Raises concern over impact of rising crude oil prices

Expressing concern over the continued debt crisis in the European Union zone and its fallout on the world economic order, Brazil, Russia, India, China and South Africa (BRICS), on Wednesday, called for a collective action to deal with the situation.

“Adversity of financial crisis is being faced by all. There is a need to work together to overcome this problem,” Commerce and Industry Minister Anand Sharma said here at the BRICS Business Forum 2012, organised ahead of the BRICS Summit. The Forum was organised by the Federation of Indian Chamber of Commerce and Industry (FICCI), Confederation of Indian Industry (CII) and Associated Chambers of Commerce and Industry of India (Assocham).

Speaking on the occasion, Chinese Commerce Minister, Chen Deming, said the U.S. recession and EU debt problems were impacting all and pulled down even Chinese exports to the region.

“I am sure they will recover. There is a need to prevent the EU crisis quickly before it gets worse. There has been a decline in demand in the European markets. Despite this we have to sustain a high level of growth,” he added.

Russian Minister for Economic Development and Trade Elvira Nabioullina said that over 50 per cent of Russian trade went to eurozone.

“The world has to stop accumulating risks. There is a need to work closer,” she said.

The BRICS members also raised concerns over the impact of rising crude oil prices in the wake of sanctions being imposed by Europe and the U.S. on Iran.

“Rise (in price) of crude oil has impacted all countries. The Iran issue has become an issue for all. We need to continue with normal relations with Iran, but, at the same time, we respect UN resolution. We hope that unilateral movement by one country will not affect other countries,” Mr. Deming said.

Mr. Sharma said that due to volatility in oil prices, India's trade balance was widening and hurting the economy. “Our trade account is stressed primarily because of oil and gold imports,” he said.

On the proposed development bank by BRICS nations, Brazilian Development, Industry and Foreign Trade Minister Fernando Pimentel said the country would support the proposal tomorrow [Thursday] to fasten the process.

“This is a powerful tool. Creating such a tool may be a major support to overcome the EU crisis,” he said.

Development banks of BRICS nations are in advanced stage of reaching a pact for extending cross-country credit in local currencies of member-nations. Commenting on trade among BRICS nations, South African Trade and Industry Minister Rob Davies said that there was a huge potential to increase trade among member-nations.

“It is not just government's effort which will help increase trade. The business community of BRICS needs to come closer,” he said. At present, intra-regional trade of BRICS stood at $230 billion.

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