Sunday, June 14, 2009

BRIC seeks global voice at first summit

By Guy Faulconbridge
MOSCOW (Reuters) - The leaders of the world's biggest emerging markets -- Brazil, Russia, India and China -- meet next week for their first formal summit, seeking a louder voice on the global stage.
Leaders of the so-called BRIC nations will discuss ways to reshape the global financial system after the worst economic crisis for decades and ideas for a new reserve currency to reduce dependency on the U.S. dollar may be on the agenda.
"The good news is that rich countries are in crisis and that emerging countries are making a huge contribution to save the economy and, consequently, save the rich countries," Brazilian President Luiz Inacio Lula da Silva told Reuters on Wednesday.
"Wealthy countries are no longer the only ones that account for the world's production capacity and consumption," he added, saying the BRICs should work together to "change the political and trade geography of the world.
The BRIC term was coined by Goldman Sachs economist Jim O'Neill in 2001 to describe the growing power of emerging market economies. The June 16 summit in the Russian Urals city of Yekaterinburg marks a step toward cooperation as a group.
BRIC countries account for 15 percent of the $60.7 trillion global economy but Goldman Sachs predicts that in 20 years time, the four countries could together dwarf the G7 and China's economy will overtake the United States in total size.
"BRIC is a myth but a myth that is slowly becoming a reality," said Alexei Pushkov, a professor of international relations and a leading Russian journalist.
"This summit shows there is a tentative community taking root. The question is whether it can become a political institution or whether it will be dormant."
Behind the bluster, divisions abound.
Chinese President Hu Jintao brings as much GDP to the table in Yekaterinburg as the three other BRIC countries combined and Beijing is wary of being seen to confront the United States.
It is Russia and Brazil -- arguably the weakest BRIC members -- that have been most vocal about pushing for discussions on reducing dollar dependence.
China, the world's largest holder of U.S. Treasuries, says the dollar will retain its dominant role and analysts said there is unlikely to be substantial agreement on major issues at the summit.
"This meeting shows the growing influence and voice of the emerging world, something that the Obama administration is also paying attention to," said Qin Yaqing, vice president of China Foreign Affairs University in Beijing.
"But there are also big differences between them. So complete cooperation between them would be extremely difficult, but partial cooperation is possible, and a meeting like this will help amplify their shared voice," said Qin.
Russian President Dmitry Medvedev has made proposals on giving a greater role to the International Monetary Fund's Special Drawing Rights that echo ideas from Chinese central bank chief Zhou Xiaochuan. Continued...
Source: Reuters

BRICs won't mull new reserve currencies: Kremlin

MOSCOW (Reuters) - Leaders of Russia, China, India and Brazil do not intend to discuss new global reserve currencies at their first summit in the Urals city of Yekaterinburg on Monday, a top Kremlin aide said on Sunday.
"We will hardly be discussing the new reserve currencies," Sergei Prikhodko told reporters. "As far as practical issues are concerned, we will speak more about the possible ways to reform international financial institutions."
Brazil, Russia, India and China are trying to strengthen their clout as the producers of 15 percent of global output by building up their BRIC grouping into a powerful world player.
Russia, holder of the world's third largest foreign exchange reserves, has called for the world to become less dependent on the dollar and suggested that the yuan and the rouble could become reserve currencies in the future.
Concerns that dollar's role as the dominant reserve currency has contributed to global financial instability has been discussed by BRIC's top security officials, who met in Moscow last month to prepare the summit.
Brazilian Strategic Affairs Minister Roberto Mangabeira Unger told Reuters last month the summit was due to discuss the role of the U.S. dollar, strengthening the G20 group, reshaping the world trade regime and reform of the United Nations.
"We don't want a European-style central bank made global. We don't want a global Brussels," he said, adding that the International Monetary Fund's Special Drawing Rights were an option as long as the issuer's powers were limited.
Russian Finance Minister Alexei Kudrin said on Saturday the dollar's role as the world's main reserve currency was unlikely to change in the near future
"It is hard to say that in the next few years this system will change significantly," Kudrin told reporters after a meeting of finance minister of the G8 (Group of Eight) leading economies in Italy.
(Writing by Oleg Shchedrov; Editing by Jon Boyle)

Source: Reuters

Pfizer eyes deals to raise emerging markets presence

Pfizer eyes deals to raise emerging markets presence
By John Irish
DUBAI (Reuters) - Pfizer Inc, the world's largest drugmaker, is looking to conclude deals in emerging markets over "few months" to raise its share of a market estimated at about $80 billion, an executive said on Sunday.
Pharmaceutical companies are increasingly turning their attention to developing nations as they face tougher conditions in more mature markets.
The drugmaker struck a $68 billion deal in January to acquire U.S. rival Wyeth to help shore up profits and in May signed licensing agreements with two Indian-based companies, including Aurobindo Pharma Ltd as it seeks new growth opportunities in generics and emerging markets.
"We will have other elements in the next few months," Pfizer's emerging market business unit president Jean-Michel Halfon told Reuters when asked if the firm was eyeing new acquisitions.
"We see opportunities coming from the financial crisis ... opportunities to build partnerships in emerging markets."
Halfon declined to give further details.
Pfizer is seeking to add $3 billion in annual sales by 2012 in developing markets and is targeting China, Brazil, Mexico, Russia, Turkey, India and to a lesser extent the Middle East to help lift its 4 percent market share, Halfon said.
"We start in position number three in emerging markets and we want to be number one."
The emerging markets pie could increase to $120 billion by 2012 with China providing the greatest growth prospects, Halfon said.
The group saw 28 percent growth in sales in the world's most populous nation in the first quarter, he said.
Pfizer, which posted $48 billion in revenue last year, faces severe sales declines in the coming years from patent expirations to its own products, including its blockbuster Lipitor cholesterol treatment.
It has responded with the purchase of Wyeth, which Halfon said the firm was looking to complete "somewhere in the fourth quarter" and the restructuring of its operating model around separate units including generic drugs and emerging markets.
"We are in a very competitive environment and need to make decisions very fast in this area, so an example of what we're doing is managing the acquisition of Wyeth ... It will add significant revenues to our organization in emerging markets by adding footprint in vaccines, biological medicine ..."
Halfon said he expected growth in the Middle East of about 10-12 percent over the next five years as opportunities arise from sustained economic activity in the world's largest oil exporting region.

Source: Reuters

Canada decries "rising tide" of U.S. protectionism

Canada decries rising tide of U.S. protectionism
By Euan Rocha
NIAGARA FALLS, Ontario (Reuters) - Canada decried on Saturday a "rising tide of protectionism" in the United States, but Secretary of State Hillary Clinton said the "Buy American" provisions in an economic stimulus package will not interfere with U.S. trade obligations.
Clinton, during a brief visit to Canada, said she and Canadian Minister of Foreign Affairs Lawrence Cannon discussed the issue during a meeting. The United States and Canada are each other's largest trade partners, with close to $600 billion in total two-way trade of goods in 2008.
"Canadians are worried by a rising tide of protectionism in the United States, in various circles, and our government is very concerned in particular about the negative impact of the 'Buy American' legislation being felt on Canadian businesses," Cannon said during a joint news conference with his U.S. counterpart.
Canada sends about 75 percent of its exports to the United States and could be harmed by U.S. protectionism. Key areas of trade include oil and gas, agriculture, vehicles and machinery.
"We also have been very focused on ensuring that nothing interferes with the trade between our countries," Clinton said.
"I deeply respect the minister's comments and his concerns, but, as President (Barack) Obama has said, nothing in our legislation will interfere with our international trade obligations, including with Canada," Clinton added.
In February, Congress passed the $787 billion stimulus package with a provision that public works projects such as infrastructure improvements should use iron, steel and other goods made in the United States, as long as that did not contravene commitments to trade agreements.
The Canadian government previously had expressed concerns about the "Buy American" language.
Ottawa says Canadian companies are being discriminated against by U.S. state and municipal governments on some water and sewage treatment projects funded by the bill.
Canadian Prime Minister Stephen Harper on Wednesday said Canada would continue to protest the "Buy American" policy, saying that "we will continue to make the case against creeping protectionism, both at home and abroad."
U.S. steel companies and many small- to medium-sized manufacturers lobbied hard for the "Buy American" provisions, which was opposed by large U.S. business groups.
(Editing by Will Dunham)

Source: Reuters
 

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