BRICS blazes a new trail

Global rebalancing requires greater role for Brazil, Russia, India, China and South Africa in international governance

Amid the ongoing global economic and financial uncertainties, BRICS members will be discussing closer cooperation and coordination at their fourth summit, which opens in New Delhi, India, on Wednesday.

President Hu Jintao is meeting with the leaders of Brazil, Russia, India and South Africa to exchange views on the global economy and other major international issues of common concern. The establishing of a joint development bank, which was raised by their finance ministers on the sidelines of the February G20 summit, is also likely to be discussed.

The original grouping of Brazil, Russia, India and China – South Africa joined in 2010 – was a commercial concept aimed at providing transnational companies with important economic indices for them to pursue commercial chances in emerging markets. The grouping has since evolved into a mechanism for multilateral consultations and cooperation among the emerging economies with the rise of developing countries and with South-South cooperation booming over the past decade.

The addition of South Africa, the largest economy in Africa, means the cooperation mechanism encompasses Asia, Europe, Latin America and Africa. The all-inclusive agenda of the previous summit in Sanya, southern China’s Hainan province, in April, demonstrated that BRICS is now a platform for dialogue and cooperation among the emerging nations in various fields.

At the end of the Sanya summit the BRICS nations issued a declaration elaborating their cooperation and coordination on a wide range of global and regional issues, from reform of the global monetary and financial systems, economic and trade cooperation and global climate change to monitoring the global bulk commodity market, grain safety and utilization of nuclear energy. BRICS countries play an increasingly important role on the world stage.

From a political perspective, all except Brazil are members of the UN Security Council, with China and Russia permanent members with the power of veto. From an economic perspective, BRICS countries account for nearly 20 percent of the world’s total gross domestic product, more than 15 percent of its trade volume and around 75 percent of global foreign reserves. Their contribution to global economic growth now exceeds 50 percent. Cooperation among BRICS countries has become particularly manifest in the post-crisis era. As a young multilateral mechanism, BRICS countries have not only set up the annual summit meeting mechanism, but also tried to push their cooperation and coordination at different levels.

For example, academic circles among BRICS countries have established close links as a supplement to the official channels of cooperation and exchanges. At the same time, their business circles have frequently held symposiums.

At the official level, exchanges and cooperation already extend from traditional diplomatic and commercial departments to financial, economic, agricultural, health and security departments. At the New Delhi summit, the BRICS countries are likely to discuss establishing a multilateral development bank.

BRICS countries have also showcased their booming coordination and cooperation in international affairs. Vadim Lukov, Russia’s BRICS negotiator, once called BRICS nations an “alliance of reformers” due to their shared determination to reorganize the key international financial and economic institutions. The ever-increasing representation of emerging countries in international organizations has proven this view.

Ahead of the New Delhi summit, the nominees for the next head of the World Bank have been named: the US-recommended Jim Young Kim, an American professor of Korean descent; Jose Antonio Ocampo, a Colombian economist; and Ngozi Okonjo-Iweala, the Nigerian finance minister. This is the first time since its establishment in 1945 that candidates from other countries will compete with a US citizen for the position. Whoever finally wins, emerging countries represented by BRICS nations have already taken a step toward breaking the long-established US-dominated global financial system.