (IMF) to "tell the United States" what is the limit for the operation of institutions, and the Central Banks in those countries to set the boundaries for the operation of investment banks.
"I first mentioned the subprime [the mortgage loan system that allegedly triggered the financial crisis in the United States] in September 2007. This is already October 2008, and only in the last two weeks did the main heads of state in Europe and the United States become attuned to the fact that there was a crisis going on in their countries," said Lula.
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