The BRICS Contingent Reserve Arrangement and its Position in the Emerging Global Financial Architecture

In its present shape and size the BRICS Contingent Reserve Arrangement (CRA) should be regarded as symbolic and exploratory rather than as a substantive challenger to the International Monetary Fund (IMF).

However, the momentum of the BRICS process and the experience of the similar Association of Southeast Asian Nations plus Three (ASEAN+3) process suggest that the CRA has the potential to develop in two directions. Firstly, it should aim to become an adequate safety net and provide high-quality macroeconomic monitoring, and hence ensure participating countries’ independence from the IMF. Secondly, it should aim to draw in other emerging economies. However, the CRA in itself does not represent a significant break from prevailing orthodoxy. Its limited scope may condemn it to playing a bit part in the global financial system.