BRICS – the dream deferred, for now
The commanding position that the BRICS economies once held in the post-global financial crises era legitimised their claims for more equitable global governance institutions. Equally, they believed that the development challenges they shared could be addressed through a collective voice in international forums on the back of their strong economic performances.
Yet the political and economic realities within the BRICS have changed drastically since their first Summit in 2009. While the Indian presidency believes that their common dream is still best pursued through further institutionalisation of the group, this might prove difficult without the full engagement of all five members and a greater commitment and willingness towards compromise.
In addition, they need to deal decisively with their domestic economic and political constraints.
The recent BRICS Academic Forum (19 – 22 September) provides key insights into what can be expected when the leaders of this grouping meet in India this week. Under the Indian leadership a strong affinity for the institutionalisation of the BRICS has emerged, whether through physical means by creating the New Development Bank (NDB), or through softer approaches such as agreements.
Institution-building signals greater political commitment to a particular cause because of the higher associated costs of setting up an institution. It also implies the introduction of legal rigour enabling greater structure, codification and less deviation, all of which support certainty and ultimately strengthen co-operation.
In addition, an institution-building agenda allows the group to move away from key personalities (e.g. China’s Xi Jinping, Russia’s Vladimir Putin and South Africa’s Jacob Zuma) towards more sustainable cooperation mechanisms. As India seeks to put its stamp on the BRICS group, some of the institutions already mooted under its presidency include a BRICS/NDB Think Tank, a BRICS financial ratings agency and the establishment of a common set of standards to regulate trade between members.
While institutionalisation of cooperation is certainly the way forward, the group be wary of creating a Brussels-like organisational monstrosity. Objections from member countries already highlight that the countless working groups, technical committees, forums, taskforces, high level expert committees, common agendas and principles and official meetings are a strain on members. This is especially true at a time when fiscal austerity is required at the domestic level and organisational capacities are stretched]. Institutionalisation should be pursued more strategically, considering the costs and benefits of each mechanism and the value it adds to BRICS co-operation.
In addition to the challenges posed by institutionalisation, there are three underlying issues that the BRICS have to resolve if they want to further their co-operation.
Firstly, the group needs to ensure greater buy-in from its most influential member, China. The success of the BRICS has been ascribed to the political buy-in of all its members as illustrated by the high-level participation of its political executives, and more importantly, finance ministers. Their financial commitment was best illustrated by the $2 billion capital committed by each member to the NDB.
Nonetheless, the group’s greatest achievement towards institutionalisation so far also highlights the challenges.
Despite the initial optimism around the establishment of the bank, the NDB has not been the panacea that China thought it would be for its reformist global ambitions. Instead, China’s experience in setting up the NDB, where the core principle of consensus building reigns supreme, exposes the difficulties in achieving consensus and the slowness of the process. It is therefore unsurprising that it spearheaded its own institution, the Asian Infrastructure Investment Bank (AIIB) shortly after the BRICS decided to set up the NDB. In comparison to the latter, progress has been significantly faster with the AIIB being viewed as ‘China’s’ bank, in stark contrast to the equal sharing of rights and ownership in the NDB. Some Chinese stakeholders have suggested that China prioritises the AIIB over the NDB, as it serves its global interests better and because it has arguably lost confidence in an institutionalisation process based on the principle of consensus.
The significant economic and political disparities within the BRICS further complicate matters. For China, BRICS is merely another forum in the existing alphanumeric soup of organisations it already belongs to. The other members have a much greater vested interest in BRICS co-operation. While China is among the top 5 trading partners of each of its BRICS counterparts, the reverse is not true. Ensuring continued support for the BRICS agenda will be critical for the future of the grouping, precisely because China is in such a commanding position.
Secondly, the BRICS will have to reach greater compromise amongst themselves if they want to further co-operation. BRICS is a forum of consent and a marriage of convenience providing a space to cooperate exclusively on issues of mutual interest. Yet, there is a list of outstanding issues, such as security, domestic politics and the role of civil society, on which BRICS members disagree. Principles of democracy and consent, pursued by all members in the international sphere, create room for national ideologies and sovereignty within the BRICS. However, a more open forum and a willingness to discuss these issues among themselves, are necessary to support broad-based participation in the BRICS.
Lastly, the BRICS need to address the various national challenges they face. Brazil recently saw the ousting of its president on the back of dismal economic performance. International sanctions against Russia continue to cause economic hardships which are in turn exacerbated by its various forays in several war zones. China has transitioned into what appears to be a ‘new economic normal’ of well below 10% growth per annum, and South Africa is in economic and political turmoil. Domestic strife and challenges resonate in the international realm and detract from both the profile and merit of some of the issues put forward by the BRICS. Without the resolution of national political and economic issues, the BRICS will also struggle to focus on their agenda.