The modern global political and economic infrastructure is currently in the process of a rather rapid and significant transformation – there is a transition from unipolar (with the predominant dominance of Western countries, primarily the United States) to a multipolar world based on the concept of cooperation between the largest emerging economies, which in terms of not only financial development, but also political influence in the world are gradually replacing the United States and its allies. To coordinate cooperation between countries – “new centers of power” – Russia, China, India, Brazil, the states of the Middle East and Southeast Asia, new integration structures are being created. The most influential of them was the BRICS Union, initiated by the Russian Federation in 2006. Initially, this informal association of countries included Russia, China, India, Brazil, and Republic of South Africa.
BRICS – an integration structure in a multipolar world
In 2011, the general principles of the BRICS were clearly formulated: openness, pragmatism, solidarity, non-bloc character, the absence of unfriendly actions against other countries.
Currently, BRICS has become BRICS +, expanding the number of participating countries through the accession of the UAE, Saudi Arabia, Iran, Argentina, Egypt, Algeria and Ethiopia. Thus, today BRICS + includes the most influential countries in Asia, South America, and Africa. The new format of the association makes it possible to solve already serious problems and coordinate the efforts of all countries on a global scale. But BRICS expansion also means increased responsibility for decisions made, which predetermines a closer analysis of existing issues and a thorough study of existing risks and possible consequences before making decisions.
BRICS, with a significant representation of countries, allows to cover a serious range of issues. However, the most important areas of cooperation are economics and security. At the same time, the presence of countries with different positions and political preferences requires a common approach to security issues. Therefore, it is necessary to understand what disagreements exist or may arise in the future, how these disagreements should be resolved, in what format. Is it worth creating an arbitration mechanism and a special body responsible for resolving problems, while approaches to its solving differ among the participating countries. Such questions will arise as BRICS + expands, scaling up already existing “acute issues”. But given the main principle of BRICS + “do no harm”, the participating countries will always be able to find a common approach, using compromises, to come to a consensus.
Perceiving BRICS + as one of the foundations of a new more stable, open and just world order, it is necessary to address serious issues, such as nuclear weapons and nuclear non-proliferation, as a priority. BRICS initially consisted of two official nuclear states – Russia and China; India isan unofficial member of the nuclear club since 1974, ignoring the Treaty on the Non-Proliferation of Nuclear Weapons (NPT); South Africa is a state that previously had nuclear weapons, however, unlike the previous three, it voluntarily abandoned it and is now in favor of disarmament; and finally, Brazil that was seeking nuclear-armed status, but has abandoned these plans over the past few decades. But now Iran is also participating in the BRICS, which, according to estimates, still possesses these weapons, thus maintaining a security balance in relation to “nuclear” Israel, which, too, has not yet officially admitted to have nuclear weapons. Countries of the Middle East, such as Saudi Arabia, the UAE and Egypt, also seek to possess such weapons, which meets the opposition of countries officially included in the “nuclear club”, in particular Russia and China. Thus, each BRICS + member state has its own national interests and strategic tasks, which can consist both in possessing nuclear military technologies and in voluntarily abandoning them and creating a monitoring system to prevent the creation of nuclear weapons from other states, both members of BRICS +, and others.
Another issue is other weapons of mass destruction prohibited by international conventions. For example, Egypt has not joined the conventions on biological weapons and chemical weapons. However, the advantage of BRICS + is that it is an equal union, without imposing the point of view of other countries. The decision-making procedure is not even spelled out here if the opinion of the countries is divided, it is assumed that nevertheless diplomatic efforts and negotiations will make it possible to make a common decision that suits absolutely everyone. Such circumstances only strengthen the stability of the association and attract more and more new participants, because there are still a number of states ready to become full members of BRICS +. Note that right now, a new world order and a new global infrastructure are being formed, and the foundation and principles must be adopted and operate for a long period.
In 2015, the “Memorandum on Cooperation in Science, Technology and Innovation between Governments” was signed, which determined the general areas of cooperation and promotion of the efforts of member countries. These are very promising projects:
- food security and sustainable agriculture;
- climate change and minimizing the consequences of natural disasters;
- space, aeronautics, astronomy and Earth observation;
- medicine and biotechnology;
- high-tech zones, science parks and incubators;
- new and renewable energy sources, energy conservation;
- creation and exchange of new technologies and know-how.
BRICS – the basis of the new world order
In the context of a sharp increase in political tension and the division of the world community into opposing blocs along with stopping the process of globalization and the active processes of reformatting the old architecture, it is necessary to build new systems of interaction between states, the leaders of which are the BRICS + states. Experts recognize unanimously that these countries will become the basis of the new world infrastructure and world order.
In this regard, it is important that for the BRICS countries to form coordinated strategic guidelines for development. Such directions in the new world economic architecture may include restarting globalization on the basis of a new platform of countries and regions, creating a new institutional system for modernizing the countries of the world economy, creating a new pool of reserve currencies from emerging markets, creating an alternative track to the Western format for the development of the world economy, creating new regional blocks and platforms for their coordination and development.
All these areas of world development can be implemented within the framework of the broad BRICS + format, which implies a multivariate format of cooperation both within the BRICS and the integration association itself with other states. BRICS is still in the process of formation, active development, the inclusion of new participants and the growing interest of other countries in joining this multilateral organization. There is the potential to create a full-fledged integration structure with headquarters, permanent staff, governing bodies, budget, etc. But the difficult process of formation does not stop the development of the BRICS + concept in the context of interaction, including regional integration associations of the countries of the global South.
From the point of view of practical implementation, one of the most affordable formats for BRICS + is the unification of three continent-wide regional associations – the African Union, CELAC (associations of Latin American countries), as well as the SCO/SCO + in Eurasia. This kind of alliance gives maximum coverage to the countries of the global South, which does not require deep and complex economic integration or harmonization of economic interaction formats on all three continents. The expanded format provides an opportunity to coordinate interaction for developing countries in the international arena in promoting the priorities of the global South’s sustainable development agenda.
Another important area of strengthening cooperation between states in the global plan may be the use of BRICS as a platform for interaction with other integration blocs in which BRICS countries participate. These can be: MERCOSUR, the South African Customs Union, BIMSTEC, the EAEU, as well as RCEP or the Free Trade Zone of China and ASEAN. In this case, BRICS can become a center for coordinating cooperation to simplify trade mechanisms, standardize mutual investments, and expand the mechanisms developed in BRICS at the expense of participating countries around the world. It is important to note that at this stage, most of the countries of the association form their foreign trade policy precisely in the format of regional integration blocs (RF-EAEU, Brazil-MERCOSUR, South Africa – SATA). This approach is called “integration of integrations”, that is, the use of “centrifugal force” and the authority of BRICS + to be involved in international projects, other regional unions and individual states.
BRICS +, created on a voluntary basis by the five largest and authoritative countries of the “new formation”, implements its policy based on the interests of all participants. The entire range of national characteristics of the participating countries is taken into account and affects the adoption of an agreed final decision for the implementation of multilateral initiatives of the BRICS + countries. This is what attracts other countries to this community. The spirit of multilateralism and the presence of multimodality of various formats of interaction within the BRICS + framework, which take into account the entire range of national interests and priorities of countries and their regional partners, is a serious advantage of BRICS + compared to integration associations formed by Western states dominated by large countries such as the United States and Great Britain.
Thus, BRICS + can develop both by attracting other states to its membership, and by extending its multilateral initiatives to other international and regional associations. That is, the BRICS + platform acts as a framework for establishing directions and standards of international cooperation, gradually connecting developed countries. Thus, it seems promising to expand membership at the expense of BRICS partner countries in the New Development Bank, which is already happening: the new members of the New Development Bank are the Bank of Egypt (South Africa’s partner in the African Union), Uruguay (Brazil’s partner in MERCOSUR) and Bangladesh (India’s partner in BIMSTEC and South Asian free trade zone).
Cooperation can develop with the creation of a single currency and unified payment mechanisms of BRICS +. The BRICS Pay payment system has already been created, it should be integrated with the national payment systems of the participating states, for example, with the Russian MIR payment system, which will create a reliable payment mechanism for Russians to pay around the world. By the way, applications are already being received from EU banks with a request to let them join the new system. It is also necessary to make greater use of the mechanism of functioning of the BRICS Pool of Conditional Foreign Exchange Reserves, and to involve other regional financial organizations in the work. BRICS could become a coordinator for monitoring the macroeconomic situation in the BRICS countries, for the formation of anti-crisis programs, sustainable development mechanisms, the development of standards in the field of digital financial technologies, including the DFA, the procedure for using neural networks and AI.
In the context of reformatting the global economy, the coordination of actions of the BRICS countries is of great importance. But this is clearly not enough to build a new sustainable framework for the world’s infrastructure. It is necessary to involve other countries in the “common construction”, especially those with signs of regional leaders. At the same time, the integration process can be both at the level of individual states as well as entire integration associations, which will make it possible to establish interaction with a number of states at once. It will facilitate the process of coordinating joint actions and already established mechanisms of interaction within regional associations.
BRICS 2.0: expansion and new prospects for business cooperation
Currently, experts began to talk about reformatting BRICS + and creating BRICS + 2.0. The unconditional advantages of the BRICS + paradigm are not only in strengthening cooperation between participating countries, increasing their importance and replacing them with the union created by Western countries, but in creating global mechanisms for integrating developing countries and their unions into the global economy. Instead of competition – cooperation, instead of dominance – equal opportunities. If we consider BRICS + as the backbone for the formation of the world infrastructure, then we must start with the promotion of regional programs.
The following can be proposed as promising areas:
- Establishing a Comprehensive Regional Economic Partnership (RCEP) led by China and ASEAN countries.
- Implementation of the African Continental Free Trade Area (ACFTA).
- Participation of regional associations in the work of BRICS + as observers.
- Further expansion of cooperation options according to the signed memorandum of understanding between the Eurasian Economic Union (EAEU) and MERCOSUR (2018), as well as between the EAEU and ASEAN (2018).
- Opening branches of the New Development Bank in Brazil, Russia and South Africa.
- Accession of Bangladesh and Uruguay to the New Development Bank.
BRICS +, due to the political influence of the participating countries, representing almost half of the world’s population, is currently an unstable center of attraction from other states and regional integration blocs that are striving to find long-term and stable formats of cooperation in the trade, financial, investment, and technological segments. It is BRICS + that is the only effective format for replacing the previous alliances created by Western countries, as well as for building an integrated, viable system of economic and political interaction on a global scale. The synergy of regional unions, the dominant participants of which are the BRICS + states, for example, South Africa (SADC/SACU), Russia (EAEU), Brazil (MERCOSUR), will create a whole integration system of cooperation mechanisms between various regional unions, the center and framework of which will be BRICS. This is what we must strive for, and this should be the main medium-term vector of BRICS development.
By Ilyas Zaripov, PhD (Econ.), Associate Professor, Department of World Financial Markets and Fintech, PRUE named after G.V. Plekhanov