The current global crisis has revealed a number of deficiencies in the global governance framework, whether at the level of global institutions, or at the level of regional integration blocks. With respect to the latter, the lack of response to the crisis from the regional institutions was exacerbated by the lack of contingency measures to strengthen the impact of these anti-crisis stimuli for the regional partners of the leading heavy-weights in the global economy. The current crisis has amply demonstrated the importance of regional factors in the spreading and the containment of the pandemic. This is why new formats of economic cooperation that accord substantial weight to regional and cross–regional cooperation – such as the BRICS+ initiative – may become more prominent in the anti-crisis efforts at the global level going forward.
In fact, the usefulness of the BRICS+ as an anti-crisis framework for developing countries has already been singled out in a recent report prepared by an Argentinian think-tank Observatorio de CoyunturaInternacional y Política Exterior (OCIPEx).
The report calls for Argentina to consider its entry into the BRICS Plus circle in view of the potential benefits associated with the country’s participation in the projects of the New Development Bank (NDB) as well as access to the resources of the BRICS Contingent Reserves Arrangement (CRA).
The resources of NDB and the BRICS CRA are accordingly viewed as alternative instruments to the standard tools of World Bank and IMF loans in countering the severe economic downturn.
Apart from greater optionality in finding additional sources of anti-crisis financing, there is also an important role to be performed by BRICS+ as a platform for coordinating the anti-crisis efforts of the entire Global South as the current crisis has revealed a particular vulnerability of the developing countries in the face of the pandemic and the economic downturn. Indeed, as the pandemic spread across the developed economies during the first stages of the crisis, the subsequent phases of the propagation of the pandemic engulfed the countries of the Global South with great speed, with BRICS countries and developing economies from Latin America being particularly hard hit.
The anti-crisis role of the BRICS+ framework may be predicated on the greater engagement with the regional partners of the BRICS core in areas such as regional connectivity, regional early warning systems as well as anti-crisis measures that are designed to deliver a strong regional (not just national level) effect. This in turn will involve more activism from the New Development Bank in expanding its membership to the regional partners of the BRICS countries and designing anti-crisis and economic sustainability measures for new members. With respect to the BRICS CRA there is a need for a comprehensive analysis of the economic and systemic vulnerabilities (including potential regional spillover effects) across the BRICS+ platform, with the evaluation of the possibility for extending stabilization loan packages to the regional partners of the BRICS countries.
An important element within the BRICS+ anti-crisis framework will need to be the promotion of the use of national currencies as a way to reduce currency mismatches – the NDB and the BRICS CRA as well as the potential creation of a BRICS Pay mechanism could play a crucial role in this respect. Another area to be explored in the area of cooperation among the regional integration arrangements such as MERCOSUR, EAEU or ASEAN may be the promotion of regional and trans-regional value-added chains that may be supported during crisis periods with coordinated policy measures to prevent their fragmentation. And of course there is also the need for the NDB and the BRICS CRA to serve as platforms for the cooperation of the respective regional development institutions – in the case of NDB this would concern the regional development banks, while in the case of the BRICS CRA this relates to the cooperation among the Regional Financing Arrangements (RFAs) of the Global South.
In the end, the BRICS+ framework may turn out to be more inclusive in engaging a wider range of economies from the Global South compared to the QUAD+ project that includes the QUAD core (the United States, Australia, Japan and India) as well as Vietnam, South Korea and New Zealand. While the QUAD+ expansion appears to be focused on bringing additional countries into the fold on the basis of a strategic proximity in interests, the BRICS+ initiative is evolving via bringing together not just individual countries, but regional integration groupings across the Global South. As opposed to the QUAD+ framework BRICS+ includes such regions as Africa and Latin America, regions that are currently particularly hit by the COVID-19 crisis and are at the heart of the global efforts to bolster development and modernization in the developing world. Most importantly, the advantage of a regional dimension in the BRICS+ set-up will enable the grouping to be more effective in delivering growth impulses across a wide range of developing countries that are regional partners of the core BRICS via the coordinated anti-crisis measures.