In the past several years even as Russia’s activism in building economic alliances across the globe has increased appreciably, the role of the BRICS in these efforts of Russian economic diplomacy lacked vigor. Indeed, despite the creation of the New Development Bank and some of the initiatives to boost economic ties between BRICS members, there is a sense that the BRICS is starting to encounter limitations to further integration. Perhaps BRICS as merely a forum of discussion among its members may be the right format after all, but given the size and potential of each BRICS members, one cannot help but hope for more of a synergy in the interaction between the leading developing economies of the world.
One of the ways to overcome the limitations in BRICS development as well as the lingering contradictions may be to shift the focus from trade liberalization or large-scale integration amongst its core members towards building a wider framework of integration/cooperation in the developing world that fills the voids of integration and opens new gateways for cooperation among BRICS and their partners across continents. This in turn is made possible by the unique nature of the BRICS, which is represented by one or several major powers in virtually all continents of the developing world.
The first thing to realize about the uniqueness of the BRICS is that each member is also a leading economy in its continent or sub-region within a regional integration arrangement (see Valdai Discussion Club, Y. Lissovolik: What Are the Vectors of Future BRICS Trade Integration?): Russia in the Eurasian Economic Union, Brazil in MERCOSUR, South Africa in the South African Development Community (SADC), India in the South Asian Association for Regional Cooperation (SAARC) and China in the Shanghai Organization for Cooperation (SOC) and the prospective Regional Comprehensive Economic Partnership (RCEP). All countries that are partners of the BRICS in these regional integration arrangements may form what may be termed as the “BRICS+” circle that becomes open to flexible and multiple modes of cooperation (not exclusively via trade liberalization) on bilateral or regional basis.
Secondly, each of the regional integration groups led by BRICS economies also has its own network of economic alliances with third countries – Eurasian Economic Union has an FTA with Vietnam, while MERCOSUR concluded a Free Trade Agreement with Israel. These countries and/or regional blocks that have concluded agreements with BRICS countries’ regional blocks, may form the “BRICS++” circle, which further expands the possibility set of potential alliances that may be facilitated for BRICS economies and their partners. The expansion in the BRICS network to several circles of alliances not only broadens the possibilities for integration, but also improves their optionality as each country can vary integration within the network and render it more piecemeal and gradual.
In effect the BRICS+ circle forms the inner “regional” rim of partnership for BRICS economies, which is composed of the key regional integration blocks such as the Shanghai Organization for Cooperation (SOC) (brings together the three key players in Eurasia – India, China and Russia), Mercosur, SADC/SACU, etc. The BRICS++ ambit forms a looser circle of bilateral alliances (with individual countries or regional blocks) on an FTA basis or on the basis of other types of economic integration agreements (including in the investment sphere). Both BRICS+ and BRICS++ expand the set of alliances for all of the countries included into this wider circle, whereby existing trade or investment agreements can form the basis for multilateralizing such deals with other members of the enlarged group. If successful in building its economic weight, the enlarged BRICS network may exert significant impact on trade and investment flows in the world economy and become a focal point of attracting these flows on a “cumulative causation” basis much as was the case with the developed economies in the preceding decades.
In the end, by building a network of economic alliances across continents the BRICS may take the lead in shaping global economic integration against the backdrop of waning integration impulses in the developed world. Apart from opening new pathways and fostering new alliances the BRICS could also perform the role of an “aggregating platform” for some of the RTAs and other types of agreements – akin to the aggregating effect on regional agreements that TPP was to perform in the Pacific. The essence of the operation of such an integration network will however need to be different from the transcontinental project (the developed economies’ analog of such a network) that sought to bring together the Transpacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). The network with BRICS at its core will need to allow for greater variety and flexibility in setting the standards of economic integration, with one of the key guidelines being inclusiveness and openness in accepting new members and modes of integration. The result is a global economy that is characterized by divergence of various models of development rather than a convergence towards one sole model or standard.