The president of Brazil, Luiz Inácio Lula da Silva, said that emerging market nations like Brazil must have a strong say in developing strict international rules for financial institutions which will help control the anarchy hitting the world economy.
Brazil and other developing countries "need to learn from this crisis to construct a new world economic order," Lula said in a speech to Brazilian and US trade investment forum attended by US Commerce Secretary Carlos Gutierrez.
The Brazilian leader demanded tighter regulations for high risk investments in rich nations that he and many other leaders of developing market nations blame for eroding their economies after they spent decades adopting US backed reforms.
New rules are crucial to "control the anarchy that is hitting the world economy" said the Brazilian president, laying out harsh criticism for bankers who made risky bets on mortgage-backed securities that went bad.
"What happened is that some people acted like they were teenagers with failing grades on their report cards, wanting to hide them from their parents," he underlined.
Central banks around the planet must adopt new rules, and governments must make sure financial institutions comply or are punished to prevent another debacle like the US born crisis, said Lula.
The president reiterated his belief that Brazil is better insulated from a deep domestic economic crisis because it has put its financial house in order, paying off its foreign debt and accumulating more than US$ 200 billion in foreign reserves.
He emphasized that Brazil will stick to its plans for hundreds of billions of dollars in infrastructure investment in coming years, including hydroelectric dams, highway improvements and railways.
On Friday the São Paulo Bovespa index ended the week at 35.609 points, having fallen for the seventh day in a row. The index had fallen as much as 10% earlier, forcing authorities to suspend trade for 30 minutes. Bovespa has fallen 20% this week, the worst weekly decline since October 1997 and down 47% since the beginning of the year.
Lula da Silva also called for a new global free trade agreement as an important step to prevent economic chaos. He revealed the had been lobbying for progress on the stalled World Trade Organization trade negotiations several days ago in a phone call with President Bush, and will deliver the same message in India next week to Prime Minister Manmohan Singh.
US Secretary of Commerce Gutierrez echoed the Brazilian leader's message that free trade, and not protectionism, is needed to bolster the global economy but the said there "is little hope of an agreement on a world trade treaty until after the inauguration of a new US president in January".