“The stone the builders rejected has become the cornerstone" (Psalm 118:22)
In the beginning of 2020 Russia assumed chairmanship in the BRICS amid an escalation in geopolitical risks and further shocks to the global economy. Among the plethora of priorities and initiatives that are traditionally launched by countries assuming chairmanship in the BRICS the focus this year is likely to accord more weight to exploring the pathways to strengthening the multilateral layers of global governance. In order to aspire to have a global impact on the evolving global governance construct of the world economy the BRICS need to form an effective platform for extending their economic cooperation to the Global South. Such a platform may be based on the BRICS-plus initiative launched by China, with the aggregation of regional integration blocks from the developing world serving as the core of such a platform.
Perhaps the most effective way in which the BRICS could prove to be instrumental in rendering the construct of the world economy more balanced would be to through filling the voids and the gaps in the current global governance system. These include imbalances within multilateral global institutions (between the weight of developed and developing economies), lack of coordination of regional institutions such as regional trading blocks, regional development banks, regional financing arrangements (currently there is no such mechanism in the global governance system), the acute need for an expansion in the array of reserve currencies available in the global economy, as well as the absence of an ex-ante, pre-determined anti-crisis mechanism that may involve coordinated fiscal and/or monetary stimuli across the globe during periods of severe downturn.
The BRICS are uniquely positioned to lead the global community in bridging the above gaps and inefficiencies. Apart from the increasing weight of the block in the world economy, the BRICS exercise a “comparative advantage” compared to other blocks and arrangements in reaching out to the rest of the world, given that this diverse grouping is present in all of the main regions of the developing world. The aggregation of the regional integration blocks where BRICS are members may form the basis of BRICS+, which in turn through greater openness and inclusivity will be in a much stronger position to address the gaps in global governance outlined above.
Most importantly, the BRICS through the BRICS+ framework can serve as a gateway to alternative liberalization and economic integration impulses vis-a-vis the developed world. Such an alternative should allow for a critical level of optionality in the direction of the development of the global economy, whether in terms of the economic models pursued by countries or in terms of currencies and payment systems that may be employed to service cross-border transactions. It should also allow the world economy to make full use of one of the most promising reserve for boosting global economic growth, namely South-South economic integration.
In order to raise the appeal of building alliances with the BRICS countries and to become one of the critical elements in the new international economic architecture the block needs to make advancements in such critical areas as raising environmental standards. Greater emphasis on environmental protection needs to become one of the systemic elements of BRICS strategy in intra-BRICS cooperation as well as the outside world. There may also be a case for jointly developing strategies for raising corporate governance standards as well as reducing economic imbalances and inequalities across regions. On the latter point, one of the promising venues of cooperation may be the fostering of economic linkages and the broader development of the remote inland (Hinterland) regions of the BRICS countries that are faced with high transportation costs and other infrastructural bottlenecks.
The path to playing a major role in shaping the new global governance will also involve the BRICS working with global organizations such as the WTO to address issues ranging from procedures on dispute settlement to cooperation with regional institutions and devising norms on curbing technological, financial and investment protectionism in the global economy. In working with the advanced economies on addressing some of the key gaps in the global governance system the BRICS together with allies from the wider BRICS+ circle can deliver a crucial contribution to the reinforcement of the multilateral framework of international institutions.
Importantly, rather than seeking to sideline existing arrangements and institutions, the BRICS have openly advocated the need to reinforce multilateralism and strengthen the global institutions in the face of mounting protectionist pressures. In other words rather than aiming to substitute existing global institutions the BRICS are creating new arrangements that complement and reinforce the existing institutional framework of the global economy via addressing some of the weaker links and gaps in global governance. Rather than being the disruptor of the current governance framework the BRICS block may play the role of a stabilizer as well as an incubator of innovative approaches to raising the global system’s effectiveness and inclusivity.
In conclusion, the past decades provided a unique opportunity for the advanced economies to build an open, sustainable and inclusive world economic architecture that promotes development. The reality of today’s world economy characterized by protectionism, sanctions and weakening multilateralism points to the necessity for reforming global governance. The BRICS could become the key pillar of the new emerging economic architecture and for Russia’s chairmanship in the BRICS in 2020 this means that the key focus needs to be directed at building the framework of BRICS partnerships across the globe. It is through such efforts that the BRICS may after all turn out to be “the stone the builders rejected [and that] has become the cornerstone”.