BRICS: The Stepping Stones Towards New Global Governance

Article originally published by Valdai Club

In the beginning of 2020 Russia assumed chairmanship in the BRICS amid an escalation in geopolitical risks and further shocks to the global economy. Among the plethora of priorities and initiatives that are traditionally launched by countries assuming chairmanship in the BRICS the focus this year is likely to accord more weight to exploring the pathways to strengthening the multilateral layers of global governance. In order to aspire to have a global impact on the evolving global governance construct of the world economy the BRICS need to form an effective platform for extending their economic cooperation to the Global South. Such a platform may be based on the BRICS-plus initiative launched by China, with the aggregation of regional integration blocks from the developing world serving as the core of such a platform.

Perhaps the most effective way in which the BRICS could prove to be instrumental in rendering the construct of the world economy more balanced would be to through filling the voids and the gaps in the current global governance system. These include imbalances within multilateral global institutions (between the weight of developed and developing economies), lack of coordination of regional institutions such as regional trading blocks, regional development banks, regional financing arrangements (currently there is no such mechanism in the global governance system), the acute need for an expansion in the array of reserve currencies available in the global economy, as well as the absence of an ex-ante, pre-determined anti-crisis mechanism that may involve coordinated fiscal and/or monetary stimuli across the globe during periods of severe downturn.

The BRICS are uniquely positioned to lead the global community in bridging the above gaps and inefficiencies. Apart from the increasing weight of the block in the world economy, the BRICS exercise a “comparative advantage” compared to other blocks and arrangements in reaching out to the rest of the world, given that this diverse grouping is present in all of the main regions of the developing world. The aggregation of the regional integration blocks where BRICS are members may form the basis of BRICS+, which in turn through greater openness and inclusivity will be in a much stronger position to address the gaps in global governance outlined above.

Most importantly, the BRICS through the BRICS+ framework can serve as a gateway to alternative liberalization and economic integration impulses vis-a-vis the developed world. Such an alternative should allow for a critical level of optionality in the direction of the development of the global economy, whether in terms of the economic models pursued by countries or in terms of currencies and payment systems that may be employed to service cross-border transactions. It should also allow the world economy to make full use of one of the most promising reserve for boosting global economic growth, namely South-South economic integration . . .