Calls For Global Governance Reform

With the admission of six news members, the BRICS, a group of five big emerging economies, has emerged as a formidable force of Global South, enabling it to reshape the global order dominated by the US-led Western block. The BRICS’s 15th summit, held in South Africa from 22 to 24 August 2023, has inducted Iran, Saudi Arabia, Egypt, Argentina, the UAE and Ethiopia as its full members effective from next year. BRICS has currently five members - Brazil, Russian, India, China and South Africa, which consists of more than 40 per cent of the world’s population and contributes around two-thirds to the global GDP. The membership expansion has been termed ‘historic’ as this will further boost BRICS’s credibility, influence and greater say in the international affairs. 

With the theme of "BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism", the summit issued a 92-point declaration, calling for ‘a more representative, fairer international order, a reinvigourated and reformed multilateral system, sustainable development and inclusive growth'. The 15-year-old regional body has three pillars of political and security, economic and financial, and cultural and people-to-people cooperation. The BRICS members have expressed commitment to ‘spirit of mutual respect and understanding, sovereign equality, solidarity, democracy, openness, inclusiveness, strengthened collaboration and consensus’.

Growing charm 

BRICS members have diverse political and economic systems but it has embraced inclusive multilateralism, a crucial factor that has attracted more and more countries to be its part. Many emerging economies that refuse to toe the line of Washington have to face unilateral sanctions. Similarly, they are also not happy with the IMF and World Bank’s stringent conditions that are enforced under their structural adjustment programmes. Fed up with the hegemonic attitude of international financial institutions, the BRICS nations have set up several institutions and mechanisms such as the New Development Bank (NDB) and the BRICS Contingent Reserve Arrangement to help economies with payment difficulties.

The declaration has reflected the BRICS’s reservation about the unilateral and arm-twisting strategy: “…. the use of unilateral coercive measures, which are incompatible with the principles of the Charter of the UN and produce negative effects notably in the developing world.” Those countries that are not on the same page with the US and allies are eager to enter the BRICS club. More than 40 countries have shown their interest to be the BRICS members while 23 formally applied for it. More than 50 countries had sent their heads of state or representatives to the South African summit. In June this year, French President Emmanuel Macron also expressed his desire to participate in the summit but he could not do so due to the objection by Russia. 

The BRICS has sought drastic reforms and representation of emerging markets in Bretton Woods institutions such as the IMF, World Bank and WTO which were created in the aftermath of the World War II to address the contemporary global economic and political challenges. It intends to improve global governance by ‘promoting a more agile, effective, efficient, representative, democratic and accountable international and multilateral system. They have demanded quota-based and adequately resourced IMF for a robust Global Financial Safety Net. They insist that any adjustment in quota shares should result in increases in the quota shares of emerging markets and developing economies (EMDCs). 

Likewise, the BRICS has voiced for the open, transparent, fair, predictable, inclusive, equitable, non-discriminatory and rules-based multilateral trading system with the World Trade Organisation (WTO). Moreover, they stand for a comprehensive reform of the UN, including its Security Council to make it more democratic, representative, effective and efficient. Russia and China are the permanent members of the Security Council with veto power while Brazil and India have been vying for their enhanced role in the global body. 

The West has been claiming that they have championed democracy, human rights and civil liberties, and prescribe other nations to embrace these political values. However, the critics say that the Western nations are using the ideas of ‘democracy’ and ‘human rights’ as the soft power to impose their own culture, religion, values and economic interest. Often these sacred values are instrumentalised as a ruse to instigate regime change in the countries that dare to snub their diktats. The BRICS declaration makes a veiled criticism of this lopsided approach and stresses to ‘promote, protect and fulfill human rights in a non-selective, non-politicised and constructive manner and without double standards'.  

De-dollarisation process

The BRICS is poised to create a new economic architecture to challenge the dollar-centric world order. The BRICS countries have already started to settle trade in their own currencies. Over 80 per cent of bilateral trade between China and Russia occurs in their own currencies while China and Brazil have reached a deal to conduct trade in their own currencies. India is also using its rupees to trade with around 22 countries. The New Development Bank is seen as a Global South-oriented alternative to the World Bank. A growing number of countries are eager to join it. Newly appointed NDB chief Dilma Rousseff, who was also former president of Brazil, said that its objective was eventual de-dollarisation. The NDB aims to give 30 per cent NDB loans in local currencies in the short term. In last April, Rousseff announced that nearly one-third of its loans would be issued in the currencies of member countries by 2026.

With the diversification of global exchange currency, the developing and poor nations are expected to benefit from the multipolar global trading system. However, the BRISC as a counterweight to the G7 must not be stuck in the geopolitical battle with the West, which might hurt the genuine interest of the least-developed countries. The BRICS comprises of regional and global powers, with their own agenda and ambition. The Global South has been reeling from the vicious cycle of poverty, instability, terrorism, climate crisis, rising foreign debt and geopolitical vulnerabilities. The BRICS also requires addressing these burning issues which is critical to building a fairer, inclusive and democratic international order.

(The writer is Deputy Executive Editor of this daily.)