By Yaroslav Lisovolik
April 15, 2022 Anno Domini
Translated from Russian
In the context of an unprecedented growth of geopolitical risks in the world, there is a growing awareness that the old architecture of the world order is being replaced by a new configuration of international relations and regional blocs. One of the most important driving forces of this kind of transformation of the world economy is the countries of the global South, which create their own institutions, regional integration associations and financial settlement systems. Among the leaders of these processes are the largest emerging markets, primarily the BRICS countries. So, in March 2022, Deputy Foreign Minister Sergei Ryabkov said:
“The BRICS countries, which make up almost half of the world’s population and a significant part of world GDP, will be one of the backbones of the new emerging world order.”
In order for BRICS to become the basis for a new world order, this bloc must offer other countries of the world economy new paradigms for the development of a global scale. Such areas in the new world economic architecture may include the restart of globalization based on a new platform of countries and regions, the creation of a new institutional system for the modernization of the countries of the world economy, the creation of a new pool of reserve currencies from emerging markets, the creation of an alternative track to the Western format for the development of the world economy, the creation new regional blocs and platforms for their coordination and development.
Almost all of these possible paradigms of a global scale can be implemented within the broad BRICS+ format, which opens up various options for the BRICS countries to interact with the rest of the world economy. The BRICS+ format, initiated by China in 2017, still has to get its tangible contours of development in many respects, although some possible models for cooperation within its framework have already been announced by representatives of the BRICS countries. China’s BRICS Presidency in 2022 creates a favorable basis for the development of the BRICS+ format, while Chinese representatives have already stated that they are considering the development of the BRICS+ concept in the context of interaction, including regional integration associations of the countries of the global South.
From the point of view of practical implementation, one of the most accessible formats for BRICS+ is the union of three all-continental regional associations, including the African Union, CELAC (an association of Latin American countries), and the SCO/SCO+ in Eurasia. This kind of alliance provides maximum coverage for the countries of the global South, which does not require deep and complex economic integration or harmonization of economic interaction formats on all three continents. The expanded format provides an opportunity to coordinate interaction for developing countries in the international arena in the field of promoting the priorities of the global South agenda in the field of sustainable development.
This year, relatively favorable conditions are emerging for the formation of such an expanded circle of interaction between developing countries: in Latin America, within the framework of the CELAC association, Argentina presides, which has recently stepped up steps to establish interaction with BRICS. The suspension of Brazil’s participation in CELAC in 2020 seems to be a deterrent in the Latin American direction, but this factor is likely to be temporary. The SCO in 2022 is chaired by Uzbekistan, a country that is actively involved in the integration processes in Eurasia after a period of closedness. Senegal takes over AU chairmanship in 2022 , which promotes issues of coordination and cooperation of regional integration associations, and also significantly increases interaction with the BRICS countries, primarily with China .
The second track within the framework of BRICS+ can be a platform for interaction between regional integration blocs, in which the BRICS countries participate. This kind of platform may include the priority regional integration projects of the BRICS countries – MERCOSUR, the South African Customs Union, BIMSTEK, the EAEU, as well as the RCEP or the Free Trade Area of China and ASEAN. All these regional blocs can cooperate in a coordinated manner towards the harmonization of standards and a more open economic space for trade and investment by the BRICS countries and their regional partners. It is important to note that at this stage, most of the countries of the association form their foreign trade policy precisely in the format of regional integration blocs (RF-EAEU, Brazil-MERCOSUR, South Africa – SACU).
When creating such platforms, the spirit of multilateralism and the construction of a new architecture in the interests of the entire expanded format of the global South is important. Attempts to form BRICS+ on the basis of exclusively narrow national interests may adversely affect the prospects for the development of the BRICS+ initiative itself and other multilateral initiatives of the BRICS countries. For BRICS+ as a new format of interaction between the BRICS countries, the key to success lies in the multimodality of various formats of interaction within the framework of BRICS+, which can take into account the entire range of national interests and priorities of the BRICS countries and their regional partners.
Thus, within the framework of the BRICS+ format, two tracks of interaction between the countries of the global South can be formed:
- The SCO + AU + SELAC format is the most inclusive and focused on the broad interaction of developing countries in international organizations. This kind of format may to a greater extent reflect the vision of China, announced back in 2017 by Chinese Foreign Minister Wang Yi, who announced BRICS+ as the largest platform for interaction for developing countries.
- A platform for the “integration of integrations” of regional economic groupings, in which the leaders are the BRICS countries. This format largely reflects the Russian BRICS+ development concept announced by Sergey Ryabkov at the beginning of 2018: “We invite our partners to consider the BRICS+ format as a development platform for what could be called ‘integration of integrations’.”
If the Chinese BRICS+ format is a kind of maximum coverage of the global South in breadth, then for the Russian BRICS+ format, the depth and harmonization of the integration of priority regional projects of the BRICS countries becomes more important.
In general, the number of tracks and formats of interaction between developing countries can be much larger and reflect the globalization vision of each member of the BRICS bloc. In other words, the BRICS+ platform can be the basis for the divergence of models and platforms for development and economic integration, in contrast to the unipolar/“mono-model” approach of the integration processes of developed countries. In this regard, for the development of the BRICS+ format within this kind of divergence of development patterns, it is important that India, Brazil and South Africa also present their vision of the BRICS+ concept, as well as globalization within the global South and beyond. It is possible that for India,
Activation of the role of BRICS in the international arena can also occur through the improvement of the mechanism of functioning of the Pool of Conditional Foreign Exchange Reserves (CUVR) of the BRICS. In the last few years, the BRICS RWR has stepped up coordination with other regional financial institutions (RFIs) through regular IMF consultations with regional financial facilities. At the same time, the activity of the BRICS PWR has been significantly lower in response to the crisis in the BRICS countries in recent years compared to the BRICS NDBs. Within the framework of the BRICS+ mechanism, it would be possible to consider the possibility of strengthening the mandate of the BRICS IWR to monitor the macroeconomic situation in the BRICS countries, to develop coordinated anti-crisis measures, as well as to interact with the BRICS IWR with other RFIs of developing countries and regional partners of the BRICS countries. In particular, it would be possible to form a regular mechanism for coordinating the BRICS IWRP with the Eurasian Fund for Stabilization and Development (EFSD), the Chiang Mai Initiative of the ASEAN countries and their regional partners (CMIM), as well as the Latin American RFO FLAR. Another direction could be the expansion of membership in the BRICS IWR by including regional partners of the BRICS countries, including a number of countries that have received membership in the BRICS NDB.
The prospects for the transformation of the world economy are largely related to the coordination of actions between the largest countries of the global South, primarily between the BRICS countries. However, for a truly global restart of the development of the world economy, a more expanded format of BRICS + interaction is needed, which will allow other countries of the developing world to be involved in this process. In this case, the reformatting of the global economy will become truly inclusive and sustainable. An important tool for scaling up the transformation of the world economy can be the format of “integration of integrations” within the framework of cooperation between regional integration blocs of the countries of the global South. China’s BRICS Presidency in 2022 can give an additional impetus to the processes of building platforms for interaction between regional groupings of developing countries.
This kind of BRICS progress towards creating platforms for cooperation between regional integration associations of developing countries can become the basis for the formation of a common platform for cooperation among all countries of the global South. This expanded platform could contribute to the growth of the inclusive development and openness of the countries of the global South, their greater dynamism, the structuring of integration associations, filling the vacuum and “white spots” on the map of the integration processes of the developing world. So far, we have to state that developed countries are much more provided with dynamic and structured integration associations compared to the countries of the global South.
Yaroslav Lisovolik , Doctor of Economics, Program Director of the Valdai International Discussion Club, RIAC Member