BRICS finance ministers band together in call to reform the IMF

Ministers of finance from the BRICS group of developing nations called for an IMF overhaul that will redistribute voting rights and end a tradition of putting a European at the fund’s helm.

The unified proposal, which is a first for the growing organization that aspires to represent the Global South, will be discussed at an IMF meeting later this year that will review the current quota system.

BRICS finance ministers propose changes to the IMF

The finance ministers of the countries forming the BRICS bloc are calling for reforming the International Monetary Fund (IMF) in a joint statement presenting their shared stance on the matter for the first time, as reported by Reuters.

Introducing a new formula for distributing voting rights and ending an informal rule to appoint European management of the fund are part of the proposal, approved at a meeting preceding the BRICS Leaders Summit in Brazil on Sunday.

The ministers convened in Rio de Janeiro on Saturday and agreed to support the unified position for the upcoming IMF meeting in December devoted to reviewing changes to the fund’s quota system that also determines contributions.

Insisting that the new distribution mechanism should increase quotas for developing countries, the government officials from BRICS stated:

“Quota realignment should reflect members’ relative positions in the global economy, while protecting the quota shares of the poorest members.”

The revised formula must be weighted by economic output and purchasing power, while taking into account the relative value of currencies, the finance ministers emphasized. That should better represent low-income countries, according to a Brazilian official, quoted in the report.

BRICS influence grows with membership

BRICS, which was founded by Brazil, Russia, India, and China, held its first ministerial meeting in 2006 and its first summit in 2009, before South Africa joined the group in 2010. The organization has since added Egypt, Ethiopia, Indonesia, Iran, and the United Arab Emirates as full members.

In 2024, it invited Algeria, Belarus, Bolivia, Cuba, Indonesia, Kazakhstan, Malaysia, Nigeria, Thailand, Turkey, Uganda, Uzbekistan, and Vietnam to participate as “partner countries,” bringing the total of nations involved to 23.

“That has added diplomatic clout to the group, which aims to speak for developing nations in the Global South, urging reforms of institutions long dominated by traditional Western powers,” Reuters noted.

In that context, BRICS is also proposing to put an end to a historic tradition of picking a European to head the International Monetary Fund. Its finance ministers made that clear in their statement:

“With full respect to a merit-based selection process, regional representation must be enhanced for the IMF management, overcoming the anachronistic post-World War II gentlemen’s agreement that is unfit for the current world order.”

Group confirms talks on NDB guarantee mechanism

The document also confirmed plans to establish a new guarantee mechanism backed by the group’s New Development Bank (NDB), which is supposed to cut financing costs and boost investment in developing countries.

The main role of the BRICS-funded NDB is to support public and private projects through loans, guarantees and other financial instruments. The Shanghai-based bank was established a decade ago and has a dozen members now, expanding its scope beyond BRICS.

On Friday, Russian Finance Minister Anton Siluanov, who is also in Brazil, revealed that the financial assets of BRICS nations have surpassed $60 trillion and urged for attracting more capital, including by employing digital financial assets.

Meanwhile, Indonesia’s Deputy Finance Minister Thomas Djiwandono was quoted by the Antara news agency as stating that the BRICS’ development bank will not evolve into a dominant institution like the International Monetary Fund or the World Bank.

Speaking to the Indonesian media outlet in Rio, he elaborated that the BRICS approach to governance, which emphasizes equality and mutual respect among member states, sets the NDB apart from traditional global financial institutions.

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