G-5 mulls alternative currencies for trade

L' Aquila (Italy), July 9 (ANI): Indian Foreign Secretary Shivshankar Menon on Wednesday said the Group of Five major developing economies meeting in Italy deliberated over the use of alternative currencies to settle trade among themselves.

"There was some discussion at the use of alternate currencies, not so much as reserve currencies. Brazil President Luiz Inacio Lula da Silva suggested that we should consider using our own currencies to settle our own trading accounts with each other. The Chinese Foreign Minister also said that was a long-term issue of reserve currencies," said Menon.

China, Russia and to a lesser degree India had expressed an interest in the talks between G-5 and G-8 leaders due on Thursday including debate on seeking long-term alternatives to the U.S. dollar as the global reserve currency.

Discussions were also held to seek new vehicles of growth in world economy.

Prime Minister Dr. Manmohan Singh laid stress on the need to make the poor bankable, which provided with skills and jobs, could create the demand and the consumption that actually could help to pull the economies forward.

"G-8, there will be a discussion on new sources of growth in world economy. So there was some discussion around the table on where these new sources of growth would come. PM's own feeling was, that for country like ours, which has a young population, the challenge is really to make the poor bankable.

In the sense that if they are given the skills and jobs, they can create the demand and the consumption which actually could help to pull these economies forward and bring growth into these economies, and that would be an enormous source of growth," said Menon.

The G-5 also held discussions on the need to reform financial institutions of international governance.

"There was also considerable discussion on the need to reform international, not just financial institutions, but also the institutions of international governance. This is a recurrent field.

Prime Minister spoke of it, so did Lula, so did all the other speakers, so did the Chinese representative, President Hu Jintao was represented by Tai Pin Ko, and he also spoke of this. It also comes out very clearly in the G-5 declaration that there is a very strong statement about the need to do that," Menon said.

Leaders of the G-5 nations also said the world's richest nations had greater responsibility to address climate change.

With only five months until a new U.N. climate pact is due to be agreed in Copenhagen, the G-5 called on developed nations to reduce their aggregate emissions by at least 40 per cent below 1990 levels by 2020.

Mexico even came up with the proposal of setting up a 'Green Fund', that is a multilateral fund that is to be structured in a manner that everyone contributes to keep check on emission levels.

"The green fund is a multilateral fund which Mexico has suggested, but contribution to this fund would be on the basis of several criteria. For example, the Mexican President has spoken about the criteria of historical responsibility that is, what is the total emission that has gone into the atmosphere since the dawn of the industrial age by specific countries? Secondly, what is the current level of emissions? That would be given a certain weight.

Level of development of a country, therefore what is the overall GDP of the country? What is the per capita income of a country? That would also a certain weightage given to per capita emissions of a country," said Shyam Saran, the Prime Minister's Special Envoy on climate change issues.

"You would make some allowances for least developed countries, of countries which are small and developing states, which have very specific requirements. But the fund is to be structured in a manner that everyone contributes, that is the Mexican proposal," Saran added.

Leaders of the world's richest and main developing nations meet on Thursday to try to find common ground on global warming and international trade, with the poorer countries seeking concessions.

Indian negotiators said developing countries first wanted to see rich nation plans to provide financing to help them cope with ever more floods, heat waves, storms and rising sea levels.

Temperatures have already risen by about 0.7 Celsius since the start of the Industrial Revolution ushered in widespread burning of fossil fuels, and Italy's prime minister said everyone should share the burden of tackling the problem. (ANI)