BRICS and Global Governance 2017050165, 9781472480767, 9781315569925

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BRICS and Global Governance

The past few decades have witnessed the development of an increasingly globalized and multipolar world order, in which the demand for multilateralism becomes ever more pronounced. The BRICS group, established in 2009, has evolved into a plurilateral summit institution recognized both by skeptics and proponents as a major participant in the international system. Addressing the BRICS’s role in global governance, this book critically examines the club’s birth and evolution, mechanisms of inter-BRICS cooperation, its agenda priorities, BRICS countries’ interests, decisions made by members, their collective and individual compliance with the agreed commitments, and the patterns of BRICS engagement with other international institutions. This volume advances the current state of knowledge on global governance architecture, the BRICS role in this system and the benefits it has provided and can provide for world order. This book will interest scholars and graduate students who are researching the rise and role of emerging powers, global governance, China and India’s approach to global order and relationship with the United States, Great Power politics, democratization as a foreign policy strategy, realist theory-building and hegemonic transitions, and the (crisis of) liberal world order. Marina Larionova, Center for International Institutions Research (CIIR), Russian Presidential Academy of National Economy and Public Administration (RANEPA). John J. Kirton, Munk School of Global Affairs, Trinity College, Department of Political Science, University of Toronto.

Global Governance Series Editor: John J. Kirton University of Toronto, Canada

Global governance is growing rapidly to meet the compounding challenges of a globalized twenty-first-century world. Many issues once dealt with largely at the local, national or regional level are now going global, in the economic, social and political-security domains. In response, new and renewed intergovernmental institutions are arising and adapting, multilevel governance is expanding, and subnational actors are playing a greater role and creating complex combinations and private-partnerships to this end. This series focuses on the new dynamics of global governance in the ­twenty-first century by: • • •

•

Addressing the changes in the structure, operation and impact of individual intergovernmental institutions, above all their innovative responses to the growing global challenges they confront. Exploring how they affect, are affected by and relate to nonstate actors of global relevance and reach. Examining the processes of cooperation, competition and convergence among international institutions and the many global governance gaps where global challenges such as terrorism, transnational crime and energy do not confront powerful international institutions devoted to their control. Dealing with how global institutions govern the links among key issues such as climate change and health.

In all cases, it focuses on the central questions of how global governance institutions and processes generate the effective, legitimate, accountable results required to govern today’s interconnected, complex, uncertain and crisis-ridden world. See the web page for a full list of titles: https://www.routledge.com/GlobalGovernance/book-series/ASHSER1420

Recent titles Accountability for Effectiveness in Global Governance Edited by John J. Kirton and Marina Larionova BRICS and Global Governance Edited by Marina Larionova and John J. Kirton

BRICS and Global Governance

Edited by Marina Larionova and John J. Kirton

First published 2018 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2018 selection and editorial matter, Marina Larionova and John J. Kirton; individual chapters, the contributors The right of Marina Larionova and John J. Kirton to be identified as the authors of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Names: Kirton, John J, editor. | Larionova, Marina, editor. Title: BRICS and global governance / edited by Marina Larionova and John Kirton. Description: New York: Routledge, [2018] | Series: Global governance | Includes bibliographical references and index. Identifiers: LCCN 2017050165 | Subjects: LCSH: International organization. | Globalization— Political aspects. | Globalization—Economic aspects. | BRIC countries. Classification: LCC JZ1318 .B745 2018 | DDC 341.2—dc23 LC record available at https://lccn.loc.gov/2017050165 ISBN: 978-1-4724-8076-7 (hbk) ISBN: 978-1-315-56992-5 (ebk) Typeset in Times New Roman by codeMantra

Contents

List of tables List of figures List of contributors Preface and acknowledgements Abbreviations and acronyms

vii ix xi xiii xvii

Part I

Introduction

1

1 The rise of new institutions

3

M arina L arionova

Part II

The evolving institutional identity of the BRICS

21

2 Explaining the solid, strengthening success of the BRICS summit

23

John J. K irton

3 BRICS engagement with international institutions for better governance

49

A ndr ey Shelepov

4 Political dynamics within the BRICS in the context of multilayered global governance

70

M ar ia R aquel F reire

Part III

The BRICS contribution to global governance

89

5 The New Development Bank in the global financial and economic architecture

91

A lexandra Morozkina

vi Contents 6 BRICS financial and payment arrangements: A locus of intragroup trade development

106

Natalia K hmele vskaya

7 The BRICS security agenda: Russia’s approach and the outcomes of the Ufa Summit

129

Victoria V. Panova

8 The BRICS and nontraditional security

150

N iall Duggan

9 Prospects for cooperation in science, technology and innovation among BRICS members

168

M ichael K ahn

Part IV

BRICS interests and priorities for cooperation

187

10 The BRICS for better global governance: A Russian perspective

189

Georgy T oloraya

11 The BRICS agenda in the Asia-Pacific region

208

H aibin N iu

12 South Africa in the BRICS: Last but not least

223

Vladimir Shubin

13 BRICS regional policy in Africa

242

Tatiana Deych

Part V

Conclusion

265

14 Looking into the future of the BRICS

267

M arina L arionova

Index

275

List of tables

Appendix 2-A  Appendix 2-B Appendix 2-C Appendix 2-D Appendix 2-E Appendix 2-F 3.1 5.1

BRICS Performance, 2009–2015 41 BRICS Conclusions, 2009–2015 42 BRICS Commitments by Issue, 2009–2015 43 BRICS Compliance, 2009–2014 44 References to Outside Institutions 47 International Image of BRICS Countries, May 201348

References to International Institutions, 2008–2015 51 Multilateral Development Bank Loan Portfolios by Sector, %, 2015 92 5.2 World Bank Loan Portfolio by Country, %, 2015 93 5.3 Asian Development Bank Loan Portfolio by Country, %, 2009–2015 94 5.4 African Development Bank Loan Portfolio by Region, %, 2009–2015 94 5.5 European Bank for Reconstruction and Development Loan Portfolio by Region and Country, %, 2009–2015 95 5.6 Inter-American Development Bank Loan Portfolio by Country, %, 2009–2015 96 5.7 Financial and Operational Indicators of the Multilateral Development Banks, 2015 97 5.8 Loan Portfolios of the BRICS Development Banks, by Sector, %, 2015 99 5.9 Financial and Operational Indicators of BRICS National Development Banks, 2015 99 5.10 Infrastructure Quality Indicators, 2013–2014 100 5.11 Key Technology Development Indicators, 2007 101 5.12 Gross Domestic Product and Bretton Woods Quotas 101 6.1 Modes of BRICS Monetary-Related Dialogue 108 6.2 BRICS in International Financial Arrangements, as at December 31, 2016 113 8.1 FAO Four Dimensions of Food Security 158 9.1 PESTEL Indicators (2012 or Nearest) 171

viii  List of tables 9.2 Subject Area Specialization on Scopus: Total Publication Count post 1995 178 9.3 Article Counts and Percentage Co-publication, BRICS 2012 180 13.1 BRICS Contributors to UN Peacekeeping Operations on June 30, 2017 254 14.1 BRICS Main Achievements 268 14.2 BRICS Members’ Voting Power in the International Monetary Fund and Gross Domestic Product 271

List of figures

3.1 References to international institutions, 2008–2015, %52 3.2  Intensity of References to International Institutions, 2008–2015 53 3.3  Number and Intensity of References to the United Nations, 2008–2015 56 3.4  Number and Intensity of References to the G20, 2008–2015 59 3.5  Number and Intensity of References to the International Monetary Fund, 2008–2015 60 3.6  Number and Intensity of References to the World Bank, 2008–2015 61 3.7  Number and Intensity of References to the World Trade Organization, 2008–2015 63 3.8  Number and Intensity of References to the World Health Organization, 2008–2015 65 6.1  BRICS Export Structures in 2010–15 117 6.2  BRICS Real Effective Exchange Rate and Nominal Exchange Rate in 2010–14 120

List of contributors

Tatiana Deych is a leading research fellow of the Institute for African Studies of the Russian Academy of Sciences. Niall Duggan is a college lecturer of the Department of Government at University College Cork. Maria Raquel Freire  is the director of the PhD Program in International Politics and Conflict Resolution at the University of Coimbra. Michael Kahn is a professor extraordinaire in the DST/NRF Centre of Excellence in Scientometrics and Science Policy and the Centre for Research on Evaluation, Science and Technology at Stellenbosch University. Natalia Khmelevskaya  is an associate professor of the Department of Foreign Economic Ties and International Economic Relations at the M ­ oscow State Institute of International Relations of the Ministry of Foreign ­Affairs of Russia. John J. Kirton is the codirector of the BRICS Research Group and the G20 Research Group and director of the G7 Research Group, a fellow of the Munk School of Global Affairs and Trinity College, and a professor of political science at the University of Toronto. Marina Larionova  is the codirector of the BRICS Research Group and head of the Center for International Institutions Research (CIIR) of the ­Russian Presidential Academy of National Economy and Public Administration (RANEPA). Haibin Niu  is a senior fellow at the Shanghai Institutes for International Studies. Alexandra Morozkina is a PhD student at the National Research University Higher School of Economics and head of the structural reforms division in the Economic Expert Group. Victoria V. Panova  is director of the Institute of Oriental Studies, School of Regional and International Affairs, professor at the Department of

xii  List of contributors International Relations at the Far Eastern Federal University and a strategy planning advisor for the Russia’s National Committee on BRICS Research. Andrey Shelepov is a lead analyst on international financial institutions at the Center for International Institutions Research (CIIR) of the Russian Presidential Academy of National Economy and Public Administration (RANEPA). Vladimir Shubin is a professor and principal research fellow at the Institute for African Studies of the Russian Academy of Sciences. Georgy Toloraya  is a chair of the Regional Programs Department at the “Russkiy Mir” Foundation and executive director of the National Committee on BRICS Research (Russia).

Preface and acknowledgements

The BRICS group of Brazil, Russia, India, China and South Africa, which was hosted by Russia for its first summit of BRIC members at ­Yekaterinburg on June 16, 2009, has evolved into a plurilateral summit institution recognized both by former skeptics and proponents as a major participant in the international system. However, its members’ interests and priorities, the group’s actorness features and an assessment of its performance remain subject to research and debate. As the BRICS return to South Africa for their tenth summit in 2018, the leaders will deliberate and make decisions on a wide number of issues covering most major global governance challenges. BRICS members remain committed to inclusive growth, macroeconomic coordination, strengthened financial stability and the reform of international institutions to reflect the increasing weight of emerging markets and developing countries in the world economy. The BRICS countries are steadily stepping up their cooperation on the social agenda, in development, education, health and agriculture, as well as in innovation and information and communications technology to enhance opportunities for all. Political and security issues remain among the top priorities, given the members’ commitment to ensure peace as the cornerstone of development and growth. BRICS institutionalization has been fast. Its rapid pace is likely to continue. The formal track has grown into a constellation of 14 cooperation forums. The BRICS Business Forum and the BRICS Business Council, established in 2010 and in 2013 respectively, serve as platforms for a regular dialogue between business and the BRICS governments. Since 2010, the BRICS Academic Forum has provided a framework for generating research and producing new ideas and testing concepts that can then be taken up by policy makers in the BRICS. The BRICS Think Tanks Council was set up in Durban in 2013 to enhance cooperation in research, knowledge sharing, capacity building and policy advice among think tanks in the BRICS countries. It presented its long-term vision for the BRICS to the leaders in 2015. Also in 2015, dialogue with social partners expanded to include the Civil BRICS, which held a forum to bring together non-governmental organizations from the member states in June. A Trade Unions Forum also took place during the Russian BRICS presidency.

xiv  Preface and acknowledgements BRICS outreach cooperation has been acquiring a regional dimension since the 2013 South African presidency initiated and successfully held the BRICS Leaders-Africa Dialogue Forum. In the lead-up to Fortaleza in 2014, the Brazilian presidency hosted a working session in Brasilia between the BRICS leaders and South American leaders. Such an exchange between BRICS leaders and their counterparts in the host’s region has become a systemic component of the BRICS outreach strategy. Russia invited the leaders of Armenia, Belarus, Kazakhstan and the Kyrgyz Republic, all members of the newly created Eurasian Economic Union that came into force on J­ anuary 1, 2015, as well as members and observers of the Shanghai Cooperation Organizations for an outreach meeting in Ufa. This book was inspired by the transformation of the BRICS into a global summit institution and by the need to elaborate new and innovative theoretical frameworks for analysing the BRICS phenomenon from a multidisciplinary and comparative perspective. The volume first looks at the evolving institutional identity of the BRICS, then focuses on its contribution to several key policy areas of global governance and, finally, explores BRICS members’ interests and their priorities for cooperation. The book was conceived during the preparations for the conference on “The BRICS in the Spotlight,” convened by the University of Parma in ­Italy in November 2014. Early versions of several chapters were published in a special issue of the International Organisations Research Journal on the theme of “The BRICS in the System of Global Governance,” analysing the contextual background for the group’s rise and consolidation as an international actor and offering insights on specific BRICS policies and political perspectives. We are grateful to Veronica Federico of the University of Florence and Lucia Scaffardi of the University of Parma for their invaluable help and advice during the process of preparing that special issue. This book is a result of the substantial work of an international pool of experts engaged in BRICS research and process. We highly value the work implemented by the BRICS Research Group and its members. This publication would not be feasible without the continuous efforts of our joint University of Toronto and Russian Presidential Academy of National Economy and ­Public Administration teams (RANEPA) to monitor compliance of the BRICS countries with the commitments made by their leaders at their summits. We also express our gratitude, as always, to Madeline Koch of the BRICS Research Group, who turned the separate chapters of the book into a high-quality professional text. And we acknowledge with great thanks the tireless and efficient work of Elizaveta Safonkina at RANEPA. We are deeply grateful to many individuals working within the official BRICS process. It is their work that turned the BRICS from a concept into one of the key actors in the system of global governance. We highly appreciate the dedication of the BRICS Think Tanks Council, all the researchers and authors, and our colleagues at Russian and international research institutions studying the BRICS.

Preface and acknowledgements  xv At Routledge, we owe a great deal to the professionalism and the patience of Rob Sorsby and his colleagues. We also would like to thank the future readers of this book for using the volume. We hope that this book will add value to BRICS research and contribute to a better understanding of the BRICS by the expert community and by all those people interested in the BRICS and non-BRICS members. Marina Larionova and John J. Kirton January 2018

Abbreviations and acronyms

ABC ACIRC ADB AEOI AfDB AIIB AISA ANC APEC ASEAN AU BAIES BEPS BERD BNDES BRIC BRICS BRL BTTC CCR CDB CFETS CICA

Brazilian Cooperation Agency African Capacity for Immediate Response to Crises Asian Development Bank automatic exchange of tax information African Development Bank Asian Infrastructure Investment Bank Africa Institute of South Africa African National Congress Asia-Pacific Economic Cooperation Association of Southeast Asian Nations African Union Basic Agricultural Information Exchange System base erosion and profit shifting business expenditure on research and development Brazilian Development Bank Brazil, Russia, India and China Brazil, Russia, India, China and South Africa Brazilian real BRICS Think Tanks Council Centre for Conflict Resolution China Development Bank China Foreign Exchange Trade System Conference on Interaction and Confidence-Building Measures in Asia CII Confederation of Indian Industry CMIM Chang Mai Initiative Multilateralization CNY Chinese renminbi COSATU Congress of South African Trade Unions CRA Contingent Reserve Arrangement Consumer Unity and Trust Society CUTS DESA Department of Economic and Social Affairs (of the United Nations) Development Bank of South Africa DBSA

xviii  Abbreviations and acronyms DIRCO

D  epartment of International Relations and Cooperation of the Republic of South Africa DRC Democratic Republic of Congo EAEU Eurasian Economic Union EBRD E  uropean Bank for Reconstruction and Development EFSD E  urasian Fund for Stabilization and Development EMBRAPA Brazilian Agricultural Research Corporation EMDCs emerging markets and developing countries ESI Export Similarity Index EU European Union Exim Bank Export-Import Bank of India FAO F  ood and Agriculture Organization of the United Nations FDI foreign direct investment FIFA F  édération Internationale de Football Association FOCAC Forum on China-Africa Cooperation FSF Financial Stability Forum G20 G  roup of 20 (Australia, Argentina, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, United Kingdom, United States and the European Union) G7 G  roup of Seven (Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and the European Union) Group of Eight (G7 plus Russia) G8 Group of 77 developing countries G77 G  roup of Eight + Five (G8 plus Brazil, China, G8+5 India, Mexico and South Africa) Global Competitiveness Index GCI gross domestic product GDP gross expenditure on research and development GERD Human Development Index HDI h  uman immunodeficiency virus / acquired HIV/AIDS immunodeficiency syndrome Human Science Research Council (South Africa) HSRC Inter-American Development Bank IADB International Atomic Energy Agency IAEA IBSA Dialogue Forum India, Brazil and South Africa Dialogue Forum ICT information and communication technology I nternational Fund for Agricultural IFAD Development

Abbreviations and acronyms  xix IFI international financial institution IGO intergovernmental organization IMF International Monetary Fund INR Indian rupiah ITC International Trade Centre ITU International Telecommunication Union LDCs least developed countries MDGs Millennium Development Goals MENA Middle East and North Africa Mercosur (Mercado Común del Sur) Southern Common Market MOEX Moscow Exchange MOU memorandum of understanding NATO North Atlantic Treaty Organization NDB New Development Bank NER nominal exchange rate NEPAD New Partnership for Africa’s Development NPT Nuclear Nonproliferation Treaty OECD  Organisation for Economic Co-operation and Development P5 Permanent Five members of the United Nations Security Council (China, France, Russia, United States and United Kingdom) PESTEL analysis  political, economic, social, technological, environmental and legal analysis PICI Presidential Infrastructure Champion Initiative (of the New Partnership for Africa’s Development) PPP purchasing power parity plurilateral summit institution PSI research and development R&D responsibility to protect R2P Regional Comprehensive Economic Partnership RCEP revealed comparative advantage RCA real effective exchange rate REER Russia-India-China RIC Russian ruble RUB Southern African Customs Union SACU Southern Africa Development Community SADC South African Institute of International Affairs SAIIA Shanghai Cooperation Organisation SCO Sustainable Development Goal SDG special drawing right SDR System of Payments and Reciprocal Credits SICAP SKA Square Kilometre Array (SKA) radio telescope small and medium-sized enterprises SMEs SML Sistema de Pagos en Moneda Local

xx  Abbreviations and acronyms STI SWOT analysis TPP UN UNASUR UNCLOS UNCTAD UNDP UNESCO UNGA UNICEF UNSC USPTO VEB WEF WFP WHO WTO ZAR

science, technology and innovation a nalysis of strengths, weaknesses, opportunities and threats Trans-Pacific Partnership United Nations Union of South American Nations United Nations Convention on the Law of the Sea United Nations Conference on Trade and Development United Nations Development Programme U  nited Nations Educational, Scientific and Cultural Organization United Nations General Assembly United Nations Children’s Emergency Fund United Nations Security Council United States Patent and Trademark Office Vnesheconombank World Economic Forum World Food Programme World Health Organization World Trade Organization South African Rand

Part I

Introduction

1 The rise of new institutions Marina Larionova

Introduction: the challenges and responses The past decades have witnessed dramatic changes in the world. The bipolar world order has vanished, the unipolar period has passed and a new multipolar world order is emerging. In this “unraveling” globalized world, geopolitical, economic, environmental, societal and technological challenges are tightly interconnected (Haass 2014). They “transcend borders and spheres of influence and require stakeholders to work together, yet these risks also threaten to undermine the trust and collaboration needed to adapt to the challenges of the new global context” (World Economic Forum 2015). The challenges and their perceptions have been driving shifts in international cooperation. One major trend is “the proliferation and diversification of actors, forums, and their arrangements to address global challenges,” leading to a presumed fragmentation of global governance (Egel 2015, 4–5). However, fragmentation is also often perceived positively as “contested multilateralism,” because institutional diversity can produce better outcomes than “stalled cooperation through existing venues” struggling to respond to persisting and emerging challenges (Egel 2015, 5). With multipolarity rising as countries outside the old core become economically more powerful, and clusters of countries gravitate to form new poles, the demand for multilateralism becomes more pronounced (Wade 2011). Multilateralism can be defined simply as the practice of coordinating policies in groups of states through ad hoc arrangements or institutions (Keohane 1990). Different modes of multilateralism and participation in coordinating mechanisms exist: the entry of new states into apex governing forums, the increased voting power of emerging states in international organizations, and new agreements and institutions established to coordinate and contribute to regional or global governance. In spite of an increasing number of international actors, including nonstate actors, both formal and informal organizations as well as governments remain key players. Responsibility for ensuring that this emerging multipolar world remains stable and contributes to global well-being rests with the

4  Marina Larionova states—both the established powers and the rising centres of power—as well as with the principals of global governance and their agents—international institutions, global and regional, multilateral and plurilateral. The emergence of informal multilateral institutions claiming a major role in defining the global governance agenda has created alternatives for providing common goods. These new summit institutions—led by the Group of Seven/Eight (G7/8) and, more recently, the Group of 20 (G20) and the BRICS group of Brazil, Russia, India, China and South Africa—are at the centre of the galaxy of global governance institutions. These groupings are often referred to as clubs, an arrangement that does not imply a common ideological commitment of its members, whose positions can differ on policy and economic ideas (Reay 2012). Club mechanisms are considered flexible, noninstitutionalized intergovernmental platforms for engagement (Drezner 2007). Other experts define a club as a group with clear rules, concrete and exclusive privileges for members, and a high degree of protection from external pressure. These informal summit institutions are characterized by limited membership, relatively low bureaucracy and reliance on open, flexible and voluntary approaches. Regular meetings of heads of state and government who engage on a wide range of international, regional and domestic politics stand at the pinnacle of such international arrangements, which involve many actors operating according to established procedures on two levels: domestic and international. Commitments contained in their collectively agreed documents are not legally binding, but implementation is stimulated by peer pressure. As with any multilateral institution, they are based on the principles of generalized reciprocity, in which states make common undertakings and agree to act cooperatively, irrespective of their degree of institutionalization (Hampson and Heinbecker 2011, 300). Most importantly, within informal summit institutions, states do not delegate certain levels of authority to international bureaucrats within intergovernmental organizations (IGOs), so there is no delegating relationship between the states and the IGOs in which states are principals and the IGOs are agents. Hence the states retain their sovereign control over their institution’s design and agenda. These new informal groupings set their own agenda. They also engage with established international organizations to steer global governance processes. Those formal organizations have “the UN system as the core of the organized multilateral order” (Thakur et al. 2014, 1). They need reform and cannot respond on their own to the interconnected persisting and arising challenges. Interinstitutional cooperative mechanisms are being transformed, and new models of cooperation are being established. A trend in the informal groupings leadership is evident in certain areas. On financial regulation, the G20 has taken up the initiative for decision making since its first summit in Washington in 2008, issuing mandates for further elaboration and implementation to relevant international organizations.

The rise of new institutions  5 The BRICS has adopted a different approach, characteristic of the G7 in its early years of performance, transmitting signals to international organizations, treating the issues within the summit-based apparatus and establishing its own institutions, such as the New Development Bank (NDB) (on the G7 see Putnam and Bayne 1987, 156–57). If common sense is any guide, global governance would gain effectiveness from a combination of the catalyst, core-group and parallel-treatment approaches exercised by summit institutions: influencing international organizations’ changes through endorsement or stimulus, or compelling them to reform; setting a new direction by taking a lead that the other organizations would follow; and creating the informal institutions’ own mechanisms. The first two approaches—especially in relation to the United Nations, the International Monetary Fund (IMF), the World Bank, the World Trade Organization (WTO), the Organisation for Economic Co-operation and Development (OECD) and relevant regional organizations—would undoubtedly enhance the resilience, legitimacy and effectiveness of the global governance architecture. The parallel treatment, however, could initially give rise to tensions and concerns about competition or rivalry, but fills a gap in governance and serves the needs of members and other interested stakeholders, with the new arrangements acquiring their own actorness and a place in the system of global governance.

Analytical paradigm Rational choice institutionalism can best explain not only the origins of the summit institutions, but also their existence and evolution. In its account of the institutional origins, rational choice institutionalism turns “primarily on the functions that these institutions perform and the benefits they provide” (Hall and Taylor 1996, 952). The rationalist fundamental position aptly holds that institutions are created by states because the states see benefits accrue to them from the functions performed by the institutions (Rosamond 2000, 116). The calculus approach fits the analysis of summit institutions bringing ­together states from a wide range of civilizations, continents and economic ­ rigin development. Its distinctive features clearly apply to the analysis of the o of the BRICS. First, the member states act strategically to ­maximize the attainment of their priorities. Second, summitry presents an arrangement where strategic interaction among leaders plays a major role in determining political outcomes. Third, according to Peter Hall and Rosemary Taylor (1996), rational choice institutionalism offers the greatest analytical leverage to settings where consensus among actors accustomed to strategic action and of roughly equal standing is necessary to secure institutional changes— the features typical of summitry institutions. Fourth, the institutions are created by a voluntary agreement among the leaders of the respective countries to perform concrete functions and missions (Hall  and  Taylor  1996).

6  Marina Larionova Thus, the leaders designated the G20 to be the p ­ remier forum for their international economic cooperation (G20 2009, para. 19). BRICS members came together to establish a platform for dialogue and cooperation to promote peace, security and development in a multipolar, interdependent and increasingly complex, globalizing world, on the basis of universally recognized norms of international law and multilateral decision making (BRICS 2012, paras. 3–4). Any theory has its strengths and weaknesses, however, and the rational choice limitations do not conscribe the analysis in this book. First, the book relies on a highly functionalist approach to explore BRICS performance on the global governance functions of deliberation, direction setting, decision making, delivery and development of global governance. Deliberation is understood as face-to-face discussions of the members encoded in their collectively issued communiqués. Direction setting is defined as collective affirmation of shared principles, norms and prescriptions. Decision making is regarded as credible, clear, collective commitments with sufficient precision, obligation and delegation. Delivery is understood as stated compliance with collective decisions. The development of global governance is perceived as the capability of the BRICS to use other international institutions and create its own institutions as global governance mechanisms (Kirton 2013, 37–39). Second, given that the founders’ intentions may not be fully understood or attained and that the founders themselves may not fully perceive the future effects of the institutions they establish or control, the analysis in Part II tracks the evolution and contribution of the BRICS to global governance across a wide range of policy areas. This analysis is based on the assumption that its agenda and the commitments its leaders make nevertheless reflect its intentions, interests and priorities, which are changing in response to the external and internal dynamics. Part III reviews the BRICS contribution to the global finance and economic architecture and on traditional and nontraditional security issues, science, technology and innovation. Part IV explores the BRICS members’ interests and priorities that shape the cooperation agenda. Third, the actors voluntarily create an institution to realize certain ­functions they value in a world already crowded by other organizations. In order to maximize benefits from the new arrangement, the founders may choose to engage with existing institutions in ways they regard most ­efficient for attaining their goals. Those modes of BRICS engagement with the other international organizations reflected in the leaders’ discourse should indicate the group’s place and role in the global governance architecture, as imputed at its launch and through its subsequent evolution. This assumption is tested by Andrey Shelepov in Chapter 3 on “BRICS Engagement with International Institutions for Better Governance” and Maria Raquel Freire in Chapter 4 on “Political Dynamics within the BRICS in the Context of Multilayered Global Governance.”

The rise of new institutions  7

Why the BRICS? This book deals directly with one of the most visible recent cases of summitry institutions, namely the BRICS, which is gaining importance and attention both regionally and globally but which, as an international actor, remains largely unexplored by scholars. The BRIC group of Brazil, Russia, India, China and South Africa, which was hosted by Russia for its first stand-alone leaders’ meeting at ­Yekaterinburg in Russia on June 16, 2009, has evolved into a plurilateral summit institution recognized both by skeptics and by proponents as a major participant in the international system. Ever since, the forum has grown institutionally, developed into the BRICS with the inclusion of South Africa, expanded its agenda and the intensity of interaction among its members, and demonstrated its capacity to deliver on a wide range of decisions. Among the examples are the NDB, the Contingent Reserve Arrangement (CRA), the Cooperation Agreement on Innovation and the Memorandum of Understanding on Cooperation among BRICS Export Credit Insurance Agencies. Skeptics, however, still regard BRICS as a loose group operating in opposition to western states, unable to articulate a shared alternative agenda, and struggling to secure solidarity among its members and its future as a bloc (Egel 2015, 3). Some go as far as to assert that no idea has done more to muddle thinking about the global economy than that of the BRICs. Other than being the largest economies in their respective regions, the big four emerging markets never had much in common. They generate growth in different and often competing ways — Brazil and Russia, for example, are major energy producers that benefit from high energy prices, whereas India, as a major energy consumer, suffers from them. Except in highly unusual circumstances, such as those of the last decade, they are unlikely to grow in unison. China apart, they have limited trade ties with one another, and they have few political or foreign policy interests in common. (Sharma 2012, 4) In spite of the critique, the BRICS is firmly established as an international actor and prominent for at least three reasons: first, the sheer size of its members’ combined population and their share of global gross domestic product; second, the fact that all its members are regional powers; and, third, the BRICS operates across at least five regions. So, what are the key features of BRICS actorness?

Nature of the grouping The BRICS runs counter to the general trend among the progeny of IGOs observed since 1950, accounting for the majority of them (Johnson 2014, 8).

8  Marina Larionova As an informal multilateral institution, it is an example of intergovernmental cooperation in which states retain their monopoly over the establishment and evolution of a new actor. There is no agent, no delegation of authority to international bureaucracy and no principal-agent relationship. The institutional design and agenda setting remain the prerogative of the BRICS leaders, the national governments and their bureaucrats. International bureaucrats or a secretariat do not affect the content or flow of information, which is similar to the G7. To some extent, it is also similar to the G20, although avoiding the influence of international bureaucracies is more difficult given the highly technical nature of many of the issues addressed by the G20 and the need for expertise from relevant international organizations. Thus, the nature of the BRICS permits it to avoid being influenced by international bureaucrats. However, it is not immune to national bureaucracy entrepreneurship and is certainly not free from national interests. Given its nature, the BRICS is not as far removed from the attention and control of the general public as traditional IGOs are and cannot as easily avoid the democratic deficit. As with other exclusive clubs, the BRICS is often accused of being illegitimate and ineffective, but the increasing involvement of business, experts and, recently, non-governmental organizations from the five members is a good indication of their awareness of their responsibility to the public.

Mission At the heart of the BRICS mission is support for a multipolar, equitable and democratic world order, based on international law, equality, mutual respect, cooperation, coordinated action and collective decision making of all states. The group strives to improve the global governance system and ensure the representation of developing countries in international institutions, which goes hand in hand with its commitment to take more responsibility for delivering global public goods through existing institutions or, if needed, through a parallel governance system. The NDB is the most vivid example of such a parallel system. Moreover, the BRICS also sees its mission as finding a new model of socioeconomic development.

Values BRICS members have repeatedly defended their values. Those values include multilateralism; the indivisible nature of security; democracy in international relations; inclusive decision making based on universally recognized norms of international law; a comprehensive, concerted and determined approach to establishing sustainable peace based on mutual trust, mutual benefit, equity and cooperation; and the inadmissibility of unilateral military interventions and economic sanctions.

The rise of new institutions  9

An established and expanding agenda The BRICS agenda reflects the group’s mission and values. An increasing share of social issues on the agenda indicates the commitment to deliver public goods for the members’ own citizens and those other countries. Based on the documents released by the leaders at their summits, the issues of health (9.78 ­percent), development (7.22 percent), and education, science and innovation (6.15 percent) have higher shares of the discourse than do political (5.60 ­percent) and security (3.40 percent) issues, even though the BRICS is often labelled a political gathering. However, the economy (23 percent), finance (11 percent) and trade (17.68 percent) remain the top three priorities. This pattern reflects the members’ shared objective to ensure sustainable and inclusive growth. Environmental protection, renewable energy, and clean and efficient energy technologies have been on the agenda since the first summit; their share in the documents is not high, but remains stable. With the launch of the energy ministers’ dialogue in 2015, cooperation on these policy areas will likely expand. Similarly, with the start of the employment and labour ministers’ dialogue, the share of the employment issues shot up, and, given the BRICS’s intention to continue cooperation on employment and labour, will likely continue to increase. Thus, although the BRICS is criticized for being unable to build its own positive agenda and for uniting based on opposition to the western-­dominated governance system, in fact its members have established a balanced agenda, where economic, social and political dimensions reinforce each other.

Institutionalization Institutionalization does not automatically translate into actorness or enhanced implementation, but does contribute to shaping the identity of the BRICS. The group’s family tree is growing with its expanding agenda. This trend is similar to the G7 and G20 processes. The formal track has now grown into a constellation of 14 cooperation formats, including meetings of sherpas and sous-sherpas, central bank governors, ministers and deputy ministers, senior officials, contact groups, and working and experts groups. From the first stand-alone meeting of the leaders in Yekaterinburg to the end of Russia’s 2015 presidency, 122 meetings took place. BRICS members produced 56 documents covering their constantly broadening agenda in that period. There is a clear trend of increasing the number of stand-alone meetings, releasing more documents, and creating more working groups and other mechanisms of coordination.

Balance of global governance functions With the evolution and institutionalization of the BRICS, the distribution of the global governance functions of deliberation, direction setting, decision

10  Marina Larionova making, delivery and the development of global governance in its discourse is changing. There was a notable decline in direction setting (from almost 49 percent in the total of all discourse for Yekaterinburg to 30 percent for Ufa) and a rise in decision making (from 22 percent for Yekaterinburg to 29 percent for Ufa). The share of deliberation fluctuated from summit to summit, but averaged a healthy 28 percent of the total discourse. At an average three percent, delivery was not high, but its presence indicated an awareness of accountability to the public. The global governance function reflected both the BRICS support of reforming existing institutions—such as the IMF, the World Bank and the World Health Organization (WHO)— and the trend of establishing its own institutions.

Compliance performance The number of concrete commitments made at summits increased, peaking at 130 for the 2015 Ufa Summit. However, BRICS compliance performance was mixed with an average of 70.7 percent. It was relatively high for the 2011 Sanya and 2013 Durban summits at 74 percent, while for the  2012 New Delhi Summit compliance amounted to 64 percent, and for the 2014 Fortaleza Summit it reached 70 percent. There was a clear trend toward a higher compliance performance with priority commitments. In the absence of any self-accountability mechanisms, a shared sense of urgency for collective and coordinated actions remained the main catalyst for BRICS compliance performance. BRICS self-­a ccountability mechanisms were nascent, and their emergence should encourage implementation. There was one positive example in the case of development and the adoption of the Strategy for BRICS Economic Partnership in Ufa. That decision followed the leaders’ request to their sherpas the year before at Fortaleza to advance discussions on intra-BRICS economic, trade and investment cooperation, informed by the work of the BRICS Think Tanks Council.

An emerging pattern for BRICS engagement with IGOs The BRICS pattern of engagement with IGOs conforms to its mission and evolving identity. To enhance the effectiveness of its collective actions, the BRICS engages with international organizations at various levels. Up to and including the 2015 Ufa Summit, 675 references to 48 IGOs were registered in BRICS documents. This number increased from summit to summit with the exception of the second leaders’ meeting in Brasilia. The top ten IGOs in BRICS discourse included the UN with the highest share at 28 percent, the G20 at 10.8 percent, the WTO following closely at 10.4 percent, the IMF and the World Bank at 8.8 percent and 4.2 percent respectively, WHO at 8.5 percent, and the United Nations Conference on Trade and Development (UNCTAD) rounding out the ninth at 3.5 percent. The BRICS

The rise of new institutions  11 institutions—the NDB and the CRA—each took a five percent share in the BRICS discourse. The African Union comes 10th with a two percent share. Two types of engagement are characteristic for the BRICS: catalytic influence (the stimulation and support of reform and changes) and parallel treatment (the creation of the forum’s own institutions). Since 2012, the BRICS has been working toward establishing its own institutions. The NDB and CRA are often perceived as alternatives to the existing institutions in the international financial system. At the same time, the BRICS almost never resorts to the core-group model often practised by other summit institutions, particularly the G20, leading in a new direction that other organizations would follow, nor does it tend to use the governing-through model (Shelepov 2015). The results of the study of BRICS engagement with international ­organizations confirm the hypotheses that the leaders’ choice of engagement model reflects the institution’s mission and role in the global governance architecture, attributed to the forum at its launch and consolidated over its evolution. Thus, by pledging “support for a multipolar, equitable and democratic world order, based on international law, equality, mutual respect, cooperation, coordinated action and collective decision-making of all States,” the BRICS consistently engages with the UN and its organizations, simultaneously striving to stimulate their reform (BRIC 2010, para. 2). This catalytic influence enhances the effectiveness of both the UN and the BRICS cooperation with it. This trend was strengthened in the course of the Russian presidency in 2015. Combatting financial and economic crises, ensuring strong, sustainable and balanced growth and facilitating development are key components of the BRICS mission. Indeed, in setting these objectives, the BRICS recognizes the G20 as the premier forum for international economic coordination and cooperation and demonstrates its unwavering support of G20 decisions on inclusive growth. Although the commitment to engage with the G20 weakened somewhat during the period from Sanya in 2011 to Fortaleza in 2014, the BRICS reinforced its consultations and coordination on the G20 agenda in 2015 and pledged to continue working to bring greater attention to the issues on the G20 agenda that reflect the priorities of developing countries and emerging markets. One continued BRICS priority is the reform of the international financial institutions to increase the voice and representation of emerging markets and developing countries in decision making. The leaders’ documents promote the legitimacy, credibility and effectiveness of these institutions by consistently calling on the IMF and its members to implement the 14th General Review of Quotas without further delay. However, with catalytic influence not producing any results (until the U.S. Congress approved the 2010 quota and governance reform in December 2015), the number of references to the IMF and the World Bank declined since 2012 (Lew 2016). This trend coincided with a rise in references to the NDB, which increased in 2015.

12  Marina Larionova The BRICS is committed to a strong, open, rules-based multilateral trade system with the WTO at its centre (BRICS 2011). This commitment is reflected in the continuous support of the Doha round of trade negotiations and the Trade Facilitation Agreement, and in a cautious assessment of the “plurilateral initiatives that go against the fundamental principles of transparency, inclusiveness and multilateralism,” which “distract members from striving for a collective outcome and … fail to address the development deficit inherited from previous negotiating rounds” (BRICS 2012, para. 16). Moreover, considering UNCTAD to be the focal point in the UN system on trade, investment, finance and technologies related to development, BRICS leaders supported its mandate at every meeting since the New Delhi Summit in 2012 (BRICS 2015, para. 22). The cornerstone of the BRICS mission is developing mutually enriching and beneficial cooperation and shaping the forum’s agenda on a wide range of issues. This is accompanied by rapid institutionalization, which is likely to continue. In 2015, the BRICS launched a dialogue on new policy areas: industrial cooperation, migration, employment, environment and energy. New mechanisms for internal coordination were also set up, such as the working group on socially important economic sectors, the working group on energy saving and energy efficiency, the Basic Agricultural Information Exchange System (BAIES), and the working group on cooperation on information and communications technologies. However, such institutionalization does not imply that the BRICS strives to substitute new institutions for existing intergovernmental ones or aspires to set up a new fundamentally different BRICS-centred international system. By creating its own institutions, the BRICS consolidates engagement with the relevant IGOs. Thus, in 2015, the BRICS continued to engage with WHO, reaffirmed support for the mandate of the UN International Development Organization, started a dialogue with the International Labour Organization, welcomed the proposal for the NDB to cooperate closely with existing and new financing mechanisms including the Asian Infrastructure Investment Bank and laid foundations for a dialogue between the members of the Eurasian Economic Union and the Shanghai Cooperation Organization. In its first ever reference to the OECD, the BRICS committed to continue cooperating in relevant international forums on issues related to the G20/OECD Action Plan on Base Erosion and Profit Sharing, which suggests that the five members are prepared to use the OECD’s expert potential. In conclusion, in establishing new institutions, the BRICS has consolidated its cooperation with other organizations. The choice of engagement model has depended on the policy area, the phase in the development of cooperation and the perception of the organization’s relevance to BRICS objectives. The preferred engagement models have been catalytic influence and parallel treatment, consistent with the governing-without model. The models are not mutually exclusive, but coexist and change in the course of cooperation. With the UN organizations and the WTO, engagement has

The rise of new institutions  13 followed the model of catalytic influence (exerting an influence on international organizations through endorsement or stimulus, or compelling them to reform), whereas, with the G20, the BRICS intention to engage on the governance-in-alliance model has remained unfulfilled. The BRICS has continued to refrain from issuing mandates to international organizations; hence there have been no cases of the governing-through model. As its own institutions strengthen, the BRICS will likely apply the governance-in-­ alliance model in its cooperation with relevant international organizations.1 Thus, as an actor in the system of global governance, the BRICS has the autonomous capacity to define and pursue its mission, interests, values and agenda; it has the capability to harness resources to implement collective commitments; and its collective actions are significant enough to engage with and influence the behaviour of other actors in the global system.

The structure of this book After this introductory chapter, the book looks at the BRICS’s evolving institutional identity. It then focuses on the forum’s contribution to several key policy areas of global governance, before moving on to exploring BRICS members’ interests and priorities for cooperation. Part II opens with a chapter by John J. Kirton of the University of ­Toronto on “Explaining the Solid, Strengthening Success of the BRICS Summit.” He reviews the ongoing debate among several competing schools of thought about how and why this plurilateral summit institution arose, evolved and performed, and reveals key success factors of its rising performance across major dimensions of global summit governance. Kirton makes a convincing case for his thesis that although this performance has been driven by the global financial, economic and food shocks since 2008, it is caused primarily by the failure of the multilateral organizations from the 1940s, the G8-Plus process from 2003 to 2009 and the first two G20 summits to give the big emerging powers the equal role, rights, responsibilities and effective influence warranted by their rising relative capability and the international openness needed to solve the new challenges of an intensely interconnected world. It was also due to the increasing institutionalization of the BRICS as a constricted, compact club, where rational incentives to cooperate could slowly start to breed personal bonds that enhanced cooperation among the participants. In his chapter on “BRICS Engagement with International Institutions for Better Governance,” Andrey Shelepov of the Russian Presidential Academy of National Economy and Public Administration (RANEPA) explores the models, intensity and distribution of BRICS cooperation with international organizations. Drawing on the findings from quantitative and qualitative analysis, he concludes that the dynamics of BRICS engagement with other international institutions is positive. However, engagement with international institutions is mainly based on two models: catalytic influence and

14  Marina Larionova parallel treatment. The establishment of the BRICS’s own institutions has not led to a noticeable decrease in the number and intensity of references to other international organizations. Thus, the BRICS and its NDB and CRA should be considered new tools for developing multilateralism and coordination rather than alternatives or competitors to existing international institutions. Maria Raquel Freire from the University of Coimbra, in her chapter on “Political Dynamics within the BRICS in the Context of Multilayered Global Governance,” explores how political dynamics within the BRICS shape existing and new governance mechanisms. She argues that the BRICS members, despite their asymmetrical character and sui generis nature, have been promoting a new international agenda built on sovereign principles and looking at a more equal and just global order. The author believes that the group is influencing global governance mechanisms, even if just by challenging existing institutions, and that its members have become relevant actors in the international system, to a great extent as a result of ­consensus-based decision making that facilitates a concert of policies in broader forums. However, this remains a challenge, as the BRICS members are neither homogenous nor similar in political, economic, cultural or social terms, so keeping coherence in decisions and actions is not easy. The political dynamics within the BRICS (and beyond) are pursued both in a competitive and cooperative manner, with geostrategic and political-economic issues on the agenda. Nevertheless, Freire concludes that the actorness of the BRICS should be acknowledged, as the group has been influential in decisions and has increasingly become an active participant in global governance arrangements. Part III is devoted to the BRICS contribution to global governance. It opens with the chapter on “The New Development Bank in the Global ­Financial and Economic Architecture” by Alexandra Morozkina of the ­National Research University Higher School of Economics. She addresses the question of whether the NDB will promote the role of the BRICS countries in the global financial architecture and foster their development. ­Morozkina compares the key multilateral development banks (the World Bank, the Asian Development Bank, the African Development Bank, the Inter-­A merican Development Bank, and the European Bank for Reconstruction and Development) and the BRICS countries’ national development banks with the newly established institution. She concludes that, given the NDB’s purpose to mobilize resources for infrastructure and sustainable development projects in the member countries, it could add to the functions of the existing institutions and become a significant development bank for those countries. After examining the current role of the BRICS countries in the global financial architecture, Morozkina asserts that, with the arrival of the NDB, the BRICS countries have the potential to change the current system of development finance and, therefore, to increase the role of the BRICS countries in the global financial architecture.

The rise of new institutions  15 Natalia Khmelevskaya of the Moscow State Institute of International Relations of the Ministry of Foreign Affairs of Russia, in the chapter on “BRICS Financial and Payment Arrangements: A Locus of Intragroup Trade Development,” explores monetary cooperation among the five countries. Drawing on in-depth statistics and analysis of trade flows, export structure similarities and exchange rate indicators of bilateral trade among the BRICS members, Khmelevskaya argues that their common vulnerability to external shocks, asymmetry in the trade network regarding value and structures, and their aspiration for internationalizing their currencies all push them toward common financial and payment arrangements. “The BRICS Security Agenda: Russia’s Approach and Outcomes of the BRICS Ufa Summit” is the focus of Victoria V. Panova, of the Far Eastern Federal University and Russia’s National Committee on BRICS Research. She contends that peace and security issues may be, if not divisive, at least the leading lowest common denominator in BRICS cooperation. This derives from a variety of factors—geographical and geopolitical positions, diverse political historic traditions, different international political status levels within the current political governance system, close economic and political ties, and complicated forms of cooperation and competition with the established western powers, as well as differences in understanding and promoting their own global ambitions and priorities. However, there is an additional responsibility vested in the BRICS by the fact that their cooperation and achievements in global political and economic governance reform are considered an alternative to the domination of the advanced economies and a new model of equal and mutually beneficial cooperation by the majority of developing countries. They should therefore seek viable solutions to security challenges. Niall Duggan of the University College Cork, Ireland, explores “The BRICS and Nontraditional Security.” His chapter reviews how the BRICS has influenced the agenda of global governance bodies and highlights its role as a collective actor in dealing with nontraditional security threats. Two areas of nontraditional security—water security and food security—are examined. In both cases, the BRICS countries have presented new discourses that focus on the links between nontraditional security and development. There is a particular focus on the relationship between food, energy and water, as well as on the possible ramifications of climate change on all three sectors. The core aspects of this discourse are the reduced role of the market in regulating food, energy and water and the need for greater support in terms of knowledge and technology exchange between countries. Duggan notes that the BRICS members themselves have agreed, as a collective actor, that food and water security are critical to their further development. The chapter makes it clear that that the BRICS countries agree that in order to deal with water and food security, the issues must be seen as interdependent and must be tackled at a global level by bodies dedicated to these areas of nontraditional security.

16  Marina Larionova Michael Kahn of Stellenbosch University looks at the “Prospects for ­Cooperation in Science, Technology and Innovation among BRICS ­Members” for improving the understanding of the nature and extent for scientific cooperation among the five BRICS countries using scientometric and bibliometric indicators. Scientometric indicators are available from a range of internationally recognized sources for science, technology and innovation indicators such as the U.S. National Science Board, the OECD, La Red de Indicadores de Ciencia y Tecnología—Iberoamericana e Interamericana and the United Nations Educational, Scientific and ­C ultural Organization, and for intellectual property statistics the United States Patent and Trademark Office and the World Intellectual Property Organization. The five BRICS members are the leading knowledge producers in their respective regions. This is partly a function of their size relative to their neighbours, but it is also embedded in their particular histories. However, a bibliometric analysis reveals low levels of ­i ntra-BRICS scientific collaboration when measured by coauthorship. The BRICS members collaborate much more with their traditional partners in the United States and Europe; and even where there is a high concentration of effort, as in physics, the meaning of “collaboration” is unclear. Kahn’s findings lead to the conclusion that intra-BRICS cooperation in science is more rhetoric than reality. However, it also raises a question of how and if this would change as a result of intra-BRICS cooperation on education and the BRICS Network University launched in 2015. Part IV on the interests and priorities of BRICS members opens with a chapter by Georgy Toloraya of Russia’s National Committee on BRICS Research “The BRICS for Better Governance: A Russian Perspective.” He outlines the BRICS key goals: to quantitatively strengthen members’ positions in the existing global economic and financial system, to create new institutions that would work in cooperation with existing ones but would be a better, more efficient and fair system and to design new ways of socioeconomic development for countries facing rising challenges. Toloraya asserts that if the BRICS succeeds in formulating a new development model, in the long run it will have much more impact on the road the global economy would take and how it will be governed. He claims that the more difficult situation for the “rising powers” becomes, the greater the need for intra-BRICS coordination of policies vis-à-vis the West, given that so many disagreements on certain issues among the BRICS countries and that their interests sometimes do not coincide. The chapter concludes with a road map for strengthening intra-BRICS cooperation and the forum’s engagement with other partners to enhance the relevance of the BRICS, decrease external perceptions of confrontation and ensure a smooth transition to a new global governance paradigm. In “The BRICS Agenda in the Asia-Pacific Region,” Haibin Niu of the Shanghai Institutes for International Studies argues that, given the increasing dynamics of the region on the global stage and the fact that three BRICS

The rise of new institutions  17 members—China, India and Russia—are from Asia, it is high time to think about an Asia-Pacific agenda for the BRICS. He offers an explanation of why the BRICS agenda in Asia is weak and proposes a vision for a possible Asian agenda. “South Africa in the BRICS: Last But Not Least,” by Vladimir Shubin of the Institute for African Studies at the Russian Academy of Sciences, reviews the priorities of South Africa’s participation in the BRICS. He demonstrates that the country’s 2011 accession to the bloc was consonant with the main principles of its foreign policy elaborated by the first democratic government, regarding the association as a group of like-minded independent countries as a political and moral force for changing the world. Through the BRICS, South Africa wanted to achieve aims at various levels, such as addressing poverty, inequality and job creation at home, gaining support from BRICS partners to Africa and obtaining increased support for the reform of international financial institutions and the UN. However, by admitting a leading African country, the other four BRICS members wanted to eliminate the geographical divide and include a country with moral authority that plays an important role in peacekeeping and conflict mediation. Shubin analyses of the extent to which those plans have been realized during five years of South Africa’s membership and concludes that South Africa may be the last but is not the least member of the BRICS. Tatiana Deych of the Institute for African Studies at the Russian Academy of Sciences explores the “BRICS Regional Policy in Africa” as a whole and individually, focusing on the members’ political and economic interests in the continent and the various patterns and strategies of each one’s cooperation with Africa. She presents an evidence base of the BRICS’s deepening engagement with African countries. The BRICS countries are large trading partners for Africa, and its trade with them is growing. ­A frica has become the main destination for BRICS development aid and investment. Deych asserts that BRICS members’ attention to Africa is determined by its resource potential and its growing influence in the world economy and contemporary international relations. BRICS members use soft power widely in developing ties with Africa, particularly in health care and education. The BRICS also actively participates in peacekeeping and conflict resolution in Africa. Deych concludes that the BRICS contributes much to African economics, and its presence on the continent has become important and welcome. In her conclusion to this volume, “Looking into the Future of the BRICS,” Marina Larionova builds on the evidence of BRICS performance to provide an outlook for the outcome of the second sequence of five BRICS summits. She asserts that the group’s summitry will mature, and it will retain its current membership and mission of building a multipolar, equitable and democratic world order. It will also resist the bureaucrats’ push for institutionalization and creeping expansion of its agenda. With

18  Marina Larionova China’s economy increasingly driven by new sources of growth, India’s continued rise, and the midterm recovery of Brazil, Russia and South ­A frica, the BRICS will be well placed to pursue global governance reform and take more responsibility for delivering global public goods through established IGOs as well as its own institutions. Despite differences in economic and political weight, the future cooperation of the BRICS as a concert of equals is defined by its members’ shared values and goals.

Acknowledgement This chapter was prepared under the RANEPA Research Project 2017 “Assessment of the G20 and BRICS effectiveness on the basis of monitoring of compliance with the summits’ decisions.”

Note 1 A full analysis of BRICS engagement models with other international organizations during the Russian presidency is available in the forthcoming article by Marina Larionova, “Russia’s 2015–16 BRICS Presidency: Models of Engagement with International Organizations,” International Organisations Research Journal, 2016.

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The rise of new institutions  19 Hampson, Fen O., and Paul Heinbecker (2011). “The ‘New’ Multilateralism of the Twenty-First Century.” Global Governance 17(3): 299–310. Johnson, Tana (2014). Organizational Progeny: Why Governments Are Losing Control over the Proliferating Structures of Global Governance. Oxford: Oxford ­University Press. Keohane, Robert O. (1990). “Multilateralism: An Agenda for Research.” International Journal 45(4): 731–64. doi:10.2307/40202705. Kirton, John J. (2013). G20 Governance for a Globalized World. Farnham: Ashgate. Lew, Jacob J. (2016). “Remarks by Treasury Secretary Jacob J. Lew at IMF-World Bank Spring Meetings.” U.S. Department of the Treasury, Washington DC, 15 April. www.treasury.gov/press-center/press-releases/Pages/jl0427.aspx (September 2017). Putnam, Robert, and Nicholas Bayne (1987). Hanging Together: Co-operation and Conflict in the Seven-Power Summit. 2nd ed. London: Sage Publications. Reay, Michael J. (2012). “The Flexible Unity of Economics.” American Journal of Sociology 118(1): 45–87. doi:10.1086/666472. Rosamond, Ben (2000). Theories of European Integration. Basingstoke: Palgrave Macmillan. Sharma, Ruchir (2012). “Broken BRICs: Why the Rest Stopped Rising.” Foreign Affairs 91(6): 2–7. www.foreignaffairs.com/articles/brazil/2012-10-22/broken-brics (September 2017). Shelepov, Andrey (2015). “BRICS and International Institutions: Models of Engagement in Global Governance.” International Organisations Research Journal 10(4): 7–24. http://iorj.hse.ru/en/2015-10-4/168629158.html (September 2017). Thakur, Ramesh, Brian Job, Mónica Serrano et al. (2014). “The Next Phase in the Consolidation and Expansion of Global Governance.” Global Governance 20(1): 1–4. Wade, Robert (2011). “Emerging World Order? From Multipolarity to Multilateralism in the G20, the World Bank, and the IMF.” Politics and Society 39(3): 347–78. doi:10.1177/0032329211415503. World Economic Forum (2015). “Global Risks 2015: Executive Summary.” Geneva. http://wef.ch/1DsvcNw (September 2017).

Part II

The evolving institutional identity of the BRICS

2 Explaining the solid, strengthening success of the BRICS summit John J. Kirton

Introduction Significance Among the world’s many plurilateral summit institutions (PSIs) of global relevance and reach, the BRICS grouping of Brazil, Russia, India, China and South Africa stands out in several ways. It arose as a summit on the sidelines of the Group of Eight (G8) summit in 2008, just before the arrival of the first Group of 20 (G20) summit in which all the BRICS members had an equal place. It was initiated by Russia, which soon hosted the first stand-alone BRICS summit at Yekaterinburg on June 16, 2009, and which had been an established member of the G8 since 1998. The BRICS combined territorially large, centrally located powers from major continents: R ­ ussia from Europe, East Asia and Central Asia; China from East Asia; India from South Asia; Brazil from South America; and, upon its admission in 2011, South ­Africa from Africa. At its outset, the BRICS contained a small set of countries of a distinctive kind—the economically, demographically and geographically big emerging countries that were growing very fast and were rapidly approaching or already in the major power tier. It had a quite comprehensive agenda, unlike the G20 initially focused on finance and economics and unlike the G8 apparently focused, after 2009, on development and security. The broad agenda of the BRICS highlighted the questions of whether and why the group would provide better global governance than the G8 and G20 and whether it would do so in cooperation or competition with these other global PSIs. The debate Answers to these questions are the subject of ongoing debate among several competing schools of thought about how and why the BRICS summit arose, evolved and performed. The first school sees a failed BRICS of little relevance to its members or those beyond. Adherents point to its lack of big achievements on central, pressing issues such as reforming the United Nations Security Council (UNSC) and the long struggle to produce only a modestly resourced BRICS development

24  John J. Kirton bank by 2014. As causes, they point to the lack of common characteristics and interests among BRICS members, notably the differences between democratic India, Brazil and South Africa and the less democratic members, the territorial disputes and military tension between China and ­India, and the admission of a much smaller South Africa focused on its n ­ eighbouring ­African region rather than on the globe as a whole (O’Neill 2012). The second school sees the BRICS experiencing a boom-to-bust decline (Niu 2015). This school emerged in 2013 when the economic growth of China and India began to slow and that of Russia, Brazil and South Africa suddenly started to plunge. A variant sees the BRICS as merely one of many new groups of emerging powers arising in the same period, with others having more promise due to their more reliably rising power and democratic political systems (Keukeleire and Hooijmaaijers 2014). The third school sees a “facade of unity” as the BRICS summit struggles to agree on a reformed international financial order, due to its members’ domestic economic and political challenges and the close ties of some to a much more powerful United States (Jones 2014, 80). Members’ difficulties in meeting the demands of their middle-income transition mean that the future power of the BRICS is by no means assured. Others highlight the members’ economic disparities (with China so much more powerful than the rest), their different domestic political systems and rivalries between China and India (Acharya 2014, 65). The fourth school sees the BRICS as a short-term, single-issue, successful response to the financial crisis that created it (Petropoulos 2013). It argues that the BRICS summit arose due to the imbalance in the international economic system exposed by the global financial crisis of 2008. The economic size of BRICS members allowed the group to participate successfully in discussions about solutions to the crisis. This showed that their collaboration could improve their global standing. This leverage focused the BRICS agenda, especially at its early summits, on reforming the existing international financial institutions (IFIs) to enhance the influence of emerging economies. The fifth school sees the BRICS becoming increasingly influential but still far from being a unified geopolitical bloc or globally influential alliance ­(Kulik 2014). Its leaders created a currency reserve pool in 2013, were the G20’s most active members, and were reshaping global order with increasing influence and impact due to their rising relative capabilities. Yet, after several summits, they “still have a long way to go before they can manage to find the common ground necessary to act as a unified geopolitical alliance” (Li 2014, 14). Similarly, Steen Fryba Christensen and Raúl Bernal-Meza (2014, 44), employing concepts developed by Antonio Gramsci and Robert Cox, conclude that “it is difficult to conceive of the BRICS as a counter-­ hegemonic ‘alliance’ to the extent that the interests and the differences between its members do not permit one to consider it a force that could generate systemic changes.” A variant of this school sees “interdependent hegemony,” asserting that “the rise of the BRICS has indeed, to a large extent, challenged the many aspects of the existing international order’s functionality,

Explaining the solid, strengthening success of the BRICS summit  25 scope, legitimacy and authority (Flockhart and Li 2010). However, it has not yet fundamentally changed the structural power of the existing international system” (Li and Garcia Agustin 2014, 60). The sixth school sees the BRICS as Russia’s counter-hegemonic coalition, created as an assertive, long-term, finance-focused group that is crystallizing as an influential community (Roberts 2010; Fituni 2014, 98–107). Its cohesion and influence are based on its members’ status as regional superpowers and economic growth engines, and their consensus is based on common principles for world order. This school argues that the BRICS was led by Russia seeking to counter unipolarity in an international system directed by the United States. Russia thus turned the BRICS from an investment strategy and concept about economic cooperation, invented by Jim O’Neill (2001) in 2001, into a political alliance to change the international balance. When the economic crisis exposed the United States as vulnerable, Russia seized the opportunity to highlight the failures of the U.S.-led international economic system. Russia called for emerging economies to become equals in decision making. By 2008, it had obtained a favourable international ­position, as it had integrated into the international economic system on its own terms. Russia thus reacted to the western sanctions imposed on it due to the Crimea crisis in 2014 by trying to use its connections with China and India to boost trade and foreign investment (Zhong 2014). As members of the G20, the BRICS countries also bonded to counter G20 host ­Australia’s suggestion that Russia might be suspended from the governing troika ­preparing the Brisbane Summit in November 2014 (Jones 2014, 83). The seventh school sees the BRICS as a broader developing country coalition seeking to shift the balance of global political influence from the West toward the developing world as a whole (Krasnov 2014). It was an expression of the unified political will of several countries to establish a new international institutional balance to correspond to the emerging geopolitical one. As the existing institutional balance was undemocratic and unipolar and failed to offer opportunities for all parties, the BRICS helped developing countries to claim their place. It thus challenged not only the G7/8 but also western dominance as a whole. The eighth school sees the BRICS as a stand-alone success, due to its own institutional skill (Cooper 2014, 2016; Cooper and Thakur 2014). Andrew F. Cooper and Asif Farooq (2013, 428) argue that “BRICS members have been successful in amplifying converging interests while avoiding friction from disagreement by downplaying issues on which there is geopolitical divergence and policy competition” and relying on institutional flexibility from a loose, informal style. A variant sees particular BRICS success in the global South, led by the BRICS New Development Bank (NDB), based on its members’ financial, technical and foreign reserve capabilities (Modi 2014, 86–87). The ninth school sees the BRICS as a successful competitor to the G8 and G20 (Kirton and Larionova 2012). It produced agreements important to its members and the world and succeeded on issues where other international institutions had failed. This school highlights the expansion of the

26  John J. Kirton BRICS to embrace South Africa as a member in 2011, the involvement of many ­African leaders at the Durban Summit in 2013 and the creation of the NDB at the Fortaleza Summit in 2014. As causes, it identifies the members’ growing power, similarity and like-mindedness as big, emerging, largely postcolonial powers and the failure of the established G7 powers and the international institutions they control to accommodate this power and distinctive common interests in a sufficiently fast and full way. The tenth school sees the BRICS as a successful cooperator with the G20 and ­ riority the G8 (Kirton 2013b, 2015a; Luckhurst 2013). It points to the many p subjects, principles and actions that the BRICS and all G20 members agree on and the tendency of the BRICS to voice its distinctive dissent in reasonable, restrained, diplomatic terms. It notes the BRICS summit’s regular expression of support for the G20. As causes of this cooperation, it identifies the seriousness of the global problems that all three global PSIs ­address, their shared agenda, the continuing need of the BRICS for G7 members’ capabilities and cooperation, the membership of all BRICS ­members in the G20, and the unique position of Russia—the BRICS founder—as a member of the BRICS, G20 and, until its suspension in 2014, the G8. A variant of this school sees BRICS members diverging on many G20 issues but uniting to secure the G20 agreements on IFI reform and shifting the G20’s focus to development issues (Stuenkel 2012). Puzzles All these schools acknowledge the growing international economic and political power and role of the BRICS members, their desire for an enhanced place in global governance, and their leadership in regional institutions such as the Shanghai Cooperation Organisation (SCO) and the India-­BrazilSouth Africa (IBSA) Dialogue Forum. Yet, none fully explains why BRICS summitry arose before G20 summitry did and then became institutionalized as a stand-alone summit in 2009, after the G20 had become an ongoing PSI in which all BRICS members and other key emerging countries had an equal place. None offers a comprehensive, evidence-based assessment of the BRICS summit performance, across all major dimensions of global governance that such PSIs have, nor does any apply an analytical framework that allows for systematic assessment and results that can be directly compared to the performance of the similar PSIs of the G7/8 and G20. Almost none offers explanations based on a well-specified, internally consistent, causal model that is grounded in the major international relations theories of realism, liberal institutionalism and constructivism and that directly connects causes to the hypothesized and observed effects. Such systematic scholarship is necessary to describe accurately how well the BRICS summit performed and explain compactly why it did so. This chapter takes up these tasks of systematic, theory-grounded, model-based description and explanation. It does so using a method of input-output matching, reinforced by a brief process tracing of the critical cases of the BRICS summits at Fortaleza in 2014 and at Ufa in 2015.

Explaining the solid, strengthening success of the BRICS summit  27 Thesis This analysis shows that the BRICS summit became a solid, increasingly comprehensive, cooperative success, both alone and within the G20, on behalf of all emerging countries. This was due primarily to the failure of the international institutions from the 1940s and 1975 generations to give the leading emerging powers an equal role in solving the compounding global financial, food and other crises and challenges erupting since 2008. As the BRICS grew institutionally in its level, membership, agenda, interaction intensity and depth, its summit performance rose to a substantial level across most dimensions of global governance. This rise was driven somewhat by the shocks of the global financial, food and economic crises of 2008–13, but above all by the failure of the multilateral organizations from the 1940s, the expanding G8 from 1975 and the first two G20 summits to give the big emerging powers the equal role, rights, responsibilities and influence that their rising relative capability and increasing international openness warranted and that were needed to more fully solve the new challenges of an intensely interconnected world. It was also due to the increasing institutionalization of the BRICS as a constricted, compact club, where rational incentives to cooperate could slowly breed personal bonds among the participants.

The growth of the BRICS as an international institution The BRIC was created conceptually as an attractive investment class of countries in 2001 by Jim O’Neill (2001) of Goldman Sachs. Yet, its political origins go back to the early 1990s in Russia, in the form of a “strategic triangle” of Russia, India and China (Senokosov 2012; Fituni 2014, 98–100). It was later fostered by the formation of the SCO led by Russia and China. The BRIC institution itself first emerged at the ministerial level, as a ­gathering of the foreign ministers of Brazil, Russia, India and China on the margins of the opening of the United Nations General Assembly in ­September 2006 (Roberts 2010; Luckhurst 2013). The first meeting of BRIC leaders took place on the margins of the G8 and Major Economies Meeting on Energy Security and Climate Change in Toyako on July 9, 2008 (Hansen and Sergunin 2015). BRIC leaders agreed there to hold a “proper” ­freestanding meeting the following year. That stand-alone summit took place at Yekaterinburg on June 16, 2009, after the first two, highly successful G20 summits had been held in ­November 2008 and April 2009 (Kirton 2013a). BRICS leaders continued to hold their annual stand-alone summits each spring. By 2011, they had added a second one each autumn, held on the margins of the G20 summit. At the second stand-alone summit, South Africa was admitted as a member. It attended the third summit in Sanya for the first time as such and hosted the fifth summit in Durban in 2013. The BRICS summit quickly acquired a broad and dense array of ministerial and official-level bodies. Stand-alone ministers’ meetings started

28  John J. Kirton for foreign affairs in 2006; finance in 2008; agriculture, trade and health in 2010; education and science, technology and innovation in 2013; and environment, energy and employment in 2015.1 The initial peace and security group thus quickly became an economic and social development one.

Dimensions of BRICS performance BRICS summit performance generally rose slowly and steadily over its first seven summits to reach a solid level. This progress is seen in a systematic assessment of the evidence according to the six dimensions of global governance by which such summits are assessed, as outlined and justified in the model of systemic hub governance developed to account for the performance of the G20 (Kirton 2013a) (see Appendix 2-A). Domestic political management On the first dimension of performance, domestic political management, the BRICS stand-alone summits had a perfect attendance record. The leaders always deemed it important to attend. The same was true for the BRICS summits held on the margins of the G20 and G8. This record was maintained by the decision at the G20 Toronto Summit in 2010 not to hold a BRICS meeting because Brazilian president Luiz Inácio Lula da Silva did not attend the accompanying G20 one. The principle of fully inclusive equality was thus affirmed. At their stand-alone summits, the BRIC leaders issued an increasing number of compliments to individual members in the summit’s communiqué. Such compliments, 56 in total, were issued at every summit, starting with two in ­Yekaterinburg in 2009 and rising to a peak of 13 at Ufa in 2015 (see Appendix 2-A). The BRICS also featured in the subsequent national policy addresses of its members. In China, in the report to the 18th Party Congress in the autumn of 2013, when Xi Jinping became the new president, the foreign policy section referred to only four international institutions: the UN, G20, BRICS and the SCO (Kirton 2016). The effect of BRICS summits on its leaders’ domestic re-election is difficult to determine. Most leaders attending the early summits (Russia’s ­Dmitry Medvedev, China’s Hu Jintao, India’s Manmohan Singh and ­Brazil’s Lula) did not run for re-election. In the case of South Africa’s Jacob Zuma, the newest member, there seems to have been a small positive effect. It did not help Brazilian president Dilma Rousseff serve out her term, as she was forced to resign in 2016. Deliberation Performance slowly increased on the second dimension, deliberation, in its public component measured by the conclusions in the summit’s concluding communiqué. The first summit produced just under 2,000 words, the second and third between 2,000 and 2,500, the fourth and fifth more than 4,000,

Explaining the solid, strengthening success of the BRICS summit  29 with a surge at the sixth to 21,907 words, followed by a slight fall to 19,047 in Ufa in 2015 (see Appendix 2-A). It took the G7 summit 13 years to exceed 4,000 words; the BRICS did so by its third summit. At the first summit in 2009, the leading issue was macroeconomics, occupying 57 percent of the communiqué, followed by trade and investment at 36 percent, development at 35 percent, and the financial crisis at 22 percent, with considerable overlap (see Appendix 2-B). In 2010, macroeconomics and development again led with more than 40 percent; IFI reform rose to take the third spot and employment was added. In 2011, macroeconomics and development again led, while food and agriculture at 18 ­p ercent came third and health at 14 percent came fourth, with arms control and proliferation added. In 2012, macroeconomics and development again led at 39 percent and 36 percent, respectively. In 2013, when South Africa hosted, development soared to a strong first at 46 percent and macroeconomics dropped to a distant second at 25 percent. However, in 2014, IFI reform took the lead at 19 percent, with macroeconomics next at 14 percent, and development dropped down to fifth place at eight percent. And in 2015, trade and investment came first at 21 percent, followed closely by macroeconomics at 20 percent and development now in sixth place at seven percent. The BRICS summit thus always had development as a priority, especially before 2014, and always had macroeconomics near the top of its agenda. Its agenda broadened into the social concerns of food and health. It also expanded into the political-security subjects of nonproliferation with a peak of nine percent in 2012 and terrorism with a peak of nine percent in 2013. In 2015, the BRICS communiqué further demonstrated this broadening and balancing of the summit’s agenda. No single topic dominated apart from trade, investment and macroeconomics, with the communiqué showing a more equitable distribution among the issues addressed. Direction setting On the third dimension, the principled and normative direction setting emphasized by constructivist theory, performance has been strong, above all in emphasizing the BRICS institution’s foundational distinctive mission. At the very start of their first joint statement in 2009, the BRIC leaders (2009) defined the mission of their new group as discussing “the current situation in global economy and other pressing issues of global development, and also prospects for further strengthening collaboration within the BRIC.” In the first numbered paragraph, they declared: “We stress the central role played by the G20 Summits in dealing with the financial crisis.” The statement ended by defining the BRIC’s purpose as “serving common interests of emerging market economies and developing countries, but also to building a harmonious world of lasting peace and common prosperity.” What rendered this foundational mission distinct from that of other international institutions was “strengthening collaboration within the BRIC,” supporting the G20 summit in the face of financial crisis and, less clearly, supporting

30  John J. Kirton the common interests of emerging countries in their economic development. The mission of intra-BRICS collaboration was supported at the Ufa Summit as BRICS leaders (2015) opened their communiqué by declaring their key priority as “further strengthening and broadening our ­intra-BRICS cooperation.” Decision making On the fourth dimension, decision making through producing commitments with precision, political obligation and future orientation, as reflected in the legalization variant of liberal-institutionalist ­theory, ­p erformance rose (­Abbott et al. 2000). The BRICS summit started with only 16 commitments in 2009, quickly jumped to 45 in 2010 and ­remained at about that level through to 2013 (see Appendix 2-C). It took the G7 summit six years to reach a similar level. In 2014, the BRICS soared to produce 97 commitments. In 2015 at Ufa, it jumped again to 130. In 2009, when Russia hosted, the leading subject was energy with five commitments, followed by international cooperation with four and well ahead of seven other issues with only one each. In 2010, when Brazil hosted, energy again came first with 11 commitments, followed by development with seven. In 2011, in China, climate change came first with six commitments, followed by macroeconomics and trade with five each. In 2012, in India, trade with nine commitments led by far. In 2013, in South Africa, development led with 11, followed by IFI reform with eight. In 2014, decision making broadened even more, as commitments came in turn on international cooperation with 24, macroeconomics with 10, and socioeconomic issues, regional security, and crime and corruption with nine each. One of the main topics of the 2015 summit was international cooperation, which was the focus of 30 (23 percent) of the commitments made; both food and agriculture and ICT followed with 17 (13 percent) each. The BRICS was increasingly becoming a full-strength decisional forum, much like the G7/8 had long been. This increasingly comprehensive decisional performance is seen in the addition of the first commitments on ­financial ­regulation, macroeconomics, trade, climate change and energy in 2010, and on food and agriculture, health, human rights, accountability, terrorism, and regional security in 2011. It is further seen in its surge in international cooperation commitments in 2014 and its continued focus into 2015. Its 405 cumulative commitments were led by international ­cooperation ­ utwardwith 75 and development with 33. This shows the BRICS was an o looking, cooperative, development-devoted group. Delivery On the fifth dimension of delivery, defined as the compliance of its members with its priority commitments in the year following the annual stand-alone summit, performance is assessed by an application of the methodology developed for, applied to and used to assess the G7/8, G20 and UN summits (Drezner 2014, 142; Kirton et al. 2014a, 2014b; Kirton 2015b). This method requires extensive, systematic research on the behaviour of BRICS members in

Explaining the solid, strengthening success of the BRICS summit  31 implementing their priority summit commitments, identifying by or consistent with the summit commitments their leaders made. The research based on this methodology has produced the best data base currently available about the compliance performance of the G7/8, G20 and BRICS summits. This research shows that BRICS compliance performance, based on 30 assessed priority commitments, has always been in the positive range, usually substantial and with a rising trend (see Appendix 2-D). Compliance with the one assessed commitment from 2009 was +1.00 (100 percent) and with the three from 2010 at +0.25 (63 percent). Compliance with the eight assessed priority commitments from 2011 was +0.60 (80 percent) and with the five commitments assessed from 2012 at +0.28 (64 percent). For the five assessed  commitments from 2013, compliance rose back to +0.48 (74 ­percent). For the eight assessed commitments in 2014, compliance was +0.40 (70 ­percent). This BRICS average compliance performance of +0.45 (73 percent) is similar to the G8’s first 37-year average of +0.40 (70 percent). Development of global governance On the sixth dimension, the institutionalized development of global governance, performance was strong. References to institutions inside the BRICS started with two in 2009 but rose to 32 in 2012 and 26 in 2013, peaked at 58 in 2014 and dropped back to 35 in 2015 (see Appendix 2-A). There was a similar rise in references to outside institutions, starting at 13 in 2009 and 35 in 2010, spiking up to 92 in 2014 and dropping back to 74 in 2015 (see Appendix 2-E). There was always more attention to outside than to inside institutions, although the gap narrowed over the years. In keeping with its distinctive mission, the BRICS launched its NDB in 2014 to promote development, just as the G20 had created the Financial Stability Board in 2009 to meet its distinctive mission of promoting financial stability.

The cadence of BRICS performance Taken together, BRICS summit performance over its first six years suggests a four-stage progression. The first stage of getting started saw a small success, with accomplishments primarily in the public deliberative domain. The second stage of taking off, in 2010 and 2011, saw a substantial increase in almost all dimensions, especially in decision making in 2010 and delivery in 2011. The third stage, in 2012 and 2013, saw a further rise to a substantial level, above all in public deliberation. The fourth stage, at the start of its second hosting cycle in Fortaleza in 2014 and then in 2015, saw a spike in deliberation, decision making and the development of global governance inside the BRICS, led by the birth of the NDB and increased references to outside institutions, too. On a comparative basis, this performance fits well with that of the G7 after its first six summits from 1975 to 1980. However, in comparison with the first six G20 summits, the BRICS lags on all dimensions, save only for the leaders’ attendance where the smaller BRICS had a perfect score.

32  John J. Kirton Causes of BRICS performance The concert equality model of G8 governance and the systemic hub model of G20 governance can explain this particular pattern of BRICS performance rather well. But, in the case of the BRICS, both models’ second cause of multilateral organizational failure now replaces the first cause of shock-­ activated vulnerability as the enduringly most salient (Kirton 2013b). Shock-activated vulnerability The first cause is shock-activated vulnerability, notably in finance, food and foreign military interventions. The global financial crisis, which emerged in the United States, United Kingdom and continental Europe in 2007, was a key cause of the first BRIC stand-alone summit at Yekaterinburg in June 2009 and, to a lesser extent, its first sideline summit in the summer of 2008. By 2009, all BRIC members were severely affected by the crisis, which erupted when U.S. investment bank Lehman Brothers collapsed on September 15, 2008, and spread globally and deepened swiftly during the following months. The diminishing strength of the crisis after 2009 coincided with the reduced attention given by the BRICS to the financial crisis and the increasing intensity of their summitry and performance focused on other subjects. The second shock salient for the creation of the BRICS summit was the food crisis of 2007. Its impact is seen in the release at the first BRIC summit of a separate leaders’ statement on food security. However, although most BRIC members were food importers, the impact was limited within their countries, if not on the poorer developing ones beyond. The declining severity of the global food crisis was, however, accompanied by the rising attention given to food security in 2011, for this was a chronic condition for the poor. The third shock came from foreign military interventions led by G8 powers, above all in Libya in 2011. Those actions inspired the BRICS to express its opposition to the Libyan intervention in 2011 and more generally to express its devotion to the principle of noninterference, even if these military interventions were not mounted directly against BRICS members or their close allies. Multilateral organizational failure The second cause, multilateral organizational failure, was more consistently salient. BRICS actions were directly caused by the failure of the UNSC to prevent the expansion of the military intervention launched by the North Atlantic Treaty Organization in Libya, the failure of the International ­Monetary Fund (IMF) to reform its voice, vote and governance in full on time, and the failure of the World Bank. Indeed, the World Bank failure led to the creation of the NDB in 2014. The World Trade Organization’s inability to complete its badly overdue Doha Development Agenda also fuelled BRICS performance on trade. In similar fashion, the G8 failed at its 2008 summit in Hokkaido and 2009 summit in L’Aquila to give BRIC leaders a fully equal, permanent place.

Explaining the solid, strengthening success of the BRICS summit  33 The leaders were again only invited guests at some sessions and at L’Aquila their status was diluted by the 40 leaders who attended on the last day. BRICS performance surged at Fortaleza in July 2014, the first BRICS summit held after Russia had been suspended from the G8, which held two summits earlier that year. Performance remained equally high at Ufa in 2015. Predominant, equalizing capabilities The third cause, the predominant, equalizing capabilities of BRICS members, also mattered. Since its 2009 start, the BRIC had increased its move toward global predominance to approach a majority in global gross domestic product in purchasing power parity, growth rates and population. Its growing, if still minority, global share was consistent with the solid level in its performance overall (Kirton 2013a, 2013b). However, the combined soft power of the BRICS members remained modest compared to that of the G7 and some of the other G20 members (see Appendix 2-F). Moreover, the BRICS internal equality and equalization were low. C ­ hina’s economy was larger than the other four members combined and its growth rate far exceeded that of the other, slowing members in 2013 and 2014. In 2015, a soaring India and China, juxtaposed with a plummeting Russia, Brazil and South Africa, increased the gap. The addition of South Africa as a member in 2011 also reduced the equality and equalization of the group. One result of China’s much superior relative capability was its 2014 success in securing the Shanghai headquarters of the NDB. Common characteristics and principles The fourth cause, common characteristics and principles, had some weight. Most BRICS members were big, rapidly emerging economies, with a global foreign policy and relevance. Most had direct experience as colonies under European imperialism. Yet, there was a large divide between the democratic members of India, Brazil and South Africa, institutionalized in their IBSA Dialogue Forum since 2013, and Russia and China, joined with outsiders in the SCO. China and India had a territorial dispute, just as Russia and Japan did within the G8 club. Domestic political cohesion The fifth cause, domestic political cohesion, was high and thus helps account for the solid and increasing success of the BRICS. Each BRICS leader in the first six years was in firm control of his or her domestic legislature, judiciary and central bank and, until 2015, was relatively popular among his or her domestic public. Continuity was considerable, as each original member had no more than two leaders since the summit’s start; South Africa had only one leader since it joined in 2011. The cumulating continuity helps account for the rising BRICS performance, if not the singular spike in 2014.

34  John J. Kirton Constricted participation in a club at the hub The sixth cause, constricted participation in the club, also had a strong effect. With only one member added in its first seven years to make it a five-member group, the BRICS was a highly compact institutional club. It met twice a year after 2011, acquiring the interaction intensity needed to have it ­become an ­interpersonal club. All members also belonged to the G20. Russia connected the BRICS to the G8 until 2014, India and South Africa to the Commonwealth, Russia and China to the SCO and the Asia Pacific Economic ­Cooperation ­forum, and Russia, China and India to the Asia-Europe Meeting.

Critical case: 2014 Fortaleza The sixth BRICS summit, held in Fortaleza on July 15, 2014, showed that the BRICS was becoming a more comprehensive, cooperative success on behalf of all emerging and developing countries, by acting as an internally equal and embryonically interpersonal club. Some of Brazil’s partners felt that the preparatory process was disorganized. The Brazilian presidency was preoccupied with hosting the World Cup, which resulted in a delay in the summit from the usual springtime scheduling to mid July. Brazil was also preoccupied with its forthcoming elections in October and with the one big make-or-break BRICS summit agenda item—the long-discussed and negotiated development bank. This issue was rendered more complex and competitive when South Africa decided to seek the site of the bank, even though it did not expect to win. ­China’s strong desire to host the bank in Shanghai and its campaign to secure supporters for its bid led China to readily accept several of its partners’ proposals that it had previously refused. Russia’s international isolation due to its invasion and annexation of the Crimean region of Ukraine made it similarly accommodating, in an effort to boost its geopolitical support from its BRICS colleagues. Brazil’s desire to host a successful summit in the lead-up to President Dilma Rousseff’s re-election campaign and to secure an agreement on the bank as the defining achievement of her summit led it to accept large passages of text proposed by its partners for the communiqué, which appeared unaltered in the final declaration. These dynamics of equal initiative and easy agreement were most evident in the success of several issue-specific initiatives from South Africa, the least powerful country and newest member in the group. The New Development Bank The defining achievement of Fortaleza was the long-awaited birth of the NDB (Kirton 2015a). It took much time to debate the details, especially regarding the physical home, first president, board of directors, and quota contributions and voting shares. At one moment at the summit, it looked like

Explaining the solid, strengthening success of the BRICS summit  35 there would be no consensus. But, in the end, the leaders themselves realized that if they did not agree, they would lose a historic opportunity and might not have another chance. They produced a result that satisfied them all. The decision to call the new institution the “New Development Bank” was a compromise rather than a signal of any particular approach or significance about the word “new.” Other names had been suggested, including the “BRICS Development Bank” and the “Infrastructure Bank.” The bank was, in fact, new in several ways. One was the equal sharing of the capital contributions among the five countries, as distinct from the World Bank with its different quota shares and proportional voting rights, with the largest share from the United States. This arrangement required much negotiation, as China had wanted to contribute more than the other members. However, the majority’s insistence on equality won. The NDB was intended to complement the established World Bank and Asian Development Bank rather than substitute for them. It would fill the gaps that the old ones could not cover. This was in the interest of developing countries, such as Indonesia, which had complained about the detailed, intrusive conditionality of the IMF and World Bank, especially in the Asian financial crisis of 1997. The new bank would do things the other banks and IMF were not able or willing to. The NDB was initially devoted mainly to traditional infrastructure, such as roads and connectivity. However, senior Chinese officials foresaw its projects expanding from hard infrastructure to social development over time. The first task, however, was to develop a strategy about the role of the BRICS in the world, and what it and only it could collectively do. UNSC permanent membership A second issue showing the advance of the BRICS as an equalizing club was the reform of the permanent membership of the UNSC. This was a difficult issue arousing a defensive positionalist dynamic from Russia and China as the existing Permanent Five (P5) members of the UNSC, who saw expansion as a dilution of their status, rights and control. It was one of the many major differences among the BRICS countries. At each BRICS summit, the leaders’ personal representatives had spent much time drafting the section on this issue of the declaration. India, Brazil and South Africa pushed hard to have their claims for enhanced membership recognized. China and Russia, both members of the P5, had always refused. At Fortaleza, however, the BRICS members finally put their differences aside and acknowledged the IBSA claim. The declaration read: “China and Russia reiterate the importance they attach to Brazil, India and South Africa’s status and role in international affairs and support their aspiration to play a greater role in the UN” (BRICS 2014). At the previous two summits, the IBSA members had unsuccessfully pressed for such language, in a stronger form. This time a gentler version of the IBSA initiative got in.

36  John J. Kirton Sexual and reproductive rights Another achievement was the commitment on sexual and reproductive rights. The declaration read: “We confirm our strong commitment to address social issues in general and in particular gender inequality, women’s rights and issues facing young people and we reaffirm our determination to ensure sexual and reproductive health and reproductive rights for all” (BRICS 2014). The passage on sexual and reproductive rights was drafted by South Africa and appeared verbatim from its drafted text. South Africa had made such a proposal for the two previous summits at Durban and Delhi but had been refused, despite its status as Durban’s host. This was due to Russia’s resistance to anything that might be seen as legitimizing the status and claims of its gay community. Even though this Russian antipathy was particularly prominent at home in the spring of 2014, at Fortaleza the passage sailed swiftly through. Social security and education Further achievements arose on social security and education. The Fortaleza Action Plan authorized a “Meeting of Ministers or Senior Officials responsible for social security, on the margins of a multilateral meeting” (BRICS 2014). This South African initiative and success flowed from the passage on population led by South Africa at the Sanya Summit. Another South ­African success at Fortaleza was the paragraph that linked education explicitly to the Millennium Development Goals and the post-2015 Sustainable Development Goals.

Critical case: Ufa 2015 The seventh BRICS summit, in Ufa on July 8–9, 2015, demonstrated further progress on a broadening agenda from regional security to socioeconomic, agricultural and especially environmental issues.2 Held in the capital of the autonomous Republic of Bashkortostan in the Russian Federation, the BRICS summit was deemed highly important by the authorities of both the republic and Russia. Preparations started long before 2015, quickly becoming the highest priority for the government in Ufa and receiving adequate attention from Russian media. The importance of the summit and its smooth production was evident. Bashkortostan undertook reconstruction of the city’s infrastructure. The airport was modernized to accommodate heavy planes such as the Airbus 330 and Boeing 747 and to increase capacity for 800 passengers per hour. Roads were renovated and seven new hotels built; round-the-clock cameras were installed to ensure security in the city. The BRICS summit took place at the same time as the SCO meeting in Ufa. The leaders’ visit allowed Bashkortostan to create the conditions “to gain a foothold on the international political and business maps” as a strategic project, with decade-long effects to “lay the foundation of further

Explaining the solid, strengthening success of the BRICS summit  37 cooperation at the regional level, to establish a contact with the business community of the SCO and BRICS countries, [and] to show investment opportunities” (Head of the Republic of Bashkortostan 2015). As the West continued its political and economic isolation of Russia, the success of the BRICS and SCO summits would demonstrate that the country remained not only a major power in international relations but also an increasingly interconnected and strategically important partner. The main theme and an overall objective of both summits was fostering deeper cooperation among established partners while facilitating new bilateral and multilateral partnerships among the BRICS and SCO members. Russia’s long-term objective in the BRICS and, accordingly, a consistent goal of its 2015 presidency was the gradual transformation of the group from a dialogue forum and tool for coordinating positions on a limited range of issues into a full-scale mechanism for strategic and daily cooperation on key issues in world politics and the global economy. This objective was to be achieved by consistently expanding the range of areas of cooperation, actively promoting the common international interests of BRICS countries and creating an extensive set of mechanisms for cooperation, primarily in the financial and economic sphere. These mechanisms would gradually evolve into concrete institutions. Integration as the theme Russia’s main objectives of integration and the active cooperation of its presidency were fully reflected in the spirit of the Ufa Summit. Active cooperation was underlined in the communiqué, with its historic high number of commitments. The promotion of active cooperation was seen not only among the BRICS members but also among the members of the SCO and the countries invited as guests. The second-ever trilateral meeting between Russia, Mongolia and China took place on the sidelines of the summit, with leaders agreeing to a memorandum to establish an economic corridor among them in the future. Several meetings held on the sidelines addressed security challenges. On regional security, they included meetings between the leaders of India and Pakistan, as well as Russia and Tajikistan. The Ufa Summit demonstrated BRICS members’ recognition of the need for their cooperation network to grow in order to strengthen their international position. Development Development was another area for cooperation among the BRICS. The NDB was presented as a new vehicle for expanding BRICS relations among its members and in other regions. It would help BRICS members and other developing countries with their development projects. When asked if the NDB ­ acedonia and could be used for development projects in such countries as M Serbia, Luciano Coutinho, president of the Brazilian ­Development Bank,

38  John J. Kirton responded: “Those are the periphery of the European Union. They deserve attention, they are not fully developed economies, and I think the New Development Bank could take action in the future” (­Sputnik News 2015).

Conclusion As the BRICS grew institutionally, its summit performance rose to a substantial level, across all six dimensions of performance and across a broadening agenda extending into the political-security sphere. This progression was due primarily not to initial and continuing financial shocks but to the failure of the multilateral organizations from the 1940s and 1970s to give the big emerging powers the greater role, rights and responsibilities warranted by their rising relative capability. It was also due to the intensifying institutionalization of the BRICS as a constricted, compact club, where rational incentives to cooperate could start to breed personal bonds that enhanced cooperation among the participants themselves.

Notes 1 See the BRICS Information Centre (www.brics.utoronto.ca) for more meetings of BRICS ministers, officials and experts. 2 The author is grateful for the research and drafting assistance of Olga Milkina for this section.

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Appendix 2-A  BRICS Performance, 2009–2015 Summit

Domestic Political Management

Deliberation

Decision Delivery Making

Attendance Compliments # Words # Documents 2009 Yekaterinburg 2010 Brasilia 2011 Sanya 2012 Delhi 2013 Durban 2014 Fortaleza 2015 Ufa Total Average

100% 100% 100% 100% 100% 100% 100% 100% 100%

2 8 11 7 5 10 13 56 7

1,844 2,436 2,253 4,415 4,789 21,907 19,047 56,691 8,099

2 1 1 2 2 3 3 14 2

16 45 38 32 47 97 130 405 58

Development of Global Governance

Compliance # Commitments Inside Assessed

Outside

+1.00 +0.25 +0.60 +0.28 +0.48 +0.40 N/A

13 35 28 43 51 92 74 422 48

+0.45

1 5 3 8 5 8 N/A 30 5

2 16 12 32 26 58 35 181 26

Notes: Only documents issued at a stand-alone summit in the leaders’ name are included. Domestic Political Management refers to participation by BRICS leaders. Compliments are references to members in summit documents. Decision Making refers to number of commitments as identified by the BRICS Research Group. Delivery scores are measured on a scale from −1 (no compliance) to +1 (full compliance, or fulfilment of goal set out in commitment). Figures are cumulative scores based on compliance reports. Development of Global Governance: internal refers to the number of references to BRICS institutions in summit documents; external refers to the number of references to institutions outside the G20.

42  John J. Kirton

Appendix 2-B  BRICS Conclusions, 2009–2015 Issue Area Macroeconomics Development Trade and investment Financial crisis International financial institution reform Health Food and agriculture Exchange rates Terrorism Employment Nonproliferation (arms control) Social Protection Crime and corruption Regional security: Syria Regional security: Afghanistan Regional security: Iran Regional security: Mali Regional security: Iraq Regional security: Ukraine

Average 2009 (%) (%)

2010 (%)

2011 (%)

2012 (%)

2013 (%)

2014 (%)

2015 (%)

34.0 30.4 18.7 13.0 12.6

56.8 35.2 35.7 21.5 12.9

43.2 40.8 6.8 18.1 21.1

40.5 40.2 11.5 14.4 7.9

39.2 36.4 25.5 12.2 12.5

25.0 45.7 19.2 9.3 8.3

13.9 7.9 11.7 9.1 18.7

19.6 6.6 20.8 6.1 6.6

10.3 08.3 06.7 06.4 05.2 04.0

6.8 6.8 7.2 5.6 0 0

7.3 8.9 5.9 5.1 6.4 0

14.4 17.7 4.4 4.6 1.2 8.8

16.3 8.8 10.5 6.4 7.3 8.9

15.4 8.1 10.2 9.2 9.0 2.6

6.6 2.7 6.9 5.4 4.3 3.0

5.5 5.1 2.1 8.4 8.0 4.6

03.2 02.4 01.8

5.2 0 0

8.5 0 0

1.2 0 0

1.3 0.5 3.8

0.0 2.7 3.6

1.8 4.0 2.2

4.7 9.6 3.1

01.1

0

0

0

2.6

2.4

0.9

1.6

01.0

0

0

0

2.9

2.6

0.6

0.7

00.5

0

0

0

0

2.5

0.4

0.6

00.3

0

0

0

0

0

0.7

1.7

00.1

0

0

0

0

0

0.2

0.5

Explaining the solid, strengthening success of the BRICS summit  43

Appendix 2-C  BRICS Commitments by Issue, 2009–2015 Issue Area Financial regulation Reform of international financial institutions Macroeconomics Microeconomics Socioeconomic Labour and employment Finance Trade Green growth Environment Climate change Energy Development Food and agriculture Health International cooperation Good governance Accountability Crime and corruption Conflict prevention Nonproliferation Terrorism Regional security Natural disasters Human rights Information and communication technologies Education Political issues Science and education Tourism Culture Total

Total 2009 2010 2011 2012 2013 2014 2015 4 20

0 1

2 4

2 1

0 2

0 8

0 1

0 3

30 1 22 1 6 31 0 4 14 19 33 23 8 75 3 1 21 1 3 7 22 4 12 22

0 0 1 0 0 0 0 0 0 5 1 0 0 4 1 0 0 0 0 0 0 1 0 1

4 0 1 0 0 4 0 0 2 11 7 0 0 4 1 0 0 0 0 0 0 2 0 0

5 0 4 0 0 5 0 0 6 1 1 1 1 4 0 1 0 0 0 1 1 1 1 2

1 0 2 0 0 9 0 0 3 2 3 1 1 3 0 0 1 0 0 1 0 0 0 0

4 1 0 0 0 4 0 0 1 0 11 0 0 6 1 0 1 0 1 2 6 0 1 0

10 0 9 1 0 4 0 3 1 0 6 4 0 24 0 0 9 1 2 2 9 0 5 2

6 0 5 0 6 5 0 1 1 0 4 17 6 30 0 0 10 0 0 1 6 0 5 17

7 4 5 1 1 405

0 1 0 0 0 16

3 0 0 0 0 45

0 0 0 0 0 38

0 3 0 0 0 32

0 0 0 0 0 47

4 0 0 0 0 97

0 0 5 1 1 130

Appendix 2-D  BRICS Compliance, 2009–2014 N = 30

Issue Area

Text

Average

Brazil

Russia

India

China

South Africa

Food security

+1.00

+1

+1

+1

+1

+1.00

+1.00

+1.00

+1.00

+1.00

MDGs Protectionism Renewable energy sources

+1.00 −1.00 +0.75 +0.25

+1 −1 +1 +0.33

+1 −1 0 0

+1 −1 +1 +0.33

+1 −1 +1 +0.33

UNSC, Libya Reform of the international monetary system Physical market regulation Cancun agreements African infrastructure development, NEPAD Public health and HIV Africa infrastructure development, NEPAD Trade cooperation

+0.40 +0.20

0 0

+1 0

−1 +1

+1 +1

+1 −1

+0.40 +0.80 +1.00

+1 +1 +1

0 +1 +1

+1 +1 +1

0 0 +1

0 +1 +1

+1.00 +0.60

+1 +1

+1 0

+1 +1

+1 +1

+1 0

+0.40 +0.60

0 +0.63

0 +0.50

+1 +0.75

+1 +0.75

0 +0.38

2009 Yekaterinburg, Russia (N = 1) 2009– Summit average

Joint statement on food security

2010 Brasilia, Brazil (N = 3) 2010–15 2010–19 2010–29 Summit average

Development Trade Energy

2011 Sanya, China (N = 8) 2011–4 2011–13

Regional security IFI reform

2011–14 2011–17 2011–25

Finance Climate change Development

2011–27 2011–28

Health Development

2011–30 Summit average

Trade

2012 New Delhi, India (N = 5) 2012–3

IFI

2012–9 2012–23

Trade Climate change

2012–25

Development

2012–27 Summit average

Energy

Mobilize resources to the IMF Cooperate within UNCTAD Convention on biological diversity African infrastructure development, NEPAD Renewable energy

+0.20

0

0

0

+1

0

0 +0.20

0 0

−1 +1

+1 +1

0 −1

0 0

+0.40

0

0

0

+1

+1

+0.60 +0.28

0 0

+0.60

+1 +0.20

0 +0.40

+1 +0.40

+1 +0.40

+1

+1

+1

+1

−1

+1.00

+1

+1

+1

+1

+1

+0.20 +0.20 +0.40

0 0 0

0 +1 +1

+1 0 +1

+1 +1 0

−1 −1 0

2013 Durban, South Africa (N = 5) 2013–9

Development

2013–21

Trade

2013–24 2013–29 2013–36

Macro Regional security Terrorism

Summit average

NEPAD and industrialization process in Africa Transparent and rules-based multilateral trading system SMEs Afghanistan and democracy UN Global CounterTerrorism Strategy

+0.48

+0.40

+0.80

+0.80

+0.80

−0.40

−1.00

−1

−1

−1

−1

−1

+0.20 +1.00

−1 +1

+1 +1

+1 +1

+1 +1

−1 +1

+0.80

0

+1

+1

+1

+1

2014 Fortaleza, Brazil (N=8) 2014–30

Trade

2014–41 2014–49

Regional security Environment

2014–53

Development

WTO dispute settlement understanding reform Afghanistan and democracy Convention on biological diversity MDGs

(Continued)

N = 30

Issue Area

Text

Average

2014–23

0

0

0

+1

0

+0.60

+1

+1

0

0

+1

2014–45

Terrorism

+0.60

0

+1

+1

+1

0

2014–59

Crime and corruption

Tax base erosion and information exchange Sexual and reproductive health and rights for all UN Global CounterTerrorism Strategy UN Convention against Corruption

+0.20

2014–58

Financial regulation Human rights

+0.80

+1

+1

0

+1

+1

+0.40

+0.13

+0.63

+0.38

+0.63

+0.25

+0.45

+0.33

+0.50

+0.57

+0.63

+0.19

Summit average Overall average

Brazil

Russia

India

China

South Africa

Notes: IFI, international financial institution; IMF, International Monetary Fund; MDG, Millennium Development Goal; NEPAD, New Partnership for Africa’s Development; SMEs, small and medium-sized enterprises; UNCTAD, United Nations Conference on Trade and Development; UNSC, United Nations Security Council; WTO, World Trade Organization.

Appendix 2-E  References to Outside Institutions Year Number of documents African Union Arab League Bretton Woods institutions Commonwealth Economic Community of West African States Eurasian Economic Union FIFA World Cup Financial Action Task Force Financial Stability Board Food and Agriculture Organization G20 G77 Global Forum International Atomic Energy Association International Bank for Reconstruction and Development International Development Association International Finance Corporation International financial institutions International Framework for Sustainable Development Intergovernmental Authority on Development International Monetary Fund Multilateral development banks New Economic Partnership for Africa’s Development Olympics Organisation for Economic Co-operation and Development Organization for the Prohibition of Chemical Weapons Regional development banks United Nations United Nations Committee on Peaceful Uses Outer Space United Nations Convention on Trade and Development United Nations Educational, Scientific and Cultural Organization United Nations General Assembly United Nations Human Rights Council

2009 2010 2011 2012 2013 2014 2015 2 0 0 0 0 0

1 0 0 1 1 0

1 2 0 0 0 0

2 0 1 0 0 0

2 6 0 0 0 1

3 5 0 0 0 1

3 1 0 0 0 0

0 0 0 0 1

0 1 0 1 0

0 1 0 0 0

0 0 0 0 0

0 0 0 0 0

0 0 0 0 0

1 0 4 0 2

3 0 0 0

6 0 1 0

5 0 0 0

5 0 0 2

2 0 0 1

2 1 0 1

0 0 0 0

0

1

0

0

0

0

0

0

0

0

0

1

0

0

0 0 0

1 0 0

0 0 0

0 0 1

0 2 0

0 1 0

0 0 0

0

0

0

0

0

0

1

0 0 0

4 0 0

1 0 1

8 0 1

4 1 2

32 0 0

4 0 0

0 0

1 0

2 0

0 0

0 0

0 0

0 1

0

0

0

0

0

1

0

0 6 0

0 9 0

0 10 0

0 15 0

1 25 0

0 44 0

0 30 1

0

0

0

0

0

0

2

0

0

0

0

0

0

1

0 0

0 0

0 0

0 0

0 0

0 0

4 2

(Continued)

Appendix 2-E  (Continued) Year

2009 2010 2011 2012 2013 2014 2015

United Nations Relief and Works Agency United Nations Security Council Universade World Bank World Expo World Grains Forum World Health Assembly World Student Games World Trade Organization Youth Olympics Total international institutions

0

0

0

0

0

0

1

0 0 0 0 1 0 0 2 0 13

0 0 3 1 0 0 1 2 0 35

0 2 0 0 0 0 0 3 1 28

0 0 8 0 0 0 0 2 0 43

0 0 0 0 0 0 0 5 0 51

0 0 1 0 0 0 0 3 0 92

7 0 1 0 0 1 0 7 0 74

Appendix 2-F  International Image of BRICS Countries, May 2013 Country

Mainly Positive % Mainly Negative % Net (Rank)

Germany (G7) Canada (G7) United Kingdom (G7) Japan (G7) France (G7) European Union (G7) Brazil (BRICS) United States (G7) China (BRICS) Korea (G20) South Africa (BRICS) India (BRICS) Russia (BRICS) G7 Average

59 55 (second) 55 51 49 49 46 45 42 36 35 34 30 51

15 13 (first) 18 27 21 21 21 34 39 31 30 35 40 21

BRICS Average

37

33

Source: BBC World Service (2013).

+44 (first) +42 (second) +37 (third) +24 (seventh) +28 (fourth) +28 (fourth) +25 (sixth) +11 (eighth) +3 +5 +5 −1 −10 +30 (16th, eighth) +4 (7, 9, 11–13)

3 BRICS engagement with international institutions for better governance Andrey Shelepov

Introduction Since its establishment in 2008, the BRICS group of Brazil, Russia, India and China, joined by South Africa in 2011, has constantly deepened its cooperation, working on a positive agenda in a wide range of areas, including finance, economy, trade, health, science, innovation, security and development. Similar to other informal summit institutions, the BRICS aims to increase the efficiency of collective actions on its priorities through using accountability instruments, creating its own special mechanisms and institutions, and engaging with international institutions at different l­ evels. The BRICS usually uses two types of engagement with international organi­ zations: a catalytic engagement approach of stimulating or supporting changes in international organizations and parallel treatment by creating its own institutions. Since 2012, the BRICS has begun establishing its own financial institutions, often considered to be alternatives to existing elements in the international system. At the same time, the BRICS rarely uses the core-group engagement approach typical of other informal institutions, primarily the Group of 20 (G20), based on leadership in defining new priorities on the global agenda and stimulating work on these priorities by relevant organizations. By participating in key international organizations, BRICS countries actively establish consultation mechanisms to coordinate national positions. By strengthening intra-institutional cooperation and interacting with international organizations, the BRICS addresses its priorities, enhances its role in global governance, and improves the sustainability, legitimacy and efficiency of the global governance architecture as a whole.

Methodology To assess the role of the BRICS in the system of global governance, this chapter explores the models, intensity and distribution of BRICS cooperation with international organizations. By analysing the content of BRICS documents, it identifies references to international organizations and assesses those references both qualitatively and quantitatively.

50  Andrey Shelepov The quantitative analysis relies on a special database that includes 50 documents adopted by the leaders and their ministers of foreign affairs, finance, health, trade, science and technology, and others, issued between 2008 and September 2015. The analysis uses data on the absolute number of references to particular institutions in the documents issued by a BRICS presidency and relative data on the shares of references to relevant institutions in the total number of references. In addition, it uses the relative parameter of intensity to examine the engagement of BRICS with international organizations across time, taking into account the differences in the volume of documents issued during each BRICS presidency. The indicator of intensity is expressed using the formula Di = Mi ⁄ Si, where Di is the intensity of references to a particular institution during a specified period, Mi is the number of references to this institution in the BRICS documents issued during that period and Si is the total number of characters in these documents. The qualitative analysis of BRICS documents is aimed at identifying the three models of summit engagement with international institutions (­Larionova 2016). The catalyst model influences international organizations through endorsement or stimulus, or compels them to reform. The ­core-group model imparts a new direction, by leading so that other organizations follow. The parallel-treatment model involves the informal institutions creating their own mechanisms. The study is based on the premise that the BRICS can adopt the engagement models of “governing through,” “governing against,” “governing without” and “governing in alliance with” multilateral institutions (Kirton et al. 2010). However, governing without is very much akin to parallel treatment, and catalytic engagement is close to governing in alliance; and the core-group model has features similar to the governing-through model. The qualitative analysis revealed the most typical models of BRICS engagement with different organizations, the incentives for this interaction and the results. The results of the quantitative and qualitative analysis help trace the dynamics and nature of BRICS engagement with multilateral institutions. It allows analysts to assess the effectiveness of the forum in using international organizations for addressing collective priorities and achieving global governance objectives.

Main findings References to international institutions in BRICS documents Up to September 2015, BRICS documents contained 636 references to 48 international institutions (see Table 3.1). The number of references grew from summit to summit, with the exception of the second BRICS summit in 2010 in Brasilia. BRICS countries constantly emphasized their commitment to the principles of multilateralism, international law, and active cooperation with international and regional organizations, and to the United

Table 3.1  References to International Institutions, 2008–2015 Up to 2008 United Nations G20 World Trade Organization International Monetary Fund World Health Organization Contingent Reserve Arrangement New Development Bank World Bank UNCTAD African Union Others Total

2009 Yekaterinburg

2010 Brasilia

2011 Sanya

2012 New Delhi

2013 Durban

2014 Fortaleza

2015 Ufa

Total

6 8 0

8 13 3

9 7 2

19 9 6

9 9 12

29 5 14

45 3 11

53 15 18

178 69 66

8

13

4

4

6

4

13

4

56

0

0

0

7

10

22

9

6

54

–

–

–

–

0

6

18

8

32

–

–

–

–

1

6

10

15

32

2 9 0 2 60

3 7 5 15 116

2 2 5 20 138

1 4 2 24 150

27 22 13 87 636

6 0 0 5 33

9 0 0 3 49

3 0 0 4 29

1 0 1 14 61

Note: UNCTAD, United Nations Conference on Trade and Development.

52  Andrey Shelepov United Nations

28.0

G20

10.8

World Trade Organization

10.4

International Monetary Fund

8.8

World Health Organization

8.5

New Development Bank

5.0

Contingent Reserve Arrangement

5.0

World Bank

4.2

UNCTAD African Union

3.5 2.0

Figure 3.1  R  eferences to International Institutions, 2008–2015, % Note: UNCTAD, United Nations Conference on Trade and Development.

Nations as the core of the international institutional architecture. Thus, the UN was the most frequently mentioned institution in the BRICS documents at 28 ­percent (see Figure 3.1). BRICS members, mostly at the meetings of their leaders and foreign ministers, stressed the UN’s leading role in addressing key global challenges. Given the aspirations of Brazil, India and South ­Africa to become members of the United Nations Security Council (UNSC), the BRICS also often emphasized the need to reform the UN, particularly the Security Council. The General Assembly (UNGA) was also one of the most frequently mentioned elements of the United Nations (­taking 4.9 ­percent of all references to the UN). The next most frequently mentioned institution was the G20, at 10.8 ­percent. The BRICS confirmed the central role of the G20 in reforming the global economic and financial system and ensuring that “the emerging and developing economies must have greater voice and representation in international financial institutions” (BRIC 2009). BRICS members consistently expressed support for G20 efforts to achieve strong, sustainable and balanced growth. They also regularly coordinated their positions on key issues on the G20 agenda. The BRICS supports an open, stable, equitable and non-discriminatory international trading system and stresses the centrality of the World Trade Organization (WTO). In the documents analysed, references to the WTO were also connected to ensuring a balanced outcome of multilateral trade negotiations, allowing for the interests of developing countries. In addition, the WTO was actively mentioned prior to and just after Russia’s accession to the organization. As a result, the share of WTO references also exceeded 10 percent. BRICS trade ministers and leaders also often referred to the United Nations Conference on Trade and Development (UNCTAD), considering its role in addressing the trade and investment interests of developing countries to be “unique and necessary” (BRICS 2014a). The share of references to UNCTAD was 3.5 percent.

BRICS engagement with international institutions  53 Given the delay in reforming the Bretton Woods institutions as agreed in 2010, BRICS members retained their focus on this problem. This resulted in relatively high shares of references to the International Monetary Fund (IMF) and the World Bank, reaching about 8.8 percent and 4.2 percent respectively. The intensity of BRICS engagement with health-related international institutions, especially with the World Health Organization (WHO), remained consistently high. From 2008 to 2015, there were 54 references, constituting 8.5 percent of all references. The BRICS’s own institutions, namely the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA), were also frequently mentioned. The numbers of references to these two institutions were equal at five percent of the total. The intensity of references to international institutions, i.e., the ratio of the number of references to the number of text characters, was the highest before the summit in Yekaterinburg and during the subsequent Russian presidency. This can be explained, first of all, by the establishment of this new summit institution under trying economic conditions and the need to develop collective responses to the global financial crisis. Following the Brazilian presidency in 2010, the intensity of engagement with international institutions declined by almost a half. This is explained by the formation of the institution’s own independent agenda, the establishment of special working formats within the BRICS, and the subsequent increase in the number and volume of documents issued. The intensity of references to international organizations increased during the South African presidency in 2013, due to a growing number of mentions of the UN, WHO, the African Union (AU), the New Partnership for Africa’s Development (NEPAD) and other organizations involved in development, especially related to Africa, given that the issue was a key priority of South Africa’s presidency. Brazil’s 2014 presidency saw a decline in the intensity of references. However, there was a slight increase during Russia’s 2015 presidency (see Figure 3.2).

25

22.57

21.75

21.58

20 15.87 15

11.43

12.84 8.98

10

9.87

5 0

Before 2009

2009

2010

2011

2012

2013

2014

Figure 3.2  I ntensity of References to International Institutions, 2008–2015

2015

54  Andrey Shelepov The proportion of references to various institutions changed, along with fluctuations in the total number of references and their intensity. References to the G20, the IMF and the World Bank declined. NEPAD was not mentioned in the later years, although due to the expansion of cooperation to new areas, the BRICS developed its engagement with WHO and UNCTAD, among others. Given the group’s continued institutionalization, its members began referring more frequently to its own NDB and CRA. There were also changes in the distribution of different models of BRICS engagement with international institutions. Given the ongoing BRICS institutionalization and its strengthening role in global governance, the share of the governance model without international institutions or parallel treatment increased. Moreover, there were some cases of core-group engagement based on BRICS leadership in setting priorities for other international institutions. The practice of the BRICS encouraging and supporting changes and reforms of international organizations, or acting as a catalyst, strengthened. Nonetheless, the establishment of internal institutions and mechanisms did not decrease the intensity of references to other international organizations traditionally working on the same issues. This indicates that the BRICS did not position its own institutions as competitors to existing ones. Thus, the number of references to international institutions in the BRICS documents grew steadily. However, given the increase in the number of documents adopted in the different BRICS cooperation formats, a declining intensity of references is observed. The list of the most frequently mentioned institutions in BRICS documents included the UN, the G20, the WTO, UNCTAD, the IMF, the World Bank, WHO, and the BRICS institutions of the NDB and the CRA. The catalyst approach remained the main model of BRICS engagement with international institutions. However, ongoing institutionalization and the corresponding increase in the BRICS’s role in the multilateral global governance system led to the increasingly active implementation of other models of engagement. Closer cooperation with international institutions in developing and implementing decisions, including through mandating institutions to fulfil the commitments, could increase the impact of the BRICS on global governance processes.

Engaging key international organizations United Nations The BRICS considers the UN to be the key international organization that guides and coordinates the global community’s efforts to address a wide range of issues. The UN was mentioned most frequently in BRICS documents, with a total of 178 references—more than twice as many as the next highest organization—in the documents issued up to 2015. Moreover, the UN was mentioned in every document released by the BRICS leaders, with the number of references steadily increasing. Thus, the intensity remained relatively constant.

BRICS engagement with international institutions  55 The UN was mentioned for the first time in the first ever document issued by the BRIC: the joint communiqué of the foreign ministers of Brazil, Russia, India and China dated May 16, 2008. The foreign ministers stressed that “today’s world order should be based on the rule of international law and the strengthening of multilateralism with the United Nations playing the central role” (BRIC Foreign Ministers 2008). They also reaffirmed “the need for a comprehensive reform of the UN,” so that it could better respond to global challenges. In addition, the Russian and Chinese ministers noted the importance of the status of India and Brazil in international relations and supported their aspirations to play a greater role in the UN. The three main ideas on the UN—its centrality in international affairs, the need for reform and the need to strengthen India and Brazil’s role—were reflected in almost all subsequent documents issued by the foreign ministers, as well as by the BRICS leaders. As the agenda and influence expanded, the BRICS emphasized the UN’s role more specifically. For instance, at the Yekaterinburg Summit, the BRIC leaders expressed their expectations of a successful outcome of the United Nations Conference on the World Financial and Economic Crisis and Its Impact on Development held in New York on June 24–26, 2009. They also called for the urgent adoption of the Comprehensive Convention on International Terrorism that was under consideration by UNGA (BRIC 2009). At the 2010 summit in Brazil, BRICS leaders declared for the first time that “the fight against international terrorism must be undertaken with due respect to the UN Charter, existing international conventions and protocols, the UN General Assembly and Security Council resolutions” (BRIC 2010). Also for the first time, the BRICS focused on encouraging a dialogue among civilizations, cultures, religions and peoples within the UN’s “Alliance of Civilizations” and holding the Conference of the Parties to the United Nations Framework Convention on Climate Change. They also discussed the Millennium Development Goals and declared their expectations of policy recommendations to be developed at the UN summit later that year in ­September. At the third BRICS summit in Sanya, in addition to the previously identified priorities, the leaders discussed cooperation within the  UN to resolve regional conflicts, noting that the presence of all five BRICS countries on the UNSC during 2011 presented a valuable opportunity to work closely together on issues of peace and security, especially in the Middle East and North and West Africa (BRICS 2011). A separate commitment was made on cooperation in the UNSC on Libya. The BRICS Delhi Declaration stressed the need to strengthen the role of the UNSC in resolving the Israeli-Palestinian conflict and addressing the problem of Iran’s nuclear program (BRICS 2012a). A year later, similar statements were made in relation to conflicts on the African continent (with the Democratic Republic of Congo [DRC] mentioned specifically) and in Syria. Referring to the post-2015 development agenda, the leaders called for “an inclusive and transparent inter-Governmental process under a UNwide process which is universal and broad based” (BRICS 2013a). During

56  Andrey Shelepov the Brazilian 2014 BRICS presidency, the commitment to a sustainable and peaceful settlement of disputes according to the principles and objectives of the UN Charter was underscored at various levels. At the summit in Fortaleza, the leaders condemned “unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations,” primarily the UN Charter (BRICS 2014a). They also expressed support for the UN efforts to promote peace, human rights and sustainable development in Guinea-Bissau, Madagascar, Mali, South Sudan, the Central African Republic, the DRC, Syria, Palestine and Afghanistan. The BRICS called for multilateral negotiations within the framework of the UN to develop a code of conduct for outer space ­activities. The agenda expanded to include the fight against organized crime, corruption and drugs, with the leaders noting the importance of implementing relevant UN conventions (BRICS 2014a). At the Ufa Summit in 2015, the leaders pledged to promote cooperation and strengthen coordination within the UN. For the first time, they stressed the importance of cooperation in the UN human rights institutions, discussions on restructuring the sovereign debt of developing countries in the framework of the UN and UN participation in developing public policies pertaining to the internet. BRICS  leaders  also supported the UN’s work to combat the Ebola virus (BRICS 2015b). The range of priorities of BRICS engagement with the UN constantly expanded (see Figure 3.3). In addition to the 144 direct references to the UN, BRICS documents contain 31 references to UNGA, three mentions of the UNSC and many references to various UN conventions. BRICS countries not only expressed support for UN activities, but also sought to coordinate their positions on topical issues from its agenda. Starting in

60

8 6.70

7

53

6 5

45 4.10

4

3.55

3.97

3.56

29

3 19

2

40 3.49

30

2.93 20

1.93

10

1 0

50

6 Before 2009

8

9

2009

2010

9 2011 Intensity

2012

2013

2014

2015

0

Number

Figure 3.3  N  umber and Intensity of References to the United Nations, 2008–2015

BRICS engagement with international institutions  57 September 2008, the BRICS foreign ministers met at least once a year on the UNGA sidelines. Their dialogue focused on the current UN priorities and on issues relevant to the BRICS. The Strategy for BRICS Economic Partnership adopted at the Ufa Summit pledged to continue “to develop cooperation within the UN system … in accordance with the fundamental principles of the UN Charter” (BRICS 2015a). Thus, the main modes of BRICS cooperation with the UN were coordinating the five members’ positions on the UN agenda on the sidelines of its meetings, and expressing support for its activities and making relevant commitments. This cooperation can be generalized as an aspiration for catalytic engagement or governing in alliance. The key priorities in this context are to ensure global peace and security, protect human rights, and promote sustainable development. Strengthening cooperation is reflected in the relatively stable intensity of references to the UN in BRICS documents and the development of consultation mechanisms on UN priorities. G20 Despite the widespread belief that the BRICS competes with the G20 for influence, this analysis of BRICS discourse shows that its engagement is characterized by support and cooperation. The G20 is mentioned in most documents issued by BRICS leaders and their finance ministers. The total number of references was 69. This intention to engage was not reciprocated, however: the BRICS was mentioned only once in all G20 documents in the same period, in the Action Plan to Support the Development of Local Currency Bond Markets issued in 2011 (G20 Finance Ministers and Central Bank Governors 2011). BRICS countries recognized the G20’s role as a key forum for dialogue and coordination on international economic and financial issues. They cooperated with other G20 members, and they coordinated their positions in the G20 to achieve the common goals of stimulating economic growth, reforming IFIs, improving financial markets regulation and ensuring a fair world order. The BRICS mentioned the G20 for the first time on November 7, 2008, before the first G20 summit in Washington, in the communiqué issued by the BRIC finance ministers in São Paulo. They “welcomed the initiative to convene a summit of G20 leaders on financial markets and the world economy” (BRIC Finance Ministers 2008). The BRICS leaders expressed support for the G20 in each of their subsequent declarations and emphasized the G20’s key role in ensuring strong, sustainable and balanced growth. At the Yekaterinburg Summit in June 2009, the BRIC leaders called for the implementation of the decisions adopted at the G20 summit in London in April and pledged to cooperate among themselves and with other partners “to ensure further progress of collective action” that would be agreed on a few months later at the G20’s Pittsburgh Summit in September (BRIC 2009).

58  Andrey Shelepov At Brasilia on April 15, 2010, the BRICS leaders welcomed the establishment of the G20 as the premier forum for international economic coordination (BRIC 2010). At Sanya a year later, they supported G20 actions to stabilize international financial markets and ensure the sustainable and balanced growth and development of the global economy (BRICS 2011). They also appreciated Russia’s proposal to host the G20 summit in 2013. At the fourth BRICS summit, in New Delhi in March 2012, the leaders agreed to cooperate with Mexico, which held the G20 presidency, to strengthen coordination on macroeconomic issues, and ensure the recovery of the global economy and financial stability, including through improving the international financial architecture (BRICS 2012a). In the eThekwini declaration issued at Durban in March 2013, they welcomed the efforts of the Russian G20 presidency to ensure growth and employment across the globe (BRICS 2013a). For the first time, they stressed the importance of addressing the issues on the G20 development agenda as an important element of global financial stability. In the Fortaleza declaration of July 2014, BRICS leaders committed to contribute to the G20 goal of lifting the collective gross domestic product over the next five years by more than two percent above the trajectory implied by current policies (BRICS 2014a). At Ufa Summit in July 2015, they decided to continue consultations and coordination on the G20 agenda, and reaffirmed their commitment to strengthen global growth and improve the financial architecture. They also pledged to pay more attention to issues on the G20 agenda that were particularly important for developing countries, including coordinating macroeconomic policy, containing spillover effects, supporting economic activity, bridging gaps caused by cross-border impacts of global financial regulation reform, and adapting to the new rules introduced by the Action Plan on Base Erosion and Profit Shifting and the Common Reporting Standard for Automatic Exchange of Tax Information. Expressing support to China’s G20 presidency in 2016, the BRICS leaders committed to work closely “with all members” to consolidate the role of the G20 as the premier forum for international financial and economic cooperation (BRICS 2015b). References to the G20 have thus been consistently present in BRICS documents since 2008. The greatest number (44) was during the Russian presidency in 2015. Despite the expansion of the BRICS agenda and the creation of the NDB and CRA—often considered competitors to the existing international financial institutions—the BRICS remains committed to cooperation with the G20 and aims to contribute to its goal of achieving strong, sustainable and balanced growth. Inclusive growth, one of the three key priorities of Turkey’s G20 presidency in 2015, has been one of the main priorities on the BRICS agenda since its second summit in Brasilia, where the leaders declared that “an inclusive process of growth for the world economy is not only a matter of solidarity but also an issue of strategic importance for global political and economic stability” (BRIC 2010).

BRICS engagement with international institutions  59 BRICS finance ministers usually meet on the margins of G20 ministerial meetings, as well as at the regular meetings of the IMF and the World Bank. The meeting of BRIC finance ministers and central bank governors in ­London in September 2009 is an important example. The participants discussed most issues on the G20 financial agenda and proposed setting a target for redistributing the quotas at the IMF and the World Bank by seven percent and six percent respectively to reach an equitable distribution of voting power between advanced and developing countries (BRIC Finance Ministers and Central Bank Governors 2009). As already noted, BRICS foreign ministers meet mainly on the margins of UNGA sessions. Despite the obvious focus of these meetings on cooperation in the framework of the UN system, ministers also discuss coordination within the G20 (see Figure 3.4). They also met during the Nuclear Security Summit in The Hague in March 2014, where they indicated the equal “custodianship” of all G20 members and stressed that “no one Member State” could unilaterally determine the G20’s nature and character (BRICS Foreign Ministers 2014). BRICS leaders met on the sidelines of the G20 summit for the first time at Cannes in 2011. Just before the 2012 Los Cabos Summit, they agreed that these informal consultations at multilateral events were valuable and contributed to closer coordination on issues of mutual interest (BRICS 2012b). Media notes issued on these meetings, especially in St. Petersburg in 2013 and Brisbane in 2014, show that these meetings are increasingly used to discuss the distinctive BRICS agenda rather than issues addressed by the G20 (BRICS 2013b, 2014c). Thus, these meetings cannot be considered as focusing solely on coordinating BRICS positions in the G20. Supporting G20 activities and coordinating positions on key issues on the G20 agenda are the two main dimensions of BRICS engagement with this international institution. 16

7 6

5.47

5.77 13

5

15 5.21

12 10

4 3

9

8

7 1.69

2

8

9

6

1.93 5 0.68

1 0

14

Before 2009

2009

2010

2011 Intensity

2012

2013

3

0.99

2

0.20 2014

Number

Figure 3.4  Number and Intensity of References to the G20, 2008–2015

4

2015

0

60  Andrey Shelepov The International Monetary Fund and the World Bank The importance of ensuring global economic growth and financial stability determines the BRICS active engagement with IFIs, especially the IMF and the World Bank. These two institutions were among the top 10 most frequently mentioned (see Figures 3.5 and 3.6). BRICS countries emphasized the need for the urgent completion of the agreed governance reforms and called for a better reflection of developing countries interests in IFI activities. At the first meeting, in November 2008, the BRIC finance ministers noted that the IMF and the World Bank reforms “should move forward and be guided towards more equitable voice and participation balance between advanced and developing countries. The Financial Stability Forum [FSF] must immediately broaden its membership to include a significant representation of emerging economies” (BRIC Finance Ministers 2008). At their next meeting, in March 2009, the idea of reforming the IFIs was further developed. IMF reform was called one of the important conditions for the new financial architecture necessary to prevent global crises. BRIC countries proposed increasing IMF resources and activating a new income model, in addition to the governance reform and quota redistribution. The ministers called for implementation of the voice and representation reform of the World Bank, increasing its resources through the use of global capital markets and relaxed restrictions on infrastructure project financing. They said that the new heads of the IMF and World Bank should be selected based on their professional qualities irrespective of nationality. The ministers also welcomed the expansion of the FSF and the Basel Committee on Banking Supervision and encouraged other international standard-setting bodies in the financial sector to follow this example and reinforce the representation 7 6

5.47

10 8

8

2.98

3

6

6

2

4

4

1 0

12

13 5.77

5 4

14

13

1.28

4 0.55

0.85

2012

2013

2014

0.26

0.75 Before 2009

2009

2010

2011 Intensity

4

2015

4 2 0

Number

Figure 3.5  Number and Intensity of References to the International Monetary Fund, 2008–2015

BRICS engagement with international institutions  61 5

10

9

9

4.10 4

8 3.99

3

7 6

6

2.23

5

2 1

3

1 0

4

3 2 0.43

0.41

0.19 Before 2009

2009

2010

2011 Intensity

3

2

2012

2013

0.13 2014

1 0.07 2015

2 1 0

Number

Figure 3.6  Number and Intensity of References to the World Bank, 2008–2015

of emerging economies (BRIC Finance Ministers 2009). In September that year, the finance ministers called again for the urgent completion of IFI reforms and reiterated their positions on IMF and World Bank activities. They welcomed the decision to increase IMF resources, agreed at the G20 London Summit, but urged implementing it in a way that did not undermine the quota review. They also reaffirmed their four countries’ commitment to contribute $80 billion to supplement the resources of the IMF (BRIC Finance Ministers and Central Bank Governors 2009). Reforming the global financial architecture, increasing IMF and World Bank resources, and improving the effectiveness of the two institutions were discussed at all subsequent meetings of BRICS finance ministers. Their position on these issues remained unchanged. Analysis of BRICS summit documents also shows active engagement with the IMF and the World Bank. Leaders consistently called for their reform and the selection of management on a competitive basis, and supported G20 decisions to increase the resources of these institutions. At Fortaleza in 2014, the BRICS leaders called on the IMF to develop options to move ahead with its reform process, with a view to ensuring increased voice and representation of EMDCs [emerging markets and developing countries], in case the 2010 reforms are not entered into force by the end of the year. (BRICS 2014a) They also called “on the membership of the IMF to reach a final agreement on a new quota formula together with the 15th General Review of Quotas so as not to further jeopardize the postponed deadline of January 2015.” At Ufa in 2015, for the first time the leaders pointed directly to the

62  Andrey Shelepov responsibility of the United States for delaying the IMF reform (BRICS 2015b). However, this is hardly an example of any catalytic impact of the BRICS on the IMF reform, given the unprecedented delay in implementing the decisions on reform adopted in 2010. The same conclusion can be made regarding the BRICS engagement with the G20. The BRICS ineffectiveness in calling for the urgent completion of the IMF and World Bank reforms probably contributed to the reduction in the absolute number and intensity of references to these institutions. During Russia’s 2015 presidency, there were only four references to the IMF and, echoing the lowest result in BRICS history (during the 2011 Chinese presidency), only one mention of the World Bank. The intensity of references to the World Bank fell by almost half compared to the 2014 presidency of ­Brazil, and the indicator for the IMF was more than three times lower. Despite the decision made at the first meeting of BRIC finance ministers in 2008 to meet again at the next spring meeting of the IMF and World Bank and the fact that such meetings at the Bretton Woods institutions’ events have become regular, during the period analysed they dealt with a wide range of issues about the world economy and did not focus directly on developing a collective position on the IMF and World Bank agendas. The IFIs were mainly a platform for regular meetings of BRICS finance ministers to discuss their own agenda. The BRICS engagement with the IMF and the World Bank was expressed in constant calls for reforming these organizations to reflect the interests of developing countries and strengthening resources to provide additional assistance to these countries as mandated. However, these calls failed to result in action. Accordingly, given the lack of catalytic impact and possibilities to set new directions for the IFIs’ activities, the BRICS resorted to the parallel-treatment model—that is, it created its own mechanisms. The World Trade Organization and United Nations Conference on Trade and Development BRICS countries actively support a stable and non-discriminatory trading system, with the WTO at its core. They included international trade issues as a priority from the start (see Figure 3.7). At Yekaterinburg in 2009, BRIC leaders called for the “international community to keep the multilateral trading system stable, curb trade protectionism, and push for comprehensive and balanced results of the WTO’s Doha Development Agenda” (BRIC 2009). The BRICS trade ministers met on April 13, 2011, prior to the Sanya Summit. Brazil, India, China and South Africa also supported Russia’s accession to the WTO (BRIC 2010; BRICS 2011). Further references to the WTO in the declarations of BRICS leaders reflected their positions on the current problems of the organization. For instance, at Durban the leaders noted the progress in selecting a new WTO director-general in 2013 and expressed their view that the next WTO head

BRICS engagement with international institutions  63 20

3 2.57 18 14 1.49

12

12

1.92 11

1.12

1

1.18

0.72

0

0 Before 2009

2009

8 4 2

2 2010

10 6

6 3

16 14

2 1.33

18

2011 Intensity

2012

2013

2014

2015

0

Number

Figure 3.7  N  umber and Intensity of References to the World Trade Organization, 2008–2015

should be a representative of a developing country (BRICS 2013a). In the Fortaleza declaration, the leaders addressed implementing the Trade Facilitation Agreement and negotiating the reform of the WTO Dispute Settlement Understanding (BRICS 2014a). At the Ufa Summit, for the first time the leaders focused on ensuring that bilateral, regional and multilateral trade agreements are compatible with WTO rules (BRICS 2014a). BRICS positions on WTO activities, relevant recommendations and commitments were expressed in more detail in the documents issued by trade ministers. The declaration issued in Geneva on December 14, 2011, was almost entirely devoted to the WTO (BRICS Trade Ministers 2011). At their third meeting, in Durban in March 2013, trade ministers agreed that their WTO representatives would meet regularly to promote collaboration and coordination on multilateral trade issues discussed both at the WTO and in other international forums (BRICS Trade Ministers 2013). Similar to many other areas, in its engagement with the WTO the BRICS pays particular attention to the interests of developing countries. For example, in 2010 the ministers emphasized the need to conclude the Doha round of negotiations in order to improve trade in food and ensure food security (BRIC Ministers of Agriculture and Agrarian Development 2010). The focus on development issues and the relationship between trade and development inspired frequent references to another relevant international institution—UNCTAD. On the eve of the New Delhi Summit, the trade ministers stressed its important role in the international trading system and called for strengthening its mandate, particularly given the global financial crisis and the stalled Doha round (BRICS Trade Ministers 2012, 2013). Later, the WTO and UNCTAD were mentioned jointly as the key elements of the international trading system, which BRICS countries aimed to

64  Andrey Shelepov maintain. In the Ufa declaration, BRICS leaders mandated an international organization for the first time, calling on UNCTAD “to fulfill its development mandate through more active implementation of technical cooperation programmes and facilitation of policy dialogue, as well as research and capacity-building” (BRICS 2015b). The aspiration to cooperate further with international trade institutions was reflected in the Strategy for BRICS Economic Partnership (BRICS 2015a). The BRICS committed to support the WTO and other organizations in combating protectionism and agreed to continue coordination and cooperation in the framework of the WTO “to develop the Post-Bali work program” (BRICS 2015a). The BRICS thus supported a transparent and fair international trading system based on the norms and principles developed by the representative international organizations. Lack of progress in some areas of mutual interest for the BRICS countries led to a shift from the engagement model based on discussing the WTO and UNCTAD to more active cooperation, including the establishment of a coordination mechanism for the representatives in the WTO and delegating mandates to UNCTAD. Intensified cooperation was confirmed by the statistics. The WTO consistently ranked third in terms of the total number and intensity of references in BRICS documents. After the 2012 Indian presidency, it outperformed the G20. UNCTAD was also among the top 10 international institutions frequently mentioned by BRICS. The World Health Organization The WHO share of BRICS references to international institutions was 8.5 percent, although health only appeared on the agenda for the first time in 2011 (see Figure 3.8). The BRICS engagement with WHO, similar to institutions in many other areas, is based primarily on recognizing the central role of this organization in coordinating the international community’s efforts to address health issues. In the Beijing Declaration of July 11, 2011, the BRICS health ministers urged developed countries to provide additional resources to enable WHO to fulfil its mandate and highlighted the need for the organization’s reform. They also agreed to institutionalize their dialogue and facilitate cooperation among themselves on the sidelines of WHO’s annual World Health Assembly (BRICS Health Ministers 2011). Eight BRICS meetings on health were held by May 2015. Each produced a document reflecting, inter alia, engagement with WHO. However, the number of references fluctuated (seven during China’s 2011 presidency, 10 during India’s 2012 presidency, 22 during South Africa’s 2013 presidency and only nine during Brazil’s 2014 presidency). Engagement is limited to recognizing WHO’s role and expressing support for its activities. Catalytic engagement was not very successful. Summit references to WHO could help intensify the engagement. But the leaders have only mentioned WHO once, in a reference at Ufa in 2015 to BRICS members’ common efforts to combat the Ebola

BRICS engagement with international institutions  65 4

25

22

20

3 2.14

3.01

15

2 1.31 1

0

9 10

7 0

0

0

Before 2009

2009

2010

2011 Intensity

10 6

0.59

2012

2013

2014

5 0.39 2015

0

Number

Figure 3.8  Number and Intensity of References to the World Health Organization, 2008–2015

virus through strengthened health systems in developing countries using WHO and other international organizations (BRICS 2015b). The BRICS used a similar catalytic engagement model with other specialized international organizations. For example, cooperation with the Food and Agriculture Organization (FAO) was reflected in BRICS agriculture ministers’ support for its activities and its role as a mechanism for coordination and dialogue among the BRICS countries’ FAO representatives (BRICS Ministers of Agriculture and Agrarian Development 2015). Regional organizations in Africa The BRICS is committed to developing cooperation with regional organizations. It supports initiatives aimed at promoting economic development and addressing political problems of the poorest countries. The most frequently mentioned regional organization was the AU (13 references). It was first noted at the 2011 Sanya Summit in the context of the need for the peaceful settlement of the Libyan conflict (BRICS 2011). The leaders also expressed their commitment to the development of infrastructure and industrial production on the African continent through NEPAD. The greatest number of references to African regional institutions arose during the South African BRICS presidency, when the country declared promoting the development of the African continent as one of its key priorities. Yet BRICS engagement with these institutions was not further strengthened: any endorsement was not followed by concrete decisions to support the implementation of the agreed initiatives. There was no mention of NEPAD during the 2014 Brazilian or 2015 Russian presidencies. The AU was mentioned five times in the Fortaleza declaration and twice in the Ufa

66  Andrey Shelepov declaration (BRICS 2014a, 2015b). All these references were made in the context of recognizing the AU’s role in addressing regional conflicts. The New Development Bank and Contingent Reserve Arrangement At the 2012 New Delhi Summit, BRICS leaders announced consultations to establish a development bank that would mobilize resources for investment in infrastructure and sustainable development projects in BRICS countries and other EMDCs. They emphasized that this new bank should complement existing multilateral and regional financial institutions (BRICS 2012a). In June 2012, at their informal meeting on the eve of the G20 summit in Los Cabos, BRICS leaders instructed their finance ministers to study the possibility of creating a pool of foreign exchange reserves (BRICS 2012b). Following a feasibility study on the proposed institutions, at their next summit the BRICS leaders agreed to establish the NDB with capital that would be “substantial and sufficient … to be effective in financing infrastructure” as well as the CRA with an initial size of $100 billion (BRICS 2013a). At Fortaleza in 2014, the five countries signed the Agreement on the New Development Bank and the Treaty for the Establishment of a BRICS Contingent Reserve Arrangement (BRICS 2014b, d). These documents define the objectives and tasks of the new institutions, the resources and methods of their replenishment, governance mechanisms and other relevant details. At Ufa in 2015, leaders committed to use the NDB and CRA to develop financial and economic cooperation among their five countries. They reiterated the role of these institutions as new actors in the existing international financial system. In particular, they welcomed the proposal for the NDB to cooperate closely with the Asian Infrastructure Investment Bank (BRICS 2015b). Their national development banks signed the Memorandum of Understanding on Cooperation with the New Development Bank (BRICS ­Development Banks 2015). The first selection of pilot projects to be financed by the NDB would be completed in 2016. Active work to establish new financial institutions resulted in a considerable increase in the number of references to them in BRICS documents. During the Brazilian and Russian presidencies, the two institutions were the fourth and fifth most frequently mentioned. However, the intensity of references to other international institutions, including the IMF and the World Bank, did not decline after the creation of the NDB and CRA. The balance of engagement models did not change. This trend once again indicates that the BRICS countries tend to support their repeatedly declared principle that the new institutions should “supplement the existing efforts of multilateral and regional financial institutions for global growth and development” and the “existing international monetary and financial arrangements” (BRICS 2015a). Nevertheless, the ­establishment of the NDB and CRA is a clear case of the parallel-treatment engagement model of creating the BRICS’s own mechanisms.

BRICS engagement with international institutions  67

Conclusion This analysis of references to international institutions in BRICS documents and review of the engagement with them on a qualitative level indicates positive dynamics. However, despite the increase in the absolute number of references, there was a decrease in intensity. This trend continues even though the BRICS agenda expanded and mechanisms of BRICS cooperation with international institutions in new areas emerged. The BRICS engagement with international institutions is based mainly on two models: the catalyst approach and the parallel-treatment approach. In addition, BRICS countries establish mechanisms for coordinating positions on the agendas of the UN, G20 and WTO on the sidelines of their relevant meetings or on the whole range of economic and financial issues in the case of the IMF and the World Bank. During the period under study, the establishment of the BRICS institutions did not lead to a considerable decrease in the number and intensity of references to other international organizations. BRICS countries themselves pointed out that the new institutions complemented the existing financial system and aimed to improve the efficiency of its functioning as a whole. Thus, the BRICS and its NDB and CRA should be considered as additional tools for developing multilateralism and coordination rather than alternatives or competitors to existing international institutions. However, to further enhance the effectiveness of global governance mechanisms, the BRICS should intensify cooperation with other institutions, giving priority to the catalytic engagement and core-group approaches— taking leadership in setting priorities, identifying new action areas, making concrete decisions to support them, delegating mandates and improving coordination mechanisms in these institutions. The Concept of the ­Russian Federation’s Presidency in the BRICS, published just before Russia assumed its 2015 presidency, reflected the need “to hold, on the margins of BRICS leaders summits and ministerial meetings, regular outreach events with the participation of the heads of major emerging economies, as well as international and regional organisations” and begin a system of regular consultations of the BRICS Presidency with the heads of leading international and regional organisations—the UN, the EAEU [Eurasian Economic Union], the African Union, the League of Arab States, the Islamic Cooperation Organisation, Latin American regional integration associations, ASEAN [Association of Southeast Asian Nations], etc. (Russia’s BRICS Presidency 2014) Implementation of these provisions can contribute to the further development and increased effectiveness of BRICS engagement with international institutions.

68  Andrey Shelepov

Acknowledgement This chapter is based on research carried out with financial support from the Russian Humanities Research Foundation within the framework of a research project “Models of international institutions engagement in the process of multilateral governance in the areas of macroeconomic policy, financial regulation, international trade, investment and infrastructure,” project № 15–07–00022.

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BRICS engagement with international institutions  69 BRICS (2014b). “Agreement on the New Development Bank.” Fortaleza, Brazil, 15 July. www.brics.utoronto.ca/docs/140715-bank.html (September 2017). BRICS (2014c). “Media Note on the Informal Meeting of BRICS Leaders on the Occasion of the G20 Summit in Brisbane.” Brisbane, 15 November. www.brics. utoronto.ca/docs/141115-brisbane.html (September 2017). BRICS (2014d). “Treaty for the Establishment of a BRICS Contingent Reserve Arrangement.” Fortaleza, Brazil, 15 July. www.brics.utoronto.ca/docs/140715-treaty. html (September 2017). BRICS (2015a). “The Strategy for BRICS Economic Partnership.” Ufa, Russia, 9 July. www.brics.utoronto.ca/docs/150709-partnership-strategy-en.html (­September 2017). BRICS (2015b). “VII BRICS Summit: 2015 Ufa Declaration.” Ufa, Russia, 9 July. www.brics.utoronto.ca/docs/150709-ufa-declaration_en.html (September 2017). BRICS Development Banks (2015). “Memorandum of Understanding on Cooperation with the New Development Bank.” Ufa, Russia, 9 July. www.brics.utoronto. ca/docs/150709-NDB-memorandum-en.html (September 2017). BRICS Foreign Ministers (2014). “Media Statement on the Meeting of the BRICS ­Foreign/International Relations Ministers.” Hague, 24 March. www.brics.­utoronto. ca/docs/140324-foreign.html (September 2017). BRICS Health Ministers (2011). “BRICS Heath Ministers’ Meeting.” Beijing, 11 July. www.brics.utoronto.ca/docs/110711-health.html (September 2017). BRICS Ministers of Agriculture and Agrarian Development (2015). “Joint Declaration of the 4th Meeting of the BRICS Ministers of Agriculture and Agrarian Development.” Brasilia, 15 March. www.brics.utoronto.ca/docs/150315-agriculture. html (September 2017). BRICS Trade Ministers (2011). “Ministerial Declaration of the BRICS Trade ­Ministers.” Geneva, 14 December. www.brics.utoronto.ca/docs/111214-trade.html (­September 2017). BRICS Trade Ministers (2012). “The 2nd Meeting of the BRICS Trade and Economic Ministers: Joint Press Release.” New Delhi, 28 March. www.brics.­utoronto.ca/ docs/120328-trade.html (September 2017). BRICS Trade Ministers (2013). “The Third Meeting of the BRICS Trade Ministers, Durban.” Durban, 26 March. www.brics.utoronto.ca/docs/130326-trade.html (September 2017). G20 Finance Ministers and Central Bank Governors (2011). “G20 Action Plan to Support the Development of Local Currency Bond Markets.” October, Paris. www.g20.utoronto.ca/2011/2011-finance-action-plan-currency-111015-en.pdf (September 2017). Kirton, John J., Marina Larionova and Paolo Savona, eds. (2010). Making Global Economic Governance Effective: Hard and Soft Law Institutions in a Crowded World. Farnham: Ashgate. Larionova, Marina (2016). “Assessing Summit Engagement with Other International Organizations in Global Governance.” International Organisations Research Journal 11(1): 126–52. Russia’s BRICS Presidency (2014). “Concept of the Russian Federation’s Presidency in BRICS in 2015–2016.” Moscow. http://en.brics2015.ru/russia_and_ brics/20150301/19483.html (September 2017).

4 Political dynamics within the BRICS in the context of multilayered global governance Maria Raquel Freire1

The BRICS group of Brazil, Russia, India, China and South Africa represents emerging economies, emerging powers or rising powers—­categorizations that, despite the differences among these five countries, point toward a common core. They are all actors with an increasing capacity to influence global development. This means they are becoming part of the management of the international system, while simultaneously challenging it. As M ­ atthew ­Stephen (2014, 913) puts it, “where previous power transitions have been interpreted in the context of a competitive struggle for survival, today’s shifting power relations raise questions for the nature of the world polity and the kinds of principles that underpin it.” The (re)positioning of the BRICS in economic and political issues is changing power relations. However, what has been advanced as a new model of power and governance might not be so new. This chapter argues that the BRICS has been advancing an alternative model for international governance, one that replicates to a great extent the existing order of which it is a part. Consequently, the novelty arising from changing relations might be limited. Nevertheless, the institutionalization of procedures and the establishment of new BRICS arrangements contribute to global governance, and also reflect the need for existing structures to adjust and accommodate new ones. International relations take place within a multilayered global governance system, where different actors and institutions interact.2 The BRICS is part of this structure, in different forms. That is, members interact as states—China, Russia and India, for example; they engage in “club politics” that challenge established powers; and they participate as an economic and political formation gaining institutional form through, for example, agreeing to create joint institutions such as the New Development Bank (NDB). What do these developments mean for global governance? Is the BRICS promoting a new configuration of power in the international system? Are the members becoming central players that influence global governance mechanisms? How do political dynamics within the BRICS affect the group’s positioning within and toward global

Political dynamics within the BRICS  71 politics? This chapter seeks answers to these questions by exploring the political dynamics among the BRICS members and how these interactions are shaping existing and new governance mechanisms. This chapter argues that these political dynamics within the BRICS club and toward the international system are pursued both competitively and cooperatively, making existing dynamics not always easy to grasp, but demonstrating members’ independent or collective will to influence global governance. In fact, the role and place of the BRICS are the subject of much debate, including several references to the end of the BRICS (Sharma 2012; Pant 2013; Degaut 2015). But, the BRICS has increasingly assumed relevance in the context of multilayered global governance. This chapter further argues that actorness, by BRICS countries individually or multilaterally, and by the BRICS as “club diplomacy,” reveals fundamental dynamics to help analysts understand shifting configurations of power and their reach.

Fitting in? The BRICS in a multilayered global governance context The BRICS is an unexpected arrangement, given the asymmetrical nature of the countries involved in political and economic terms and the absence of any geographic contiguity. This implies that there is no regional, cultural or historical identity as a common matrix. The BRICS members define themselves as pursuing network diplomacy or club politics built on consensus decision making. This means they set the agenda, deciding on the issues of collective interest. The statement issued at the first BRICS summit in ­Russia, in June 2009, stated clearly their goal of “a more democratic and just multi-polar world order based on the rule of international law, equality, mutual respect, cooperation, coordinated action and collective decision-­ making of all states” (BRIC 2009). However, the political and economic options of these countries have been different, which adds to the complexity of managing relations and forging common positions on distinct issues (both when there are no direct stakes and when competition among BRICS members arises).3 The five have sought to reinforce positions mainly at the economic level and, from there, make political gains. The establishment of the NDB on July 15, 2014, despite its limits, and the Contingent Reserve Arrangement (CRA), ratified and in place since July 2015, are cases of institutional consolidation.4 Such consolidation comes with a strong political rhetoric that underlines the hegemonic character of western institutions and the anti-hegemonic trend these new institutions seek to promote. Mobilizing resources to support infrastructure and sustainable development projects within the BRICS and other emerging economies, as well as targeting developing countries, these new BRICS institutions complement existing efforts by financial and

72  Maria Raquel Freire multilateral regional institutions to foster global growth (BRICS 2014b). In this context, as ­Fabiano Mielniczuk (2013, 1,087) writes, “the move from a liberal–unilateral to a developmental–multipolar set of social claims was a truly ‘discursive alignment’ that created the conditions of possibility for the emergence of BRICS.” The promotion of a so-called more just and balanced international order is an underlying principle of the BRICS, as is commonly voiced. The BRICS members declare themselves to be part of a polycentric international order. As Russian deputy foreign minister Sergey Ryabkov stated, “BRICS is in fact an already established new center of the multipolar world and the new and more democratic system of international relations” (TASS 2015). Basically, there is a recognition of multiple poles of decision making and influence in the international system, which render it more democratic (i.e., wider participation from the BRICS in international relations). The goal is to offer an alternative to the western-led order often described as excluding non-westerners, non-liberals and those not aligned with that order. In a world of complex interdependence, hierarchies do not work simply: there are challengers, and the usually less favoured or excluded need to be taken into account (Weiss and Wilkinson 2014).5 The BRICS countries are positioning themselves as the challengers, and the institutions they are establishing—according to their official discourse— empower the less favoured. The particular configuration promoted by the BRICS demonstrates the novelty and difference it wants to represent in the international system. ­According to Ryabkov, the BRICS is a twenty-first-century phenomenon that differs from the military and political unions of earlier epochs and from alliances created according to a particular hierarchy (TASS 2015). However, a fundamental question remains whether the group will sustain this novel approach. As Andrew F. Cooper and Daniel Flemes (2013, 955) note, having embraced the embedded institutional option, there are signs that the emerging states (or at least some of them) are becoming more wary of involvement in the new concert diplomacy because of the obligations placed on them. It is questionable which rising powers will become responsible and legitimate stakeholders of the new order and how global responsibility and legitimacy will be defined. The governance principle sustaining this group of states follows, according to their leaders, a more equal and just order, different from the ­western-led governing rules that propel a hierarchical and hegemonic-led power configuration.6 In this way, the power-shaping configuration of the BRICS points to a less-western-led international order, allowing voice and place to non-western countries. It also demands structural reforms to existing global governance mechanisms, such as the International Monetary Fund (IMF); however, “reluctance on the part of Western countries to cooperate

Political dynamics within the BRICS  73 in reforming current institutions is perhaps making just as much of a contribution to the problem” (Niu 2013, 7). Nevertheless, this change in power configuration does not mean the demise of the West or a replacement of western-led institutions, as BRICS countries want to keep working with the West. They share the political objective of contesting the hegemonic posture of the West, which they understand as questioning the very principle of state sovereignty. As Zaki Laïdi (2012, 614) writes, while they do not seek to form an anti-Western political coalition based on a counter-proposal or radically different vision of the world, they are concerned with maintaining their independence of judgment and national action in a world that is increasingly economically and socially interdependent. In this sense, the BRICS is a very conservative group with regard to power sharing and autonomy, with national sovereignty and noninterference in internal affairs as overriding principles. Moreover, BRICS members are also part of the liberal international order, which they themselves seem to be challenging, rendering this challenge limited in its reach. Global governance does not need to bend in the face of the dominant order of hegemonic power, since the politics of bargaining or consensus, or other forms, is very much present in international politics, creating dynamics beyond traditional power politics (see Held 2014). Sandra Destradi and Cord Jakobeit (2015, 68–89) note that emerging powers have actively participated in existing international governmental organisations, albeit without weakening their sovereignty or giving in to binding targets and commitments that are not in their clearly expressed interests. They continue to call for a greater say in these international institutions and are more sensitive to manipulation or being dealt with on unequal terms. Cynthia Hewitt de Alcántara (1998, 105) points out that “‘governance’ involves building consensus, or obtaining the consent or acquiescence necessary to carry out a programme, in an arena where many different interests are in play.”7 She adds that artificially separating national and international governance impedes structural changes in the system that allow for an adequate environment for other more local changes to take place (Hewitt de Alcántara 1998, 113). The multilayered, polycentric and sectoral nature of global governance thus makes it flexible enough to adjust to different configurations of power, as well as to different means and goals of distinct actors. In this way, the polycentric conception of global governance does not necessarily mean an equal order, but instead means “there is a recognition that the system is institutionally biased or distorted in favour of powerful states and vested interests” (Held 2014, 66).

74  Maria Raquel Freire The BRICS fits into this multilayered governance system as a sui generis actor, adding complexity by bringing one more actor. According to ­Anthony McGrew, multilayered global governance refers to a (formal or informal) system of political cooperation that is gradually evolving between public authorities and private institutions on the multiple layers ranging from local to global, the aim of which is to realise common goals and resolve common problems through making and implementing global or transnational norms, principles, schemes and policies. (quoted in Cai 2012, 51) In their similarities and differences, BRICS members seek to bring change. “These states share the objective of transforming the processes by which global decisions are made,” as Peter Ferdinand (2014, 378) writes. “They all want a greater role for the developing world … they want greater ‘insertion’ in global decision-making. They all aspire to greater diplomatic autonomy.” In other words, as Niall Duggan (2015, 17) summarizes it well, the BRICS members aspire to become “rule makers” instead of “rule takers” and thus become influential actors in the international system with the capacity to set the agenda and the principles that rule it. However, the reach of their desired change is highly conditioned by the very system in which the BRICS members are integrated and that allowed their economic emergence. These actors have been increasing their capacity to influence global developments. The BRICS is recognized as part of the governance of the international system, while simultaneously challenging it. The liberal capitalist international order has given BRICS members the opportunities to become emerging economies (through the costs of production, raw materials, etc.), making them a part of this same order they contest and also making them dependent on the regulating principles of the global governance system. The challenge is focused less on financial and economic norms and more on the underpinning political liberal principles. According to Stephen (2014, 912), “it is not the global governance order itself, but its most liberal features, that are contested by rising powers.” The BRICS thus promotes “a hybrid order, characterized by a deepening of transnational integration, but an erosion of global governance’s most liberal principles” (Stephen 2014, 914). The BRICS as a group is a result of its political, social and even economic organization, with more centralized ruling and guided politics preventing accommodation of western capitalism rules and, above all, liberal democratic principles. Even the big democracies of Brazil and India are not exempt from this rationale. The challenge from within derives from this ambivalence, which is evident in the BRICS positioning within and toward the international order. The normative principles underpinning the BRICS are very traditional, such as protecting sovereignty and independence in political decision making beyond western diktat, and simultaneously very modern, in that they

Political dynamics within the BRICS  75 seek to advance an alternative shaping of the international order that is more inclusive of non-western voices. But is this new order really new? Does the BRICS add a new layer and new principles (or at least a revision of existing ones) to global governance?

Agenda setting: from the wording of documents to crafting a common strategy? An analysis of the declarations issued at BRICS summits identifies common elements that assist in defining the governance system and new order that the group intends to promote. Three main thrusts have become visible and been reiterated at successive leaders’ meetings: •

•

•

the promotion of a more inclusive, transparent and just international order, where wider representability in global governance institutions might be fostered through institutional reform processes, including more ample participation by non-western countries in agenda setting and decision making; the requirement that the principles underlining this inclusive order be guided by democratic procedures, respect for human rights, noninterference in internal affairs and respect for the territorial integrity of states (on the sovereignty principle) according to the international principles espoused by the United Nations; and a broad agenda where the focus on economic and financial issues and political ties has been widened to include diverse sectoral areas—such as climate change, environment, energy, innovation and communication technologies, education, health, culture, science and urban ­development—and deepened regarding the geographical scope of attention, particularly after South Africa joined the club in 2012.

This trend has been intensified by annual meetings of the BRICS leaders and sectoral meetings at different levels, as well as at other forums where BRICS members have sought to articulate positions, such as the G20. It reflects the potential that these countries see arising from coordinated activities. The summit declarations clearly demonstrate informality as a strength of club diplomacy and downplay more contentious issues in favour of common interests and concerns (Cooper and Farooq 2013, 429). Additionally, the proposals advanced by the BRICS build on existing arrangements as a way to promote defined goals. As Andrew F. Cooper and Asif Farooq (2013, 431) write, “highlighting the shared sense of status-seeking, the reform demand is framed within the need for the greater representation of the south in global economic governance while acknowledging the G20 as the pragmatic conduit for that process.” The BRICS has been cooperating with existing structures and accommodating alternative projects in such a way that both it and its agenda have been gradually incorporated into the global

76  Maria Raquel Freire governance. Cooper and Farooq note that this process stretched to include several bodies networked into the G20: The Basel Committee on Banking Supervision extended its membership to China, India, Brazil and South Africa, among other developing countries in the G20. The Committee on the Global Financial System also added China, India and Brazil as members. The Financial Stability Forum was upgraded to the Financial Stability Board (2013), with the inclusion of a number of the BRICS, to coordinate with the national financial authorities to “develop and promote the implementation of effective regulatory, supervisory and other financial sector policies.” (Cooper and Farooq 2013, 431) Economic and financial issues have remained at the core of the BRICS agenda since the moment the term BRIC was coined. In fact, these countries are better positioned to challenge the current status quo in this area and to contribute alternative approaches. Niall Duggan (2015, 21) writes that by creating a workable economic alternative, the state-led aspect of the BRICS economies, including managed currencies, export-oriented interventionism and active industrial policies, is a direct challenge to the neoliberal ideas of economic management, and in particular to the Washington Consensus policy of the Bretton Woods institutions of development. The various summit declarations reiterate this goal of an inclusive and stable international economic and financial system, with the BRICS playing a fundamental role. At the first summit, the motto to be followed was clear: “We are committed to advance the reform of international financial institutions, so as to reflect changes in the world economy” (BRIC 2009). In fact, economic issues have been fundamental in the BRICS agenda, “including the overarching objective of generating strong, sustainable and balanced global growth … [and] financial regulation and reforming international financial institutions” (Larionova and Shelepov 2015, 45). The announcement at the 2012 New Delhi Summit of the possibility of establishing the NDB was received with much skepticism, particularly in western circles, where the heterogeneity of the group seemed to poison any plans for ­further deepening cooperation. However, one year later, at Durban in 2013, the BRICS announced that the project was “feasible and viable” and added that ­agreement was also reached on creating the CRA (at their meeting on the eve of the G20 summit in Los Cabos in June 2012) (BRICS 2013). In ­Fortaleza, in 2014, the leaders stated: “we are pleased to announce the signing of the Agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing

Political dynamics within the BRICS  77 economies” (BRICS 2014a). The Ufa Summit in 2015 marked the entry into force of these institutional arrangements. Although it is too early to assess the reach of these new institutional formats, two ideas stand out. First, the BRICS committed to and delivered these institutions, demonstrating cohesion and a steady pace for setting an inclusive alternative path to what it defined consistently as exclusive organizations. The salient criticism of the lack of reforms in the IMF structures is illustrative. The Ufa Declaration is also clear on this when referring to the relevance of the G20 and the way the BRICS might work with the group in promoting common goals: We will continue our consultations and coordination on the G20 agenda, especially on issues of mutual interest to the BRICS countries. We will also continue working to bring greater attention to the issues on the G20 agenda that are prioritized by developing countries and emerging markets, such as macroeconomic policy coordination under the G20 Framework for Strong, Sustainable and Balanced growth, containing spillover effects, supporting economic activity, as well as bridging the gaps caused by cross-border impacts of the global financial regulation reform, adaptation to new rules introduced by the Action Plan on Base Erosion and Profit Shifting (BEPS) and the Common Reporting Standard for Automatic Exchange of Tax Information (AEOI). We will continue to appeal for broader and deepened G20 consultations with low-income countries on G20 policy recommendations that will have an impact on them. (BRICS 2015) Second, the creation of the NDB and CRA also shows that the will to amplify global governance structures does not mean an overthrow of the established system, including by advancing innovative arrangements. The BRICS structures now in place are not fundamentally different in their financial and economic dealings from existing institutions. What differs is the philosophy of inclusiveness of the global South. This inclusiveness, together with the discourse on promoting sustainable development and the permanent references to the UN’s previous Millennium Development Goals and now Sustainable Development Goals in the summit declarations, confers substance to the objectives of focusing on developing countries, fighting poverty and enhancing growth. Despite lacking novelty, these arrangements broaden the global governance agenda to include new actors and renewed goals. In fact, the BRICS members “have carved out some new space in existing international institutions and have created new institutional forums and mechanisms to address problems of global governance” (Destradi and Jakobeit 2015, 64). The Fortaleza Declaration states that in this new cycle, besides its contribution in fostering strong, sustainable and balanced growth, BRICS will continue to play a significant role

78  Maria Raquel Freire in promoting social development and in contributing to define the international agenda in this area, building on its experience in addressing the challenges of poverty and inequality. (BRICS 2014a) On political issues, UN reform has been among the most difficult on the agenda. The BRICS is committed to facing global challenges and the threat of terrorism and other illegal transnational practices, to pursuing consultations on crisis situations and to assisting, when agreed, with facilitation or other means, in this way seeking a higher profile role in international matters from the Middle East to Afghanistan, from Ukraine to sub-­Saharan Africa. The common denominator is the central role of the UN in all these processes. The leaders’ declarations frequently include a statement along the lines of “we maintain that the independence, sovereignty, unity and territorial integrity of each nation should be respected” as a pillar of the global governance order (see, for example, BRICS 2011). This statement also follows the understanding about promoting the peaceful settlement of disputes and finding political solutions to violence in compliance with the UN Charter. Ukraine and Syria are two of the most difficult cases regarding the terms of intervention, imposition of sanctions and the political processes for attaining a diplomatic solution. Despite the debate generated by Russia’s actions in Ukraine (including Crimea), the BRICS has refrained from making any comment against Russia, although there have not been express declarations of support. Any mention of the situation in Ukraine refers to the situation as one of concern, where the BRICS call for a comprehensive dialogue, the de-escalation of the conflict and restraint from all the actors involved, with a view to finding a peaceful political solution, in full compliance with the UN Charter and universally recognized human rights and fundamental freedoms. (BRICS 2014a) This same reasoning applies to declaratory practices by BRICS leaders on reforming the UN. Although disagreement on future formats is well known among BRICS countries, as further analysed in the next section, the statements reproduced every year “reiterate the importance [attached] to the status and role of Brazil, India and South Africa in international affairs and support their aspiration to play a greater role in the UN” (see, for example, BRICS 2015). This formula is part of the diplomatic approach of selective engagement, meaning that the BRICS builds strength from common purposes and downplays issues where members’ approaches diverge. This approach seems to have been successful. The BRICS agenda has been continuously growing, as the inclusion of new issues on the agenda and in summit declarations clearly demonstrate every year. Moreover, the group “has evolved its global governance functions, moving from its focus on deliberation to direction-setting,

Political dynamics within the BRICS  79 decision-making, delivery and the development of BRICS governance institutions,” as the NDB exemplifies (Kirton and Larionova 2012, 9). The themes chosen by the BRICS have also evolved. This has been a practice since the third meeting in Sanya. These themes clearly sum up the main issues gluing the club together and point to a very clear agenda with very clear goals. The first theme defined was “Broad Vision, Shared Prosperity” at Sanya in 2011, then “BRICS Partnership for Global Stability, Security and Prosperity” at New Delhi in 2012, followed by “BRICS and Africa: Partnership for Development, Integration and Industrialisation” at Durban in 2013, “Inclusive Growth: Sustainable Solutions” at Fortaleza in 2014 and “BRICS Partnership—A Powerful Factor of Global Development” at Ufa in 2015. The wording of statements and declarations reveals the objectives that have been defined for the BRICS club diplomacy, marking the tone of the discourse and pointing toward what the group defines as inclusive growth leading to global development—the words by which the BRICS, after all, is better known. However, despite the cohesive message of official documents, this informal grouping, as with any other collective arrangement, faces disagreement and disparate views on both intra- and extra-BRICS matters. The next section examines the political dynamics within the BRICS, seeking to understand whether these foster or instead hinder global politics as envisaged in policy discourse.

Political dynamics within the BRICS: fostering or hindering global politics? The asymmetrical nature of the BRICS needs to be unpacked in order to understand the potential and limits of the group. Differences among members have allowed extended cooperation as a means to project influence and gain power status in the international system. Moreover, their own distinct political, economic and social approaches make it a diverse group, representative enough to bring new ideas about global governance and pursue a more inclusive course. Working through multilateral mechanisms in a coordinated way might feed into this logic. With time, “non-intervention; technology transfer to promote development; poverty alleviation; reform of the security council; restructuring of the institutions of economic global governance, like the IMF and World Bank; respect for international law; warnings against the perils of a unipolar world; and so on” have become representative topics on which consensus among these states has emerged (Mielniczuk 2013, 1,087). However, these are sovereign states, where the autonomy to decide and act is very much at the core of their politics. Also, there are many issue areas where the BRICS disagree, including issues directly involving them, which might create obstacles not only to multilateral linkages, but also to the BRICS as a group in the global order. The BRICS, as a club, has meant different things to its different members, despite the common framing binding them. For Russia, the BRICS has

80  Maria Raquel Freire become an important strategic framework, especially in a context of much tension with the West, allowing a common voice on Libya and Syria, where the veto of Russia and China can be supported by the other three BRICS members. The discourse of an alternative order fits well with Russia’s criticism of the western hegemonic order as prompting differentiated treatment and not recognizing Russia as a main player in the international system. China has found in the BRICS a supportive group for its position in the regional area, whereas India has been seeking status recognition through BRICS politics. Brazil and South Africa, the two nonnuclear powers in the group, have been building on their soft power approach to enhance their role as balancers in the international system (Brütsch and Papa 2013, 303). One of the most relevant issues that brings together BRICS members is their opposition to the international order coined as western-hegemonic, with a particular focus on the role of the United States as the leading power in this order. In fact, the BRICS has “a strong vested interest in protecting strategic autonomy vis-à-vis the USA in global affairs, and the BRICS summits have been vocal on this point,” underlining a traditional geopolitical approach (Thakur 2014, 1,793). Within the UN, the debate about reforming the Security Council (UNSC) is far from concluded, with China and Russia pursuing a united front against the real enlargement of this body and the other three BRICS members wanting to see their presence enhanced, with the support of the two with a permanent seat (Pant 2013, 100; Ferdinand 2014, 378). The political rhetoric points to openness to this enlargement, including further representability and diversity in the UNSC—in line with the principle of giving voice to non-western countries. However, the argument that any change that might preclude the UNSC from rapid decision making, which an enlargement of the Permanent Five (P5) members would most certainly entail, has been used to reinforce resistance to change. This is not to say that the other P5 members are eager to change the status quo. The case of UN reform illustrates the difficult dynamics within the BRICS club. In other institutional framings, its members have also failed to unite and speak in one voice to put in practice the club pressure they believe arises from their cooperation. For example, in 2012, during the discussions about the presidency of the World Bank, BRICS members failed to unite and campaign for the Nigerian or Colombian candidates, which consequently helped pave the way to the appointment of the American nominee (Cooper and Farooq 2013, 431; Thakur 2014, 1,794). These diplomatic moves (or the lack of them) at important moments regarding the possible (re)configuration of the international order reveal deep differences that might hamper the consolidation of political trust among the BRICS countries. It seems clear that unless the BRICS can articulate a common vision on global issues, [its members] will remain unable to set the global agenda and discourse … The point of this coalition was always to show that the balance of power

Political dynamics within the BRICS  81 is shifting to emerging countries and away from the West’s historical dominance, but a multipolar world isn’t the same as China just trying to tilt the balance of power toward itself. (Pant 2013, 101, 102–03) China is a major player in the BRICS and globally, with the second-­largest economy in the world and an economy bigger than those of the other four members combined (Pant 2013, 98). Its role in this club is fundamental with regard to outside projection and internal cohesion, given the size of its economy and its influence on financial dynamics. In this sense, China has used the BRICS as a “platform” for the “pursuit of major power status and influence,” adding to the economic dimension of its power (Cheng 2015, 373). As part of this strategic approach, China understands that building on the group’s solidarity through developing a common narrative is fundamental to shaping the image of the club as talking with one voice. It also understands that a strong image of the BRICS will contribute directly to a stronger positioning of these countries in the international order, allowing them to pursue both collective and individual goals (Cheng 2015, 373). However, being the giant in the group does not mean that China is independent resource-wise or even politically. It buys armaments and energy, particularly from Russia. Several factors have fostered a rapprochement among BRICS members: China and Russia’s shared principles on a polycentric international system, the absolute priority of respect for sovereignty and the counterbalancing of the western presence, particularly in Central Asia. The low in Russia’s relations with the West has also brought relations closer. Nevertheless, competition and rivalry in the enlarged regional space of these two BRICS members remain very much present (Freire 2015, 90–91). Russia-China economic relations are not very interdependent, although trade volume was reinforced following the Cooperative Memorandum for Economic Modernization signed in 2011 and the gas pipeline agreement of May 2014. The pipeline was a visible consequence of the soured relations between Russia and the West, particularly in the context of the crisis in Ukraine. As part of a diversification strategy, the agreement conferred leverage on Russia in the face of bleak prospects in the West, also reinforcing the discourse on the BRICS club. However, the pipeline agreement does not mean a renewed partnership between Russia and China, as many difficulties persist in this relationship. A double containment policy has underlined this relationship, both regarding containing the United States and mutual Russia-China containment (they compete regionally, including for influence and military primacy, and there remain unsettled border issues) (Pant 2013, 99; Brütsch and Papa 2013, 301). In addition, despite BRICS advances in economic and financial terms, such as the establishment of the NDB, Russia’s position within the group has become fragile. This is particularly due to its economic performance that has been strained by a combination of factors, including the drop in oil

82  Maria Raquel Freire prices, the 2008 economic and financial crisis that still affects Europe, and the sanctions that followed events in Ukraine (Freire 2015, 89). Indeed, some observers have already renamed Russia a “post-BRIC” country, given its economic decline and concerns over China’s rise (Judah et al. 2011). The pattern of China and India relations is also uneven. China does not recognize India’s rise and does not fully acknowledge its security concerns, leaving India with a sense of suspicion (Pant 2013, 99). Regionally, the two countries compete in South Asia, with overlapping areas of influence and still unresolved border issues. India has been seeking recognition of its status in global governance, which has been fraught due to internal constraints (land reforms, corruption, ethnic and religious issues) (Schmidt 2015, 123–24). The pattern of cooperation and competition between India and China resembles that of Russia-China relations, although on a different scale and at different sectoral levels. The rhetoric critical of the West connects the two, along with strong commercial and economic ties. Regional power rivalries and mistrust about China’s rise also permeate relations. According to the Indian perspective, the BRICS builds on its comparative advantages, particularly given a troubled European Union, thanks to “uber-pragmatism with business acumen” and the “relative liberal level-playing-field in global trade” (Khandekar 2014, 2; Schmidt 2015, 136). Both China and India depend on Russian energy, reinforcing trade connections with Moscow. India also negotiates with Russia on arms, and the two maintain close commercial and political linkages. This relationship is also a way of balancing the ­Chinese factor in Asia. Brazil brings in the dimension of a nuclear-free country, building on a softer approach to global governance. Siding with South Africa on the recognition effect resulting from BRICS inclusion, it has been developing good relationships with all countries. China and Brazil have commercial relations, though inexpensive Chinese production has caused some tension in relations (Cooper and Flemes 2013, 995). Nevertheless, of all five members, Brazil is probably the best qualified for good relations. Relations between China and South Africa reveal strains at the commercial level with the inflow of inexpensive manufactured products from China strangling South African production, along the same lines of ­Brazil. ­China’s rapid integration into African economies has raised concerns about the changes this increased presence might cause at different levels (Pant  2013,  99). South Africa joined the BRICS in a move to provide the coherence the club needed to promote its global agenda of giving voice to developing countries. In this way, geographical representativeness became complete. Also, South Africa has been seen as the “representative” of the continent for the international relations it has been developing and the country’s overall integration in global governance structures. Nevertheless, South Africa can be viewed as a dwarf among giants when compared with the other BRICS members. With a [gross domestic product] of

Political dynamics within the BRICS  83 about $350 billion and a population of no more than 53 million people it represents but a small friction of the combined BRICS figures. (Petropoulos 2015, 165) According to Michael Kahn (2011), the addition of South Africa, the “jeweller of the world,” to the BRICS brought a missing dimension, with ­Brazil as the “garden of the world,” Russia as the “gas station of the world,” China as the “factory of the world” and India, the “back office of the world.” South Africa’s integration in the BRICS also reinforces the country’s position within Africa and internationally, providing more room for initiatives directed at the global South. As Sotiris Petropoulos (2015, 176) writes, viewed from a political standpoint the BRIC did include the most prominent leaders of their respective regions (i.e. Mercosur, CIS [Commonwealth of Independent States], SAARC [South Asian Association for Regional Cooperation] and ASEAN/EAC [Association of Southeast Asian Nations/East Asian Community] while Pretoria’s inclusion closes the circle of bringing together representatives from all major developing regions of the world. Despite acknowledging difficulties raised by inexpensive Chinese and ­Indian manufactured products, South Africa understands it gains more than it loses from its integration into the BRICS club. South Africa can distance itself from the image of the “West’s ‘special child’” (Petropoulos 2015, 176). Instead, it can promote an image as not only being part of the global South but also being a leader in promoting its concerns and goals in the global governance order. Some authors have pointed out the challenge South ­Africa faces in avoiding being “the lackey of Beijing,” given the fierce politics of China’s penetration in Africa (see Petropoulos 2015, 177). This challenge remains unanswered for the time being.

Conclusion This chapter argues that the BRICS, despite its members’ asymmetrical character and sui generis nature, has been promoting a new international agenda. The BRICS describes this agenda as built on sovereign principles and seeking a more equal and just global order. The new financial institutions it has created are part of this rationale, although how far these developments might go in challenging and changing global governance remains unclear. The BRICS is influencing global governance mechanisms, even if just by challenging existing institutions. Also, it has become a relevant actor in the international system, to a great extent as a result of consensus-based decision making that allows the concert of policies within broader forums. As Marina Larionova and Andrey Shelepov (2015, 55) write, “solidarity of the leaders’ positions on particular issues, their relevance for domestic agendas

84  Maria Raquel Freire of member countries and the leaders’ political will are the key drivers of the BRICS evolving cooperation and enhancing effectiveness.” However, keeping coherence in decisions and actions is not easy. It remains a challenge, as BRICS members are not homogenous or similar in political, economic, cultural or social terms. The dialogue about the institutionalization process mirrors these differences and has proceeded at different rhythms according to the topics. Economic and financial issues are strongly institutionalized, whereas development is less so, and health is on the way to becoming institutionalized (Larionova and Shelepov 2015, 53–54). The political dynamics among the BRICS members (and beyond the group) are pursued both competitively and cooperatively, with geostrategic and political-economic issues on the agenda. Nevertheless, the actorness of the BRICS should be acknowledged, as the group has been influential in decisions and has increasingly become an active participant in global governance arrangements. Recent developments point to a consolidation of the BRICS and possible reconfiguration of the international system, but nevertheless have constraints. Three main reasons assist in understanding why. First, although the end of the BRICS has been announced several times in recent years, the group seems to keep its coherence, as shown by the annual summits and the decisions made, clearly identifying a particular discourse that has brought political gains to its members. The gradual informal institutionalization of this club diplomacy has allowed the BRICS a new place in the global governance structure, through which it seeks to influence fundamental decisions on the global stage. This influence has been pursued through coordination in the G20 or at the UN, through a discourse of closer proximity to the “less favoured” or the goal of lending without World Bank or IMF conditionality. But the reach of this political influence seems limited by the very factors that brought the five members together—there is not necessarily unity in diversity. Second, there seems to be no way or desire for the institutionalization of relations in formal terms, as the principles of sovereignty and autonomy are very much present in the BRICS’s dealings. However, the lack of formalized relations, as in an international organization, does not mean a lack of cohesion or an inability to make decisions, as the creation of the NDB clearly shows. It does again show, nevertheless, that the basis for consensus is fragile. This fragility results both from differences among the BRICS members and from the options to be made regionally or globally. As Duggan writes, within global security governance, for example, the BRICS have undertaken a role as a status quo power, defending the position of the sovereignty state and the noninterference in the internal affairs of others. However, within global economic governance, the BRICS nations have adopted the role of the revisionist states seeking to reform not only the structures of the institutions of global economic governance such as the IMF and the World Bank but also the rules and norms that allow for collective action within global economic governance. (Duggan 2015, 22)

Political dynamics within the BRICS  85 This leads to the third and final point. The discourse about an alternative order does not mean “without the West,” despite challenging norms promoted by the West. Maintaining close relations between these five countries and the West is an example. Moreover, the internal constraints on BRICS relations, where rivalry dominates in different issue areas, should not be underestimated. The alternative discourse put forward by this group, despite the creation of financial institutions to assist developing countries, does not clarify how this approach will promote a different international order grounded on more equal principles. Competition among the BRICS members is well known, and it remains to be seen whether the new loans to developing countries will constitute a different framing for development aid or instead replicate old procedures under new labels. The BRICS might have a limited ability to challenge the current international order, although global governance is slowly changing, thanks to the emergence of new financial mechanisms and political realignments promoted by the BRICS. Cooper and Asif (2013, 432) note that it is difficult to see the BRICS taking on a more comprehensive role as system transformer; however, the attributes embedded in the informal club style that the BRICS possess to an impressive extent will allow them considerable staying power in a world otherwise in flux. The new discourse highlighting the anti-hegemonic nature of the BRICS in pursuing an alternative global order, where rules and binding agreements become less hierarchical and more inclusive, might push for reforming and redesigning institutions and principles. It might also, instead, contribute to the further institutionalization of existing mechanisms, by defining an order that includes the non-western BRICS, but does not eliminate the “less favoured” label. And the global governance label, appropriated and misappropriated in different ways, would once more remain just a label. Time will tell.

Notes 1 The author acknowledges funding from the Marie Skłodowska-Curie Innovative Training Networks of the European Union’s Horizon 2020 research and ­i nnovation program, under grant agreement “CASPIAN—Around the Caspian: a ­Doctoral Training for Future Experts in Development and Cooperation with Focus on the Caspian Region” (642709 — CASPIAN — H2020-MSCA-ITN-2014). 2 Governance can be defined as “the manner in which power is exercised in the management of the affairs of a nation, and its relations with other nations” (­Griffiths 2005, 248; see also McGrew and Held 2002; Held and ­Koenig-­A rchibugi 2005). In global terms, governance is usually linked to the exercise of state sovereignty. However, in an increasingly globalized world, states are bound together by a web of multilateral and bilateral agreements that create mutual binding obligations and place governments under greater scrutiny … It is manifest in the growth of regional trade blocs that cooperate in such areas as trade and the

86  Maria Raquel Freire elaboration of common legal frameworks. It is also observed in the power of intergovernmental institutions and in the spread of multinational corporations … ­Globalization has profound implications for governance, including the erosion of state sovereignty as transnational bodies increasingly mediate national concerns and press for universal laws. (Griffiths 2005, 347) 3 Despite their differences in political regimes, the BRICS members seem to share a concern regarding “democracy promotion and human rights monitoring and enforcement by external state, intergovernmental, and nongovernmental actors” (Thakur 2014, 1, 797). 4 China promoted the creation of the Asian Infrastructure Investment Bank (AIIB), as a result of limitations as it understands the NDB entails. The signing ceremony of the AIIB’s Articles of Agreement took place on June 29, 2015. 5 See also Stephan Keukeleire and Bas Hooijmaaijers (2014, 584–46). 6 “The contemporary global governance system has features both of complexity and polycentricity. It can usefully be characterized as a multilayered, multi-­ sectoral, and multi-actor system in which institutions and politics matter in important ways to the determination of global policy outcomes; that is, to who gets what, when, and why. Global governance is multilayered insofar as the making and implementation of global policies can involve a process of political cooperation and coordination between suprastate, national, transnational, and often substate agencies” (Held 2014, 65). 7 See also Marek Rewizorski (2015, 1) and Sandra Destradi and Cord Jakobeit (2015, 63).

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88  Maria Raquel Freire Laïdi, Zaki (2012). “BRICS: Sovereignty Power and Weakness.” International Politics 49(5): 614–32. doi: 10.1057/ip.2012.17. Larionova, Marina and Andrey Shelepov (2015). “Is BRICS Institutionalization ­Enhancing Its Effectiveness?” In The European Union and the BRICS: ­Complex Relations in the Era of Global Governance, Marek Rewizorski, ed. Leiden: Springer, pp. 39–56. McGrew, Anthony and David Held, eds. (2002). Governing Globalization: Power, Authority and Global Governance. Hoboken: John Wiley and Sons. Mielniczuk, Fabiano (2013). “BRICS in the Contemporary World: Changing Identities, Converging Interests.” Third World Quarterly 34(6): 1075–90. doi: 10.1080/01436597.2013.802506. Niu, Haibin (2013). “BRICS in Global Governance: A Progressive and Cooperative Force?”, September, Friedrich-Ebert-Stiftung, Berlin. http://library.fes.de/pdffiles/iez/global/10227.pdf (November 2016). Pant, Harsh V. (2013). “The BRICS Fallacy.” Washington Quarterly 36(3): 91–105. doi: 10.1080/0163660X.2013.825552. Petropoulos, Sotiris (2015). “Opportunities, Challenges and Prospects of South ­Africa in the BRICS.” In The European Union and the BRICS: Complex Relations in the Era of Global Governance, Marek Rewizorski, ed. Leiden: Springer, pp. 161–80. Rewizorski, Marek (2015). “Introduction.” In The European Union and the BRICS: Complex Relations in the Era of Global Governance, Marek Rewizorski, ed. ­London: Springer, pp. 1–9. Schmidt, Johannes Dragsback (2015). “India’s Rise, the European Union and the BRICS: An Uneasy Relation.” In The European Union and the BRICS: Complex Relations in the Era of Global Governance, Marek Rewizorski, ed. London: Springer, pp. 121–40. Sharma, Ruchir (2012). “Broken BRICs: Why the Rest Stopped Rising.” Foreign ­Affairs 91(6): 2–7. www.foreignaffairs.com/articles/brazil/2012-10-22/­broken-brics (September 2017). Stephen, Matthew (2014). “Rising Powers, Global Capitalism and Liberal Global Governance: A Historical Materialist Account of the BRICs Challenge.” European Journal of International Relations 20(4): 912–38. doi: 10.1177/1354066114523655. TASS (2015). “BRICS Becomes New Center of Multipolar World—Russian ­Diplomat.” 9 July. http://tass.com/russia/807139 (March 2017). Thakur, Ramesh (2014). “How Representative Are BRICS?” Third World Quarterly 35(10): 1791–808. doi: 10.1080/01436597.2014.971594. Weiss, Thomas G. and Rorden Wilkinson (2014). “International Organization and Global Governance: What Matters and Why.” In International Organization and Global Governance, Thomas G. Weiss and Rorden Wilkinson, eds. Abingdon: Routledge, pp. 11–17.

Part III

The BRICS contribution to global governance

5 The New Development Bank in the global financial and economic architecture Alexandra Morozkina

Financial and economic issues were among the key items on the agenda of the BRIC group of Brazil, Russia, India and China, and have remained so since South Africa joined to form the BRICS. Since its first meeting, the group has been interested in changing the global financial architecture. That architecture is “a loose set of multilateral agreements and understandings, among a core group of powerful capitalist states, about the rules and norms that govern, and/or should govern, cross-border money and credit transactions of all kinds” (Armijo 2002, 3). Given the existing system of multilateral financial institutions, the BRICS’s establishment of the New Development Bank (NDB) will have an impact on that global financial architecture. BRICS leaders agreed to establish the NDB at the Durban Summit in 2013 (BRICS 2013). The agreement establishing the bank itself was signed at Fortaleza Summit in 2014 (BRICS 2014). The NDB was formally launched in July 2015 in Shanghai. By January 2016, all five BRICS members had made their first contributions, worth a total of $750 million in capital. Paid-in capital is expected to reach $10 billion in total, to be paid in seven tranches. This undoubtedly important decision shows that the BRICS countries can create a joint product with the potential to change the global financial architecture. The question is whether the NDB will deliver any tangible results and facilitate the group’s role in the global financial architecture and development of the BRICS countries. It was previously thought that the newly established bank should not compete with existing institutions and cooperation mechanisms, although many existing institutions consider it a competitor (Central Asia Monitor 2013). This question is easily resolved, however, by comparing the NDB’s activities as specified in its establishing agreement with the activities of the existing institutions and mechanisms. There are identifiable spheres of possible duplication and complementarity. According to the agreement, the purpose of the institution is to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries to complement the existing efforts of multilateral and regional financial institutions for global growth and development … It shall also

92  Alexandra Morozkina cooperate with international organizations and other financial entities, and provide technical assistance for projects to be supported by the Bank. (BRICS 2014) To compare, the purpose of the Asian Development Bank (ADB), similar to that of the African Development Bank (AfDB) and the Inter-­American ­Development Bank (IADB), is to “contribute to the acceleration of the process of economic development of the developing member countries in the region, collectively and individually” (ADB 1965, art. 1; see also AfDB 2011; IADB 1996). The purpose of the European Bank for Reconstruction and ­Development ([EBRD] 2013, 4) is to “foster the transition towards open market-­oriented economies and to promote private and entrepreneurial initiative in the ­Central and Eastern European countries committed to and applying the principles of multiparty democracy, pluralism and market economics.” Multilateral financial institutions are an important part of the global ­financial architecture. They finance development and sustainability and provide technical assistance and advisory services to the member countries. The key multilateral financial institutions are the World Bank, the ADB, the AfDB, the IADB and the EBRD. They finance projects in the energy sector (43 percent of ADB loans, 14 percent of AfDB loans, 27 percent of EBRD loans), in public management (19.2 percent of World Bank loans), in transport and communication (29 percent of AfDB loans, 13 percent of World Bank loans, 19 percent of EBRD loans, 10 percent of IADB loans), and health care and social security (14 percent of IADB loans, 16 percent of World Bank loans) (see Table 5.1). This pattern corresponds to the national priorities of the BRICS countries, which include the development of the Table 5.1  Multilateral Development Bank Loan Portfolios by Sector, %, 2015 Industry sector

ADB

AfDB

EBRD IADB

Agriculture and natural resources Education Energy Finance Health care and social security Industry and trade Public management Transport and communication Water supply and other municipal infrastructure and services Multisector

4.7 6.9 43.4 22.1 1.7 0.1 7.5 2.4 11.1

8.1 2.2 13.8 21.3 7.2 0.0 – 28.6 6.3

11.0 – 27.0 32.0 – 11.0 – 19.0 –

8.0 7.9 12.6 14.8 13.8 8.6 8.1 9.6 14.8

0.1

12.5

–

1.9

World Bank 7.1 8.3 10.6 9.5 15.6 5.4 19.2 12.9 11.2 –

Sources: Asian Development Bank (ADB) (2009–2015), African Development Bank (AfDB) (2009–2015), European Bank for Reconstruction and Development (EBRD) (2009–2015), ­Inter-American Development Bank (IADB) (2009–2015), World Bank (2009–2015), and ­L eonid Grigoriev and Alexandra Morozkina (2012). Note: Numbers may not add up to 100 percent because of rounding.

In the global financial architecture  93 human capital (education, health care and social security), agriculture, infrastructure, public management, environmental and energy efficiency, and innovation. Thus, projects in those priority areas could be financed under the current framework. The NDB’s specific features and contributions offer an opportunity to involve experts and resources from the BRICS countries, in contrast to projects financed by the International Monetary Fund (IMF) or the World Bank, which usually deploy resources from western countries. The BRICS countries are not the only borrowers and members of multilateral development banks. There is therefore an issue of whether they should receive any assistance from these institutions: what role do they play as borrowers, how much do they receive and from which banks, and in what sectors do they invest the money? They are large borrowers from the World Bank. India and China are most active (9.6 percent and 8.6 percent of the World Bank’s loan portfolio in 2015 was allocated to these countries). Brazil is slightly behind (8.6 percent). In 2015, loans to Russia and South Africa, which were significantly lower but funded projects in priority fields, accounted for 0.4 percent and 1.6 percent, respectively, of the total loan portfolio (see Table 5.2). China and India are also members of the ADB and its largest borrowers. Loans to China amounted to 25 percent of its loan portfolio in 2015; loans to India were 23 percent (see Table 5.3). In 2015, the ADB had 12 projects in China with a total volume of $1.73 billion. Funds were allocated to projects in different sectors such as natural resources and agriculture, energy, transport, and urban and social infrastructure. The ADB thus contributes to financing and realizing projects in China’s priority sectors. These sectors are highlighted in “China’s Twelfth Five-Year Plan (2011–2015),” which states as priorities economic growth, the reorientation of domestic demand, environmental protection and clean energy, agriculture, human development, social support, and public management (National People’s Congress of the People’s Republic of China 2011). In India, large projects in energy and transport (such as an $800 million project to develop rural roads) accounted for 67 percent of the ADB’s loan portfolio in this country in 2015. These projects mostly aimed at solving issues Table 5.2  World Bank Loan Portfolio by Country, %, 2015 Argentina Brazil

China

Colombia Egypt

India

Indonesia Kazakhstan Mexico Morocco

3.6

8.6

8.6

4.4

9.6

7.6

2.5

7.0

2.8

Peru

Philippines Poland Romania Russia South Africa

Turkey

Ukraine

Other

Total

1.7

2.8

6.4

3.4

18.3

100

4.2

2.5

4.1

0.4

1.6

Source: International Bank for Reconstruction and Development (2016).

94  Alexandra Morozkina Table 5.3  Asian Development Bank Loan Portfolio by Country, %, 2009–2015 Country

2009

2010

2011

2012

2013

2014

2015

China India Indonesia Pakistan Philippines Vietnam Bangladesh Other

23.1 18.7 24.0 11.3 11.9 2.0 2.9 6.0

23.5 20.4 22.5 11.4 10.7 2.2 3.0 6.3

24.4 21.1 20.1 11.0 9.9 2.8 2.9 7.7

24.9 21.8 18.1 9.9 10.0 3.1 3.1 9.2

26.2 22.8 16.2 9.3 7.7 4.1 3.1 10.7

26.8 23.5 13.8 8.4 8.0 4.6 2.7 12.2

25.4 23.1 13.6 7.3 8.2 4.7 3.0 14.7

Source: Asian Development Bank (2009–2015). Note: Numbers may not add up to 100 percent due to rounding.

Table 5.4   A  frican Development Bank Loan Portfolio by Region, %, 2009–2015 Country/Region

2009

2010

2011

2012

2013

2014

2015

North Africa West Africa Southern Africa excluding South Africa Central Africa East Africa South Africa Multinational

14.1 16.2 22.1

35.2 16.6 2.7

44.1 5.9 20.6

48.9 3.4 1.2

40.2 13.2 10.9

35.0 24.6 9.4

46.2 21.0 7.5

3.7 6.9 23.2 13.8

7.0 16.8 12.1 9.6

4.2 3.8 14.9 6.5

2.8 2.1 36.5 5.1

2.2 2.2 26.7 4.5

2.9 1.0 13.4 13.7

2.9 5.4 9.6 7.4

Source: African Development Bank (2009–2015). Note: Numbers may not add up to 100 percent due to rounding.

of poverty and inequality, which corresponded to the national priorities set out in the “Twelfth Five-Year Plan (2012–2017)”: the development of human capabilities, institutions and infrastructure (India, Planning Commission 2013). Top priorities also included energy and transport projects. South Africa is a large customer of the AfDB. Loans to this country amounted to 10 percent of its portfolio in 2015 (see Table 5.4). Projects in the financial sector accounted for about two thirds of total loans and infrastructure projects about one fifth. These two sectors corresponded to South Africa’s long-term priorities of the reduction of poverty and inequality set out in its National Development Plan 2030: Our Future—Make It Work (South Africa, National Planning Commission 2012). Increasing income per capita and inclusiveness in South Africa is achieved mainly by developing projects in financial sector, such as support for small and medium-sized enterprises (SMEs). Projects in the infrastructure sector (energy, transport, communications, water, etc.) directly influence the quality of life. Russia was among the largest borrowers at the EBRD, although it no longer undertakes any new investment in Russia and only supports existing

In the global financial architecture  95 Table 5.5   E  uropean Bank for Reconstruction and Development Loan Portfolio by Region and Country, %, 2009–2015 Country/Region

2009

2010

2011

2012

2013

2014

2015

Central Asia Central Europe and Baltic countries Eastern Europe and Caucasus Russia Ukraine South-Eastern Europe Turkey Southern and Eastern Mediterranean

7.2 21.0

10.8 16.5

5.2 15.3

9.8 13.6

6.5 18.9

9.2 12.2

15.5 13.3

18.4

17.4

20.5

16.8

8.4

10.5

7.5

30.1 – 21.4 1.9 –

25.6 – 24.2 5.5 –

32.4 – 16.9 9.8 –

28.9 – 17.1 11.8 2.0

21.4 9.4 19.4 10.8 5.3

7.0 13.8 19.2 15.9 12.2

1.2 11.0 14.2 21.1 16.1

Source: European Bank for Reconstruction and Development (2009–2015). Note: Numbers may not add up to 100 percent due to rounding.

projects. In 2015, Russia received 1.2 percent of the bank’s portfolio (see Table 5.5). EBRD projects were allocated to different sectors, including ­agriculture (a loan to salad producer Belaya Dacha, a share in the ­Hlebprom confectioner), banking industry (syndicated loan to Rosbank), energy (­financing the development of heating systems in the Sakha Republic), private sector (investments in private equity funds operated by Baring Vostok in Russia and members of the Commonwealth of Independent States), transport (a loan to MAYKOR, an equipment and information-technology maintenance company; cofinancing the building of the Western High Speed Diameter Road in St. Petersburg), science and education (a syndicated loan to the Pulkovo Technopark), and health care (loan to the Geropharm-Bio pharmaceutical company). Some of these projects corresponded to Russia’s national priorities on health care, education and agriculture, as announced in 2005 (Putin 2005). Some of the measures taken were financed from the federal budget, but could also be financed by development banks, including regional and national banks. Brazil has long been among the largest borrowers from the IADB. Loans to this country amounted to 19 percent of the bank’s portfolio in 2015 (see Table 5.6). The largest volume between 2010 and 2015 was allocated to infrastructure development (transport) and amounted to $4.3 billion. The IADB allocated $1.1 billion to modernizing and reforming public management in Brazil, and $2.3 billion to water and sanitation. These projects contributed to overcoming the 11 challenges identified by Brazil in the “Multiyear Plan for 2012–2015: Plan More Brazil” (Brazil, Ministério do Planejamento 2011). Among them were national development projects and the eradication of extreme poverty, and they covered the areas of science, education, culture, sport, health care, social protection, infrastructure, democracy and social inclusiveness, integrity and national security, and public management.

96  Alexandra Morozkina Table 5.6   I nter-American Development Bank Loan Portfolio by Country, %, 2009–2015 Country

2009

2010

2011

2012

2013

2014

2015

Argentina Brazil Colombia Dominican Republic Ecuador El Salvador Guatemala Mexico Peru Other

15.6 24.2 10.2 2.7 3.4 3.3 2.9 11.4 6.5 19.8

15.4 23.7 9.9 3.1 3.3 3.0 3.2 13.5 5.9 19.0

15.2 21.8 9.8 3.3 3.5 3.0 3.2 14.1 5.6 20.4

16.1 23.0 10.4 3.1 3.2 2.7 3.0 15.0 5.9 17.7

16.9 19.5 11.0 3.6 3.7 3.0 3.3 18.6 3.1 17.5

15.3 19.4 9.9 2.9 3.9 2.7 3.1 18.3 3.6 20.9

14.4 18.5 9.9 3.3 5.2 2.6 3.2 18.1 3.4 21.4

Source: Inter-American Development Bank (2009–2015). Note: Numbers may not add up to 100 percent because of rounding.

The BRICS thus has opportunities to finance projects in priority fields and to take advantage of those opportunities. Regional development banks have provided advisory services and financing for development for a long time. They are solvent, credible, efficient and mostly profitable (with the exception of the EBRD and AfDB, which both had a small loss in 2015, although financial efficiency is not a priority). All of them are financially sound; loans constitute less than 80 percent of their liability, which is normal even for the commercial banking sector. A quarter of the total volume of loans is financed from the equity capital, and they all have a high AAA credit rating (see Table 5.7). Consequently, the purpose of the newly established NDB in mobilizing ­resources for infrastructure and sustainable development in the BRICS members and other emerging economies in some way duplicates the work of these existing development banks. The NDB could cooperate with them and therefore gain expertise. Also, it could support independent resource mobilization and allocation, including involving experts and ordering equipment from BRICS countries. The NDB could also provide a platform for the interregional ­exchange of expert opinions and development of multilateral projects among ­ eveloped by the BRICS the BRICS countries. A list of such projects was d ­Business Council, and working groups were working on p ­ rioritizing and implementing joint projects, including those identified in the BRICS Roadmap for Trade, Economic and Investment Cooperation until 2020 (BRICS ­Business Council 2016). These projects covered infrastructure, ­finance, energy and green economy, human development and manufacturing sectors. Providing advisory services and technical assistance is another function of the existing institutions. Brazil, India, China and Russia have their own partnership strategies with the World Bank. These documents are based on national strategies and consultations with the country authorities (including regional ones) and carefully identify challenges not included in the national

Table 5.7   Financial and Operational Indicators of the Multilateral Development Banks, 2015 Indicator

ADB

AfDB

World Bank

EBRD

IADB

Assets Equity Authorized capital Loans Borrowings Net profit (loss) Return on total assets Return on equity Equity-to-loans ratio Leverage Year of establishment Rating Head office

$118 billion $17 billion $148 billion $63 billion $66 billion $0.6 billion 0.47% 3.19% 28% 79% 1966 ААА Manila, Philippines

$39 billion $10 billion $103 billion $20 billion $25 billion ($0.05 billion) −0.12% −0.48% 50% 72% 1964 ААА Abidjan, Côte d’Ivoire

$349 billion $39 billion $253 billion $157 billion $156 billion $0.3 billion 0.10% 0.86% 25% 80% 1991 ААА London, United Kingdom

$61 billion $16 billion $33 billion $24 billion $41 billion $0.5 billion 0.80% 3.03% 67% 72% 1959 ААА Washington DC, United States

$111 billion $25 billion $171 billion $79 billion $80 billion $0.96 billion 0.86% 3.8% 32% 76% 1944 ААА Washington DC, United States

Sources: Asian Development Bank (ADB) (2009–2015), African Development Bank (AfDB) (2009–2015), European Bank for Reconstruction and Development (EBRD) (2009–2015), Inter-American Development Bank (IADB) (2009–2015), World Bank (2009–2015) and author’s calculations.

98  Alexandra Morozkina strategies. India’s partnership strategy identifies sustainable, inclusive and integrated growth. China’s partnership strategy includes green growth, regional integration and the development of international relations. Brazil’s strategy highlights the second-generation issues of energy efficiency and climate change control. Russia’s strategy includes the modernization and reform of the public management system. Thus, partnership with the World Bank resolves some of the BRICS’s priority issues. The NDB could complement these existing strategies. It could consult not only countries individually but also in groups on common issues such as the middle-income trap issue, inequality and SME support (Grigoriev and Morozkina 2012; Unger 2013; Grigoriev and Morozkina 2013a, 2013b). Cooperation among national banks is also a part of the global financial architecture. In 2010, the BRICS members’ national development banks actively cooperated. This cooperation facilitated the exchange of experience in financing national development projects and making payments in national currencies. At the Sanya Summit in April 2011, the development banks signed the Framework Agreement on Financial Cooperation within the BRICS Inter-Bank Cooperation Mechanism. At the New Delhi Summit in 2012, they signed the Master Agreement on Extending Credit Facility in Local Currencies and the BRICS Multilateral Letter of Credit Confirmation Facility Agreement. In 2013 in Durban, they signed the BRICS Multilateral Cooperation and Co-financing Agreement for Sustainable Development, which applies primarily to projects in energy efficiency and green growth. In 2014 at Fortaleza, they signed one more agreement—the Cooperation Agreement on Innovation—and now have the opportunity to finance projects jointly in common fields of interest. The BRICS thus has a mechanism for mutual financing and for receiving finance from its partners. Given that the NDB’s primary goal is to mobilize resources to finance projects in infrastructure and sustainable development, the bank could rely in part on mechanisms that are already in place. For example, the members of the boards of the national development banks could be included in the NDB’s board. The breakdown of the loan portfolio of the national development banks by sector corresponds to the priorities of the national strategies. India is represented by the Export-Import Bank of India (Exim Bank), whose key sectors are industry, energy and construction. The Bank of Industrial ­Development, which is a larger development bank, supports such sectors as infrastructure, industry, trade and finance. The priority sectors for the China Development Bank (CDB) are transport and municipal services. The ­Development Bank of South Africa (DBSA) focuses on energy, transport and communication and industry. The Brazilian Development Bank (BNDES) allocates its resources to energy, as well as transport and communication. Russia’s Vnesheconombank (VEB) invests in industry and trade, as well as transport and communication (see Table 5.8). The national development banks have great potential for lending (see­ Table 5.9). The largest are the CDB, which loaned almost $2 trillion at the

In the global financial architecture  99 end of 2015, and BNDES, with loans of $270 billion. These amounts both exceeded the amount loaned by the World Bank. The NDB should use these existing mechanisms of BRICS cooperation for multilateral financing. The national development banks already cooperate on one NDB priority—­ sustainable development. Table 5.8  Loan Portfolios of the BRICS Development Banks, by Sector, %, 2015 Country

Exim Bank

Agriculture and natural resources Education, health care and social security Energy Finance Industry and trade Construction and real estate Transport and communication Water and other municipal services Multisector

CDB

DBSA BNDES

VEB

–

–

–

11

10.3

6.0

1.2

7.1

13

1

18.0 3.0 26.0 16.0 6.0 –

7.4 1.7 10.8 14.2 32.7 20.9

40.5 1.6 13.3 5.0 24.6 7.3

24 – 16 6 29 6

– – 54.5 6.7 20.7 6.8

26.0

11

0.5

–

–

Sources: Author’s calculations based on annual reports (see Export-Import Bank of India (Exim Bank) 2015; Brazilian Development Bank (BNDES) 2016; China Development Bank (CDB) 2016; Development Bank of South Africa (DBSA) 2016;Vnesheconombank (VEB) 2016). Note: Numbers may not add up to 100 percent due to rounding.

Table 5.9   Financial and Operational Indicators of BRICS National Development Banks, 2015 Country

Exim Bank

CDB

DBSA

BNDES

VEB

Assets Equity Loans Borrowings Net profit (loss) Return on total assets, % Return on equity, % Equity-to-loans ratio, % Leverage, % Year of establishment Rating

$15.5 billion $0.8 billion $13.4 billion $12.4 billion $0.11 billion 0.74

$1 944 billion $164.9 billion $1, 418 billion $1, 779 billion $15.8 billion 0.81

$5.3 billion $1.8 billion $4.3 billion $3.5 billion $0.09 billion 1.71

$269.1 billion $20.1 billion $116.4 billion $164.6 billion $0.43 billion 0.16

$55.8 billion $4.3 billion $17.2 billion $18 billion ($1.4 billion) −2.46

14.99

9.6

5.13

2.14

−31.61

6

11.62

42

17

25

94 1982

92 1994

66 1983

89 1952

81 1922a

BBB−

AA−

BBB+

BBB+

BBB

Sources: Author’s calculations based on annual reports (see Export-Import Bank of India (Exim Bank) 2015; Brazilian Development Bank (BNDES) 2016; China Development Bank (CDB) 2016; Development Bank of South Africa (DBSA) 2016; Vnesheconombank (VEB) 2016). a Became a development bank in 2007.

100  Alexandra Morozkina Table 5.10  Infrastructure Quality Indicators, 2013–2014 Country

Overall

Roads

Rail

Ports

Air Electricity Transport

Brazil China India Russia South Africa United Kingdom Germany United States Korea Japan

3.4 3.9 4.3 3.8 4.5 5.4 6.2 5.7 5.6 6.0

2.8 3.6 4.5 2.5 4.9 5.3 6.0 5.7 5.8 6.0

1.8 4.8 4.7 4.2 3.4 5.0 5.7 4.9 5.7 6.7

2.7 4.2 4.5 3.9 4.7 5.7 5.8 5.7 5.5 5.2

3.3 4.8 4.5 3.9 6.1 5.6 6.1 5.9 5.8 5.4

4.8 3.2 5.1 4.5 3.8 6.7 6.1 6.2 5.7 6.0

Source: World Economic Forum (2014). Note: Scores on a scale of 1 to 7, with 7 being the most desirable outcome.

Thus, in the global financial architecture, there are institutions and mechanisms for financing two priority areas of the NDB: infrastructure and sustainable development. However, the newly established bank could become an important institution for its members. Its key advantage is the opportunity it presents to combine the efforts of the BRICS countries in the fields relevant for all five members. These include urban infrastructure such as water, waste processing and the development of smart cities (Rogatnykh 2013). Despite the efforts of the existing institutions, infrastructure is relatively underdeveloped in BRICS countries compared to developed countries (see Table 5.10). Sustainable development projects could include the development and implementation of high technology. The cost of research and development in BRICS countries is relatively low compared to developed countries (see ­Table 5.11). It would be more efficient for BRICS members to develop technologies jointly, for example in nanotechnology or energy efficiency, than to act independently. They could thus benefit from the NDB here. The NDB could also perform analytical and advisory functions regarding common BRICS challenges such as the middle-income trap, agriculture in tropical environments and the SME development. All BRICS countries are struggling with issue of domestic inequality, both socially and regionally (Grigoriev and Morozkina 2013b; see also Silvério 2012). Energy efficiency and alternative energy are also key common issues for BRICS countries. The first loan signed by the NDB was for a solar energy project in Shanghai (New Development Bank 2016). As an institution that can integrate, identify and resolve issues relevant to all five BRICS countries, the NDB could complement the existing system of institutions and mechanisms. In this function, it could increase the BRICS’s role in the global financial architecture to correspond to the group’s role in the global economy (Preksin 2013; O’Neill 2013; Armijo and Roberts 2014). Although BRICS perspectives do not look as certain and bright as a few

In the global financial architecture  101 Table 5.11  Key Technology Development Indicators, 2007 Country

R&D expenses, % GDP

Employed High-tech in R&D, exports, % % population manufactured exports

Patent applications

Brazil China India Russia South Africa Japan Germany Korea United Kingdom United States

1.1 1.4 0.8 1.1 0.9 3.4 2.5 3.2 1.8 2.7

0.1 0.1 0.0 0.4 0.1 0.6 0.5 0.5 0.5 0.5

21,800 245,200 28,900 39,400 10,800 396,300 61,000 172,500 25,000 456,200

11.9 26.7 6.4 6.9 5.6 18.4 14.0 30.5 18.9 27.2

Source: Leonid Grigoriev and Alexandra Morozkina (2013b). Note: R&D, research and development; GDP, gross domestic product.

Table 5.12  Gross Domestic Product and Bretton Woods Quotas Country

Share in global GDP by PPP, 2015

IMF quota IMF post 2008 voting reform power post 2008 reform

IMF quota post 2010 reform

IMF voting power post 2010 reform

World Bank voting power, 2016

China India Russia Brazil South Africa

17.24 7.09 3.07 2.84 0.64

4.00 2.45 2.50 1.79 0.79

6.39 2.75 2.71 2.32 0.64

6.10 2.63 2.59 2.22 0.63

4.65 3.06 2.91 1.85 0.78

3.81 2.34 2.39 1.72 0.77

Source: International Monetary Fund (2011, 2014), International Bank for Reconstruction and Development (2016). Note: GDP, gross domestic product; PPP, purchasing power parity; IMF, International Monetary Fund.

years ago, due to the financial crisis and its consequences, experts still expect an increase of the group’s role in global economy. BRICS members’ role in the Bretton Woods institutions could be considered as one indicator. Their voting power remains much less than that of the developed countries and often less than the BRICS share in the global economy (see Table 5.12). The BRICS countries insist on reforming the governance system and quota formula, which is especially important as the previous reform announced in 2010 only came into force in 2015. Although that reform increased the share of each member except South Africa, the BRICS total remains lower than its share in global economy.

102  Alexandra Morozkina Consequently, the BRICS countries cannot influence the activities of the Bretton Woods institutions, although this could change since the establishment of the NDB. The BRICS determines the volume and direction of financial assistance to countries (its share, according to the agreement, should not decrease below 55 percent), in contrast to other multilateral development banks. The equal distribution of voting power among the five BRICS members means their opinions are equally taken into account (parity could also remain later if additional capital is raised). In addition, the BRICS can determine lending conditions, in contrast to the IMF and the World Bank, and even establish its own system of financing for development. There has been much public debate over the Bretton Woods institutions, including the opinion that their lending conditions deepened the Asian and European debt crises. The BRICS has created the possibility of changing the current system of financing development, providing lending conditions and monitoring results. It already espouses a nontraditional philosophy of development financing in bilateral development aid, which can be introduced to multilateral aid. First, unlike aid from traditional donors, emerging powers focus on mutual benefits without conditionality. Traditional donors view conditions on institution building and governance as central to ensuring efficient use of aid, whereas emerging donors use tied aid (i.e., financing that is tied to purchases from the source country). Second, traditional donors often focus on fighting poverty and social spending, whereas emerging donors pay more attention to infrastructure projects (Mwase and Yang 2012). The NDB also could finance differently by speeding up operations (South African Institute of International Affairs 2016). But it is still too early to see whether it will change multilateral lending patterns or whether it will follow the traditional path. Thus, the NDB could increase the role of the BRICS in the global financial architecture. It complements the existing system of institutions and mechanisms. It should focus on the middle-income trap and urban infrastructure development. In the field of financing development, it partly duplicates existing institutions and mechanisms, but it could promote the BRICS’s role by using resources primarily from the five founding countries and by considering their interests in the first place. The NDB has the potential to become not only a political initiative but also an instrument for addressing common BRICS issues.

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104  Alexandra Morozkina eds. Moscow: RUDN, pp. 273–86. www.nkibrics.ru/system/asset_publications/ data/53c7/b39f/676c/7631/4009/0000/original/strategiya-rossii-v-briks-tseli-i-­ instrumenty.pdf?1408705835 (September 2017). Grigoriev, Leonid and Alexandra Morozkina (2013b). “Different Economies, Similar Problems.” Russia in Global Affairs, 30 June, pp. 26–40. http://eng.globalaffairs. ru/number/Different-Economies-Similar-Problems-16051 (September 2017). India. Planning Commission (2013). “Twelfth Five-Year Plan (2012/2017).” Government of India, New Delhi. http://planningcommission.gov.in/plans/planrel/12thplan/­ welcome.html (September 2017). Inter-American Development Bank (1996). “Agreement Establishing the InterAmerican Development Bank.” Washington DC. http://idbdocs.iadb.org/wsdocs/ getdocument.aspx?docnum=781584 (September 2017). Inter-American Development Bank (2009–2015). “Annual Reports.” Washington DC. http://publications.iadb.org (September 2017). International Bank for Reconstruction and Development (2016). “Subscriptions and Voting Powers for Member Countries.” World Bank, Washington DC. http:// siteresources.worldbank.org/BODINT/Resources/278027-1215524804501/IBRDCountryVotingTable.pdf (September 2017). International Monetary Fund (2011). “Quoting and Voting Shares Before and After Implementation of Reforms Agreed in 2008 and 2010.” Washington DC. www. imf.org/external/np/sec/pr/2011/pdfs/quota_tbl.pdf (September 2017). International Monetary Fund (2014). “World Economic Outlook Database.” ­Washington DC, October. www.imf.org/external/pubs/ft/weo/2014/02/weodata/ index.aspx (September 2017). Mwase, Nkunde and Yongzheng Yang (2012). “BRICs’ Philosophies for Development Financing and Their Implications for LICs.” Working paper, March, International Monetary Fund, Washington DC. www.imf.org/external/pubs/ft/wp/ 2012/wp1274.pdf (September 2017). National People’s Congress of the People’s Republic of China (2011). “China’s Twelfth Five-Year Plan (2011–2015).” Beijing. www.britishchamber.cn/content/ chinas-twelfth-five-year-plan-2011-2015-full-english-version (September 2017). New Development Bank (2016). “BRICS New Development Bank Signs First Loan Agreement.” Shanghai, 21 December. http://ndb.int/BRIC-SNew-DevelopmentBank-signs-first-loan-agreement.php (September 2017). O’Neill, Jim (2013). “Five Surprises Ahead.” BRICS Business Magazine, pp. 28–33. http://bricsmagazine.com/en/articles/five-surprises-ahead (September 2017). Preksin, Oleg (2013). “The Great Financial Construction Site.” BRICS Business Magazine, pp. 44–45. http://bricsmagazine.com/en/articles/the-great-financialconstruction-site (September 2017). Putin, Vladimir (2005). “Vystupleniye na vstreche s chlenami Pravitel’stva, rukovodstvom Federal’nogo Sobraniya i chlenami prezidiuma Gosudarstvennogo soveta.” [“Speech of the President of the Russian Federation on the meeting with the Government, Federal Assembly and the members of the State Council.”] Kremlin, 5 September. http://web.archive.org/web/20140822232143/http://archive. kremlin.ru/appears/2005/09/05/1531_type63374type63378type82634_93296.shtml (September 2017). Rogatnykh, Elena (2013). “Industrial, Agricultural and Service Sectors in BRICS Countries: Innovation and Mutual Reinforcement.” Paper presented at the

In the global financial architecture  105 conference on “Complementarity of BRICS National Economies and Mutual Cooperation,” 18 October, Moscow. Silvério, Maria (2012). “BRICS: Desigualdades Sociais Nos Países Emergentes.” [“BRICS: Social Inequality in Emerging Countries.”] Observatório Das Desigualdades, Lisbon. http://observatorio-das-desigualdades.cies.iscte.pt/­index.jsp?page= projects&id=123 (September 2017). South Africa. National Planning Commission (2012). “National Development Plan 2030: Our ­Future – Make It Work.” 12 August, Government of South Africa, Pretoria. www.poa.gov.za/news/Documents/NPC%20National%20Development%20 Plan%20Vision%202030%20-lo-res.pdf (September 2017). South African Institute of International Affairs (2016). “Sustainable Development and the New Development Bank.” Presentation prepared for the SAIIA-Oxfam Roundtable, 2 March, Johannesburg. www.saiia.org.za/speeches-presentationsother-events-materials/988-2016-03-02-saiia-oxfam-study-brics-ndb-­sustainabledevelopment/file (September 2017). Unger, Roberto Mangabeira (2013). “Gearing Up for a New Global Order.” BRICS Business Magazine, pp. 30–33. http://bricsmagazine.com/en/articles/gearing-upfor-a-new-global-order (September 2017). Vnesheconombank (2016). “Annual Report 2015.” Moscow. www.veb.ru/common/ upload/files/veb/reports/annual/VEB_Annual_2015_2eng.pdf (September 2017). World Bank (2009–2015). “World Bank Annual Reports and Financial Statements.” Washington DC. https://openknowledge.worldbank.org/handle/10986/2127 (September 2017). World Economic Forum (2014). “The Global Competitiveness Report 2014–2015.” World Economic Forum, Davos. http://www3.weforum.org/docs/WEF_Global CompetitivenessReport_2014-15.pdf (September 2017).

6 BRICS financial and payment arrangements A locus of intragroup trade development Natalia Khmelevskaya In recent years, monetary cooperation among the BRICS countries of ­Brazil, Russia, India, China and South Africa has matured to establish the Contingent Reserve Arrangement (CRA) to address concerns about trade policy and exchange rate regimes through deepening trade and developing payments and market infrastructure (Khmelevskaya 2012). Such arrangements require ample foreign exchange reserves held by central banks to comply with international laws and financial liabilities, which are also backed up by China-led bilateral currency swap lines (Khmelevskaya 2016). They also depend on interbank relations and payments and market infrastructure. They thus provide useful pointers on what directions BRICS cooperation may take as it deals with a global economic slowdown, the rise of external pressure and mega trade agreements. According to BRICS economic indicators, the rally that occurred between 2014 and 2016 reflected the persistent impacts of commodity prices in Brazil, Russia and South Africa, external financial conditions in Russia, structural bottlenecks in Brazil and India, rebalancing in China, and also economic distress related to geopolitical factors (International Monetary Fund [IMF] 2016). The BRICS came together primarily to enhance and deepen economic relations among the five countries. By the second summit, in Brasilia in 2010, the leaders began discussing the idea of a local currency trade settlement arrangement to facilitate trade and investment among their countries (BRIC 2010). The monetary partnership has, from the beginning, emphasized local currency trade settlement arrangements, with a growing ambition to forestall liquidity gaps because of the terms of trade or sudden stops in capital flows. Exports from China and India to BRICS countries, which more than doubled between 2009 and 2014, made different contributions to trade growth. China expanded sales of intermediate and finished goods, and the other BRICS members increased exports of mineral resources. ­Brazil and Russia almost doubled their intra-BRICS exports, and as much as 80 ­percent of Russian exports were still mineral oil, but Brazil has considerably diversified its export of agricultural products (Khmelevskaya 2015a). Brazil made the most significant progress within the BRICS countries, with an average annual growth of 18 percent: its exports to China have doubled,

BRICS financial and payment arrangements  107 exports to Russia have increased by 1.3 times and to India by 1.4 times between 2009 and 2014.1 Although trade among BRICS countries has widened and deepened, strengthening cooperation with China has weakened the long-term growth of intra-BRICS trade after economic downturns. As a result, intragroup export turnover fell to unprecedented $120.765 billion in 2015, which was about $5 billion less than when the BRICS came together in 2009. China remained a pivot point: its exports to BRICS countries plunged by the deepest 65.3 percent in 2015, which impeded overall trade development. At the same time, China’s exports to BRICS members recuperated quickly after the second quarter of 2016, with overall growth at 38 percent by the end of year. This growth became an intrinsic element of intragroup demand and the basis of trade growth. As Chinese companies increased their imports of agricultural products and mineral resources, Brazil and South Africa were the first to regain exports to BRICS members, with overall growth of 22.3 percent and 21.9 percent respectively. Brazil exports grew by 32 percent by the end of the third quarter of 2016, mainly through oil seeds and oleaginous fruits, meat, ores, slag and ash, and mineral fuels, which accounted for 73  percent of its total exports to BRICS; they comprised more than 96 ­percent of exports to China.2 Taken together, these factors address the expanding complementarities among BRICS members and building intragroup value chains to enhance the resilience of each individual economy. An inclusive dialogue on monetary cooperation could respond to threshold effects from global shocks through trade facilitation and a framework for local currency settlements, which would be supported by payment arrangements (Sindzingre 2005). This would shift BRICS economic relations into a higher gear.

The evolution of the BRICS dialogue on monetary policy The first practical document issued at the 2010 Brasilia Summit was the memorandum of understanding among the development banks of Brazil, Russia, India and China (see Table 6.1). It articulated the BRIC’s financial multilateralism with balanced decision making and inclusive participation. Without a common institution, the BRIC initially relied on flexible multilateral dialogue and open cooperation modes that had been shaped by negotiation groups and bilateral monetary-related initiatives into a more comprehensive discussion at each summit. To follow the evolution of the BRICS monetary partnership, this chapter considers monetary-related dialogue as a form of plurilateral coordination related to cross-border transactions, payments and transfers, and other monetary aspects of foreign economic ties. This terminology is more applicable than regional financial integration, given that the BRICS countries strongly adhere to the principles of monetary sovereignty and financial identity. BRICS integration could only partially be achieved through financial market infrastructure or

Table 6.1  Modes of BRICS Monetary-Related Dialogue Years

Multilateral Monetary-Related Dialogue Modes

Bilateral Monetary-Related Facilities

Before and in 2009 2010

Meetings of the finance ministers and central bank governors

Currency swap agreement between China and Brazil

Meetings of the finance ministers and central bank governors Memorandum of understanding signed by Vnesheconombank, the China Development Bank, the Brazilian Development Bank and the ExportImport Bank of India BRICS Business Forum BRICS Interbank Cooperation Mechanism Meetings of the finance ministers and central bank governors Meeting of trade and economic ministers BRICS Contact Group on Economic and Trade Issues BRICS Agricultural Cooperation Working Group Meetings of the finance ministers and central bank governors BRICS Bank Forum BRICS Exchanges Alliance BRICS Master Agreement on Extending Credit Facility in Local Currencies BRICS Multilateral Letter of Credit Confirmation Facility Agreement Meetings of the finance ministers and central bank governors Meeting of the heads of tax administration BRICS Business Council Agreement on the BRICS New Development Bank Treaty for the Establishment of the BRICS Contingent Reserve Arrangement Meetings of the finance ministers and central bank governors Meeting of the ministers of energy Meeting of the communications ministers Meeting of the industry ministers Meeting of the competition authorities Meetings of the finance ministers and central bank governors Meetings of labour and employment ministers

Direct trading between the renminbi and the ruble at the China Foreign Exchange Trade System and on the Moscow Exchange

2011

2012

2013 2014 2015

2016

Source: Compiled from the official websites of the countries’ BRICS presidency.

Cross-listing of IBOVESPA futures; MICEX Index futures; S&P BSE SENSEX Index futures; Hang Seng Index futures and Hang Seng China Enterprises Index futures; and FTSE/JSE Top40 futures

BRICSMART Extended swap agreement between China and Brazil Currency swap agreement between China and Russia Currency swap agreement between China and South Africa

New Development Bank Contingent Reserve Arrangement Direct trading between the renminbi and the rand at the China Foreign Exchange Trade System

BRICS financial and payment arrangements  109 interbank relations so that regardless of any trade-offs necessary in terms of monetary policy and capital control choices, primacy would be given to a diversified, globally competitive economy—the most important pillar of ­capacity-driven growth and social stability and, thereby, an important defence against low-cost competitors. Since the first meeting of the BRIC finance ministers on November 7, 2008, in São Paulo, on the eve of the meeting of finance ministers and central bank governors of the Group of 20, the BRICS monetary-related dialogue has included an array of multilateral modes to deal with national interests and policy concerns, such as trade and investment for Brazil in 2010 and financing investments for India in 2011. This dialogue was needed partly because of the countries’ structural weaknesses and partly because increasingly intensive trade relations with China accelerated bilateral trade. Between 2009 and 2012, trade between Russia and China increased by 32  percent per year, and Brazil’s trade with China and with India grew 20 percent annually. ­Between 2013 and 2014, exports from South Africa and Brazil to other BRICS countries dropped by 5.5 percent and 1.1 percent per year respectively, while Chinese exports continued to grow six percent annually. In 2015, intra-BRICS exports plunged almost 59 percent (overall average).3 The monetary-related dialogue was launched in 2010, with the BRICS Interbank Cooperation Mechanism serving as a platform for mutual technical assistance as well as for bilateral financing investment projects in BRICS members, particularly the energy sector between Russia and Brazil and between Brazil and China, the aircraft industry between China and B ­ razil, and the complex equipment manufacturing sector between Russia and China and between China and South Africa (Khmelevskaya 2012). These multilateral modes gradually evolved into a common financial institution and an arrangement (see Table 6.1). The multilateral Master Agreement on Extending Credit Facility in Local Currency and the BRICS Multilateral Letter of Credit Confirmation Facility Agreement were signed in New Delhi in 2012. The BRICS Exchanges Alliance brought together leading emerging stock markets by cross-listing benchmark equity index derivatives starting on March 30, 2012 that are now known to investors as BRICSMART products. The BRICS Business Forum, the BRICS Bank Forum and the BRICS Business Council were also introduced between 2010 and 2013 to respond to a broadening scope of the BRICS members’ interests and to allow proposals from the financial sector to be assessed and transmitted to the ­decision-making levels. The Treaty for the Establishment of BRICS ­Contingent Reserve Arrangement and the Agreement on the New ­Development Bank, agreed in Fortaleza in 2014, entered into force after all the BRICS countries deposited their instruments of approval in 2015. The nonconventional initiatives among BRICS countries were apparently designed to set up a framework for regular trade payments, especially to reduce transaction costs through improved financial intermediation, with positive effects on economic growth, despite doubts about a solid relationship

110  Natalia Khmelevskaya between capital liberalization and growth (Levine et al. 2000; Prasad et al. 2003). Payment, clearing and settlement arrangements are fundamentally important for financial systems and public policy (Committee on Payment and Settlement Systems 2001). Several factors arise, such as conducting transactions to facilitate price discovery, allocating capital efficiently and sharing risks.4 At the time the BRIC was formed, only Russia and China had joint payment and market infrastructure.5 By December 2010, the number of Chinese companies authorized to make cross-border trade payments in renminbi and rubles had grown from 365 to 67,000, 15 Russian banks had opened foreign correspondent accounts in renminbi and 10 Russian banks made payments for transactions in renminbi (Khmelevskaya 2012, 150). The China Foreign Exchange Trade System (CFETS) launched direct trading between the renminbi and the ruble in the interbank foreign exchange market on November 22, 2010, and the Moscow Exchange (MOEX) followed less than a month later. In April 2013, the MOEX introduced new contracts for spot and swap renminbi/ruble currency pair trading and partial pre-funding of cash, as well as reduced fees for current and new instruments. The need for common financial institutions stems from the requisite that such institutions are more capable of mitigating the negative impacts of global shocks via national institutions than their composite arrangements (Sindzingre 2005, 20). Institutions can also be augmented by the payment arrangements (Sindzingre 2005). The Reserve Bank of India offered a trade settlement facility between the rupiah and the renminbi from Hong Kong in 2011. Indian banks could open nostro accounts in renminbi through the external commercial borrowings scheme that would allow companies in the infrastructure sector to access funds from abroad, but have not done so.6 Since March 2013, China and Brazil have extended exchange payments for transactions in renminbi and reais under their bilateral currency swap agreement valued at 190  billion renminbi or 60  billion real.7 In October 2014, Russia and China signed their first bilateral currency swap agreement. In April 2015, South Africa and China agreed to make payments in rand and renminbi under a bilateral currency swap valued at 30 billion renminbi (South African Reserve Bank 2015). In June 2016, direct trading between the South African rand and the Chinese renminbi was set to begin in the Chinese interbank market through CFETS (see CFETS 2016).

Requisites for the BRICS financial and payment arrangements Global crises have diverging and damaging effects on BRICS economies, which have common concerns about liquidity support should short-term balance-of-payment pressures arise. With relations increasing within the group, notably with China, as well as with broader and deeper domestic financial markets in terms of capital flows, the intragroup internationalization of BRICS currencies may spark innovation, although it is not unique, as for example national currencies are used for bilateral cross-border

BRICS financial and payment arrangements  111 payments between Brazil and Argentina and between Brazil and Uruguay (viz. Sistema de Pagos en Moneda Local, SML). To deal with macroeconomic analysis, the possible stimuli to use a ­currency for international payments are predominantly market driven in the short term. The nominal exchange rate (NER) is a matter of choice for payments, and the proportions of bilateral trade determine the unit for clearing. Current account payments and transfers are part of the aggregate liquidity flows in the money supply. Therefore, while accumulating, for instance, renminbi or rubles to pay for imports, liquidity may expand, which increases demand for stronger currencies. As exchange rates float more freely, higher market expectations are associated with the “fear of floating” (see Calvo and Reinhart 2000). From 2010 to 2013, the real, rupiah and rand were the most volatile BRICS currencies, and the ruble joined them in 2014. On the longer-term perspective, the exchange rate margin regulates the choice of currencies both for payments and for trade finance facilities, insofar as the currency affects transactions and fixed costs according to which financing help manage international market entry risks (Berman and Héricourt 2010). As per the obligations under Article  VIII and further defined under ­Article XXX(f) of the IMF’s Articles of Agreement, all the BRICS currencies are qualified as freely usable and are widely used to make payments for international transactions and traded in the principal exchange markets. At Clearstream Banking SA and Euroclear Bank SA/NV, payment transactions are performed in rubles at the Deutsche Bank in Moscow, in reais through accounts open in Itaú DTVM SA and in rand through Standard Chartered Bank in Johannesburg. Noncash operations with funds in rubles (equities and corporate bonds) are also available for settlement via ­Euroclear and Clearstream, which link directly to Russia’s MOEX, Central Security Depository and National Settlement Depository. The legal right to choose the payment currency for merchandise export or import has, of course, also significantly strengthened the payments framework. Russian and Chinese residents can select the currency and means of payment in accordance with the 1992 agreement between their two governments on trade and economic relations, which was amended in 2010. In 2014, more ­ ussia and China than 90 percent of cross-border trade payments between R were settled in rubles with later conversion into renminbi or dollars. The total turnover of correspondent banking between Russia and China increased by as much as 35 percent annually. In addition, the IMF’s decision to include the renminbi in the basket of currencies used to denominate the ­special drawing rights since October 2016 facilitates China’s attainment of its long-declared goal of a global reserve currency (IMF 2015). For BRICS currencies, the clearing arrangement for intragroup payments helps create network externalities through market infrastructure and interbank relations. In comparison with the surge in the renminbi from two percent of global payments in 2012 to 6.9 percent in 2015, by value, accounting for 1.67 percent of global payments by 2016, the renminbi still has some take-up in capital

112  Natalia Khmelevskaya markets in trade settlements, mainly because of extensive foreign investments and banking control (Eichengreen and Kawai 2014; SWIFT 2016). The government opened a renminbi offshore market in Hong Kong to promote investments in renminbi-denominated assets and for capital account liberalization as a prerequisite for freely usable currency as per the IMF’s Articles of Agreement. With 12  Indian banks and Brazil’s BTG Pactual operating in offshore renminbi markets, Russia’s Gazprombank obtained a broker licence in Hong Kong to access finance through so-called panda bonds in 2015. BRICS countries still intervene with their currency exchange rates and impose capital controls, so their financial markets are oriented more toward trade than toward stock flow, with trade significantly influencing companies’ performance. In the short run, the foreign exchange rate and the stock shocks generate the spillover co-effects for all the BRICS countries, proving that exchange rate volatility affects industrial growth (Sui and Sun 2016). Moreover, the effects of the S&P 500 on local stock returns are significant in Brazil, China and South Africa, with slight impacts on the exchange market in Brazil and Russia. Therefore, the BRICS needs its own arrangement to forestall external shocks besides existing international financial arrangements, to provide its economies with partial insurance against the risk of liquidity runs in global turbulence and, eventually, move them from strengthening representation in the institutions of global governance to a broader dialogue on macroeconomic policy (see Table 6.2). The system of international financial arrangements, where the IMF is complemented by an array of regional institutions, notably in Latin America and the Caribbean, has shown the advantages of diversity in adapting to the demands of specific regions. In contrast, there are a few monetary unions in Western Africa and a clearing union in Asia. The oldest functioning mechanisms are the Latin American Reserve Fund and the swap agreements among members of the Association of Southeast Asian Nations enhanced by the Chiang Mai Initiative Multilateralization (CMIM). Among the clearing arrangements, the oldest is the System of Payments and Reciprocal Credits of the Latin American Integration Association. The CRA conforms to the IMF’s self-financing mechanics through reserve tranche positions (Khmelevskaya 2016). It retrieves from the CMIM the IMF-linked proportion, borrowing-to-contribution ratios and management options (Asami 2005). The reserve tranche position is a member’s liquidity claim on the IMF’s international reserves, equal to the member’s quota minus the IMF’s holdings of the member’s currency. Hence, the reserve asset paid by a member for its quota subscription creates an equal amount of reserve tranche position, and the IMF lends to other members (see Table 6.2). Steering the practice of the CMIM and IMF, China may require half its fully pledged contribution to the CRA, Russia, India and Brazil their full contributions, and South Africa a sum twice as large as their contribution. The IMF’s institutionalized multilateral lending capacities

Table 6.2  BRICS in International Financial Arrangements, as at December 31, 2016 Country

International Monetary Fund Quota, SDR million

International Financial Arrangements

Reserve tranche position SDR million

% Quota

Outstanding Lending to purchases and the IMF, loans SDR million

Brazil

11,042.00

875.37

7.93

None

775.22

Russia

12,903.70

1,478.43

11.46

None

775.46

India 13,114.40 China 30,482.90 South Africa 3,051.20

1,709.92 4,721.66 420.52

13.04 15.49 13.78

None None None

618.70 2,417.16 58.92

Official foreign exchange reserves, USD million

Regional financial arrangements

USD million

SICAP SML Currency swap with China EFSD Currency swap with China None CMIM Currency swap with China

2,220 15 30,000a

372,221

3,149.8 24,500a

376,300

None 14,520a 805a

359,671 3,230,893 47,356

Source: Compiled from the official websites of the International Monetary Fund, the Latin American Integration Association, the Association of Southeast Asian Nations and the BRICS central banks. Notes: SICAP, System of Payments and Reciprocal Credits of the Latin American Integration Association; SML, cross-border local currency payment system; EFSD, Eurasian Fund for Stabilization and Development; CMIM, Chiang Mai Initiative Multilateralization (CMIM). a Valued at the date the swap agreements were signed.

114  Natalia Khmelevskaya avoid the need to hold more official foreign exchange reserves, but impose more restrictions on cross-border capital movements (Roubini and Setser 2004). At the same time, misalignments of the BRICS currencies caused by global financial instability and negative expectations may be cut down, first, by borrowing-to-contribution ratios and, second, by clearing in the currency of the largest contribution (e.g., China’s part equals $41 billion). That is, the risk of nonpayments in freely usable currencies of compensation balances, which led to the collapse of many clearing mechanisms (e.g., Fondo Centroamericano de Estabilización Monetaria), for the CRA is lower because all the countries in the agreement have a trade surplus with one another, except for China, and due to reserve currency renminbi with the largest stake. For the renminbi exchange rate, which is managed against a basket of currencies of its major trading partners, such a mechanism may be a way to use the BRICS official foreign exchange reserves to settle intraBRICS trade balances and through bilateral currency swaps (see Table 6.2). The question then arises about the parameters of the five countries’ bilateral merchandise trade insofar as the choice of payment and financing currencies affects firms’ capabilities to enter export markets as well as to export in larger quantities (Melitz 2003). It also raises the question of which unit of clearing corresponds to currency misalignments and policy shifts (­K hmelevskaya 2015b, 2016).

Drivers of the BRICS financial and payment arrangements developments In the modern paradigm of international economic relations, the scale and magnitude of changes and the challenging environment are driving the BRICS to turn the tools of political coordination into a full-fledged mechanism for cooperating in trade and investments. Stemming from the BRICS openness, the volatility in global markets—apparently in commodity markets—is now making external balance sheets more vulnerable. Slower growth in China in 2015 was explained by increased vulnerabilities from recent rapid credit and investment growth, in Brazil by weak external demand offset by the boost to the terms of trade from lower oil prices, and in Russia and South Africa by the economic impacts of sharply lower prices for oil and other commodities. The IMF’s projections for growth in BRICS countries continue to vary, with the slowdown and rebalancing of the Chinese economy and lower commodity price still factors (IMF 2017). Increased industrial and investment activity in the BRICS after policy reforms is expected to be more than offset by an adjustment to lower medium-term growth in the BRICS countries. With regard to internal reforms, Brazil and India have been traditionally very engaged in the BRICS economic partnership agenda with the focus on bilateral trade and investments to deal with structural reforms needs and to support public demand. Brazil particularly relies on trade facilitation

BRICS financial and payment arrangements  115 and market interlinkages, responding to transaction costs, whereas India leads in financial integration initiatives (see Table 6.1). When the BRICS was launched, Brazil kicked off the third period in its history of economic reforms with the Industrial, Technological and Foreign Trade Policy focused on expanding physical capacity. Given the shifts in the world prices and adverse changes in trade structure, the share of commodities in Brazil’s exports increased while the share of manufactured goods declined, largely due to strengthening Chinese competitiveness and then to the Greater Brazil Plan (Plano Brasil Maior) launched in 2011. In trade policy, this plan was a set of protection measures that provided for subsidized credits and modified import duties and doubled the federal excise tax on automobiles without at least 65 percent domestic content.8 It required the government to pay up to 25 percent more for the domestic textile, footwear, health, information technology and telecommunication sectors. From 2008 to 2012, the Brazilian Treasury lent more than $180  billion to the state-owned Brazilian Development Bank to support the industrial sector and increase infrastructure investments (Paiva 2012). At the same time, from 2000 to 2009, Brazil faced the appreciation of its currency, making it tougher for exporters to compete with their BRICS counterparts with increased prices of domestic production, and since 2012 the real has continuously plunged, gaining 40 percent against the U.S. dollar at the end of 2009 and devalued by another 52 percent during 2015 to lessen price competitiveness.9 On the domestic flank, all the BRICS members emphasized ­capacitydriven competitiveness to respond to external pressure when growth rates fell, and, to achieve long-lasting progress, India has undertaken measures to transform into a global manufacturing hub, Russia to stimulate modernizing its enterprises and support import substitution, and South Africa to focus on its social agenda. Launched on September 25, 2014, the Make in India program included 25 sectors and was accompanied by legal, foreign exchange control and regulation arrangements (such as foreign direct investment caps in defence and railway infrastructure were relaxed to 49 percent and 100  percent, respectively). In Russia, complex international relations and global distress increased the importance of the state industrial development and competitiveness enhancement program, intended to revive Russia’s historical competitive advantages through infrastructure projects, labour absorption and import substitution. In addition, the program would be synchronized with overall efforts to support local manufacturers and avoid consequent negative impacts on the trade balance. For South Africa, the major constraints to development included currency volatility and escalating administered domestic prices, especially of electricity and port charges, in concert with still unresolved social and labour issues. The annual industrial policy development plans, which are part of the National Development Plan 2030, focused on the competitiveness and labour capacity of the manufacturing sector, especially in the traditional, tradable and value-­adding sectors. They are framed by and constitute such pillars as the National

116  Natalia Khmelevskaya Infrastructure Development Plan, the New Growth Plan and the National Exporter Development Programme. Trade within the BRICS mirrors the economic weaknesses and differences among the five countries themselves through export structures in line with transaction and fixed-cost specifics (Berman and Héricourt 2010). Reduction in trade costs increases the divergence between countries in product diversification and raises demand abroad (creating a pro technology-­adoption effect), but reduces demand at home because of import competition (creating an anti-technology-adoption effect) (Peters and Schnitzer 2015). Therefore, the exports that refer to the hard-won gains of reforms and shifts in the domestic economies may also open up the possibilities for economic activity because firms in countries with reduced information and transaction costs are both financially healthier and more productive (Demirgüç-Kunt and Levine 2008). By 2017, more than 55 percent of aggregate bilateral exports came from China. Having started from a high base, China’s volume of trade globally and with its BRICS partners grew briskly over the previous decade. The other BRICS members shared economic growth and global confidence, but their export priorities were reproduced in bilateral trade flows—after 2012 there was a marked shift in China’s role as a strategic export destination. China became the major trade partner for Brazil and South Africa, and the second export market and primary import market for India. In sum, about one third of Brazilian, Indian and South African trade turnover now arises from economic relationships with China; for Russia, it was recently about 11 percent (18 percent of imports and eight percent of exports).10 In terms of geopolitics, these trade proportions among a group of countries, each one with the ambition to play a role commensurate with its global vision, are associated both with advantages and disadvantages in the form of intercountry trade imbalances (Khmelevskaya 2015b). Every third foreign trade transaction within the BRICS is with China, which is also a result of China’s competitive advantages and trade facilitation (such as tariff rates, costs of trade procedures and formalities). Like other developing countries to some extent, BRICS countries have extended export growth by improving their performance based on strategy on the intensive margin—the expansion and deepening of export relations (Besedes and Prusia 2007). Brazil has experienced a higher export growth due to extensive exports of mineral fuel and industrial goods, and India and Russia due to machinery exports, while Chinese export growth has been mostly attributed to the growth in all the export items (Khmelevskaya 2015a), Given the trade structure among the BRICS countries, a consensus has recently emerged that the structure of exports or their diversification is crucial for productivity to achieve economic growth, as more open economies with lower barriers experience higher growth (McMillan and ­Rodrik 2011; Dabla-Norris et al. 2013, 25). Tariffs are still regarded as a major trade barrier among the BRICS countries (BRICS Business Council 2014).

BRICS financial and payment arrangements  117 They correlate to back-and-forth intra-BRICS transactions—six percent of ­China’s or South Africa’s exports go to BRICS countries, five percent of Brazil’s exports, four percent of India’s exports and only two percent of Russia’s export (the average rate for 2009–15 excluding trade with China).11 The export structures of the five BRICS members are surprisingly not very similar, according to the overall Export Similarity Index (ESI) or the Finger-Kreinin Index of similarity between BRICS, which reveals to what extent product exports grow more rapidly between two BRICS countries than the average of intra-BRICS exports.12 Each has traditionally competed with one another in ore, slag and ash (Chapter 26 in the Harmonized Commodity Description and Coding System), mineral fuels and oils and their products (27), organic chemicals (29), iron and steel (72), and nuclear reactors, boilers and machinery (84). At the two-digit level of the harmonized system, South Africa has the highest coefficients, especially in trading ore, slag and ash with Brazil and India, and also in mineral oil with Russia (see Figure 6.1, the right axis). The average overall average ESI is 37 percent; the maximum was 60 percent between Brazil and South Africa in 2011, caused mostly by price factors (see Figure 6.1). While India and China exports have been growing faster than the overall intragroup trade since 2010, the scope and amount of bilateral exports have been enriched so that by 2016 they became competitors. Between 2012 and 2016, China was sued by India at the World Trade Organization more than any other BRICS country.13

45%

60% 55% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

40% 35% 30% 25% 20% 15% 10% 5% 0% 2010

2011 Brazil–Russia Brazil–China

2012

2013

2014

2015

Brazil–India Russia–India

Figure 6.1  BRICS Export Structures in 2010–15 Note:  Based on the Export S ­ imilarity Index or the Finger-Kreinin index of similarity among BRICS members, which reveals to what extent product exports grow more rapidly between two countries compared to the average of i­ ntra-BRICS exports.

118  Natalia Khmelevskaya Brazil competes mostly with South Africa in ore, slag and ash and in ­ ineral fuels and oil, with overall export structure similarity increasing to 60 m percent by 2011. It has remained on a common negative track (see F ­ igure 6.1). After world oil prices sank, Brazil redistributed part of its export of mineral fuel to BRICS so that it grew to account for about 15  ­p ercent, equal to Russian or Indian intra-BRICS sales. Russia also competes with South Africa in crude oil—at an average 18.5 percent. A rivalry between Russia and India is emerging, mostly in nuclear reactors, boilers and machinery, in mineral fuels and oil, iron and steel, with an extremely vulnerable export structure—for example, for nuclear reactors, boilers and machinery the ESI doubled in recent years, but only crude oil and petroleum were exposed in 2014–15. Hence, the competition intensified among the BRICS members and with other countries in nuclear reactors, boilers and machinery, as well as in electrical machinery and equipment. Simultaneously, export similarity has been decreasing between Brazil and the rest of the BRICS members in ore, slag and ash, and in nuclear reactors, boilers and machinery, within the BRICS in iron and steel products (except South Africa), and between India and South Africa through overall exports and mostly in 2014–15. This decrease reflects increased complementarity as well as members’ low export positions where their separate numbers of commodities and goods are concerned (Khmelevskaya 2015a). Since 2009, six percent of China’s exports have stayed within the BRICS, 8.5 percent of Russia’s exports, nine percent of India’s and 16 percent of South A ­ frica’s; from 2009 to 2014, the BRICS market received an average 21  percent of ­Brazil’s exports annually.14 At the same time, the overall ESI still remains low, even after Russia and India surpassed the maximum 5.3  percent between Russia and China in 2010 at the end of 2015 (5.5 percent). This could reflect a shift in technology content, given the countries’ increasing shares of export markets for these goods. Until the end of 2014, Brazil accounted for 40 percent of electrical machinery exported from the BRICS, Russia for 37 percent and China for 23 percent.15 In 2013, India imported about half of its electrical machinery and equipment from China, and every third imported chemical originated from China. Using the revealed comparative advantage (RCA) index, in the context of global and intra-BRICS export specialization, export competition diagnostics show that high bilateral trade intensities among the BRICS countries between 2009 and 2014 resulted mostly from their relatively diverse competitiveness advantage profiles and export structures (Khmelevskaya 2015a). Estimates at lower levels of product disaggregation (to six digits of the harmonized system focused on products trade more successfully within the BRICS compared with international markets—e.g., in 2012–14, the RCA of Russian crude oil surged in trade within the BRICS and plunged in relation to the rest of the world. At the same time, as a pivot to the intra-BRICS trade intensities, China’s imports generated most of the demand for investment

BRICS financial and payment arrangements  119 goods, often rising more sharply than demand for its consumer goods (Khmelevskaya 2015a). Thus, even when changes occur in sectors characterized by large export shares, the similarity in trade structure within the BRICS can lead to misleading conclusions, if policy determinants are not taken into account. Regarding China’s growing added value in BRICS exports, aggregate trade flows were affected in 2015 primarily through mineral products and intermediate goods, which affect competitiveness. Although 54  percent of Brazilian manufactured goods use components that originate in China and 64  percent of India’s imports consist of Chinese components, Russia more than doubled its exports of automatic data process machines, magnetic readers and computer hardware with an increase of 1.85 times in the sale of “precious goods” to India since 2010.16 Imports of “commodities not elsewhere specified” among the BRICS members were boosted in 2014: by Brazil and South Africa from Russia, and by Brazil from India. For Brazil, with the largest share of import content of exports (almost 100 percent) of the five countries, the shifts in competitiveness had inevitable repercussions on the world prices and currency fluctuations (Khmelevskaya 2015b, 2016). The competitiveness of countries with a large share of foreign added value in their exports has been eroded by the increasing cost of imported production (Bayoumi et al. 2013, 16). Although China has become a growing source of demand for other economies, the demand for investment has risen more sharply than has the demand for consumer goods, particularly in economies exposed to its investment demand. Likewise, the higher import content in intermediate goods, the greater the potential negative impact of exchange rate fluctuations on their export. From 2012 to 2014, currency deviations rather than tariff barriers persisted in many BRICS countries. The rupiah was devaluated to support ­export-oriented growth and lessen trade deficits. To respond to diminished external demand offset by lower commodity prices, Brazil weakened its currency to make its economy more competitive in the global market—a 15 ­percent depreciation between the end of June to the end of 2013. Following the same logic, the Bank of Russia announced a free-floating currency regime in December 2014; with an almost simultaneous drop in world energy prices, the ruble depreciated 69 percent within two months.17 At that time, ­Brazil’s trade balance surplus with its BRICS partners remained remarkably consistent—even in 2014, when there was a deficit in total foreign trade for the first time in over 14 years, trade with BRICS members ran a surplus of $3 billion (or 3.2 percent of aggregate trade). In contrast, although the ­People’s Bank of China kept the value of the renminbi higher in relation to the other BRICS currencies, China’s trade deficit was 2.4 times larger than the deficits of the other members put together. The exchange rate discrepancies among the BRICS countries also revealed differences in macroeconomic policy (margins between the real effective exchange rate [REER] and the NER) and depict their effects on

120  Natalia Khmelevskaya

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0

0.4 0.38 0.36 0.34 0.32 0.3 0.28 0.26 0.24 0.22 0.2 0.18 0.16 0.14 0.12 0.1 0.08 0.06 0.04 0.02 0

RUB

INR

CNY

BRL REER BRICS

BRL

ZAR BRL NER

INR

CNY

RUB REER BRICS

40 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 4 2 0

ZAR RUB NER

BRL

RUB INR REER BRICS

CNY

ZAR INR NER

5 4.8 4.6 4.4 4.2 4 3.8 3.6 3.4 3.2 3 2.8 2.6 2.4 2.2 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014

72 68 64 60 56 52 48 44 40 36 32 28 24 20 16 12 8 4 0

BRL

RUB ZAR REER BRICS

INR

CNY ZAR NER

Figure 6.2  B  RICS Real Effective Exchange Rate and Nominal Exchange Rate in 2010–14 Notes:  BRL, Brazilian real; RUB, Russian ruble; CNY, Chinese renminbi; INR, ­Indian rupiah; ZAR, South African rand; REER, real effective exchange rate; NER, nominal exchange rate.

the competitiveness of national producers.18 The real appreciated under an ­inflation-targeting regime after 2000 and was overvalued against the BRICS currencies in the marketplace. The margin between the REER and NER was the most significant with regard to the renminbi and rand, partly due to a tightly managed exchange rate regime for the renminbi and to the earlier devaluation of the rand (see Figure 6.2). Externally driven expectations fuelled the real’s purchasing power bias toward the inflation process. ­Basic products surpassed manufactured goods in exports within the BRICS. ­Brazil exports to China were mostly in three commodity groups: soy beans; ore, slag and ash; and petroleum oils. These groups accounted for more than 72 percent of exports. With respect to exchange rate discrepancies and BRICS expansion, B ­ razil has experienced the highest export growth among the BRICS countries with an average 16 percent growth rate if China is included and as much as 44 ­percent growth if China is excluded. Brazil’s export performance was mainly resilient, due to the widening and deepening trade relationships among the BRICS ­countries—as far as they refer to the cultivation of intensive export margins. Brazil began exporting butter and other fats and oils derived from milk to Russia, and its exports of vegetable saps and extracts saw unprecedented growth, increasing from $17 million in 2010 to $3.5 billion in 2014. In 2010,

BRICS financial and payment arrangements  121 Indian consumers tasted the divine aroma of Brazilian chocolate, and the assortment of cotton and chemical fibres imported to India also expanded. At the same time, 80 percent of Russia’s export growth to its BRICS partners consisted of mineral fuels and oil.19 This trend means that economic shifts could be reproduced in the export structure changes of countries participating in global supply chains, which in turn may help maintain competitiveness. ESI coefficients for Russia move synchronistically with the REER, which indicates weak market interlinkages together with currency risks. However, the strong renminbi with its de facto semifixed exchange rate was undervalued vis-à-vis BRICS currencies and its advantages were the most evident (see Figure 6.2). The magnitude of the trade response to exchange rate fluctuations thus depended on the overall structure of exports, which was increased by the gap between purchasing power and market-driven exchange rates. The transition to direct trading between the renminbi and the ruble is associated with a wider range of fluctuation of the ruble’s market rate and an increase in the renminbi’s purchasing power. Devaluations of the Indian rupiah, the Brazilian real and the Russian ruble between 2012 and 2014 reduced the gap between purchasing power and market-driven exchange rates vis-à-vis some BRICS currencies (see Figure 6.2). In this regard, the market-driven devaluations of some currencies moved ahead of domestic inflation (the real and rand, except vis-à-vis renminbi), increasing the gap between purchasing power and exchange rates, which also reflected the magnitude of the shifts in sentiment and volatility in global markets from which national producers might sporadically benefit. However, the 30 percent appreciation of China’s real exchange rate vis-àvis the U.S. dollar between 2000 and 2008 was associated with an increase of 4.5–6 percent in the exports typical of a developing country to the United States, with greater effects for countries in closer competition with China (Mattoo et al. 2012, 18). This suggests that the depreciation of the renminbi also induced BRICS exports of raw materials and intermediate goods to China to be used in the production of China’s exports. Chinese companies buy mineral fuels from all the other BRICS countries and buy ore, slag and ash from Brazil, India and South Africa. However, the cumulative volume is still statistically insignificant for China’s total imports. In contrast, about half of the nuclear reactors, boilers and machinery, and electrical machinery and equipment imported by BRICS countries were made in China. Russia’s export of mineral fuels to China grew from 45 ­percent in 2009 to 74 percent in 2014 through sales of crude oil rising more than four times in value, coal more than tripling and petroleum oils nearly doubling.20 Even after Russian export receipts from China tumbled 36 percent in 2015 when oil prices crashed, its exporters increased their sales volume, preserving Russia’s second largest export market after to the Netherlands. India also exported primary products to China. Petroleum oils and coke enriched the overall share of dominant commodities by about 50 percent.

122  Natalia Khmelevskaya Those commodities included ore, slag and ash, organic chemicals, cotton, and copper and copper-based articles. Manufactured products from China dominated imports to the BRICS, specifically nuclear reactors, boilers and machinery; electrical machinery and equipment; and commodities not specified elsewhere. Thus the benefits for the BRICS trading partners depended, first, on China’s role in vertical trade integration, which fuelled China’s rise as a leading exporter, and, second, on China as a growing source of demand for BRICS economies. Insofar as the impact of exchange rate movements on exports may be ­significant, a country’s policy then has substantial implications for the exports of counterparties. If exchange rate movements stem from the coordinated policy actions of a group of countries, these findings are relevant to the BRICS financial arrangements and to the emerging multilateral system. Transaction costs may thereby be reduced via common trade settlement arrangements and trade facilitation. During the period of the ruble’s extreme volatility in 2014, the Indian government and the Federation of Indian Export Organizations offered to put in place a rupiah-ruble agreement similar to one in place with Iran (Basu 2014). Indian imports from Russia included both primary goods (crude oil, precious metals and stones, copper and fertilizers, etc.) and automatic data processing machines, computer hardware and so on, whereas exports consisted of more high-technology goods—such as pharmaceuticals, parts for machinery and aircraft, etc., with overall 38 percent of total exports to Russia, and coffee and tea, iron and steel, and fish.21 The Indian offer could have revived the escrow account once maintained with the Soviet Union as an alternative to the letter of credit, which banks of both countries could use to accumulate their claims against each other and then settle them in their local currencies (Maurer and Harl 1992, 5–6). India and Iran have an agreement that India pays for its crude oil imports in rupiahs through the Kolkata-based UCO Bank; previous agreements were with the Europäisch-Iranische Handelsbank in Germany and Turkey’s Halkbank. For BRICS members, the New Development Bank might serve as an escrow agent, as multilateralism of the arrangement may allow them to avoid sanctions. For the design of a payment network, the BRICS might consider the example of the bilateral cross-border local currency payment systems between Brazil and Argentina (SML) and between Brazil and Uruguay, which are based on national clearing and indicative rates that do not require direct currency trading and are therefore independent of prudential regulation of the central bank of a partner country (Banco Central do Brasil 2008). Given that for all the BRICS members universal real-time gross settlement is carried out by their central banks in the national payments and clearing systems, it would be easier technologically to fine-tune the operational procedures and time schedules in order to interconnect for transfers in BRICS currencies, as the SML has done. The SML illustrates that such an arrangement is useful for mitigating foreign exchange vulnerability, when central banks have ample liquidity. For the

BRICS financial and payment arrangements  123 countries involved, the advantage is the access to exchange risk coverage under freely floating exchange rates (Khmelevskaya 2014). For the BRICS to develop intragroup payments when they hold the world’s largest foreign exchange reserves requires the development of deeper exchange markets in the local currencies, if not an agreement on a common unit of payments ­(Khmelevskaya 2016). Given that the renminbi is already traded directly with the ruble and the rand, and as part of the currency swap agreements among the BRICS members with the offshore market lag, the CRA may push its influence on the clearing mechanism. Still, so far the CRA facilities have been stipulated by trade structures, depicting productivity and competitiveness at different levels. That is, through the bilateral payment frameworks, it detects firms’ abilities to enter export markets in addition to minimizing exchange rate risks. Its clearing facilities will inevitably evolve in line with trade and monetary policy concerns, translated into transaction costs as they synchronically catch shifts in trade and exchange rates.

Conclusion Most BRICS countries have made progress in widening and deepening trade across the group while they dealt with the global slowdown, the rise of external pressure and stress related to geopolitical factors. The time was thus ripe to consider trade facilitation and local currency settlement frameworks via financial and payment arrangements, which could also shift BRICS economic relations into a higher gear. The nonconventional monetary-related initiatives among the BRICS members were apparently designed to set up a framework for trade payments, especially for reducing transaction costs through improved financial intermediation and trade finance (such as China-led currency swap agreements and direct trading between their currencies). The BRICS needs a common arrangement to forestall external shocks besides existing international financial arrangements, to provide its economies with some insurance against the risk of liquidity runs in global turbulence. Such a need stems from the requisite that international financial arrangements may strengthen national institutions to improve economic resilience and will thus be complemented as a composite arrangement or safeguarded as an emergency buffer. As far as intra-BRICS economic relations are concerned, the asymmetry has been reproduced in bilateral merchandise trade flows—since 2012, there has been a marked shift in China’s role as a strategic export destination, which affects firms’ choice of payment and financing currency. With regard to geopolitics, these trade proportions among this group of countries, each with an ambition to play a role commensurate with its global vision, are associated with specific benefits and encumbrances in the form of intercountry trade imbalances. In terms of the trade structure, which is crucial for maintaining productivity and detecting trade barriers, the similarity of BRICS members’

124  Natalia Khmelevskaya exports is surprisingly low. A rivalry emerged between Russia and India in 2015 (mostly in nuclear reactors, boilers and machinery, mineral oils, and iron and steel); export similarity decreased between Brazil and the BRICS (in ore, slag and ash, and nuclear reactors, boilers and machinery), within the BRICS (in iron and steel products, except South Africa) and between India and South Africa (through overall exports and mostly in 2014–15). Hence, trade complementarity within the group has increased, but members’ export positions are still low because of overall slow trade deepening. On the other hand, high bilateral trade intensities between 2009 and 2014 resulted mostly from relatively diverse competitive advantages and export structures and became an asset for the BRICS during the global economic distress of 2015–16 with restrictions and unfair competition. Taken together, these factors now complement BRICS’s export growth, structural reforms to improve productivity and economic progress. However, that rising competition also reflects shifts in technology content, taking into account the most competitive export shares and China’s growing added value in BRICS exports of mineral products and intermediate goods. Likewise, the higher the import content in intermediate goods, the greater the impact of exchange rate fluctuations on exports, so the magnitude of the trade response to exchange rate fluctuations depends on the overall structure of exports, multiplied by the gap between purchasing power and ­market-driven exchange rates. From 2012 to 2014, currency deviations rather than tariff barriers persisted in many BRICS countries. The transition to direct trade between the renminbi and the ruble was associated with a wider range of fluctuation of the ruble’s market rate and an increase in the purchasing power of the renminbi. Devaluations of the rupiah, the real and the ruble between 2012 and 2014 reduced the gap between purchasing power and market-driven exchange rates vis-à-vis some BRICS currencies. The appreciation of China’s real exchange rate vis-à-vis BRICS currencies affected those countries in close competition with China (Brazil and Russia), which revealed that the depreciation of the renminbi also induced BRICS exports of raw materials and intermediate goods to China to be used in producing exports. To respond to the fundamental trade patterns in which currency fluctuations are associated with increasing prices of domestic production factors, the CRA and existing payment arrangements should be adjusted to support BRICS export-led growth and production sharing, because they have already proven that they can mitigate market risks via a clearing mechanism and settlement procedures to facilitate more intensive trade relations by reducing transaction costs and sharing losses arrangements within the payment systems involved.

Notes 1 Estimated using data from the Market Access Map published by the International Trade Centre (ITC) at www.macmap.org. 2 Estimated using data from the Market Access Map published by the ITC at www.macmap.org.

BRICS financial and payment arrangements  125 3 Estimated using data from the Market Access Map published by the ITC at www.macmap.org. 4 The Core Principles for Systematically Important Payment Systems consider credit, liquidity, legal, operational and systematic risks to be the most significant for a payment system, essentially with regard to market effectiveness (Committee on Payment and Settlement Systems 2001). 5 The first agreement on trade and economic relations between Russia and China was signed in 1992 and became the basis for the revised Bilateral Local Currency Settlement Agreement signed on June 23, 2011. 6 Nostro accounts are accounts that a bank holds in a foreign currency in another bank. 7 See Resolution 4.200 of the Central Bank of Brazil on March 26, 2013. The ­Brazilian Monetary Council established the limits and conditions of the bilateral currency swap agreement signed on March 27, 2013, between the Central Bank of Brazil and the People’s Bank of China. 8 In 2014, automobiles import duties reached 35 percent (ad valorem equivalent). 9 Estimated using data from Banco Central do Brasil (Taxas de câmbio) at www. bcb.gov.br/pt-br/#!/n/TXCAMBIO. 10 Estimated using data from the Market Access Map published by the ITC at www.macmap.org. 11 Estimated using data from the Market Access Map published by the ITC at www.macmap.org. 12 To examine the trade structure among BRICS members, the ESI was calculated as follows: S(ab,c) = {∑i Minimum [Xi (ac), Xi (bc)]}100, where Xi (ac) and Xi (bc) are the export shares of industry i in country c and the exports of country a and country b to country c, which in this case includes a group of countries, namely the BRICS. 13 See the database of dispute cases at the World Trade Organization at www.wto. org/english/tratop_e/dispu_e/dispu_status_e.htm. 14 Estimated using data from the Market Access Map published by the ITC at www.macmap.org. 15 Estimated using data from the Market Access Map published by the ITC at www.macmap.org. 16 Calculations made using data from the Trade in Value Added (TiVA) database produced by the Organisation for Economic Co-operation and Development. 17 Estimated using data from the Central Bank of Brazil at http://www.bcb.gov.br and the MOEX at http://www.moex.com. 18 For these purposes, the REER for BRICS currencies vis-à-vis each other is defined using the following formula: REER*=100*Πi(Si * (Pd/Pf ))w, where wi is i’s country share in the BRICS trade turnover, normalized with i’s country share in previous year; P is the consumer price index in countries d and f; and Si is the NER. ­Exchange rate discrepancies are defined here as deviations between the REER and the NER, with the REER assumed to be closer to its equilibrium level. 19 Estimated using data from the Market Access Map published by the ITC at www.macmap.org. 20 Estimated using data from the Market Access Map published by the ITC at www.macmap.org. 21 Estimated using data from the Market Access Map published by the ITC at www.macmap.org.

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126  Natalia Khmelevskaya Banco Central do Brasil (2008). “Convênio do sistema de pagamentos em moeda local entre a República Argentina e a República Federativa do Brasil.” [“Agreement of Local Currency Payment System between Argentina and Brazil.”] 8 September. www.bcb.gov.br/rex/sml/convenio-sml-pt.pdf (September 2017). Basu, Nayanima (2014). “Government Mulls Rupee Payment Deal with Russia.” Business Standard, 24 December. www.business-standard.com/article/economypolicy/government-mulls-rupee-payment-deal-with-russia-114122400071_1.html (September 2017). Bayoumi, Tamim, Mika Saito and Jarkko Turunen (2013). “Measuring Competitiveness: Trade in Goods or Tasks?” IMF Working Paper, WP/13/100, May, International Monetary Fund, Washington DC. www.imf.org/external/pubs/ft/ wp/2013/wp13100.pdf (September 2017). Berman, Nicolas and Jérôme Héricourt (2010). “Financial Factors and the Margins of Trade: Evidence from Cross-Country Firm-Level Data.” Journal of Development Economics 93(2): 206–17. doi:10.1016/j.jdeveco.2009.11.006. Besedes, Tibor and Thomas J. Prusia (2007). “The Role of Extensive and Intensive Margins and Export Growth.” NBER Working Paper no. 13628, November. doi:10.3386/w13628. BRIC (2010). “2nd BRIC Summit of Heads of State and Government: Joint Statement of the BRIC Countries’ Leaders.” Brasilia, 15 April. www.brics.utoronto.ca/ docs/100415-leaders.html (September 2017). BRICS Business Council (2014). “BRICS Business Council 2013/2014 Annual ­Report.” 9 July. http://arquivos.portaldaindustria.com.br/app/conteudo_18/2014/07/15/6862/ BRICSBusinessCouncilAnnualReportDRAFT6-11JulySignature.pdf (September 2017). Calvo, Guillermo A. and Carmen M. Reinhart (2000). “Fear of Floating.” NBER Working Paper No. 7993, November, National Bureau of Economic Research. doi:10.3386/w7993. China Foreign Exchange Trade System (2016). “People’s Bank of China Welcomes Direct Trading between RMB and South African Rand Launched by the China Foreign Exchange Trade System.” Beijing, 17 June. www.chinamoney.com.cn/ english/svcnrl/20160617/1596.html (September 2017). Committee on Payment and Settlement Systems (2001). “Core Principles for Systemically Important Payment Systems.” January, Bank for International Settlements, Basel. www.bis.org/cpmi/publ/d43.pdf (September 2017). Dabla-Norris, Era, Giang Ho, Kalpana Kochhar et al. (2013). “Anchoring Growth: The Importance of Productivity-Enhancing Reforms in Emerging Market and Developing Economies.” Staff discussion note, International Monetary Fund, Washington DC, December. www.imf.org/external/pubs/ft/sdn/2013/sdn1308.pdf (September 2017). Demirgüç-Kunt, Asli and Ross Levine (2008). “Finance, Financial Sector ­Policies and Long-Run Growth.” Policy Research Working Paper 4469, January, World Bank, Washington DC. http://documents.worldbank.org/curated/en/63569146815 8710957/Finance-financial-sector-policies-and-long-run-growth (September 2017). Eichengreen, Barry and Masahiro Kawai (2014). “Issues for Renminbi Internationalization: An Overview.” ADBI Working Paper No. 454, January, Asian Development Bank Institute, Tokyo. www.adb.org/publications/issues-renminbiinternationalization-overview (September 2017).

BRICS financial and payment arrangements  127 International Monetary Fund (2015). “Press Release: IMF Executive Board Completes the 2015 Review of SDR Valuation.” Press release no. 15/543, Washington DC, 1 December. www.imf.org/en/News/Articles/2015/09/14/01/49/pr15543 (September 2017). International Monetary Fund (2016). “World Economic Outlook Update.” 19 January, Washington DC. www.imf.org/external/pubs/ft/weo/2016/update/01/pdf/0116.pdf (September 2017). International Monetary Fund (2017). “World Economic Outlook Update: A Firming Recovery.” 24 July, Washington DC. www.imf.org/en/Publications/WEO/­ Issues/2017/07/07/world-economic-outlook-­update-july-2017 (September 2017). Khmelevskaya, Natalia (2012). “BRIKS valyutnyy partnerstvo : predposylki i uprekaya Interesy.” In BRIKS, Giganty razvivayushchikhsya rynkov: rol’ v global’noy politike i natsional’nykh strategiy modernizatsii. Moscow: MGIMO University, pp. 144–57. Khmelevskaya, Natalia (2014). “Implications of Regional Integration for Economic Policies in Mercosur and the Pacific Alliance.” Russian Foreign Economic Journal 10: 11–20. http://eng.rfej.ru/rvv/id?open&page=400490E17 (September 2017). Khmelevskaya, Natalia (2015a). “Metamorphoses in Trade Complementarities among BRICS and Their Export Positions.” Voprosy Economiki 8. https://ideas. repec.org/a/nos/voprec/2015-08-3.html (September 2017). Khmelevskaya, Natalia (2015b). “Trade Integration in Mercosur vs Infrastructure Integration in Pacific Alliance.” Latin America 2: 48–58. Khmelevskaya, Natalia (2016). “Pul uslovnykh valyutnykh rezervov BRIKS v aspekte dostatochnosti ezhdunarodnykh (zolotovalyutnykh) rezervov.” [“BRICS Contingent Currency Reserve to Cushion the Official International Reserves of BRICS Countries.”] Den’gi i kredit [Money and Credit] 2: 42–49. http://cbr.ru/publ/ MoneyAndCredit/hmelevskaya_02_16.pdf (September 2017). Levine, Ross, Norman Loayza and Thorsten Beck (2000). “Financial Intermediation and Growth: Causality and Causes.” Journal of Monetary Economics 46: 31–77. https://faculty.haas.berkeley.edu/ross_levine/papers/2000_JME_Fin%20 Int%20Growth%20Causality.pdf (September 2017). Mattoo, Aaditya, Prachi Mishra and Arvind Subramanian (2012). “Spillover Effects of Exchange Rates: A Study of the Renminbi.” IMF Working Paper, WP/12/88, International Monetary Fund, Washington DC, March. www.imf.org/external/ pubs/ft/wp/2012/wp1288.pdf (September 2017). Maurer, Michael T. and Neil E. Harl (1992). “Using Escrow Accounts and Letters of Credit to Assure Payment under Credit Sales Agreements.” Journal of Agriculture and Law 14(1): 3–24. McMillan, Margaret S. and Dani Rodrik (2011). “Globalization, Structural Change and Productivity Growth.” NBER Working Paper no. 17143, June. doi:10.3386/w17143. Melitz, Marc J. (2003). “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity.” Econometrica 71(6): 1695–725. Paiva, Márcia de (2012). “BNDES: A Bank with a History and a Future.” Museu da Pessoa, São Paulo. https://web.bndes.gov.br/bib/jspui/handle/1408/2101 (September 2017). Peters, Katrin and Monika Schnitzer (2015). “Trade Liberalization and Credit Constraints: Why Opening Up May Fail to Promote Convergence.” Canadian Journal of Economics 48(3): 1099–119. doi:10.1111/caje.12169.

128  Natalia Khmelevskaya Prasad, Eswar, Kenneth Rogoff, Shang-Jin Wei et al. (2003). “Effects of Financial Globalization on Developing Countries: Some Empircal Evidence.” 17 March, International Monetary Fund, Washington DC. www.imf.org/external/np/res/docs/ 2003/031703.pdf (September 2017). Roubini, Nouriel and Brad Setser (2004). Bailouts or Bail-Ins? Responding to Financial Crises in Emerging Economies. Washington DC: Peterson Institute for International Economics. Sindzingre, Alice (2005). “Explaining Threshold Effects of Globalization on Poverty.” Research Paper No. 2005/53, August, United Nations University World Institute for Development Economics Research. www.wider.unu.edu/sites/default/ files/rp2005-53.pdf (September 2017). South African Reserve Bank (2015). “Reserve Bank Signs Swap Agreement with ­People’s Bank of China.” Pretoria, 10 April. www.gov.za/speeches/sarb-signs-swapagreement-pboc-13-apr-2015-0000 (September 2017). Sui, Lu and Lijuan Sun (2016). “Spillover Effects between Exchange Rates and Stock Prices: Evidence from BRICS around the Recent Global Financial Crisis.” Research in International Business and Finance 36: 459–71. doi:10.1016/j.ribaf.2015.10.011. SWIFT (2016). “Euro Surpasses RMB in Traditional Trade Finance.” La Hulpe, Belgium, 23 November. www.swift.com/node/46001 (September 2017).

7 The BRICS security agenda Russia’s approach and the outcomes of the Ufa Summit Victoria V. Panova

“BRICS” continues to be a moderately fashionable, even if contested, acronym for Brazil, Russia, India, China and South Africa. As the host of the summit in Ufa in July 2015, Russia saw a considerable surge in expert and political attention to the group, mostly within the country and mostly about the group’s potential and its future. This attention was boosted by the continuing confrontation between Russia and the West and their diverging world visions. Russia sees the BRICS and other emerging economies as natural allies in reforming the global order to make it more fair, inclusive and aware of the interests of all the players rather than only those of the old rule-makers. The advanced economies of the North still view the BRICS with varying degrees of skepticism and caution: ­d epending on analysts’ political leanings and ­g eographical ­locations, attitudes range from outright sarcasm about “what is the BRICS” to a moderate understanding of the need to cooperate with the group, but with priority given to bilateral contacts with each of the five countries. This chapter looks into the common goals that each of those c­ ountries pursues and that initially brought them together and keep them—­representatives of absolutely different cultures and civilizations—together up to this moment, even as Brazil and South Africa face political turmoil and as India guards itself against overreliance on only one group or country. The chapter looks into the conceptual formation of the BRICS within Russian political thinking, given that Russia is often credited as the group’s initial driving force. And, finally, it considers some of the areas of cooperation (or lack of such) among BRICS countries regarding peace and security, also vital for Russia, which transferred its presidency to the next BRICS host—India—in early 2016. The chapter finishes by exploring how geopolitical unrest and global imbalances might influence the BRICS’s future, as well as how those five countries together are able to survive difficult times and maintain the momentum of cooperation to achieve general and specific national goals of each member.

130  Victoria V. Panova

The common goals shared by BRICS members A quick glance at the roots of the conceptual and strategic thinking in ­Russia about emerging power cooperation is useful in order to understand what role for the BRICS the country was hoping for during its presidency. The acronym BRIC acquired a life of its own almost as soon as its founding father Jim O’Neill (2001) made it public. It was not, however, seen as anything more than a group of countries lumped together exclusively on economic terms. Russia’s concept for diversifying its policy away from the exclusively western club, a member of which it strived to become during the 1990s, could be found in former prime minister Yevgeny Primakov’s ideas of a Russia-­ India-China (RIC) triangle and enhanced cooperation with Latin American countries, with the trigger coming in the form of the ­Heiligendamm-l’Aquila Dialogue Process established by the Group of Eight.1 Although many interests of the five countries remain at odds, they converge in several important ways that allow for intensified cooperation and the continued search for common approaches. To start with, all the BRICS countries are unhappy with the rules of the existing world order, even if their pragmatic policies require a very cautious approach. After the collapse of the Soviet Union and its socialist bloc—even though the world was not strictly bipolar even before that—the reality was to live in the western-created alternative that remained, which meant that outsiders (either members of the former socialist community or developing countries with different types of government and economic systems) were possibly co-opted into agreeing to its terms and system, which generated preferences primarily for rule-makers and not for everyone. Attempts to preserve that upper status still continue—as the world saw in the discussions of possible solutions to global economic and security issues at the G7 Ise-Shima Summit in 2016. It is true that the priorities of all the BRICS countries lie within the domain of the international economic and financial architecture. But it is no less true that political governance and economic governance are closely intertwined, so security issues have become a key item on the agenda for BRICS deliberations. China is interested in pursuing and institutionalizing the BRICS cooperation agenda further, because “a stronger BRICS grouping would help to safeguard the interests of all developing countries,” even if it increases the emphasis on global economic and developmental reform (Zhao 2015). Nonetheless, the five countries stress that they are not seeking a revolution. They want gradual reforms that take their collective and individual voices seriously. As Aparajita Biswas (2011) writes, the self-declared purpose of the BRICS is not to “challenge the ‘hegemony’ or to emerge as the new ‘hegemons,’ at least in the immediate future, but to protect and secure safe places within the current hegemonic order.” Even though, given the current ­political situation, Russian and Chinese actions to defend their

The BRICS security agenda  131 own national interests prove that wrong, it is nevertheless fair to say that the BRICS is not willing to break down the existing system or reject the rules laboriously worked out over the second half of the twentieth ­c entury, ­especially those agreed to collectively by all. That is why the BRICS stresses ­adhering to international law and the rule of law as opposed to ad hoc ­actions. All five members are “sovereignty hawks” standing on a platform of sovereignty protection and noninterference in internal affairs as clearly stated in the United Nations Charter (Roberts 2009, 10). The grouping also allows Russia to use the benefits of “network diplomacy,” with the “non-crossing of red lines rule,” which stands in stark contrast to the “conditionality requirements typical of most Western institutions.” Moreover, the BRICS is a vivid example of a democratic international arrangement of countries with different political systems, governance, economic traditions, cultural and civilizational attributes cooperating peacefully on an equal basis. Even if national interests and geopolitics come into play, as happens with these five countries as with any others, that arrangement goes against the notion of only liberal democracies being full-fledged members of the world community with the right to a preferential voice in international communications. This view is reflected in the Foreign Policy Concept of the Russian ­Federation and is key to Russia’s approaches to global governance and international relations (Russian Federation 2016). The BRICS considers the UN to be the central and only legitimate body for global governance. The five countries contend that only the United ­Nations Security Council (UNSC) is mandated with maintaining peace and security, which do not accept any unilateral measures that circumvent the legitimate organ. As rightly noted by Vyacheslav Nikonov (2013), “all five countries are interested in increasing to the maximum extent the role of the United Nations, in improving its mechanisms and in responding to global challenges and threats through multilateral diplomacy.” Countries striving for permanent membership status on the UNSC get weary of the stalemate on UNSC reform. Observers see repeated empty phrases in the BRICS documents underlining “importance [Russia and China] attach to Brazil, India and South Africa’s status and role in international affairs” and support for “a greater role in the UN” (BRICS 2014). They may not see the silent revolution revealed in continuous communications within the BRICS. Although they may point out that those two members of the UNSC’s Permanent Five (P5) are in no hurry to fight for permanent seats for the other three BRICS countries, it is clear that the concept of BRICS cooperation and its model of gradual change through reform do not allow for hasty steps. Western observers not familiar with Asian culture often stamp the approach as hypocritical or wicked. Even though there is an ever-growing realization in Russia that UNSC reform is an immediate necessity and that primary consideration should be given first and foremost to its emerging country BRICS partners, the positions of the other P5 members and the lack of consensus among UN members do not

132  Victoria V. Panova make it a fait accompli. And difficulties do not come simply from Russia’s perceived less-favourable status after the collapse of the USSR and its current confrontation with the West. Some experts believe that the ambitions and positions of the two P5 versus three aspiring UNSC members present the least of the problems compared to the attitudes and approaches of the so-called “Uniting for Consensus” group, which is debating the comparable rights to become new permanent members of the UNSC. An even more fundamental problem is the position of the United States, which offers radical suggestions for reform that would clearly not lead anywhere due to existing international divergences (Martynov 2008). The BRICS and most of the other countries—especially those from the developing world—could find more common ground in unequivocally supporting a multilateral approach as opposed to a unilateral one. By its mere existence, this position presents a concern for the United States, which seeks to remain the only superpower and make sure all potential rivals are prevented from rising. This position takes different forms reflected in its official national security doctrine. The start of the twenty-first century was marked by newly elected George W. Bush claiming the country possessed “unprecedented—and unequaled—strength and influence in the world,” with the “great strength of this nation” to be used “to promote a balance of power that favors freedom” (United States 2002). Eight years later, the National Security Strategy adopted for the early years of Barack Obama’s tenure states that “as we face multiple threats—from nations, nonstate actors, and failed states—we will maintain the military superiority that has secured our country, and underpinned global security, for decades” (United States 2010). In nonofficial documents, the U.S. position was probably best described in the in-depth analysis by Stratfor Global Intelligence in 2011. It observed that the United States was secure because “most of the world is simply too geographically hostile to integration to pose significant threats” (Stratfor Global Intelligence 2014). However, two regions could potentially cause concern: South America (or, rather, the Southern Cone of Brazil, Argentina, Uruguay and Paraguay) and Eurasia (mostly its northern part consisting of European countries, rather than the former Soviet Union, and including Russia and China). Given that the final goal of the United States is to ensure that these regions do not unite to present an eventual threat, its policies are directed at keeping them “divided among as many different (preferably mutually hostile) powers as possible.” This presents a perfect explanation of why the United States may not see the BRICS as a desirable phenomenon— its mere existence challenges the core principles of the U.S. strategy.2 Neither Russia nor any of the other four members of the BRICS is willing or even genuinely able to confront the United States, or the North Atlantic Treaty Organization, or indeed the West. Their only goals within their cooperation scheme is to achieve a fairer world order, to secure multilateral approaches and make their voices heard, and to ensure the overall recognition

The BRICS security agenda  133 of the equality of different civilizational and developmental models—the United States is welcome to join those efforts. Unfortunately, a democratic and equitable global architecture does not fit the strategic standing and vision of the largest superpower, while the BRICS embrace a vision of a “multipolar and multi-civilizational world that will be based on the force of law rather than the law of force” (Nikonov 2013).

Russian foreign policy and the BRICS Even though it took a while for Russia to start implementing its foreign policy concept, what began as a lagging second-tier policy track gradually evolved into a high-priority process.3 The first time that Russia explicitly expressed the idea of diversification came with Primakov’s concept of the RIC triangle and multi-vector diplomacy in the mid 1990s. During the first half of that decade, Russia withdrew from various regions, in contrast to the Soviet Union’s global presence, and concentrated its foreign policy in theory and practice on attempting to integrate fully with western countries and western-dominated institutions. With the unfavourable international developments and awakening of Russia toward the realities, in his 1997 presidential address Boris Yeltsin (1997) noted a considerable deviation from the previous path with the stated aims of diversifying its foreign policy. The most important goals now included protecting Russian national interests and avoiding confrontation—with strengthened stability and cooperation in international relations—as well as establishing a system of international relations based on the fact that “our world is multipolar, and there should be no domination of one centre of power,” with the world in the twenty-first century relying “less on military power but rather on the power of law” (translated by author). The first practical manifestation of Russia’s multipolar approach was the visit of Primakov, as foreign minister, to Latin America, which led to several agreements to launch strategic partnerships with the leading states on the continent (see Martynov 2009). Further on, the 2000 Foreign Policy Concept stated that Russia would “seek to achieve a multi-polar system of international relations” that reflects the “diversity of the world” with differing interests and based on “mechanisms of collective resolution” and the priorities of international law and “democratization of international relations” (Russian Federation 2000). The next concept statement, issued in 2008, stressed the strengthened economic potential of the “new centers of global growth, among others connected to more equal distribution of development resources” that would result from the liberalization of global markets. These statements led to a logical conclusion that economic power in those countries and regions is bound to lead to greater political influence contributing to a polycentric world order. The 2008 concept statement also stated that “traditional cumbersome military and political alliances can no longer provide for counteracting the

134  Victoria V. Panova whole range of modern challenges and threats which are transnational in their nature” (Russian Federation 2008). It stipulated the wider use of network diplomacy and flexible forms of multilateralism to protect national interests. It also acknowledged that for the first time in the contemporary history … global competition is acquiring a civilizational dimension which suggests competition between different value systems and development models within the framework of universal democratic and market economy principles. (Russian Federation 2008) In the same document, Russia also calls out the West for its “reaction to the prospect of loss by the historic West of its monopoly in global processes,” which is evident in its policy of “containing Russia.” Moreover, “the unilateral action strategy leads to the destabilization of international situation, provokes tensions and arms race, exacerbates interstate differences, stirs up ethnic and religious strife, endangers security of other States and fuels tensions in intercivilizational relations.” Throughout the official discourse and documents, there are also explicit references to the central role of the UN, which is a principle—along with the principles of multipolarity, sovereignty and the rule of law—unequivocally shared by all the BRICS countries. The “cultural and civilizational diversity of the contemporary world” is also stressed. As mentioned earlier, as the BRICS matured, the Russian government’s appreciation for the group grew. As president in 2006, Russian president Vladimir Putin had promoted closer ties with Brazil, China and India, but it was during the presidency of Dmitry Medvedev that the BRICS began meeting at the leaders’ level. Today the importance attached to the BRICS by the Russian elite cannot be underestimated. When Putin returned to the presidency in 2012, he wrote that Russia “would continue attaching priority to cooperation with the BRICS partners. This unique structure, created in 2006, most vividly symbolizes transformation from unipolarity to fairer world order” (Putin 2012, translated by author). And Russian foreign minister Sergey Lavrov (2013) reinforced this view by stating that the creation of the BRICS was “one of the most significant geopolitical events since the beginning of the new century.” According to the 2013 Foreign Policy Concept, Russia ascribed great significance to “ensuring the sustainable manageability of global development, which requires collective leadership from the major States,” which should be “representative in geographic and civilizational terms” (Russian ­Federation 2013). This was repeated in the 2016 concept, with the declaration that R ­ ussia continues to expand cooperation “its ties with its partners within the Group of Twenty, BRICS (Brazil, Russia, India, China and the Republic of South Africa), the SCO (Shanghai Cooperation Organization), RIC (Russia, India and China) alongside other organizations and dialogue platforms” (Russian Federation 2016).

The BRICS security agenda  135 This mechanism is seen as a new model for global relations that overcomes the old barriers that divide East and West and North and South, and thus will transform into a “multilateral strategic partnership embracing far-ranging issues of the global economy and politics” (Lavrov 2013). Russia is very ambitious for the future for the BRICS, believing the idea of a “bridge” between North and South. If it is active only within the South, it would limit its capabilities as an independent actor in the international arena.

BRICS coordination on peace and security The initial idea behind the BRICS meetings at the leaders’ level grew out of the necessity to coordinate BRIC countries’ positions within the Group of 20 (G20), which itself had begun meeting at the leaders’ level in 2008 to respond to the global financial and economic crisis (South Africa joined the BRICS in 2011). Even though the BRIC members never portrayed themselves as a political bloc or security alliance, the purely economic and financial agenda quickly gave way to a whole range of political and global issues discussed actively by the five countries. Such discussions and cooperation were taking place within the BRICS format and in the multilateral platforms of other mechanisms such as the G20 and the UN. The BRICS—as a formal organization, as opposed to its current state as a ­forum or mechanism of informal cooperation of the leaders of five ­countries—is not likely to evolve in the short or even foreseeable term p ­ eriod. The primary reason lies in the fact that the highest priority on the agenda is the national economic development of each member (with the possible exception of Russia, which bid for high political stakes during the period of economic hardship and uncertainty with regard to further development, partly due to the structural mistakes of recent decades and partly due to mounting external confrontational pressure). Nevertheless, over seven short years the BRICS became a stand-alone platform for global governance, with political and security issues gaining considerable attention, along with traditional economic and financial issues, as well as social, humanitarian and cultural issues. All of the most acute issues on the political security agenda are present in its deliberations. The agenda covers the traditional threats of conflict management and prevention, the recurrence of unilateralism, the central role of the universal UN and the substitution of international law by national legislation, as well as the fight against terrorism, drug trafficking and transnational crime, and maritime security and piracy. It also includes the new challenges arising from the weaponization of space, cybercrime and internet governance, and more. All these issues enjoy varying degrees of BRICS support and united approaches. This chapter discusses a few of the topics briefly, without suggesting that those topics are more important or enjoy wider approval than the others.

136  Victoria V. Panova Global governance For several years Russia’s position on UNSC reform stressed increased efficiency as the primary goal: a more representative character would take into account the changed realities of the world and also “ensure the Council’s adequate and prompt response to emerging crises and problems” (Russian Federation 2011). However, given the fact that no single model of reform has received overwhelming support, Moscow remained very cautious, considering it counterproductive to push any single idea—since it would “inevitably polarize the General Assembly”—and a taking a much more sympathetic position toward new candidates, especially its BRICS partners. For some time, India and Brazil were part of the so-called Group of Four along with Germany and Japan. With shifting political relations and cooperation, chances are growing for this group’s members to become front-­ runners in this race. The problem that continues to hamper any reform is that, despite general consensus on the need for reform, goals of the final outcome differ. So far, the BRICS has not dared to go further than repeat the “need for a comprehensive reform of the UN, including its Security Council” and reiterate the importance that China and Russia attach to the international status of the other three countries (BRICS 2016). The drama of the situation, however, lies in the limited possibilities for the BRICS. Although there is a growing realization that having all the five countries on the UNSC would be a positive achievement, a BRICS declaration can lay a brick in the foundation of future reform but cannot fully construct the edifice. Nevertheless, if this problem were to be limited to P5 countries, the reform would have been realized by now, simply by peer pressure within the constricted group. The biggest obstacle lies not only in America’s “make it too radical to accomplish” position or a lack of any immediate threat or potential to introduce change, but also in the fact that the big systemically important countries do not want to cede their positions and lose their “equal” status, so that reform is seen as a zero sum game. For example, Brazil’s accession to permanent membership would be a failure for the other countries in that region, such as Argentina or Mexico; at the same time, China takes a cautious approach toward India’s permanent membership, but it could cause much bigger questions from Pakistan—and even more questions regarding South Africa challenging other “continental representatives” eager to undertake the role (even if Egypt and Nigeria are out of the game at this stage, they are still important enough to have potential in the long run). Differences in the global standings of the BRICS members reveal their different approaches to global governance and its reform. The ambitions of Brazil, India and South Africa are limited largely by status upgrade within the UN, but most other issues they deal with are limited to regional significance (apart from nuclear nonproliferation and India as a nonofficial member of the nuclear club). However, of those three, South Africa represents the most regional state. For

The BRICS security agenda  137 South Africa, the BRICS is “an opportunity to project itself as the economic leader on the African continent and to capitalize on its association with a prestigious club of emerging economic ­powers,” as opposed to striving for higher involvement in global governance (­Wasserman 2015, 110). One example of those ambitions is the effort led by Brazil and Turkey in 2009 to negotiate an agreement with Iran, which eventually failed because the western powers rejected this emerging powers initiative. According to Brazilian foreign minister Celso Amorim (2010, 222), who participated in the negotiations, “sanctions were imposed against Iran by the Security Council on the very day the so-called Vienna Group submitted its comments on the Tehran Declaration to the IAEA [International Atomic Energy Agency], allowing no time for Iran to reply.”4 Some saw the manifestation of Brazil’s global aspirations in its chairing of the 2005 Review Conference on N ­ uclear Non-Proliferation Treaty and its efforts to reintroduce “­thirteen steps to disarmament” in 2010 or to restore peace in East Timor and ­i mprove its development (Amorim 2010, 220; see also Chun 2013, 50). Brazil directs much of its foreign policy toward managing its regional stance: it introduced Latin American outreach to its 2014 BRICS presidency and could be considered the main driving force behind the Union of South American Nations (UNASUR). But unlike China or Russia, Brazil is not interested in ­reformulating the political rules of international relations, apart from inclusion in the UNSC with a higher status for the newcomers. India’s foreign policy remains “confused and relatively vague” and, a­ lthough largely “inward-looking,” its government realizes the impossibility of economic development without more intense global engagement (Chun 2013, 94). China’s and Russia’s ambitions stretch to include problems of global concern. This in turn presupposes if not diverging interests in the BRICS, then a lack of interest of some members in comprehensively discussing certain problems of global reach or differences in prioritizing negotiation topics within the group.5 It is generally acknowledged by the BRICS governments, including by ­Russian officials, that consensual ideas should be presented at their meetings. All the countries know each other’s “red lines” that are not to be crossed. Even if only one country differs in its approach to a matter, there is no peer pressure, in order not to weaken the group. At times, it can be difficult to find the real reason for protraction on an issue—it could be a lack of readiness to compromise or simple laziness. All five countries often have different interests and incongruous attitudes, which can lead to putting the matter aside for the time being, but, in cases of extra effort, could lead to agreement. The hot spots Although the five countries cooperate within the UN and on UN reform, there is not always full convergence among them. Nevertheless, many observers as

138  Victoria V. Panova well as politicians themselves have acknowledged that the presence of all five countries on the UNSC in 2011 strengthened the group’s dialogue on international peace and security. Peace and stability are the cornerstones of their own prosperous development in a predictable and safe world. The BRICS members do not see each other as a political bloc, less so a military one, but they have gradually embraced the expanded political role for their group. If the very first BRIC summit mentioned only one problem with a political-security flavour— the challenge of terrorism—the second meeting included discussions of another problematic topic, namely Haiti. The 2014 Fortaleza Declaration covered most of the current hot spots in all regions of the world, no matter how distant from any of the BRICS members either geographically or politically. The emerging countries’ club coordinated its position at the onset of the crises in Libya and Syria. It also took a common stance on deferring the vote on the role of the European Union in the United Nations General Assembly (UNGA) as well as on Côte d’Ivoire and Sudan. In the case of Libya, the BRIC countries and Germany abstained from the vote on Resolution 1973 on the no-fly zone in 2011. South Africa adjusted its stance when it was included in the BRICS club that same year. After the BRICS summit in Sanya in 2011, Russian president Medvedev reiterated support for the common position on the exclusive use of political and diplomatic means. He also praised South African president Jacob Zuma, in his capacity as head of the African Union, for his efforts to mediate a solution to the conflict.6 With Syria, there were differences over a western-sponsored resolution in the UNSC in February 2012. Of the 15 members, Russia and China were the only two to oppose the resolution, and came up with the different draft that excluded threats of intervention and required all political forces to be part of the negotiations. The position of the other BRICS countries remained very much the same. Their approach was mainly an all-­i nclusive process that called on all sides to stop the violence, not just President Bashar al-­Assad. All BRICS members strongly believed that the process of political settlement should be led by the Syrians themselves and no f­ oreign intervention should be allowed. It was in part due to the BRICS common position that Putin’s initiative to supervise the elimination of chemical weapons in Syria internationally was a success and helped to prevent foreign intervention. Those who favoured a military option faced not just the Russian ­position, but also their own public opinion and a firm adherence to diplomatic means by major emerging economies, whose voice could no longer be easily ignored. The 2015 Ufa Declaration, in which the leaders “express[ed] support” for Russia’s steps, promoted a “political settlement in Syria,” ­i ncluding intra-Syrian negotiations in January and April 2015 (BRICS 2015). It might be fair to claim, however, that any progress in Syria was not due to multilateral BRICS efforts, but rather due to Russia’s activities in the region.7

The BRICS security agenda  139 The five countries also managed to come up with a nonconflictual approach to the crisis in Ukraine, countering the high hopes of their western partners. India was the only one whose security officials (although not at the highest level) did not shy away from explicit support for Russia.8 Nonetheless, the cautious and subtle reactions from the rest of the group was understandable. China has security challenges of its own, both internal (Xingjiang-Uigur region) and external (South and East China Seas). Therefore, it appeals for careful consideration of the historical background before making judgements and while working out solutions, instead of offering explicit support for either side (see Keck 2014; Sibal 2015). This approach can be traced back to the abstention of all four countries on the UNGA resolution on Crimea in March 2014. Nevertheless, once again counter to western countries’ hopes, none of the BRICS members suggested Russia be an international pariah as a whole. The Fortaleza Declaration demonstrated a consensus on the need “for a comprehensive dialogue, the de-escalation of the conflict and restraint from all the actors involved, with a view to finding a peaceful political solution, in full compliance with the UN Charter and universally recognized human rights and fundamental freedoms”—which, in fact, repeats the main points of Russia’s stance on the crisis in Ukraine (BRICS 2014). Aware of the vulnerability of the African continent to military unrest, much of the 2015 Ufa Declaration was devoted to multiple conflicts in Africa, which demonstrated the BRICS’s growing self-awareness as a responsible and reliable international actor and provider of regional and global stability. Terrorism The fight against terrorism was the first political-security topic introduced into BRICS deliberations. In fact, it was already present in the very first BRIC summit document in Yekaterinburg, where the leaders not only strongly condemned “terrorism in all its forms and manifestations” and stressed the absence of any possible justification for such acts, but also called ­ rgent adoption of the draft Comprehensive Convention against for the u ­International Terrorism that had been proposed at UNGA (BRIC 2009). The second summit, in Brasilia in 2010, was aggravated by the fact that two BRIC members had suffered from terrorist attacks—Russia (in March 2010 in the Moscow metro stations of Lubyanka and Park Kultury, and two days later in the city of Kizlyar, with more attacks conducted in Dagestan and Ingushetia early April) and India (in February 2010 in Pune, with more in March and early April in Kashmir). Brazil and China “express[ed] their sympathy and solidarity” with the people and governments of the other two countries (BRIC 2010). Interestingly, the next year, the BRICS countries (now with South ­Africa) introduced a new topic into the section dealing with countering international

140  Victoria V. Panova terrorism. The whole statement remained intact from the previous two years, with only the addition of the importance of international information security and the necessity to counter cybercrime (BRICS 2011). All in all, the ­terrorism challenge received continuous but rather futile ­attention. Each year, the leaders repeated the same mantra of condemnation and non-­justification for terrorist activities, but lacked their own ideas and initiatives to solve the problem, generally leaving it to the UN.9 At the F ­ ortaleza ­Summit, apart from once again expressing grave concerns, the leaders pointed to Syria as the main problem, because of the high incidence of terrorist attacks. Terrorism obviously presents varying degrees of danger for all the BRICS countries, and this problem tends to expand.10 In 2015, the number of countries where more than 50 people were killed by terrorist attacks hit its highest point since the start of the twenty-first century (Institute for Economics and Peace 2016, figure 2.3). If only recently South Africa and Brazil were seen as the countries with zero terrorist attack incidents (with the 11th and 116th place out of 156 countries) and they were largely probed for having territories with terrorist training activities, their sad rankings have gone up.11 According to the 2016 Global Terrorism Index, India occupies eighth place on the scale of tragic fatalities, China follows in 23rd place, then Russia in 30th, South Africa in 52nd and, finally, Brazil in 80th (Institute for Economics and Peace 2016). Extreme and uncontrolled proliferation of the threat posed by the socalled Islamic State, An-Nusra and affiliated terrorist organizations also peaked in 2015. Thus, this topic grew exponentially within the BRICS itself, but more practical and detailed approaches were discussed in other forums and immediately touched upon the belt of instability. Terrorism presents the biggest challenge to Russia, India and China, which is why there are greater chances of more coordination and action in other forums where those three countries are present, such as RIC and the SCO. Thus, the SCO has the Shanghai Convention on Combating Terrorism, Separatism and Extremism, signed in 2001, the same year as the Shanghai Declaration on the Establishment of the SCO. It could be regarded as one of its founding documents, where fighting those evils is seen as the SCO’s primary task. In order to fulfil those tasks, SCO leaders decided to create a permanent body—the Regional Anti-Terrorist Structure—to allow for regular exchanges and cooperation between relevant authorities. In 2012, the SCO launched a program of cooperation among its members to combat terrorism, separatism and extremism for 2013–15, envisaging ways to increase the efficiency of such cooperation. Although the fight against terrorism is discussed with more efficacy in the SCO and RIC, the BRICS discussions should not be discounted. These five countries are affected very differently by terrorist activities—Russia, India and China find themselves in a much more dangerous neighbourhood with regard to countering this problem. Nevertheless, the years that have passed since the twenty-first century began have demonstrated that terrorism is

The BRICS security agenda  141 not confined by borders and countries that may be geographically distant from hot spots are not immune from the international terrorist challenge. Globalization does not bring only positive developments; it can inflict damage. This is clearly demonstrated by the general increase in the number of terrorist attacks and fatalities, with yet another attack in April 2017 in St. ­Petersburg’s metro. Another factor to consider is that countries that seek a higher role and status in international relations should be ready for greater responsibilities. Fighting against global evils is one such responsibility. The Ufa Declaration had a record number of references devoted to issue of fighting terrorism and, compared to previous documents, not only stated a general rejection of terrorist activities but also offered a view on the troubled region and countries that are being physically eliminated by terrorist groups, most of them sponsored at some point or still by the United States and its allies from among the Gulf monarchies. Ufa highlighted nonintervention as the basic principle that would not supplement international efforts to eliminate terrorism (see BRICS 2015, para. 38). Internet governance and cybersecurity Internet governance and cybersecurity are bringing about the newest challenges. Nevertheless, they are precisely the issues on which the BRICS could have some of the most sustainable and effective discussions in the political-security domain. Although the BRICS countries’ populations are ­heavily involved in internet use and those countries have the highest growth in internet users, they remain somewhat on the “object” side of global internet governance. Today, the BRICS contains 43 percent of internet users worldwide.12 Those five countries present considerable potential for further growth. In India, 35 percent of the population has internet access with a total population of 1.3 billion people, compared to the United States where there is 88 percent internet penetration with a quarter of the population.13 China and Russia are also among the top five in internet users, with South Africa ranked 25th in 2016. According to Vladimir Orlov (2014, 2), “the total contribution of the internet sector to BRICS economies in 2013 topped $500 bln, and yet the forecasts say it will double by 2015. In the nearest future BRICS will represent the most numerous and active part of the ‘digital society’ of XXI century.” Of all the BRICS countries, Russia and China—for a limited time joined by Brazil after the Snowden revelations—favour radically reforming current internet governance. Although discussions had started earlier, the conference of the International Telecommunication Union (ITU) in Dubai in 2012 is seen as the start of the “digital cold war,” where a coalition of 89 countries including China, Russia, Iran and the Gulf states voted in favour of the renewed register of international telecommunications. The register included a definition of the internet, the notion of

142  Victoria V. Panova sovereignty over internet and informational space, and a stronger role for the ITU in internet governance over the privately held American corporation ICANN. The United States, along with other Anglo-Saxon countries and European states (all in all 55 countries), voted against the register, describing the divergence as a fight between freedom and censorship.14 India and a very few other countries abstained to avoid having to join any of the coalitions.15 Even though there is no unified position on internet governance, all five countries are definitely concerned with their own information security and cybersecurity. At their summit in Durban, BRICS leaders reiterated their understanding of “the critical positive role the Internet plays globally in promoting economic, social and cultural development” (BRICS 2013). They stated clearly that “to contribute to and participate in a peaceful, secure, and open cyberspace,” there should be secure “use of Information and Communication Technologies (ICTs) through universally accepted norms, standards and practices is of paramount importance.” Two years earlier, the BRICS had planned to start a project to connect all five countries as well as some other states by transcontinental fibre-optic cables in order to achieve higher internet security and diversify the global network. This one idea is a rather amusing example of the BRICS countries not yet being at the top of technological advancements if they would agree to such an unrealizable business idea. Although the summit in Fortaleza did not dwell on fulfilling previous commitments, there was an increase in the deliberations on internet governance and cybersecurity. The leaders stressed the importance of establishing “a universal legally binding instrument” in ICT with the UN having a central role in this activity. They saw it absolutely necessary “to preserve ICTs, particularly the Internet, as an instrument of peace and development and to prevent its use as a weapon” (BRICS 2014). In order to continue their joint efforts, they agreed to “establish a group of experts of BRICS member States which will elaborate practical proposals concerning major fields of cooperation and coordinate positions in international fora.” Russia also won the support of the other four countries for its suggestion to work out an agreement on cooperation in the field of internet governance and cybersecurity. NETMundial, held in April 2014 in São Paolo, was mentioned and its host was commended for its organization, but its documents were not cited in the Fortaleza Declaration because Russia disagreed with several of its positions (Expert Centre on e-Government 2014). After all, the BRICS is a consensus-based mechanism, and the members do not exert unfriendly pressure on one another. As a result of the 2015 Ufa Summit, the BRICS agreed to vest its task force on ICT security with the responsibility to exchange information and best practices in ICT safety, the efficient fight to protect cybersecurity, cooperation on the Computer Security Incident Response Team, joint projects in research and development, and many other issues.

The BRICS security agenda  143 Nuclear nonproliferation The challenge of nuclear disarmament is even more multilayered than UNSC reform, not only dividing members into haves and have-nots, but also revealing differing approaches between “official members of the ­nuclear club” and “illegal possessors,” those having the potential for assured destruction and those with little capacity, and so on. Russia’s position as a signatory to the Nuclear Non-Proliferation Treaty (NPT) acknowledges the eventual goal of a world free of nuclear weapons. This position is actively promoted by Brazil and by South Africa, which voluntarily refused to possess nuclear weapons after ten years of having nuclear devices and joined the NPT as a nonnuclear state in 1991. When Russia signed the third bilateral Strategic Arms Reduction Treaty with the United States in April 2010, it took a step toward that final goal, but further reductions are hampered by unwillingness of the other “official nuclear club” countries to join in the negotiations, while those in the “non-official nuclear club” should accede to the NPT as nonnuclear states. Moreover, Russia would not be willing to demolish its nuclear potential unilaterally, as it still relies on its nuclear arsenal for potential containment. This position is even more true during recent days of rising confrontations with the western countries, when nuclear weapons are seen as a guarantee of national sovereignty against possible encroachment. There are more questions than answers in the existing nonproliferation regime. All the BRICS members have different approaches. This issue is thus one of the red lines that should not be crossed. Russia prefers to concentrate within the group or at the bilateral level on smaller but equally important aspects where interests could converge: nuclear safety, talks on the treaty to ban the of production of fissile materials for nuclear weapons and nuclear explosives, or a joint Russian-Chinese proposed treaty on the non-­ weaponization of space (Golovanova 2012). All BRICS countries cooperate intensively at the UN in order to promote this initiative and take a unified stand against the force toward space objects (Medvedev 2010).

BRICS prospects The BRICS is no longer considered a young phenomenon. Recent statements describing the group’s meetings as decaying and futile suggest it is going through a middle-age crisis. It is appropriate to move away from the notion of the BRICS as a global governance infant: it is no novice in international affairs that does not know the rules of the game or is unable to exert influence in order to claim its legitimate interests. Since the leaders first met at Yekaterinburg in 2009, the BRICS has not only successfully survived the adjustment period but also managed to deepen its interactions considerably at all levels of governmental and non-governmental cooperation, creating a solid dialogue matrix.

144  Victoria V. Panova Even with the current geopolitical situation, political turmoil in the weakest of the five members and attempts on the part of the “geriatric” western powers to attract some of the members of the BRICS away from the close cooperation format, exploiting existing security shortcomings, each one understands well that strength lies in the combination of their national potential and resources, external political choices, and presence in a diversified range of international institutions and mechanisms. Ignoring the BRICS for the beautiful promises of the “benevolent hegemon” would send most of the five members back into a state of neocolonial dependence. The BRICS has already established itself as a building bloc, one element in the changing world architecture. It has achieved much over its short life, rising from neglect and the patronizing irony of the western advanced economies and their own publics to reluctant acknowledgement and cautious praise. It also is gradually growing from being a gathering of unhappy countries deprived of their desired higher status into a body with increasingly common interests and views on a wide range of economic and political issues. There is no need to underestimate divergences among these countries and the often different aims that they promote through the international agenda, and it remains to be seen if the BRICS will evolve into a solid and integrated cooperation mechanism. But the results so far within other multilateral institutions and in the bilateral and pentalateral formats, as well as the already developed extensive structure of meetings of the leaders, ministers, officials, experts, business, civil society and youth, allow for optimistic prognosis as an important, or at the very least creative, factor in world politics. India, often viewed as one of the weakest links because it is inclined to accommodate the United States over the others, enhanced the process by producing a diverse set of official and second-track events during its presidency in 2016. There is more concern that, given its internal political situation, Brazil may lack the resources, if not the will, to participate fully in all the processes. There was some risk that China’s presidency of the G20 in 2016 might divert some of its resources away from the BRICS, but with its plans to host the BRICS in Xiamen in 2017, its commitment remained strong. At the minimum, the worst-case scenario of this “Big Five” club breaking up would be the role of bulldozing the weak economic and financial system with only a few aging western powers at the helm. The BRICS has already brought about this “wind of change.” It is an irreversible process, although it is not yet clear how long, how painful and how disastrous it will be. The keys to success of the reform are the joint and continuous efforts on the part of the BRICS members. The BRICS has already produced institutions such as the New Development Bank (NDB) and the Contingent Reserve Arrangement (CRA), with projects on renewable energy in emerging countries of the five. The established powers have acknowledged the success and further convergence of BRICS countries and their attractiveness to other countries in the developing and emerging worlds. The group is clearly established in the current international architecture, as evidenced by recently provoked

The BRICS security agenda  145 international crises and turbulence in some BRICS members and attempts to divide them by offering benefits to some members while penalizing unilaterally and thus illegally other members. Indeed, not only is it a reality, but it is also feared as a more attractive alternative for the majority of the world: it already presents a real power centre, quickly approaching its goal of becoming global rule-makers rather than rule-takers. This allows for more hope for the best-case scenario of genuine coherence and convergence on vital international issues, with the five countries serving as a core group, attracting other countries through authority and soft power and successfully achieving a more fair and democratic world order through evolution and consensus rather than chaos and revolution. Russia’s initiative thus appeared to be playing out well for the public good of world politics and for the emerging and developing countries, and also for changing the Russian mentality, for centuries focused on Europe and then the Euro-Atlantic as its only worthy partner. Russia’s economic performance will eventually be boosted by opening up the scope for real diversification and making real overtures to other civilizations, other cultures and other continents, which might also lead to positive internal political dynamics. In recent years, Russia has experienced dramatic changes as it faced internal economic and financial challenges and external political-security challenges. Its BRICS presidency in 2015 presented an excellent opportunity for it to see the support of its partners in such difficult times, and also presented an excellent opportunity for it to demonstrate itself as a reliable partner and responsible global actor. Its success as a host would be judged by its ability to achieve further measurable progress on the launched institutions (namely the NDB or CRA), implementing the Ufa-adopted ­Strategy for BRICS ­Economic Partnership, achieving the tacit approval of other members of full-fledged coordination mechanisms and more instances of the BRICS speaking with a single voice on matters of global order, peace and security, as well as fighting common threats and adhering to common principles. The immediate achievements could be traced back to the Ufa Declaration’s stance on the 70th anniversary of the end of World War II and the impossibility of reinterpreting history, the anniversary of the founding of the UN and necessity to reconfirm UN Charter principles, given the past 20 years of ad hoc breaches and reconfigurations to satisfy only a small part of global society. Issues regarding security, international law and global governance reform must be tackled substantively, so the BRICS could claim one more area of the international political domain where it has a voice and where its position must be taken into account. In the international architecture dominated by the rich North, most of the developing world needs the BRICS to be a serious actor in order to show the possibility of peaceful change. There is thus an added burden on the five countries not just to meet and present their family photo to the world, not only not to fail but also to persist and to achieve real results—with every single meeting.

146  Victoria V. Panova

Notes 1 For more on the birth of BRICS, see Victoria V. Panova (2013a, 2013b). 2 The Euro-BRICS phenomenon is insignificant at present, with marginal forces in Europe supporting cooperation rather than a bilateral platform between ­European countries and the BRICS. If this evolves into a serious approach supported by the European governments, it would present an immediate threat to the United States. 3 Such a situation was characteristic of Russia’s cooperation not only with the emerging economies. From the very start of Russia’s existence as an independent state, its foreign policy documents placed a high priority on cooperation in the post-Soviet space, although not much was done in reality. 4 For a detailed account of the Brazil-Turkey initiative and its outcomes, see Celso Amorim (2010), especially pp. 222–24. 5 This conclusion also draws on the personal experience of the author who has been heavily involved in Track Two diplomacy with experts and academia of the five countries since 2011. 6 In January 2012, Zuma issued a statement claiming that the North Atlantic Treaty Organization had by far exceeded the Resolution 1973 and should be held accountable for the consequences. 7 The 2016 G7 Ise-Shima Declaration, while generally critical of Russia, underlined Russia’s “constructive role” in the Syrian process (G7 2016). 8 According to Zachary Keck (2014), when asked for India’s official assessment of the events in Ukraine, National Security Adviser Shivshankar Menon responded: “We hope that whatever internal issues there are within Ukraine are settled peacefully, and the broader issues of reconciling various interests involved, and there are legitimate ­Russian and other interests involved … We hope those are discussed, negotiated and that there is a satisfactory resolution to them.” 9 The exception was at the Durban Summit, which expressed support for the “implementation of the UN General Assembly Global Counter-Terrorism Strategy” (BRICS 2013). But the rest of the text remained the same. 10 Apart from the problem of terrorism as such, BRICS members see double standards in interpreting the causes for terrorist activities as unfair. For example, while China fully condemned the tragic attack against Charlie Hebdo in Paris in 2015, it appealed to its western colleagues to avoid hypocrisy. Thus, according to the BRICS Post (2015), China’s Global Times said that “condemnations of terror attacks in Russia and China are not as forthcoming from Western countries as opposed to the quick and unified reactions to the attack on Charlie Hebdo in France.” The Global Times (2015) editorial went on to say that “even after China officially determines their terrorist nature, Western mainstream media puts quotation marks when describing these bloody assaults as ‘terrorist,’ saying that it is a claim of the Chinese government.” 11 For more on the BRICS division into victims and those in a way supporting ­terrorism, see Maxime Starchak (2014, 163–64). 12 Data calculated the estimate published by Internet Live Stats, “Internet Users by Country (2016),” at www.internetlivestats.com/internet-users-by-country (February 2017). 13 Average world internet penetration rate in 2016 was estimated to be 46 percent. For more details, see www.internetlivestats.com/internet-users (February 2017). 14 A very detailed and thorough analysis of the situation can be found in Oleg Demidov (2013, 77–79).

The BRICS security agenda  147 15 India may be blamed as being the biggest troublemaker and the only country that broke down negotiations in 2015 at the World Trade Organization over farm subsidies, which concerned its vital interests much more than internet governance, to maintain its comfortable neutral position.

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The BRICS security agenda  149 Russian Federation (2008). “The Foreign Policy Concept of the Russian Federation.” Moscow, 12 January. http://en.kremlin.ru/supplement/4116 (September 2017). Russian Federation (2011). “Russia’s Position at the 66th Session of the UN General Assembly.” Moscow, 12 July. www.mid.ru/general_assembly/-/asset_publisher/ lrzZMhfoyRUj/content/id/200262 (September 2017). Russian Federation (2013). “The Foreign Policy Concept of the Russian Federation.” Moscow, 12 February. www.mid.ru/en/foreign_policy/official_documents/-/asset_publisher/CptICkB6BZ29/content/id/122186 (September 2017). Russian Federation (2016). “The Foreign Policy Concept of the Russian Federation.” Moscow, 30 November. www.mid.ru/en/foreign_policy/official_documents/-/asset_ publisher/CptICkB6BZ29/content/id/2542248 (September 2017). Sibal, Kanwal (2015). “Putin Has Warded Off Attempts to Isolate Russia.” Daily Mail, 7 December. www.dailymail.co.uk/indiahome/indianews/article-3350044/ Putin-warded-attempts-isolate-Russia.html (September 2017). Starchak, Maxim V. (2014). “BRICS—obschie i chastnye ugrozy mezhdunarodnoy bezopasnosti.” [“BRICS: General and Specific Threats to International Security.”] Vestnik mezhdunarodnykh organizatsii [Bulletin of International Organizations] 4(9): 160–76. http://cyberleninka.ru/article/n/briks-obschie-i-­chastnyeugrozy-mezhdunarodnoy-bezopasnosti.pdf (September 2017). Stratfor Global Intelligence (2014). “The Geopolitics of the United States, Part 1: The Inevitable Empire.” 4 July. www.stratfor.com/analysis/geopolitics-­unitedstates-part-1-inevitable-empire (September 2017). United States (2002). “The National Security Strategy of the United States.” Washington DC, 17 September. http://georgewbush-whitehouse.archives.gov/nsc/nss/2002/ index.html (September 2017). United States (2010). “The National Security Strategy.” Washington DC, May. https://obamawhitehouse.archives.gov/sites/default/files/rss_viewer/national_security_strategy.pdf (September 2017). Wasserman, Herman (2015). “South Africa and China as BRICS Partners: Media Perspectives on Geopolitical Shifts.” Journal of Asian and African Studies 50(1): 109–23. doi:10.1177/0021909613514191. Yeltsin, Boris (1997). “Poriadok vo vlasti—poriadok v strane.” [“The Order of Power— Order in the Country.”] Message to the Russian Federal Assembly, Moscow, 6 March. www.intelros.ru/2007/02/05/poslanie_prezidenta_rosii_borisa_elcina_federalnomu_sobraniju_rf_porjadok_vo_vlasti__porjadok_v_strane_1997_god.html (September 2017). Zhao, Minghao (2015). “What Is China’s Role in the BRICS?” World Economic Forum, 20 July. www.weforum.org/agenda/2015/07/what-is-chinas-role-in-thebrics (February 2017).

8 The BRICS and nontraditional security Niall Duggan

Coined in 2001 by economist Jim O’Neill (2001), the term “BRIC” refers to the economies and states of Brazil, Russia, India and China. In 2001, the BRIC economies reflected only a small portion of global gross national product, but a large portion of the world’s population and territory. In demographic terms, the BRIC include two of the world’s most-populated countries. In 2015, China alone was home to one fifth of the world’s population (18.7 percent) and was followed closely by India (17.8 percent). Other members of the group—Brazil (2.8 percent) and Russia (1.9 percent)—also had large populations (World Bank Databank 2017b). The BRIC countries also boast large territories: Russia’s territory is 16.4 million square kilometres, India’s is three million square kilometres, China’s is 9.4 million square ­k ilometres and Brazil’s is 8.4 million square kilometres (World Bank Databank 2017a). While the economy of each BRIC member has grown rapidly since the acronym was coined in 2001, the BRIC continues to self-identity as developing or emerging states. South Africa joined to form the BRICS in 2010. Its membership is justified by political rather than economic factors. Economically, South Africa is much smaller than that of the other four countries. South Africa’s gross domestic product is only a third of Brazil’s and Russia’s. However, South Africa—as Africa’s only member of the Group of 20 (G20)—is an important political actor among developing countries. As countries with large populations and territories, as well as rapidly developing economies, the BRICS holds a unique position within the regime of nontraditional security studies: its members are both drivers and victims of many forms of nontraditional security threats. Nontraditional security threats are defined in this chapter as any threat to the security of peoples or states that arise primarily from nonmilitary sources, such as natural disasters, irregular migration, food and water shortages, climate change, infectious diseases, human trafficking, drug trafficking and other forms of transnational crime (Srikanth 2014). BRICS members individually have been active in building global governance capacity to deal with nontraditional security threats both within the current system and via the construction of new bodies (Fan and Brzeska 2010; Duggan and Naarajärvi 2015).

The BRICS and nontraditional security  151 However,  there is little research on how the BRICS, as a collective actor, builds capacity within global governance to deal with nontraditional security. Building on the works of other scholars such as Timothy M. Shaw (2014), Marco Antonio Martins (2015) and Niall Duggan (2015), this chapter focuses on how the collective BRICS, rather than the individual members, has affected the agenda of global governance bodies to focus on nontraditional security threats. Two areas of nontraditional security have been ­chosen as case studies: water security and food security.

Nontraditional security Arnold Wolfers (1962, 150) outlined two aspects of the concept of security: “security, in an objective sense, measures the absence of threats to acquired values, in a subjective sense, the absence of fear that such values will be attacked.” Social constructivists such as Emanuel Adler (1997) and Alexander Wendt (1992)—who have highlighted the importance of social values and norms, collective identities and cultural traditions in security—have developed the concept further. Within social constructivism, security is always intersubjective; that is, “anarchy is what actors make of it” (Wendt 1992, 391). After the Cold War, due to the process of increased globalization, security was reconceptualized (Brauch 2011). Within international relations, the ­social constructivist expansion of security has led to a greater focus on nonmilitary aspects of security, which in turn has led to new areas of study within security studies, such as human security and nontraditional security. Although human security focuses mostly on the individual, nontraditional security deals far more on states and peoples (Liotta and Owen 2006). However, the definition of nontraditional security has been debated among scholars. Wang Yizhou (2004) defined it as the threats of resources, transnational crime, drug smuggling, environment, ecology and illegal immigration to the security of the countries. Scholars such as Terry Terriff and colleagues (1999) and J. Liu (2004) have expanded this by arguing that nontraditional security should include topics concerning the well-being of the state, economic and trade interests, social security, economic development, political stability, environmental safety, consulting network security, transnational crime and terrorism. Both water and food security are seen by most scholars of nontraditional security as core threats to national security. There is also a direct link between water resources, food production and climate change (Schmidhuber and Tubiello 2007; Misra 2014). The Food and Agriculture Organization (FAO) of the United Nations claims that climate change “will affect agriculture through higher temperatures and more variable rainfall, with substantial reductions in precipitation likely in the mid-latitudes where agriculture is already precarious and often dependent on irrigation” (Turral et al. 2011, 1). As highlighted by the World Bank (2010), the developing world will bear 70–80 percent of the estimated cost of climate change. Emerging economic countries with large populations, such

152  Niall Duggan as the BRICS members,  are more vulnerable to threats such as food and water insecurity. The FAO (2011) has highlighted that BRICS countries— particularly China and India—as developing countries will be exposed to greater levels of water and food insecurity due to climate change. BRICS members are also exposed to what scholars such as Carl Middleton and colleagues (2015) and Morgan Bazilian and colleagues (2011) have labelled the “water-energy-food nexus.” This nexus outlines the direct link between production levels in food, energy and water. It also outlines that agriculture is a major user of water and energy and that food prices are therefore sensitive to energy prices (transportation and production), as well as policies on fertilizers and pesticides. Therefore, growing populations and shifting diets toward water-intensive diets are also putting greater pressure on both food and water systems. Energy systems are also high consumers of water—for example, thermoelectric power plants—and are increasingly becoming consumers of agriculture land—for example, through the production of biofuels. These forms of energy production will increase as they are low in greenhouse gas emissions. Ilhan Ozturk (2015) notes that the BRICS members—due to their large populations, rapid development and high-­energy consuming economics—are vulnerable to the negative aspects of the water-energy-food nexus. Ozturk (2015, 1009) has highlighted that: Energy demand is not sufficient to assure food security among the BRICS. These countries require more energy and a greater mix of energy sources to improve health infrastructure, amplify economic growth, and reduce carbon emissions … Biodiversity remains in question for the BRICS as increased energy demand depletes forests and natural resources. In order to ensure a sustainable balance within the water-energy-food nexus, a global response is needed. It will require a system that coordinates actions across these different sectors at international, national and subnational levels. However, as outlined by Heather Cooley and colleagues (2013, 8), “water, energy, and food systems, and the governance institutions set up to manage them, were often separated by well-defined silos, and managers rarely communicated with one another.” They suggest this is due to the assumption that abundant and cheap food, water and energy would be available when the systems that govern each of the sectors were designed and constructed. The BRICS countries have made moves to highlight the interdependencies of water, energy and food. The BRICS Fourth Academic Forum in New Delhi in 2012 called for a greater focus on the relationship between climate change, food security and water security at a global level (BRICS Academic Forum 2012). The forum also called for institutionalizing a framework for cooperation among bodies that deal with water, energy and food. This is clear from the BRICS attempt to restructure the system of global water governance and global food security.

The BRICS and nontraditional security  153

Global water security governance The United Nations defines water security as the capacity of a population to safeguard sustainable access to adequate quantities of acceptable quality water for sustaining livelihoods, human well-being, and socio-economic development, for ensuring protection against water-borne pollution and water-related disasters, and for preserving ecosystems in a climate of peace and political stability. (UN-Water Task Force on Water Security 2013, vi) Water security is one of the major threats to global stability. As the United Nations Educational, Scientific and Cultural Organization (UNESCO) highlighted in 2009, economics and demographics drive water insecurity significantly. The world’s population grows by 90 million people each year, adding 64 billion cubic metres to global demand for fresh water each year (World Water Assessment Programme 2009, 29). Beyond consumption, ­population increases have led to rapid urbanization, directly affecting land-use and ­water-use patterns and often leading to the pollution of water sources. The global urban population grew rapidly in the twentieth century from 220 million to 2.8 billion. The first half of the twenty-first century will see an unprecedented scale of urban growth across developing countries (UN ­Department of Economic and Social Affairs [DESA] 2006b). Developing countries are particularly adversely affected by this p ­ opulationrelated increase in demand for water. As outlined by UNESCO, an estimated 90% of the 3 billion people who are expected to be added to the population by 2050 will be in developing countries, many in regions where the current population does not have sustainable access to safe drinking water and adequate sanitation. (World Water Assessment Programme 2009, 29) This population increase in the developing world is set to follow the current pattern of migration and will be predominantly urban. By 2030, the urban areas of the developing world will make up an estimated 81 percent of urban humanity (UN DESA 2006a). This will increase the demand for water in the developing world. BRICS countries, which are seeing an increase in standards of living combined with population increases, are a major threat to the sustainability of water resources and environmental services. Increased economy activities, particularly in manufacturing industries in the BRICS, rely heavily on clean water consumption (World Water Assessment Programme 2009, 32–33). Therefore, increased economic growth will depend on access to national and possibly transnational water resources.

154  Niall Duggan In addition to economic and demographic drivers of water insecurity, climate change also will reduce the available water supply (Misra 2014). The UN Water Task Force (2014) outlined the possible effects of climate change on water security: Under present climate variability, water stress is already high, particularly in many developing countries, and climate change adds even more urgency for action. Without improved water resources management, the progress towards poverty reduction targets, the Millennium Development Goals, and sustainable development in all its economic, social and environmental dimensions, will be jeopardized. Climate change will add to the overall possibility of future water crises, which will be, by their nature, transnational. This risk requires a complex, coordinated international response. However, the current system of global governance does not seem fit for purpose. As the United Nations World ­Water Development Report outlined, a “water crisis is essentially a crisis of governance and societies are facing a number of social, economic and ­political challenges on how to govern water more effectively” (World ­Water Assessment Programme 2003, 371). The current system of global water ­security governance is a complex matrix of formal and informal international, transnational, national and subnational bodies (Cooley et al. 2013). Claudia ­Pahl-Wostl, Joyeeta Gupta and Daniel Petry (2008, 422) ­provide one of the few definitions of global water security governance: “the development and implementation of norms, principles, rules, incentives, informative tools, and infrastructure to promote a change in the behavior of actors at the global level in the area of water governance.” As William Jury and Henry Vaux (2005) acknowledged, the current system of global water ­security ­governance was established during a time when approaches to ­water management differed from today. Nowadays, economics, demographics and climate change push the world toward crisis. One of the many differences is the importance of developing countries to the system. However, despite the fact that developing countries will be the worst affected by water insecurity, they are underrepresented in the current system of global water security governance. That system is centred on UN Water, which was created in 2003 to serve as the interagency coordinating mechanism to promote coherence and coordination of the UN system and other actors at all levels. UN Water focuses on water supply and sanitation, climate change, water quality and transboundary issues. Cooley et al. (2013) point out that UN Water has neither a strong mandate nor the personnel or funding to meet the challenges of global water security and therefore does not make centralized policies. They also highlight that UN Water’s remit is too limited, and many of its functions are performed by bodies such as UNESCO, the United Nations Environment Pro­ gramme, the United Nations Children’s Fund (UNICEF), the United Nations

The BRICS and nontraditional security  155 Development Programme, the FAO, the World Health Organization and the World Meteorological Organization. Other organizations, such as the World Bank and regional development banks, also play a role in global water security governance in terms of their support of large-scale infrastructure projects. UN Water does not have the power to promote collaboration among the various bodies involved in water security issues. Therefore, global water security governance lacks focus and leadership. Consequently, nationaland subnational-level bodies such as Germany’s Deutsche Gesellschaft für Internationale Zusammenarbeit and the United States Agency for International Development develop their own projects, which results in piecemeal, ineffective attempts to achieve global water security.

Water security and the BRICS Ozturk’s (2015) study, “Sustainability in the Food-Energy-Water Nexus: ­Evidence from BRICS,” outlined that the BRICS members are open to ­water insecurity and, due to the nature of the links between water, food and energy in those five countries, this may have major knock-on effect in other sectors. For example, in the BRICS agriculture accounts for 60 percent of water withdrawals (Aquastat 2017). Therefore, the food supply depends on a stable supply of clean water. Despite the BRICS members’ vulnerability to water insecurity, they have not yet fully developed collective grounds for action. In fact, the word “water” does not appear in any BRICS summit’s final declaration issued between 2009 and 2015. However, this does not mean that the BRICS have not been building a foundation at a global level. Water security within the BRICS has been linked strongly to food security and agriculture. For example, the 2011 communiqué of the BRICS ministers of agriculture and agrarian development (2011b) stated that “we will advance sustainable agriculture in an effort to achieve the sustainable use of natural resources, land, water resources, and bio-diversity in particular.” Climate change was h ­ ighlighted as a threat to both water and food security. The ministers moved to support the advancement and exchange of technologies, “boost … farmland protection and clean production, and promote e­ nvironment-friendly and resource-saving agriculture, stressing the importance of both modern and traditional agriculture for sustainability.” The promotion of water security was advanced further by the Indian government, which hosted the First BRICS Urban Infrastructure Forum in New Delhi on February 1, 2013. This forum facilitated the sharing of experiences on water supply and sanitation, effective solid waste management for improved environment and urban transportation. At the New Delhi ­Summit, in 2012, Manmohan Singh, the prime minister of India, listed ­water security as one of the focus areas for the BRICS, along with energy and security, urbanization, and sustainable growth (Kroth 2013). The prime minister’s statement brought water security into focus—not only in terms of

156  Niall Duggan food security but also in terms of urbanization and economic development. The Russian and Brazilian governments have been driving the issue since the 2012 summit and have called for greater levels of cooperation in water security among the BRICS members and within the system of global water security. A 2013 paper, BRICS Economic Cooperation Strategy, published by  the Ministry of Economic Development of the Russian Federation and the ­Russian Foreign Trade Academy, called for a greater level of exchange among the BRICS in the area of technological innovation (BRICS 2015a). The main areas of cooperation in this field include promoting research in areas of common priority for the BRICS members, such as climate change, water resources and water treatment technology. The Russian government developed this further, calling for a greater level of cooperation among the BRICS in the green economy, where water security plays a key role. On ­February 10, 2014, Cape Town hosted the first meeting of BRICS ministers of science, technology and innovation (STI). The BRICS countries agreed under this STI framework to cooperate in several areas, including the exchange of information on policies and programs and the promotion of innovation and technology transfer; food security and sustainable agriculture; climate change; and natural disaster preparedness; and water resources and pollution treatment (BRICS Science, Technology and Innovation 2014). To allow for cooperation, they agreed to build upon existing bilateral synergies and other forms of multi-country frameworks of cooperation among the five countries. Russia’s increased engagement has pushed it to the fore in terms of developing the BRICS’s collective identity in the area of global water security governance. In June 2014, Russia hosted the International Conference on Water Management and Ecology in the Framework of Russian Federation participation in BRICS in Moscow. This meeting developed the foundation for a memorandum of understanding (MOU) that would establish a strategic framework in priority STI areas. That MOU, which was signed by the BRICS ministers in Brasilia on March 18, 2015, says that the BRICS agreed to develop and negotiate a work plan for 2015–18 based on the Brazilian proposal, during Russia’s presidency in 2016, to be approved in the next meeting of STI senior officials and signed at the next ministerial meeting. This work plan focuses on five priorities, with new initiatives to be included: • • • • •

The prevention and mitigation of natural disasters, to be led by Brazil Water resources and pollution treatment, to be led by Russia Geospatial technology and its applications, to be led by India New and renewable energy, and energy efficiency, to be led by China Astronomy, to be led by South Africa.

This work plan has clearly given Russia the leading role in terms of ­water s­ ecurity in the BRICS. In 2015, Russian environment minister Sergei ­Donskoi outlined this goal:

The BRICS and nontraditional security  157 We would like to suggest that the effort of the BRICS countries should be combined and put together for implementing green initiatives and priorities in our economies so as to increase its competitiveness and business attractiveness … As per the focuses of our future co-operation in the framework of BRICS … most pressing for us … is water resources treatment, security of environment, decrease of dangerous emissions. (PTI 2015) In the same year, at the BRICS summit, Russian president Vladimir Putin also outlined the importance of water security and the need for further cooperation at a global level: I am convinced that this is the only foundation we should use to seek and find solutions to acute international problems, to respond to challenges and threats that are relevant to all of humanity such as the spread of weapons of mass destruction, terrorism, extremism, transnational crime, drug trafficking, and food and water shortages. (Putin 2015) This statement suggests that the BRICS will push for shifting the focus toward the water-food-energy nexus among the bodies that make up the complex network of global water security governance. Russia seems to be the driving force for this change in focus, but the area seems to be underdeveloped. With the establishment of the BRICS New Development Bank (NDB), there may be an opportunity for the BRICS to play a more direct role in global water security governance. However, its role seems to be limited to establishing a forum for exchanging knowledge on water management.

Global food security governance The FAO, the International Fund for Agricultural Development (IFAD) and the World Food Programme (WFP) (2015, 8) estimate “that about 795 million people in the world—just over one in nine—were undernourished in 2014–16.” The share of undernourished people in the population decreased from 18.6 percent in 1990–92 to 10.9 percent in 2014–16, reflecting fewer undernourished people in a growing global population (FAO et al. 2015). Although this marks a significant achievement in global food security, the effectiveness of the system of global food security governance remains in question. Even the FAO, IFAD and the WFP (2015, 9) credited this success to changes in large, populous countries—notably China and India, which played a large part in explaining the overall hunger reduction trends in the developing regions— rather than the effectiveness of international bodies. The current system of global food security governance is complex in its nature and reflects the economic ideology of developed countries. This section examines the current global governance approach to achieving global food security.

158  Niall Duggan The 1996 World Food Summit (1996) stated that “food security exists when all people, at all times, have physical and economic access to sufficient, safe and nutritious food that meets their dietary needs and food preferences for an active and healthy life.” Accordingly, the FAO outlined four dimensions of food security: food availability, food access, utilization and stability (see Table 8.1). These four dimensions have become the underlining function areas of the current system of global food security. However, the global governance system that deals with food security has not always functioned under these dimensions, and there are legacy issues from the historical development of the system. Since the FAO was established in 1944 as part of the emerging UN system, food security has been part of global governance. However, the process of improving food security has been restricted by disagreements over how far trade and national interests should be risked for food security (­Gustafson and Markie 2009). The system of global food security governance that has emerged since the establishment of the FAO is a complex network of international bodies, such as the UN World Food Conference, IFAD and the WFP, which play a direct role, and also bodies such as the World Bank and the World Trade Organization (WTO), which are involved in regulating agriculture, trade and investment. There is also a wide-ranging network of ­national bodies, such as the International Poverty Reduction Center in China, and non-governmental organizations, such as Concern Worldwide, that deal with food security. Table 8.1  F  AO Four Dimensions of Food Security Food availability Food access

Utilization

Stability

The availability of sufficient quantities of food of appropriate quality, supplied through domestic production or imports (including food aid). Access by individuals to adequate resources (entitlements) for acquiring appropriate foods for a nutritious diet. Entitlements are defined as the set of all commodity bundles over which a person can establish command given the legal, political, economic and social arrangements of the community in which they live (including traditional rights, such as access to common resources). Utilization of food through adequate diet, clean water, sanitation and health care to reach a state of nutritional well-being where all physiological needs are met. This brings out the importance of non-food inputs in food security. To be food secure, a population, household or individual must have access to adequate food at all times. They should not risk losing access to food as a consequence of sudden shocks (e.g., an economic or climatic crisis) or cyclical events (e.g., seasonal food insecurity). The concept of stability can therefore refer to both the availability and access dimensions of food security.

Source: Food and Agriculture Organization (2006).

The BRICS and nontraditional security  159 The turning point in global food security governance came in 1964 with the establishment of the Group of 77 (G77). These developing states attached considerable importance to the FAO. The G77 saw it as an instrument that could help improve agricultural commodities and achieve food security (McKeon 2011, 3). However, as the FAO began to take a central role in global food security governance with the support of ­d eveloping states, the world food crisis of the mid 1970s became a major driver of change within the system. Due to this crisis, many developing countries began to question the various functions the FAO exercised as the UN’s “Ministry of Agriculture.” The result was the transfer of many FAO policy functions by developed states to new bodies in the 1970s. A number of organizations were established in the 1970s, including the Consultative Group on International Agricultural Research headquartered at the World Bank (1971), the UN World Food Conference (1974) and IFAD (1977), as well as the WFP, an independent UN agency (McKeon 2011, 4). That shift was followed by the greater involvement of international ­financial institutions, such as the World Bank and the International Monetary Fund (IMF) in the 1980s. Because these institutions controlled much of the power to finance development projects, they dominated the system of global food security governance. They were ideologically dominated by the so-called Washington consensus (Srinivasan 2000). The Washington consensus introduced free market ideology, which resulted in new policies to reduce government deficits, liberalization and deregulation of international trade and cross-­border investment, and to pursue export-led growth. These policies were mainly in the form of structural adjustment policies, which were adopted by developing countries that required funding from international bodies. Structural adjustment regimes imposed on debt-ridden developing countries by the World Bank and the IMF drastically curtailed the policy decision-making space of national governments. The regime also opened up the markets of developing countries and cut back severely on state support to and regulation of agriculture (Cépède 1984). This led to the rapid growth of corporate ownership, concentration and integration in the food system, which expanded the number of actors in global food security governance and led to a disproportionate impact of corporations on global food policies (McMichael 2009). The 2007 global food crisis highlighted the fact that power within the system of global food security governance had moved from international bodies such as the FAO to corporate bodies and international institutions such as the World Trade Organization (WTO) and the World Bank. In the case of both actors, food security was not a core business issue (Shaw 2007). The 2007 crisis and the clear shift in power toward these bodies sparked a range of international institutional initiatives, such as the UN High Level Task Force on the Food Security Crisis, the Global Partnership for Agriculture and Food Security, and the reform of the Committee on World Food Security.

160  Niall Duggan Since the 2007 crisis, there have also been two important changes within global food security governance. First, the core decision-making power in global governance in general has moved away from bodies such as the WTO, UN and IMF toward first the Group of Eight and now the G20 (Clapp and Cohen 2009; De Schutter 2009). Likewise, decision-making power in global food security governance has moved to the G20. Developing countries and members of the BRICS play an important role within the G20 and have used it to influence the overall agenda of global food security governance. The second important change has been the increased role that developing states are taking within global food security governance. This has been done by developing states taking a greater level action as rule-makers within international bodies but also by creating new bodies that are procuring many of the dimensions of food security outside the western-constructed system.

Food security and the BRICS It is said that the price of onions can determine the results of national elections in India, and in China, food insecurity has historically led to the overthrow of governments (Kannan 2013; Duggan and Naarajärvi 2015). It is true for each BRICS country that a constant, affordable supply of food is critical to economic and political stability. This has been reflected in the development of the BRICS global governance reform agenda. As outlined by ­Marina ­Larionova and Andrey Shelepov (2015), agriculture and food security have been at the heart of the BRICS agenda since 2009. At the Yekaterinburg Summit in 2009, the BRIC states issued a joint declaration on agriculture and global food ­security, which promoted ensuring sustainable production in ­accordance with the three pillars of sustainable development: society, economy and the environment (BRIC 2009). An understanding of the importance of the waterfood-­energy nexus is obvious within this joint declaration. The BRIC gave its support for the provision of technological and financial resources to help developing countries build the necessary infrastructure to minimize the adverse impact of climate change, as well as the adverse impact responses to it, e.g., movement toward biofuels on food security. A joint declaration at the meeting of BRIC ministers of agriculture in Moscow in 2010 developed the BRIC collective discourse on food security further (BRIC Agriculture Ministers 2010). The declaration established modes of action—which focused on the production of grain and on the increase in the standard of living and the development of rural areas—that could be jointly pursued by the BRICS countries to achieve global food security. These modes of action included creating an agricultural information-based system of the BRIC countries, developing a general strategy for ensuring access to food for the most vulnerable members of the population, reducing negative impacts of climate change on food security by the adaptation of agriculture to climatic changes, and enhancing agricultural technology, cooperation and innovation. Since 2010, food security has remained a major part of the BRICS dialogue. It has started to shape a discourse on food security that calls

The BRICS and nontraditional security  161 for a greater focus on the role of food security in the prevention of conflict, the role of private corporate bodies in food insecurity and the links ­b etween energy, climate change, economic development and food. A focus on reducing volatility in commodity prices was the main focus of the 2011 Sanya Summit, where the BRICS expressed concerns that “excessive volatility in commodity prices, particularly those for food and energy, poses new risks for the ongoing recovery of the world economy” (BRICS 2011). The BRICS supports the international community in strengthening ­c ooperation to ensure the stability and strong development of the physical market by reducing distortion and further regulating the financial market. This summit also saw the BRICS move toward exchanging information on problems, such as shortages in demand and supply at international, regional and ­national levels. This led to a strengthening of the Agriculture Expert Working Group and the establishment of the BRICS System of Agricultural Information. The first meeting of the BRICS Agricultural ­Cooperation Working Group was held in Beijing in August 2011. It agreed to create an action plan on agricultural cooperation for the 2012–16 ­p eriod, which was launched at the second agriculture ministerial meeting. The Action Plan 2012–16 for Agricultural Cooperation of BRICS Countries has five key parts: 1 Creation of basic agricultural information exchange system of BRICS countries (coordinated by China in collaboration with the other four countries), 2 Development of a general strategy for ensuring access to food for the most vulnerable population (coordinated by Brazil in collaboration with the other four countries), 3 Reduction of negative impact of climate change on food security and adaptation of agriculture to climate change (coordinated by South ­Africa in collaboration with the other four countries), 4 Enhancement of agricultural technology cooperation and innovation (coordinated by India in collaboration with the other four countries), 5 Promotion of trade and investment (coordinated by Russia in collaboration with the other four countries) (BRICS Ministers of Agriculture and Agrarian Development 2011a). The Delhi Summit in 2012 advanced the BRICS position on food security even further. The BRICS moved toward greater levels of cooperation, allowing its members to contribute effectively to global food security and nutrition through improved agriculture production and productivity, transparency in markets and reducing excessive volatility in commodity prices, thereby making a difference in the quality of lives of the people particularly in the developing world. (BRICS 2012)

162  Niall Duggan Food security was also put on the agenda of the science and technology senior officials in Dalian, China, in September 2011, where growing capacities for research and development and for innovation in food production among the BRICS countries was given particular focus (BRICS 2012). The 2014 summit in Fortaleza outlined that the BRICS were committed “to promoting agricultural cooperation and to exchange information regarding strategies for ensuring access to food for the most vulnerable population, reduction of negative impact of climate change on food ­s ecurity and adaptation of agriculture to climate change” (BRICS 2014). It is clear from these statements that there is a high level of institutionalization of the BRICS dialogue in the area of food security, which is also supported by the research of scholars such as Larionova and ­Shelepov (2015). The BRICS has also moved to support the UN ­c entral system of global food security governance. The 2012 summit linked food and energy production together as key aspects for development: “accelerating growth and sustainable development, along with food, and energy security, are amongst the most important challenges facing the world today, and central to addressing economic development, eradicating poverty, combating hunger and malnutrition in many developing countries” (BRICS 2012). The link between food and development was also a focus of the 2013 summit in Durban, where food security was seen as a key aspect in achieving international development goals (BRICS 2013). A notable aspect of that summit—and again at the 2015 Ufa Summit—was the BRICS support of the UN central system of global food security governance. The 2015 summit in particular called for the UN General Assembly to declare 2015 the International Year of Soils and to “welcome cooperation of our delegations in international organizations, including in UN Food and Agriculture ­Organization” (BRICS 2015b). In terms of food security, the BRICS called for food security to be a consideration in peacekeeping and conflict prevention. At the 2014 Fortaleza Summit, the BRICS put a greater focus on the need for food security in the long-term political stability of Guinea-Bissau, calling for encompassing measures to reduce food insecurity in the country (BRICS 2014). In terms of food security, the rise of the BRICS has had three major effects. First, the BRICS has strengthened the link within its own discourse between food security and development, building a foundation for efforts to develop this discourse as a core principle of global governance. Second, by supporting the UN central system of food security, it has helped promote international bodies such as the FAO back to centre stage in terms of global food security governance. Finally, by creating several BRICS central bodies that deal with global food security governance, the BRICS has allowed for a structure whereby ideas that mainly run against the interest of developed states can garner support.

The BRICS and nontraditional security  163

Conclusion This chapter focuses on how the BRICS has influenced the agenda of global governance bodies. It focuses on the role of the BRICS as a collective actor in the realm of nontraditional security threats. Two areas of nontraditional security—water security and food security—were examined as case ­studies. In both cases, the BRICS countries have presented new discourses that focus on the links between nontraditional security and development. Within the discourses, there is a particular focus on the relationship between food, energy and water, as well as the possible ramifications of ­climate change on all three sectors. The reduction of the role of the market in regulating these sectors and the need for greater support in terms of knowledge and technology exchange among countries are the core aspects of this discourse. Although the BRICS water security agenda is underdeveloped compared to its food security agenda, both promote a greater role of current global governance bodies, particularly those that are part of the UN’s centralized system. This discourse calls for the water and food security agendas to be returned in full to bodies whose sole purpose is to deal with these areas. Therefore, the BRICS agenda is calling for bodies such as the World Bank and WTO to reduce their roles in the areas of water and food security. The BRICS has taken action to support this agenda by giving its support to bodies such as FAO and UN Water. However, particularly in the area of water security, the success of promoting this agenda remains questionable, because bodies such as the WTO and World Bank still play a role in these areas. The creation of BRICS bodies such as the NDB may lead to the adoption of the BRICS agenda in areas such as food and water security within global governance, as such bodies will be able to directly fund projects that fit the BRICS discourse or use their funding to support UN central bodies to adopt the BRICS’s position. As the NDB is a relatively new body, its longterm role in promoting the BRICS discourse on food and water security in global governance requires further research. Nonetheless, the BRICS members themselves have agreed, as a collective actor, that food and water security are critical to their further development. They also agree that water and food security must be seen as interdependent and must be tackled at the global level by bodies focused solely on these areas of nontraditional security.

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9 Prospects for cooperation in science, technology and innovation among BRICS members Michael Kahn

A little more than a decade ago, Jim O’Neill, former chair of Goldman Sachs Asset Management, famously identified the BRIC grouping of ­Brazil, ­Russia, India and China as a significant economic bloc. Over that time, recession notwithstanding, the BRIC countries have grown in economic significance far beyond expectation. Then, in 2011, South Africa, already a member of the Group of 20 (G20) and the major voice in Africa, joined the BRIC ­family, which duly morphed into the BRICS. O’Neill drily observed that South ­Africa had no place in the BRIC club, given its modest size, and that by contrast Indonesia, Mexico or Turkey had stronger claims to join. The 2016 downturn in the fortunes of Brazil and Russia persuaded O’Neill to question the very idea of the BRIC core that in his view might wither down to “IC” alone. This suggests that it is timely to probe deeper into some of the underlying trends that characterize the relationships among the five BRICS countries. That is a narrow economic view. The primary objective of this chapter is therefore to consider a somewhat neglected aspect of these relationships by investigating the rhetoric and reality concerning intra-BRICS cooperation in science, technology and innovation (STI). This arena of engagement has acquired a heightened profile through the Cape Town Declaration on February 10, 2014, whereby the BRICS ministers responsible for science, technology and innovation committed to a program of STI cooperation (BRICS Science, Technology and Innovation 2014). The secondary objective of this chapter is to show why O’Neill is incorrect in his assertion that South Africa does not matter. To provide such a rebuttal requires a study of geopolitics, finance, trade and other modes of engagement, STI included. The Cape Town Declaration acknowledges the lead role of science and technology for long-term development and proposes specific responsibilities for each country. In the declaration, the ministers agreed to “enter into a BRICS Memorandum of Understanding” at the BRICS summit of July 2014 held in Fortaleza, Brazil (BRICS Science, Technology and Innovation 2014). However, that meeting was dominated by the launch of the New Development Bank (with a capitalization of $100 billion) and Contingent ­Reserve ­A rrangement (also $100 billion) (Ortiz 2014). The BRICS

Prospects for cooperation in STI  169 ministers subsequently signed the memorandum on March 18, 2015, in Brasilia (see BRICS ­S cience, Technology and Innovation Ministers 2015). Science, by virtue of its claimed universality, displays a veneer of political neutrality and has a long history before and since the Enlightenment of acting as a channel for dialogue among city-states and states. Science is an intimate component of soft diplomacy, an art best illustrated by the table tennis tournaments of the Nixon-Zedong rapprochement in the early 1970s and more recently in European Leadership in Cultural, Science and Innovation Diplomacy, a project funded by the European Union’s Horizon 2020 Research and Innovation Programme (European Commission 2014). Technology and technology transfer are quite different, for reasons of competition and security. Business innovation is intimately linked with economic competition and spreads by a variety of mechanisms through linkages among firms. It manifests itself through imitation, reverse engineering (theft by any other name), adaptation, creativity and secrecy. In the security domain, secrecy is paramount and sharing is restricted and prosecutable. It is of more than academic interest to unpack the potential of the Cape Town Declaration and to separate the rhetoric from the reality. The stellar economic growth of the BRICS in the first decade of the ­twenty-first century was accompanied by a rapid increase in their contribution to the global stock of knowledge. More precisely, between 2002 and 2007, Brazil, China and India each doubled their respective gross expenditure on research and development (GERD), with their share of global GERD rising from 17 percent to 24 percent. Indeed, China’s share of global GERD is now on par with its share of world gross domestic product (GDP), and between 2004 and 2010 China’s share of world scientific publications doubled. This growth gives notice of a major shift in the locus of scientific publishing signified by the new triad of the United States, Europe and Asia, with Asia expected to become the dominant scientific continent in the medium term (Hollanders and Soete 2010; see also Nascimento 2014). As will be shown as follows, international co-publication has also risen steeply over this period. International scientific collaboration is part of the new globalization of knowledge, and the Cape Town Declaration seeks to harness this ­momentum to the benefit of the BRICS. The declaration proposes country specializations as follows: Brazil—climate change and disaster mitigation; Russia— water resources and pollution treatment for Russia; India—­geospatial technology and applications; China—new and renewable energy and energy efficiency; and South Africa—astronomy. To understand the viability of BRICS cooperation in STI, it is necessary to answer a number of questions. What is the current state of STI cooperation among the BRICS members? What is the explanation for the selection of the five fields of interest? Furthermore, do these fields align with domestic strategies for STI? These questions allow an assessment of country-to-­ country interactions: Which bilateral STI agreements are already in place, and what have they delivered? How does the Cape Town Declaration align

170  Michael Kahn or compromise the collaboration of the India-Brazil-South Africa (IBSA) Dialogue Forum? Will the rising geopolitical tensions (Black Sea, South China Sea) limit the scope of STI cooperation? Underscoring these questions and answers is the role, if not the legitimacy, of the smallest of the BRICS members, South Africa. A convenient organizing framework against which these questions may be assessed is a political, economic, social, technological, environmental and legal (PESTEL) analysis. This chapter will focus on the macro level, with a more detailed look given to technological factors, or STI. Together with bibliometric data, the analysis of other documents and economic, social and STI indicators will provide the empirical basis. This chapter is organized into sections as follows. Following the introduction, the next section addresses the political, economic, social, environmental and legal dimensions. The technological features are covered in the next section, which examines the state of STI in each of the BRICS countries. This is followed by an analysis of scientific activity using publication counts as a proxy measure. This also allows for an assessment of the level of STI cooperation among the BRICS members. Together with the identification of national imperatives, this analysis assesses the potential of the Cape Town Declaration. The next section places STI cooperation in the much larger context of geopolitics: the Russia-China energy accord, India’s newly assertive foreign policy, South Africa as the “Gateway to Africa” and Brazil’s role in Africa as commodity exploiter and entrepreneur. The final section returns to O’Neill’s assertions and their rebuttal.

Environmental scan—PESTEL analysis PESTEL analysis, sometimes referred to as PESTLE, is a tool that has evolved to inform strategic management, with first environmental and then legal factors added to the earlier political, economic, social and technological analysis. A PESTEL analysis seeks to delineate the macro-environment within which strategic choices are to be made and is often followed with a detailed analysis of strengths, weaknesses, opportunities and threats (SWOT). The PESTEL analysis that follows is necessarily a bird’s eye view of a massive terrain of study. It represents but a first pass at analysing what is a complex and contested landscape. This analysis is grounded in the empirical evidence given in Table 9.1 and commences with politico-legal factors. A commonality of the BRICS countries is that they have all experienced significant political ruptures in the last 30 years. They share a history of ­authoritarian rule, in some cases under direct military control, in others via an overarching ruling elite. To this day, they display elements of what ­Douglass North, John Wallis and Barry Weingast (2009, 47) refer to as “­mature natural states.” Politically and legally, the BRICS countries other than China are multiparty “democracies,” although they have  not

Table 9.1  P  ESTEL Indicators (2012 or Nearest)

Global Competitiveness Index   Basic requirements  Efficiency enhancers  Innovation/ Sophistication Institutions Financial market development Defence expenditure/ GDP % GERD/GDP % BERD/GERD % Researchers/1,000 employed Web of Science/ million Main fields of publication (Web of Science) USPTO/m Plant cultivars in force/million Global Innovation Index Gini coefficient Decile 10/Decile 1 Human Development Index Annual CO2 tonnes/ capita

Brazil

Russia

India

China

South Africa

56

64

60

29

53

79 44

47 51

96 42

31 31

95 34

46

99

41

34

37

80 50

121 121

72 19

47 54

41 3

1.5

4.0

2.5

2.0

1.2

1.2 45 1.4

1.12 26 6.2

0.88 30 0.4a

1.98 74 1.8

0.76 47 1.6

180

191

38

136

181

Clinical medicine Biology Biomedical 1.3 8.6

Physics Chemistry Engineering 2.4 29.3

Chemistry Clinical medicine Engineering 1.4 n/a

Chemistry Clinical Engineering medicine Physics Biology Chemistry 4.0 3.1 2.6 48

67

52

87

46

51

51.9 54 85

42.0 7 55

36.8 9 136

47.3 18 101

63.1 43 121

2.15

12.18

1.64

6.18

9.18

Sources: CIA Factbook; World Bank; World Economic Forum; Organisation for Economic Co-operation and Development Main Science and Technology Indicators; Red de Indicadores de Ciencia y Tecnología; Web of Science; United States Patent and Trademark Office; Union of Plant Varieties, INSEAD. Notes: The Global Competitiveness Index (GCI) uses indicators accessed from multiple sources and comprises 12 pillars in three groups: basic requirements (institutions, infrastructure, macroeconomic environment, health and primary education); efficiency enhancers (higher education and training, goods and labour market efficiency, financial market development, market size, technological readiness); and innovation and sophistication (business sophistication and innovation). Values for institutions (pillar 1) and financial market development (pillar 8) are shown. The various indicators are a mix of quantitative and qualitative. a Author estimate. n/a, not available; BERD, business expenditure on research and development; GERD, gross expenditure on research and development; GDP, gross domestic product.

172  Michael Kahn transitioned into fully fledged open access societies. Their relatively low scores on the Global Competitiveness Index (GCI) measurement of institutions attest to this assertion. Significant ruptures were experienced in ­Brazil, Russia, India and South Africa from 1991 to 1994, partly as a result of the end of the Cold War, the deepening of globalization and the spread of the Washington consensus. Following the 1986 move to democracy, ­Brazil adopted a program of structural adjustment under the Plano Real in 1994. This brought inflation under control, thereby stabilizing the currency. ­Privatization of state assets formed part of the program mix. ­After the collapse of the Soviet Union, Russia underwent a radical economic transformation through rapidly adopting free market economics and privatizing state assets. India, under the guidance of Manmohan Singh, began to deconstruct the “licence Raj,” but still maintained a strong protectionist stance against foreign penetration. China, following the land and agriculture reforms from 1949 up to the 1960s, commenced a second Long March in 1978, this one down the capitalist road (Studwell 2013). South Africa, maintaining the thrust of the outgoing minority government, accelerated a neo-liberal agenda as the country re-entered world markets. To a large extent, it maintained the mix of state ownership of the commanding heights, with a vibrant private sector that rapidly spawned new transnational corporations. Having gained political rights, the African majority began its own second long walk toward economic freedom. These ruptures had major internal and external impacts, with the rise of China as the new factory of the world becoming a decisive factor in global trade and finance. The inexorable growth of China’s economic might has moved it to rank second in size after the United States. All things being equal, China will be the largest economy in the world within a decade. This shift from West to East, with India now moving up to rank third, manifests the new global order of multipolarity. After the brief period during which the United States was the sole superpower, there are now numerous centres of power: the United States, the European Union, Japan, Russia, China, India, Brazil and South Africa. Indonesia, Mexico and Turkey stand alongside, waiting their turn to influence regional events. India and China are engaged in a space race and, in common with Japan, are also expanding their military, especially their naval capabilities. In this multipolar world, new political alliances are being formed and dormant tensions are igniting. The form that a new equilibrium will take is elusive. Pax Americana is yielding to pax fragile, with some commentators even speaking of a Cold War II (Trenin 2014). During the period of military rule, Brazilian industry deepened and broadened even as its current account deficit worsened. Examples of this diversification were sugar-to-ethanol production, offshore oil extraction, the opening of the highland cerrado to large-scale crop farming, aeronautical engineering and the creation of new overseas markets to be exploited by its construction companies. The worsening financial situation then persuaded

Prospects for cooperation in STI  173 the military to relinquish power to civilian control and to allow a democratic process to unfold. Brazil was able to enter the 1990s as a large-scale exporter of agricultural commodities and mineral ores, along with manufactured goods and services. It is noteworthy that Brazil’s Africa-oriented foreign policy dates back to the time of the generals. In fact, in Angola when the Marxist MPLA government gained power in 1975, Brazil was the second country to recognize the new government. Brazil then used this political legitimacy to grow its trading footprint across Lusophone Africa and beyond. In the 1990s, the Russian government transferred many state mining, metal and energy enterprises to private control. Russia opened its economy to western capital and allowed western companies to grow and capture its consumer market. However, Russian companies lagged behind as innovators so that this foreign dominance has continued (Kuznetsova 2013). The Russian economy depends painfully on the export of oil, gas and minerals, which together with the sanctions arising from the Ukraine crisis has caused severe financial problems. Russia maintains significant prowess in military and aerospace capability, spending four percent of GDP on defence ($100 billion in purchasing power parity [PPP]), the highest proportion among the BRICS countries. Russia was, of course, a major actor in Africa during the Cold War, and these prior relationships continue into the present, enabling the new nonstate actors of Russia to engage in infrastructure and mineral development in Africa. India has been slower to embrace the challenges and opportunities of the multipolar world and globalization. India’s politics are complicated by its vast ethnic diversity, vestiges of central planning, ongoing tension with ­Pakistan and nervousness regarding the intent of China with which it has previously engaged in open warfare. India is belatedly expanding its diplomatic footprint and its navy, with defence expenditure now at 2.5 percent of GDP ($121 billion of PPP). Its private sector shows considerable ability to manage complex merger and acquisition deals, thereby making Tata, Mittal, Reliance and Infosys global brands. India’s presence in Africa is growing slowly. China is sui generis—the Communist Party rules; the free market creates prosperity. In Deng Xiaoping’s words, “It doesn’t matter whether a cat is white or black, as long as it catches mice.” Hence, state capitalism is embraced in an ever-increasing number of special economic zones. Joe Studwell (2013) argues that political freedoms are only loosely coupled with economic growth in China, so economic growth and outward expansion continue unabated. The Chinese government made an explicit decision in 2006 to reach out across the globe, and it is now the largest source of foreign direct investment (FDI) into its bordering countries and a major source for Africa. China was the major promoter of South Africa’s accession to the BRIC ­ hina’s club. In return, South Africa lends its political and moral standing to C positions in international political forums, such as denying the Dalai Lama a visa to attend a meeting of Nobel laureates in Cape Town. This support

174  Michael Kahn is somewhat unexpected, since in 1961 South Africa’s ruling party turned to the Soviet Union for military assistance when it embarked upon armed struggle; China played a much smaller role in the anti-apartheid campaign than did the Soviet Union. Wielding economic might as a major creditor to western consumers, China also asserts itself diplomatically and militarily in pursuit of its territorial claims in the South China Sea. This explains its naval expansion and defence spending of two percent of GDP ($245 billion PPP). As to the economic domain, the GDP statistics confirm O’Neill’s original conjecture that size counts, with China having overtaken Japan to become the second largest economy after the United States. From an economic viewpoint, the BRICS is composed of China plus the rest—the “BRIS.” ­China’s relations with the BRIS are severely lopsided, with a trade balance very much oriented in China’s favour, as mineral, energy and agricultural commodities flow eastward while manufactured goods and state-funded infrastructure projects ship in the opposite direction. Demand is influenced by the strength of domestic markets and purchasing power as reflected in per capita income. Russia scores low on the indicators most closely associated with free markets, and, as Natalia Gorodnikova (2013) argues, it has proven difficult for innovative firms to emerge and prosper in Russia. South Africa is arguably the major political player on the African continent. At home, it is central to the Southern African Customs Union that includes Botswana, Lesotho, Namibia and Swaziland and dominates the 15 countries in the Southern African Development Community. Further afield, the country promoted both the forming of the New Partnership for Africa’s Development (NEPAD) and the transformation of the moribund Organization of African Unity into the African Union, chaired by South Africa’s Nkosasana Dlamini-Zuma. South Africa has deployed peacekeeping forces to South Sudan, the Central African Republic and the Democratic Republic of Congo, played a mediating role in the Great Lakes conflict resolution process, and acted as intermediary under the Mandela administration to bring Libya in from the cold. The extreme monopoly capitalism of the 1960–90 period has since given way to more diverse ownership of equities (in the hands of foreign portfolio managers), and state pension and investment funds. Simultaneously, its leading publicly listed companies have expanded across the Limpopo River in a second Great Trek, but this time of commercial brands, rather than cattle farmers. Many of these companies have secondary listings abroad and they derive up to half of their revenues globally. The cement for the BRICS comes from a shared desire to rebalance global political power relations and institutions in the same way that global market forces have rebalanced economic power. BRICS members’ internal and bilateral issues are another matter entirely, with care taken to refrain from public criticism of one another. For the present, Russo-Sino relations are orderly, with a mammoth 30-year gas deal signed in 2014. Sino-India tensions are another matter entirely, with conflict a medium-term possibility, vide the close relationship blossoming between New Delhi and Tokyo. Brazil is

Prospects for cooperation in STI  175 quietly asserting its dominance of the South Atlantic, as evidenced in the planned purchase of French submarines and surface vessels, while South Africa tries to act as the African village police officer. Of the five BRICS members, South Africa has the longest continuous experience of business conducted according to free market norms and the rule of law (although the country excluded its African majority up to 1994). At this point, it is appropriate to examine the data of the World ­Economic Forum (WEF) Global Competitiveness Report, whose index draws on a mix of quantitative and subjective indicators, gathered through the annual ­Executive Opinion Survey. Among the BRICS members, the 2014 GCI ranked China highest at position 29 and Russia lowest at 64 (WEF 2014). This ordering was already evident in the institutions pillar for which South Africa ranked highest in position 41, while Russia stood in position 121. South Africa retained its leading position for Financial Market Development, ranked third worldwide year on year. This gave the country important standing worldwide and particularly in Africa. To do business in Africa, the place to start is the financial hub of South Africa. Until 2014, South Africa displayed the largest GDP in Africa, at which point Nigeria announced the results of its rebasing exercise that saw its GDP double and exceed South Africa’s. With regard to social factors, GCI’s Basic Requirements pillars assess administrative capacity, health and primary education. Brazil, India and South Africa did poorly in addressing these basic requirements compared to Russia and China. The WEF measurements may be compared with the ­Human Development Index (HDI) published by the United Nations Development Programme (UNDP), the Gini coefficient and the new indicator dX/d1. HDI is a proxy for human development based on life expectancy, educational attainment and income. It serves as an alternative to GDP per capita for measuring relative socioeconomic progress. South Africa’s HDI ranking slipped badly as a consequence of the HIV/AIDS epidemic that by 2005 had reduced life expectancy by nearly 10 years. With the introduction of large-scale state-sponsored antiretroviral therapies, life expectancy climbed to 61 years by 2012. Russia, with its stronger health and education systems, ranks highest on the HDI among the BRICS countries (UNDP 2016). This average masks the major gender disparity in life expectancy, as females are outliving males by more than 10 years. South Africa’s Gini coefficient score of 63.1 is among the highest in the world; at 36.8, India records the lowest Gini among the BRICS, although this places the country above the European Union average of 30.6. Both Brazil and South Africa display high Gini coefficients for income and have adopted extensive social welfare systems to mitigate absolute poverty. If these social benefits were included in the estimates of total household income, the Gini coefficient would be lower, though still unacceptably high. An alternative measure of inequality is the Palma index, which examines income distribution according to decile share (Cobham and Sumner 2013).

176  Michael Kahn A simplified Palma index can be calculated by comparing the ratio of the income accruing to decile 10 with that of decile 1, termed here the dX/d1 ratio. The simplicity of the ratio arises from the fact that the necessary data are readily available from the CIA Factbook Library. Calculation of dX/d1 suggests that Brazil is less equal than the Gini suggests; conversely, it shows that income disparities in Russia and India are relatively modest. As with other measures of inequality, even dX/d1 is a blunt instrument. The income accruing to the top one percent may be the most appropriate measure of income inequality, since this is the domain of billionaires, oligarchs and plutocrats (and media personalities). It is worth briefly mentioning the environmental aspects of the PESTEL analysis before moving to the longer discussion concerning STI. The simplest comparable environmental indicator is carbon dioxide emissions per capita. Russia, South Africa and China are large consumers of fossil fuels and among the highest carbon dioxide emitters in the world. Thanks to the availability of hydroelectricity, Brazil has a lower carbon footprint. The low emission value of India arises from its relative underdevelopment and low levels of industrialization. Specific mention must be made of toxic smog that pollutes many of its large cities, with an estimated reduction of life expectancy by 5.5 years in the case of Beijing (Hook 2013).

Science, technology and innovation Traditions of western university and academy research go back more than a century in the five BRICS countries. All of the BRICS members experienced relatively late industrial revolutions and were able to benefit from imported technologies. Science was a strong component of the modernization and military agendas of the BRICS, with considerable technological transfers from the then Soviet Union to both China and India. Today, the BRICS countries display unique innovation systems, of different size, complexity and focus, with their own path dependencies (World Bank 2010). The Russian and Chinese academies of science teach and conduct research while their universities play smaller roles in research. South Africa’s research councils and universities enjoy similar levels of research expenditure, with the latter solely responsible for awarding degrees. The world-renowned Indian Institutes of Technology and Tata Institute of Technology enrol students through a highly selective process and stand alongside a massive university system complemented by public research institutions such as the Council of Scientific and Industrial Research. Brazil’s ­EMBRAPA is a world leader in agricultural research, as is medical research at the Oswaldo Cruz Foundation. The University of São Paulo is the academic research leader, standing at the pinnacle of the publicly funded state universities. The present character and specializations of these innovation systems owe much to their earlier period of authoritarian, if not military rule,

Prospects for cooperation in STI  177 during which weapons production was a major consideration. Russia, China and India have nuclear weapons; Brazil foreswore the development of atomic weapons; and South Africa in 1994 uniquely dismantled its atomic arsenal. China, India and Russia have intercontinental ballistic missile and satellite launch capacity, with Russia and China having mastered manned space flight, and India intending to follow after 2017. The India Mars probe has placed it virtually on par with China. Brazil’s Embraer has captured a niche in the market for midsized commuter aircraft, and the Brazilian Space Agency has launched its own rockets. For many years, Brazil and South Africa have designed and built satellites that have been launched by other countries. Brazil and South Africa are cooperating in air-to-air missile technology, and India and Russia extensively share technology. South Africa still competes in light arms and artillery, as well as compact radar systems and military vehicles, based on the programs developed following the 1977 UN arms embargo. All have significant industrial capacity and high levels of self-sufficiency other than in the realm of consumer goods (enter China) and advanced technologies (enter the European Union, the United States and Japan). They possess advanced medical, scientific and technical skills and contribute to the global stock of knowledge. The private sector plays differing roles in these innovation systems according to the extent of state enterprise involvement and the residue of central planning. Among the BRICS members, the 2016 Global Innovation Index ranked China first in position 25 and Brazil last in position 69 (Cornell University et al. 2016). The BRICS members publish regularly updated STI strategies and have specialized agencies that gather and produce STI indicators. China, ­Russia  and South Africa maintain strong engagement with the Science, Technology and Innovation Directorate of the Organisation for Economic Co-operation and Development (OECD). As China’s manufacturing capability has moved toward the technological frontier, its GERD has risen to reach 1.98 percent with an increasing proportion of this activity occurring in Chinese firms. In parallel, these firms have found it necessary to protect their intellectual property as Chinese brands proliferate globally. For China in particular, future growth is expected to spring from innovation-driven development (Xinhua 2013). China’s intensity of U.S. patent awards has also grown and is the highest in the BRICS at four per million. This is a recent achievement, as is the rise in Chinese-authored articles recorded in the Web of Science database. Brazil, Russia and South Africa have similar publication intensity, while South Africa stands second for U.S. patenting. India lags according to both of these key STI output indicators. The registration of plant cultivars is another important STI output; South Africa’s intensity is nearly double that of Russia’s and is far ahead of Brazil’s and China’s, reflecting the diversity of its agricultural base and associated exports. Publication counts must be prefaced with the usual caveats that bibliographic databases are incomplete, are biased toward the English language

178  Michael Kahn and do not cover the social sciences and humanities in sufficient depth (see Table 9.2). This is particularly important for Brazil, China and Russia, which each have numerous national-language scientific publications not adequately represented in the Web of Science or Scopus until recently. Starting in 2006, the Web of Science moved to correct these biases and Brazil in particular saw a massive increase in the number of its national journals indexed in that database. The other four BRICS members ­enjoyed varying increases, with South Africa’s coverage tripling. Notwithstanding these caveats, bibliometrics cannot function without using these ­d atabases. The BRICS show some similarities in their areas of concentration of scientific publications (see Table 9.1). The three leading fields of China and ­Russia are identical; Brazil and South Africa specialize in clinical medicine and biology. India is a mix of the two groupings with its emphasis on engineering. Wolfgang Glänzel (2001) suggests a typology according to which China and Russia display the “socialist” model; Brazil and South Africa are “western,” while India is a mix of western and “­Japanese.” This typology is not cast in concrete and must change as economic dictates pull science along in new directions. The area of space science is also addressed, accounting for 10 percent of the totals for Russia and South Africa, and around five percent for Brazil, China and India. These few STI output indicators cannot adequately capture the complexity of the wide range of activities that contribute to and arise from the process of innovation. It is instructive to compare the different emphases that emerge from the Web of Science and Scopus. Table 9.2 provides total publication counts and the top three subject area concentrations on Scopus since 1995. Table 9.2  Subject Area Specialization on Scopus: Total Publication Count post 1995 Count 000s

Count/ Subject area 1 Population 000s 000 000s

Subject area 2 000s

Subject area 3 000s

Brazil

597.2

3.2

Russia

709.9

5.0

India

1,001.2

0.91

China

3,612.3

2.76

A/B Science (107.8) I Engineering (121.3) III Engineering (170.4) III P/A (571) III

B/G/M (69.6) III Chemistry (118.8) II Chemistry (142.1) I Material science (558) Social science (21.2)

South 167.6 Africa

3.5

Medicine (162.2) I P/A (246.6) I Medicine (192.8) II Engineering (1,500) II Medicine (40.3) I

A/B Science (31.5) II

Note: P/A: physics/astronomy; A/B: animal/biological; B/G/M: biochemistry/genetics/ microbiology.

Prospects for cooperation in STI  179 The data show that the three leading subject areas on Scopus for B ­ razil, Russia and India are unchanged, although individual rankings do shift. For China and South Africa, important shifts are evident, with the rise of material science and social science to third rank respectively. The emergence of material science in China is less surprising than the leap in rank of social science in South African output, which saw its share of all publications double to 14 percent in the period 2007–12 compared to 1995–99. This difference in emphasis revealed between the Web of Science and Scopus is not unexpected: the former began with a strong emphasis on ­English-language publications in the natural sciences and engineering; the latter was established largely to capitalize on the unhappiness this bias elicited among other disciplines and languages (De Bellis 2009). The struggle for dominance of the scientific publication marketplace continues. Perhaps the most important marker of scientific activity is the lead indicator of GERD to GDP. Both India and South Africa have yet to a­ ttain the level of one percent; China is now close to two percent. GERD/GDP is an input indicator representing expenditure for research and development (R&D) with its promise of return to come. Close to half of such expenditure is the labour cost of researchers and support staff. The conventional measure of the size of the research stock is the ratio of full-time equivalent researchers to the labour force. Russia has by far the highest, India the lowest. This points to the lack of an obvious correlation between these two indicators. With the exception of Russia, the ratio of full-time equivalent researchers within the labour force is below the EU average (OECD 2015). Unfortunately, GERD data disaggregated by the standard science fields are generally not in the public domain. The little material that is published is restricted to specific sectors as shown by the homepages of the UNESCO Institute for Statistics or that of the OECD’s Science, Technology and Innovation Directorate. South Africa is exceptional in publishing such data. These data show that the top three fields by expenditure are engineering and technology (26.5 ­percent), health sciences (17.2 percent), and information and communications technology (ICT) (12.8 percent), with social sciences ranking fourth at 12 percent. These field expenditures are aggregated across all sectors, so it is unsurprising that there is a poor correlation with the intensity of publication outputs that tend to arise mainly from the higher education ­sector. In higher education, one third of expenditure goes toward the social sciences and humanities that gives support to the Scopus finding that the social sciences “matter.” The next topic for consideration is collaboration, for which a proxy measure is scientific co-publication as revealed by search of the Web of Science or Scopus.

180  Michael Kahn

Co-publication among the BRICS countries As of 2011, both the Web of Science and Scopus show that some 35 percent of scientific articles involved international partners, a rise of 10 percent over 15 years (Royal Society 2011; National Science Board 2014). Table 9.3 presents data on country pair co-publication as captured from the Web of Science. South Africa has the highest intensity of BRICS country-pair collaborations, significantly above the median level of 1.4 percent. Russia is ­s econd; China is last. Barely 4,609 (1.5 percent) of the 302,739 articles that represent that total scientific production of BRICS members involve a ­s econd BRICS country. The reality is that scientific co-publication among the BRICS is low. Collaboration is a two-way street. The Thomson-Reuters evaluation of Framework Programme 7 outputs suggested that for country-to-country collaboration to be described as “significant,” at least 7.5 percent of a partner’s publications must be concentrated in a field of common interest (Evidence 2010). By this criterion, there is no significant scientific collaboration between any of the BRICS country pairs. There are, however, much higher levels of co-publication between the BRICS and the United States: Brazil with 5,320 articles or 14.7 percent; ­Russia with 3,020 or 11.1 percent; India with 4,270 or 9.2 percent; China with 23,829 or 13 percent; and South Africa with 2,250 articles or 24.4 percent.1 A number of fields of interest to the BRICS exceed the Thomson Reuters 7.5 percent level of co-publication concentration. This is overwhelmingly unidirectional: it represents a highly significant channel for knowledge acquisition from the BRICS perspective, but less so for the United States or European Union. This is the reality of co-publication: the main site of frontier science is the United States, hence co-publication will pull scientists toward that location. The European Union is another major node. Co-publication rates with it are 13.6 percent for Brazil; 20 percent for Russia; 11 percent for ­India; 18.6 percent for China; and 25 percent for South Africa. What Caroline ­Wagner (2008) termed the “new invisible college of science” has two virtual Table 9.3  A rticle Counts and Percentage Co-publication, BRICS 2012

Brazil Russia India China South Africa

Brazil

Russia

India

China

South Africa

36,111 533 (1.5) 373 (1.0) 623 (1.7) 266 (0.7)

533 (2.0) 27,303 393 (1.4) 898 (3.3) 237 (0.9)

373 (0.8) 393 (0.8) 46,348 699 (1.5) 262 (0.6)

623 (0.3) 898 (0.5) 699 (0.4) 183,760 325 (0.2)

266 (2.9) 237 (2.6) 262 (2.8) 325 (3.5) 9,217

Source: Science Citation Index-Extended, Social Science and Humanities Index, and Arts and Humanities Citation Index.

Prospects for cooperation in STI  181 campuses—the United States and the European Union. The global community of scientists transacts through the invisible college in spite of, not because of, government policy. Like South Africa’s broad economy, its science is open and international co-publication has risen to nearly 50 percent of all locally coauthored articles. Its R&D expenditure has seen a decline in engineering and technology, while research has risen in the health sciences, particularly in the infectious disease area, and the health sciences are acting as a very strong pull for international collaboration (Kahn 2011). It is the most prolific of the BRICS in scientific co-publication, and the impact factor of its publications is higher than that of China or Brazil (SAccess 2011). One notes the success of South African astronomers and astrophysicists in winning the right to host the bulk of the Square Kilometre Array (SKA) radio telescope that will be the largest scientific instrument yet built. The main array of dishes for high and medium frequencies will be constructed in the interior, with other dishes located in eight African countries. Australia will host the complementary low frequency array. Full SKA operations are expected in 2024 (SKA Organisation 2012). O’Neill is wrong; South Africa matters.

To the future STI bilateral agreements are commonplace among the BRICS countries, and between them and other science-producing countries. These agreements go back many decades and have fostered joint projects and staff exchanges, but the co-publication data are not exactly encouraging. This statement requires some qualification, since certain collaborative activities, such as space and defence, involve intensive STI exchanges that are usually bound by secrecy requirements that preclude open publication. What about the 2003 IBSA agreement and the subsequent 2010 STI agreement? In 2013, it was noted that intra-IBSA trade is a clear indication of the potential and success of IBSA as the initial trade target of US$25 billion by 2015 is likely to be overshot given the current intra-IBSA trade figure of US$23 billion. IBSA has also partnered with developing countries, especially least-­ developed countries (LDCs) and post-conflict and reconstruction development countries through the IBSA Facility for Hunger and Poverty Alleviation (IBSA Fund) in development projects that will benefit those countries. (IBSA Dialogue Forum 2013) Those responsible for IBSA are thus on record as being satisfied with the “achievement” of the IBSA target, although no counterfactual is available against which the assertion may be tested. Without IBSA, the same result

182  Michael Kahn would most likely have emerged. The 2010 IBSA STI Agreement seeks to promote the “short-term exchange of scientists, researchers, technical experts and scholars,” trilateral workshops and exchange of information, and the “formulation and implementation of trilateral research and development programs” (Government of the Federative Republic of Brazil et al. 2010). Each signatory is expected to contribute $1 million annually to facilitate cooperation. To date, there is scant evidence of activity, although it may be too soon to tell. Even so, the scale of funding may be too low to attract the attention of top researchers. These considerations now allow the appropriateness of the five focal areas of the Cape Town Declaration to be assessed, namely: • • • • •

Brazil: climate change and disaster mitigation; Russia: water resources and pollution treatment; India: geospatial technology and applications; China: new and renewable energy, and energy efficiency; South Africa: astronomy.

A first matter is to make sense of the choices. Clues can be found by assessing the STI “grand challenges” that each country has declared (Brazil describes these as strategic areas). A literature scan indicates the following challenges: Brazil: biotechnology, nanotechnology, energy, ICT, health, biodiversity and the Amazon, climate change, space science, national security (­Brazil Ministry of Science and Technology 2007); Russia: energy, nuclear, space science, health, strategic information technology (Meissner et al. 2013); India: sustainable agriculture, health care, energy, transport and infrastructure, environment, inclusion, space STI (McGrath et al. 2014); China: biotechnology, food security, new energy sources and materials, clean energy vehicles, climate change and environment (McGrath et al. 2014); South Africa: biotechnology, renewable energy, climate change, space STI, poverty alleviation (South Africa, Department of Science and Technology 2008). A comparison with Table 9.2 shows direct overlaps for Brazil, India and South Africa, but less overlap for China and Russia. The focal areas for Brazil, China and South Africa match the already declared grand challenges or strategic areas. So Brazil has a long tradition of research on Amazonian weather systems and their role in climate change. The country is also experienced in the management of large-scale ­weather-driven disasters. China, faced with severe pollution in its major ­cities, is now the world leader in photovoltaic energy systems and is working

Prospects for cooperation in STI  183 on clean vehicle technologies. Allocating astronomy to South Africa’s aligns with the award of the SKA and its established work in optical and radio astronomy. China and India are also members of the SKA organization. At first sight, however, there is no clear overlap for Russia or for India. One might speculate that Russia’s problems with the pollution of Lake Baikal and the Aral Sea could equip it to lead research in water pollution. India is strong on software development including in geographic ­i nformation systems, both of which would equip it to work on geospatial technology.

All at sea: STI and geopolitics The BRICS is a powerful economic, political and science producing bloc. The O’Neill conjecture retains its merit, but, contrary to that view, South Africa—the dominant power in Africa—belongs at the main table. The last quarter century saw a shift from the bipolar Cold War to a short period of U.S. hegemony. A new world disorder is now in the making where various regional superpowers are asserting dormant territorial claims, with uncertain consequences. The Black Sea, South China Sea, Indian Ocean, South Atlantic and Arctic Ocean are all becoming militarized. Old maps are brandished to question boundaries that have blurred with time. John Kenneth Galbraith (1977) might have been optimistic in suggesting that the world was entering an age of uncertainty. Global science is dealing with its own sea changes. As Hugo Hollanders and Luc Soete (2010, 25) note: We seem to be on the verge of a structural break in the pattern of knowledge contribution to growth at the level of the global economy. This is also reflected in the arrival on the world scene of large, multinational firms from emerging countries … [that] are increasingly opting for cross-border mergers and acquisitions to secure technological knowledge overnight. China in particular is poised to become the largest economy and largest producer of scientific publications. As to intra-BRICS cooperation in science, the publication data attest to this being more rhetoric than reality. The five BRICS countries each engage in much higher levels of cooperation with the centres of science production in the United States and European Union than with one another. Even so, much of this cooperation with the United States and European Union is unidirectional. South Africa has the highest rate of international co-­publication among the five BRICS members. The Cape Town Declaration on STI was surely based on good intentions, but there is no budget on the table. It might well go the same way as the IBSA STI Agreement—good in theory, yet hard to manifest in practice.

184  Michael Kahn The principals of the BRICS declaration might therefore wish to move beyond rhetoric and factor in the realities of the new invisible college of science. This would require acknowledgement of the central value of the United States and European Union to global science production as shown in the proliferation of collaboration among the BRICS-U.S.-EU scientific communities. But this assertion requires further elaboration, specifically as to what is meant by collaboration. While using coauthorship as a metric of collaboration is inherently problematic as it restricts attention to a single mode of collaboration, it remains the primary metric for the task. Much of the collaboration among the BRICS, European Union and United States is through mega science projects, with large numbers of contributing authors, so that publication counts are distorted, giving the impression of very high levels of collaboration. Even so, such mega science projects are an important channel for scientific development, with unanticipated spillovers as, for example, the World Wide Web that emerged from high-energy physics based at CERN in Geneva. By the same token, the mega science projects coming on stream in the BRICS might also contribute future disruptive technologies. Two such projects are the SKA in South Africa and the Tianyan Radio Telescope in China, which will generate massive amounts of data and call for the new techniques for signal extraction. It would therefore make sense for activities in the five proposed focal areas to be open to participants from the United States, European Union and other countries. Including the invisible college will strengthen all participants.

Note 1 Russia-Germany co-publications stood at 2,934 articles in the same year.

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Prospects for cooperation in STI  185 Cornell University, INSEAD and World Intellectual Property Organization (2016). “The Global Innovation Index 2016: Winning with Global Innovation.” I­ thaca, Fontainebleau and Geneva. www.globalinnovationindex.org/userfiles/file/­reportpdf/ gii-full-report-2016-v1.pdf (September 2017). De Bellis, Nicola (2009). Bibliometrics and Citation Analysis: From the Science Citation Index to Cybermetrics. Lanham: Scarecrow Press. http://elisa.ugm.ac.id/user/ archive/download/92386/f2878618868fbea525d0a79a8672fa46 (September 2017). European Commission (2014). “European Cultural and Science Diplomacy: ­Exploiting the Potential of Culture and Science in the EU’s External Relations.” Europe as a Global Actor. H2020-INT-SOCIETY-2015, Research and Innovation, Brussels. http://ec.europa.eu/research/participants/portal/desktop/en/­opportunities/h2020/ topics/1063-int-11-2015.html (September 2017). Evidence (2010). “Expert Group for the Interim Evaluation of Framework Programme 7: Bibliometric Analysis—Final Report.” Report was prepared for the Expert Group for the Interim Evaluation of Framework Programme 7, November, Thomson Reuters, Leeds. https://ec.europa.eu/research/evaluations/pdf/­archive/ fp7-evidence-base/experts_analysis/j.%20adams_-_bibliometric_analysis.pdf (September 2017). Galbraith, John Kenneth (1977). The Age of Uncertainty. London: Andre Deutsch. Glänzel, Wolfgang (2001). “National Characteristics in International Scientific Co-­ authorship Relations.” Scientometrics 51(1): 69–115. doi:10.1023/A:1010512628145. Gorodnikova, Natalia (2013). “The Russian Federation.” In Financing Innovation: BRICS National Systems of Innovation, Michael Kahn, Luiz Martins de Melo and Marcelo G. Pessoa de Matos, eds. New Delhi: Routledge, pp. 78–133. Government of the Federative Republic of Brazil, Government of the Republic of India and Government of the Republic of South Africa (2010). “Memorandum of Understanding on Trilateral Co-operation in Science, Technology and Innovation.” www.mnre.gov.in/mous/mou-ibsa.pdf (September 2017). Hollanders, Hugo and Luc Soete (2010). “The Growing Role of Knowledge in the Global Economy.” In UNESCO Science Report 2010: The Current Status of Science Around the World. Paris: UNESCO Publishing, pp. 1–27. http://unesdoc.unesco.org/images/0018/001899/189958e.pdf#nameddest=211137 (September 2017). Hook, Leslie (2013). “China Smog Cuts 5.5 Years from Average Life Expectancy.” Financial Times, 8 May. India-Brazil-South Africa Dialogue Forum (2013). “About IBSA: Introduction.” www.ibsa-trilateral.org/component/content/category/89-home (September 2017). Kahn, Michael (2011). “A Bibliometric Analysis of South Africa’s Scientific Outputs— Some Trends and Implications.” South African Journal of Science 107(1/2): 1–6. doi:10.4102/sajs.v107i1/2.406. Kuznetsova, Tatiana (2013). “Russia.” In The Role of the State, Mario Scerri and Helen M. M. Lastres, eds. New Delhi: Routledge, pp. 80–137. McGrath, Cecile Hoareau, Vernoika Horvath, Ben Baruch et al. (2014). “The International Dimension of Research and Innovation Cooperation Addressing the Grand Challenges in the Global Context.” RAND Corporation, Santa Monica. http://ec.europa.eu/research/innovation-union/pdf/expert-groups/eriab_final_ policy_brief_international_R&I_cooperation.pdf (September 2017). Meissner, Dirk, Leonid Gokhberg and Alexander Sokolov, eds. (2013). Science, Technology and Innovation Policy for the Future: Potentials and Limits of Foresight Studies. Berlin: Springer Verlag.

186  Michael Kahn Nascimento, Paolo A. Meyer M. (2014). “Some Trends in Higher Education and ­Research in BRICS Countries.” In Papers of the Fifth BRICS Academic ­Forum: Partnership for Development, Integration and Industrialization, Siphamandla Zondi, ed. Pretoria: Department of Internal Relations and Cooperation of the Republic of South Africa, pp. 117–28. http://bricspolicycenter.org/homolog/uploads/­ trabalhos/6533/doc/596381132.pdf (September 2017). National Science Board (2014). “Science and Engineering Indicators 2014.” ­February, National Science Foundation, Arlington. www.nsf.gov/statistics/seind14/ (September 2017). North, Douglass, John Joseph Wallis and Barry R. Weingast (2009). Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History. New York: Cambridge University Press. Organisation for Economic Co-operation and Development (2015). Main Science and Technology Indicators 2014(2). doi:10.1787/msti-v2014-2-en. Ortiz, Fabíola (2014). “BRICS Summit Makes Little Porgress on Science Cooperation.” Sci Dev Net, 21 July. www.scidev.net/global/cooperation/news/brics-­ summits-make-little-progress-on-science-cooperation.html (September 2017). Royal Society (2011). “Knowledge, Networks and Nations: Global Scientific Collaboration in the 21st Century.” 27 March, London. https://royalsociety.org/policy/ projects/knowledge-networks-nations/report (September 2017). SAccess (2011). “Report on South African Research and Innovation Capacity.” ­ACCESS4EU—South Africa (Contract number 243851). www.esastap.org.za/ download/sa_ri_capacity.pdf (September 2017). SKA Organisation (2012). “The Square Kilometre Array Fact Sheet.” Cheshire. www.skatelescope.org/wp-content/uploads/2011/03/SKA_Factsheet_July2012_ web_r.pdf (September 2017). South Africa. Department of Science and Technology (2008). “Innovation Towards a Knowledge-Based Economy: Ten-Year Plan for South Africa (2008–2018).” www. esastap.org.za/download/sa_ten_year_innovation_plan.pdf (September 2017). Studwell, Joe (2013). How Asia Works: Success and Failure in the World’s Most ­Dynamic Region. New York: Grove Press. Trenin, Dmitri (2014). “Welcome to Cold War II.” Foreign Policy, 4 March. https:// foreignpolicy.com/2014/03/04/welcome-to-cold-war-ii (September 2017). United Nations Development Programme (2016). “Human Development ­Report 2016: Human Development for Everyone.” New York. http://hdr.undp.org/sites/default/ files/2016_human_­development_report.pdf (September 2017). Wagner, Caroline (2008). The New Invisible College: Science for Development. Washington DC: Brookings Institution Press. World Bank (2010). “Innovation Policy: A Guide for Developing Countries.” Washington DC. http://hdl.handle.net/10986/2460 (September 2017). World Economic Forum (2014). “The Global Competitiveness Report 2014–2015.” World Economic Forum, Davos. www3.weforum.org/docs/WEF_ GlobalCompetitivenessReport_2014–15.pdf (September 2017). Xinhua (2013). “Xi Jinping Urges Deepening Reform, Innovation-Driven Development.” China Daily, 5 November. http://usa.chinadaily.com.cn/china/2013-11/05/ content_17083709.htm (September 2017).

Part IV

BRICS interests and priorities for cooperation

10 The BRICS for better global governance A Russian perspective Georgy Toloraya

At the end of the first decade of activity by Brazil, Russia, India, China and South Africa (BRICS)—if the foreign ministers’ meeting of the first four countries on the sidelines of the United Nations General Assembly in 2006 is considered the formal start—there was still no clear understanding of the ultimate goal of the group and why it mattered. Could it really become a successful “union of reformers” as so often stated (Likhachyov and ­Tkachenko 2015)? Or would it degrade into yet another occasion for high-level meetings and photo opportunities—just one more additional cooperation mechanism on a limited number of specific issues? An ongoing academic discourse on the BRICS since its inception has become a serious ideological struggle in Russia and in the other BRICS countries, as well as in the international scholarly discourse on the theory of international relations and global governance. In the West, the general mood of commentaries is critical and pessimistic—increasingly so with the deterioration of the economic situation in some member countries and pol­ itical problems, especially in Brazil. At the same time, the BRICS is still recognized as a new element of global governance reflecting the need for a contemporary transformation period in international relations. The BRIC—without South Africa at first—emerged as a reaction to the systematic crisis in the global economic order. After a period of mostly symbolic meetings, the BRIC’s practical activities started in earnest when the members felt the need to deal with the 2008 global financial crisis. The greatest challenge was also the corresponding formation of the Group of 20 (G20), an attempt to create a “club” to govern the global economy. Obviously, the raison d’être of the BRIC dialogue format was to give more leverage to the rising powers in global affairs. Indeed, the BRICS is, in general, about improving global governance—which so far has been dominated by developed countries headed by the United States. But there is no universal consensus on whether the existing rules of the game are unfair or outdated or on what aspects should be changed or improved and in what direction. The BRICS has the potential to become an instrument for solving the historical problem of the peaceful transformation of the rules of the game in different areas of global governance. For that, a new balance between

190  Georgy Toloraya developed and developing countries should be sought, in economy and finance first. It might then be possible to move to a new system of sharing the responsibility for international security and for jointly charting the course for a future of the “global village.” The question of whether such an evolutionary approach is possible remains open. Some radically minded experts argue that the sequence be the opposite one—first achieve a new balance of power in the global arena through compromise or coercion and then set the rules for a corresponding global governance system (something like a global neo-Congress of Vienna). Regardless, to achieve such a transformation, the five BRICS countries should be highly unified on principal issues, which is not the case now. At the same time, the issue of the development paradigm for the BRICS members is still unclear. It is generally assumed that this combination of the world’s biggest countries and growing economies should continue to develop in the framework of the existing liberal capitalist model and globalization rules as the “best possible” choice, while perhaps slowly modifying their role in it. However, there also exists a more radical view: the BRICS should present a new, more ecology-friendly and human-friendly model of economic growth. Such a model should provide for economic sustainability, as growth cannot be limitless on a limited planet. It should probably be based on new technologies and a new paradigm of consumption. It remains doubtful, though, whether—even based on a consolidated ­concept—the BRICS could produce a government-level blueprint for the corresponding rules of global economic, financial and technological exchanges. Also, how can such a model, even if formulated, be agreed on— should it be within the existing format of universal international institutions such as the World Trade Organization (WTO), or should it come into being through regional and closed structures, such as free trade agreements, through trial and error? From a Russian perspective, it is natural to consider how Russia, given its current economic troubles and disruption of relations with the West, which were triggered by the Crimea absorption (but are, in fact, long term in nature, based on diverging geopolitical interests), takes advantage of the BRICS to maintain a prominent role in global governance. There are more questions than answers—so this chapter is but a modest contribution to the ongoing discussion.

Why the BRICS? Why does the BRICS matter, not only in global economics but also in geo­ politics? One argument is that the current global turmoil (conflicts and wars  both internal and between countries and communities, the rise of terrorism and extremism, the rupture of regional groupings) signifies the decline of the post–World War II era and a change in the geopolitical order

The BRICS for better global governance  191 set at the end of that war. It actually started with the dissolution of the Soviet Union, perceived in the West as a victory in the Cold War. ­Russians did not think so; and, in fact, this led not to the “end of history” and the emergence of a globalized world playing by unified rules, with the central governing role of the West led by the United States, but instead to the increasing fragmentation of global relations. The growth of aggressive nationalism, the success of Donald Trump in the United States and the decision of the United Kingdom to leave the European Union are just the latest manifestations of this tendency. Nation-states, not blocs or nonstate actors (although their significance is not questioned), have once again become the leading actors in international relations. The world is increasingly polycentric, with a special role played by rising powers and major civilizational platforms. Some historians even suggest that the more than five centuries of ­Eurocentric global rule is coming to an end (Lukhin 2016). China chose the road of self-isolation, and other great ancient civilizations such as India also felt that self-sufficiency was best for them, while the Arab world was in turmoil after a period of comparative prosperity. Later, due to several reasons (including Protestantism and the weakness of states built on the remains of the Roman Empire and barbaric Europe constantly fighting with each other), comparatively small European powers diverged from a universal paradigm of societal organization. After the days of ancient empires, successful societies were traditionally based on a “strong state” and authoritarianism with priority given to state interests (or suzerain, symbolizing it) and disregard for commoners. Europeans introduced the primacy of individual freedom and democracy (which, in fact, had been limited to the unique experience of some ancient small cities). This, along with scientific discoveries, boosted the invention and growth of productive forces and increased the wealth and “hard power” of these states. As a result, Europe followed the road of cross-border geographical adventurism (for example, looking for a “road to India”) and expansion. Its states met little opposition as they achieved remarkable progress in technology and hence weaponry. The outcome was that Western Europe started exercising control (by the most brutal means) over vast territories of the world. The result, in turn, was the creation of a colonial system and the exploitation of global resources and labour to the benefit of the Western European states (and Russia was not a total stranger to these policies either). The Congress of Berlin in 1878 divided the countries of the word into “civilized” and “uncivilized,” giving the former the formal right to control the rest of the world. Although the colonial system dissolved after World War II, most of the “Third World” remained under the economic control of the “First World.” As the planned administration and economy and totalitarian political model of the “Second World”—the former Soviet bloc—proved its inefficiency and after communism (which represented an alternative to the First World model) broke down, the West mistook it for proof that its economic and political

192  Georgy Toloraya model was universal and could be imposed on the rest of the world without any moral repercussions. This was called globalization, akin to westernization. The welfare of western countries has historically been built on their domination in the economic, technological and military-political spheres, as well as in their defining the global agenda. In fact, the historical western (European) territory of the Earth’s surface is small, while the BRICS occupies 30 percent and is inhabited by 45 percent of its population. Nonetheless, the developed countries as well as transnational corporations and financial institutions, mostly originating in the West, rule much of the global agenda. It would be ridiculous to underestimate the economic, financial, political-military, technological and soft power of the West, as well as its contribution to “civilizing” and introducing better standards of living to less developed states. However, this policy, despite bringing prosperity to many underdeveloped areas of the world, has backfired. Along with the growth of wealth and national power, rising countries and civilizations have started to demonstrate their desire to have an appropriate role in governing the global process and protecting their own interests. ­Today, the global power balance is shifting away from Euro-Atlantic to Asia and  the Pacific, with new important actors also emerging in Africa and Latin America. If the democratic canons are applied to international relations, the BRICS should become a viable factor in determining the global agenda of the day. As some scholars put it, something else had occurred in the previous ten years [before 2010], and this was the “rise of the South”. What was so significant about this, in contrast to say the rise of the first tier East Asian newly industrialising countries, was that a number of new middle income countries in the South had very high populations, above all China and India. (Kiely 2015) Again, that does not mean denying the achievements of Western European countries, which had created a new technetronic civilization within some 200–300 years, or the need for confrontation with it under the banner of traditional values. The BRICS countries have actually increasingly become part of this civilization over the last century. These countries are not going to retreat to self-isolation à la North Korean juche model. At the same time, the West-leaning institutions of global governance created as a result of World War II have largely exhausted their potential and need to be radically modernized to take due account of the existing political and economic realities and the emergence of new influential players. The BRICS has become the manifestation of such a tendency that, as some authors suppose, can change the future of the global order (Stuenkel 2015; Bond and Garcia 2015). However, the mastery of compromising with the “old leaders” might prove tricky.

The BRICS for better global governance  193 Since BRICS is no longer the global economic locomotive it used to be, another question arises—should the BRICS modify the existing system or should it build a parallel (mirror) one? Much skepticism regarding this new association was obvious from the early stages of its emergence. Too many pessimists expressed doubts about the vitality and effectiveness of the BRICS, not only in the West but even in its member states. The BRICS is criticized in an attempt to prove its artificial, speculative character and lack of prospects for any association of five such different states. It has even been labelled a phantom (Jacobs and Van Rossem 2013). It was stated that “no idea has done more to muddle thinking about the global economy than that of the BRICs” (Sharma 2012). Analysis of the contradictions among the member countries can be found in numerous articles and studies. Indeed, the BRICS states do have many differences—in political systems, economic models and living standards—and sometimes these differences are obstacles for the development of the “Big Five.” However, the group’s members do not strive for uniformity, domination or convergence. Despite differences among them, they are united by strategic interests: the desire to reform the basics of world politics and economics, independence in politics, primacy of international law, support for the role of the United Nations as the guarantor of international security, maximum use of the possibilities of complementarity of national economies and cooperation in society’s modernization. Contradictions among its members, lack of coordination, and unrefined mechanisms for adopting and implementing joint decisions are secondary matters, although these factors can undermine this spectacular project. It is often feared that the BRICS might become a replica of a Cold ­War– era “anti-Western alliance” or, at best, a replica of the Non-Aligned Movement. However, from the very beginning, the BRICS was not an association against, but was conceived and realized as an association for—above all, for more just regulating of the global financial and economic system. However, the BRICS has been regarded with suspicion by the United States and the West. As Vadim Lukov, Russia’s BRICS sous sherpa, said in 2014 in the wake of the Crimea-related crisis in Russia’s relations with the West, there was pressure on Russia and the entire group to prevent its consolidation (RIA Novotni 2015). He said that western countries, from the very beginning, had regarded the BRICS as an undesirable and dangerous rival and wanted to exert pressure to prove its unviability and emphasize the contradictions among its members. “Conspiralogists” even suspected that the political crisis in Brazil and Dilma Rousseff’s impeachment in 2016 were engineered by the United States, inter alia, in order to rip Brazil from the BRICS (Escobar 2016). Similar suspicion lingers in connection with the ongoing political crisis in South Africa. At the same time, some critics in the BRICS argue that too much compromise with the developed world could exclude the ability to set the agenda in the future.

194  Georgy Toloraya BRICS political leaders still shy away from these questions. There is no definite leader in the BRICS (China does not wish to assume this role, although during its BRICS presidency in 2017 Beijing began to reconsider the BRICS as a formidable lever for promoting Chinese global instruments). The BRICS will likely go a long way to search for a basic compromise within the framework of the existing global system. In such a deal, advanced countries should provide for redistributing the roles and ceding some rights and privileges in exchange for the prospects of harmonious global development and the abolition of a threat of conflict. Some scholars go as far as to suggest that a new triad of global governance is forming with the three pillars of the Group of Seven/Eight, the G20 and the BRICS replacing the former “super triads” of economic governance (the economic triad of the United States, Europe and Japan, and the institutional triad of the International Monetary Fund [IMF], the World Bank and the WTO) based on network diplomacy (Rewizorski 2015).

Strategic goals in global governance There are two approaches to BRICS strategy and goals in global governance. The first is to quantitatively strengthen the positions of the BRICS countries based on their previously acquired place in the existing global economic and financial system. The second is to create parallel structures in international governance. The BRICS, in general, is against ignoring or decreasing the role of the existing institutions of global management, such as the UN, the IMF and the WTO. Referring to the need to reform the UN, which in recent years has increasingly been criticized for failing to confront global challenges quickly and effectively, the Ufa Summit in 2015 noted the need to make the organization more representative and responsive to security threats (BRICS 2015b). It recognized the need to expand the permanent membership of the United Nations Security Council (UNSC), which was especially important for India and Brazil. However, it is true that the current five permanent members are reluctant to cede any authority to the newcomers, which has become a source of tension inside the BRICS. Russia and China, advocating the centrality of the UN, face a dilemma. Without reform, the UN would slide further down into irrelevance, as its decision-making and implementing processes are outdated and do not reflect the current balance of power. But any reform of the UNSC, even by bringing in BRICS partners such as India and ­Brazil, would undermine China’s and Russia’s positions as permanent UNSC members. Moreover, China is especially wary of increasing the status of India, its long-term rival, although Russia holds a more nuanced position. For example, Russian experts suggest compromise, such as bringing in India and ­Brazil as permanent members with a moratorium on veto power for 10 years.

The BRICS for better global governance  195 The efforts of the BRICS to ensure a more prominent place in the existing governance system cannot be underestimated. For example, after years of procrastination by the U.S. Congress, in 2015 the quotas of BRICS members in the IMF reached 14.7 percent (China increased to 6.4 percent, Russia and India to 2.7 percent, Brazil to 2.3 percent and South Africa to 0.6 percent). This change could allow the BRICS to block an IMF decision for the first time, with the support of other small countries (BRICS Panorama 2015). Russian scholars calculated that the “just” quota of the BRICS should be about 24 percent (Europe’s should be 20 percent, down from the current 30 percent, and the United States should have about 21 percent). Chinese experts consider IMF reform one of the “five major tasks” with increasing quotas at the core, as well as appointing BRICS representatives to governing positions (MIA Russia Today 2016). However, one should not be overoptimistic. Without changing the basic modus operandi of the international governance system and its bodies, there is a danger that western countries will use their experience, personnel and soft power to remain the centre of agenda setting and, in the long run, push through decisions that benefit them. Many in the developing world observe that the recommendations of international financial bodies do not always lead to welfare, but do frequently lead to the consolidation of subordinate positions of these countries in the international division of labour. A common and consistent recipe is needed, which, however, does not fit current institutions of global governance—for example, the dissatisfaction of developing countries with the trade regimes was clearly demonstrated at the WTO ministerial conference in Nairobi in 2015 (Persio 2015). In response, the West is creating new institutions under its control, which may become the “nucleus” of new international regimes. The U.S. administration under Barack Obama concentrated on creating the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership, and the Trade in Services Agreement. These “global nooses” would have actually suffocated the G20 as a mechanism for compromise solutions regarding the global economy. In fact, a select group of countries would dictate the rules to the rest of the world. If China, with other developing countries, tries to create an alternative (say, on the basis of the Regional Comprehensive ­Economic Partnership or the Silk Road Economic Belt), these groupings risk becoming secondary and would be based on less progressive parameters. They may result in conflicts. Moreover, the emergence of such closed partnerships may signal the eventual decline of the system of universally accepted trade and investment rules for the benefit of advanced countries and corporations (WikiLeaks 2016). Although the subsequent U.S. administration under Donald Trump did not support this grand design, the danger of such a development, attractive to transnational corporations, remains potent.

196  Georgy Toloraya Nonetheless, there are limits to increasing the role of the BRICS in decision making within these institutions. Another option is to impose new rules of the game or corresponding “mirror” structures that parallel existing ones or are separate from others. However, the BRICS countries so far have neither the desire nor the will even to formulate such new rules, let alone the opportunities to implement such radical changes. But if the BRICS abstains from fulfilling this mission, it would be threatened with stagnation and the inertia in effecting any transformation. Recently, there has been more experimenting with an alternative governance system. The adherence to universalism does not preclude the creation of the BRICS structures that mirror existing ones. The first such institutions were the New Development Bank (NDB) and the Contingent Reserve ­Arrangement (CRA), as decided by the leaders at the BRICS summit in Fortaleza in 2014. The NDB began operating after the Ufa Summit in 2015. ­According to Russian president Vladimir Putin, creating a new development bank and pool of foreign exchange reserves would enable the BRICS countries to coordinate macroeconomic policies much more successfully (Russia Today 2014). It is important that the NDB work in areas where the western financial institutions do not want to work and consider BRICS countries’ needs rather than only profitability. However, the NDB’s initial activities were criticized for a lack of strategy and insufficient transparency. The creation of the China-dominated Asian Infrastructure Investment Bank (AIIB), which started operating in January 2016, undermined the NDB’s primacy as an alternative financial global management institution: the AIIB is often cited as a concern for the United States (Weiser 2015). The second reason for the BRICS’s existence, although much less publicly known than the task of increasing the role of emerging countries in global affairs, is to find a new development paradigm. The group’s basic unifying goal is to suggest new ways for the socioeconomic development of countries facing rising challenges. Its mission is to develop a new, more egalitarian model than the liberal market-based model. In all probability, it should remain market based with a coordination mechanism based on the “invisible hand,” although with bigger roles for the state and central regulator to solve not only profitability issues but also major challenges confronting society. This model should also take into account the environmental imperatives, preventive excessive consumerism and waste of resources. Such a model could be based on new technologies—for example, 3D printing could mean a shift to totally new modes of mass production, distribution and marketing. The information and communication technology (ICT) of tomorrow would also become a basis for that new economy. In recent years, the applicability of sustainable development to the needs of economic growth in rising countries has become increasingly important. The 2015 Paris climate conference revealed an increasing schism between developed and developing countries as well as between corporate and societal interests on these issues (Harvey 2015). However, BRICS countries are also not all on the same page with regard to environmental concerns and related global initiatives.

The BRICS for better global governance  197 The disastrous environmental situation in countries such as China and India underlines the special importance of these efforts. Promoting a green economy often means curbing economic growth, which the rising countries consider unfair. This contradiction was particularly evident at the Paris climate conference. The criteria for reducing emissions specified in the outcome document were different for developed and developing countries, but the mechanisms were not clear, and the prospects for implementation remained obscure (Persio 2015). Some countries stated that the document shifted the responsibility for regulating greenhouse gas emissions from rich countries to developing countries (Khlyustova et al. 2015). So if the BRICS is to succeed in formulating a new development model, in the long run it will have much more impact on what shape the global economy would take and how it will be governed.

Widening the agenda Today, the BRICS agenda contains almost three dozen tracks of mutual cooperation apart from politics and economics, such as security, environment, space research, energy, science and technology, transport, health, education, cultural cooperation, the internet, and the use of so-called “common space”—space, water and world oceans. The BRICS would like to be in the vanguard of innovative development: its member countries pose the questions of transfer to a new technological structure, actively cooperate in science and education, and carry on joint research involving leading western specialists. The scope of cooperation is getting wider. In 2009, the first summit in Yekaterinburg ended with a declaration of 10 points related to financial and economic issues—basically, how to overcome the financial and economic crisis that had started in 2008 (BRIC 2009). The Ufa Declaration in 2015 already contained 75 points—and, in fact, as a declaration of the heads of states representing more than 40 percent of humanity, introduced a new concept for world development (BRICS 2015b). This concept was supported by important Eurasian countries because Russia had included representatives from so-called outreach countries such as Iran, Pakistan and C ­ entral Asian countries (by simultaneously holding meetings of the Shanghai C ­ ooperation Organisation [SCO], the Collective Security Treaty Organization and the Eurasian Union with India and Pakistan continuing the process of joining SCO in 2016) (Andreeva 2016). Thus, Ufa became a geopolitical landmark for setting up a new system of security and cooperation. The concept of broadening the outreach format beyond geographically adjacent areas was developed further by China, which proposed the “BRICS+” idea to include not only neighbouring countries, but also global partners, probably on a permanent basis.1 As the leaders of the five countries noted in their speeches, the agenda was the most extensive in the history of the summits and covered a wide range of issues, from international security and fighting terrorism to the cooperation

198  Georgy Toloraya in specific areas of economic and humanitarian spheres. The 50-page Ufa Declaration signed by the BRICS leaders covered many issues, ranging from the Syrian conflict and regional conflicts to ecology, education and health. BRICS leaders again stressed the importance of reforming the IMF, another international organization created at the end of World War II. The claims are the same as for other international institutions: the underrepresentation of emerging powers, lobbying the United States and its allies’ interests. The Ufa Declaration touched on many conflicts around the world, specifically mentioning the so-called Islamic State terrorist group. It emphasized the need to deal effectively with this organization, which represents a threat to international security. Subsequent events after the summit—the involvement of Russian air and space forces in the conflict in Syria, terrorist attacks in Egypt, France and other countries—confirmed the need for decisive, tough and concerted action against terrorists and their accomplices. The leaders of the five states confirmed their readiness to continue cooperating through the NDB and the CRA. The NDB approved its first investment project in early 2016. BRICS leaders also endorsed a proposal for the new bank to cooperate closely with the existing financial institutions, in particular the AIIB. The declaration noted the willingness of the BRICS countries to fight the threat of drugs and other forms of international crime. The leaders reaffirmed their readiness to cooperate in the field of space, making it a common area of research. They reiterated their commitment to strengthen the role of the G20 as the main forum for international cooperation. The Strategy for BRICS ­Economic Partnership says that the BRICS countries will continue to participate actively in the G20 and exchange views to strengthen the international financial architecture and sustainable and balanced growth (BRICS 2015a). The BRICS also plans to continue coordinating preparatory ­meetings on the eve of G20 activities. The BRICS called for opposition to all forms of trade protectionism and for support for the WTO. The strategy says that the BRICS countries seek to deepen cooperation, to expand and diversify their participation in global trade, and to support the completion of the Doha Round of trade negotiations (BRICS 2015a). Many critics hoped that the Ufa Summit would signal a split, because for the first time in quite a short history, the summit gathered in a country that was in a state of major conflict with the West. Russia found itself in tense confrontation with the United States and the European Union in 2015; China was in a state of latent confrontation, with military and political tensions with the United States increasing. In addition, the India-China contradictions were not disappearing. India was conducting a multi-vector policy, playing its own game without objecting to simultaneously friendly relations with the United States and the BRICS to get the maximum

The BRICS for better global governance  199 advantage. Brazil had no reason to quarrel with the United States because of Russia. South Africa was more associated with the issue of development and overcoming poverty on the African continent than with solutions to global problems. This was a new situation and many “well-wishers” hoped that India, Brazil and South Africa would try to keep their distance from the “Northern wing” of the BRICS. However, the BRICS yet again showed consolidation on major issues.

Russia and the BRICS: goals and tasks Russia was one of the initiators of the creation of the BRICS. The first summit took place in Yekaterinburg in 2009, not long after Putin’s famous speech in Munich in 2007 in which he strongly criticized “unipolarity.” He stressed: The combined GDP [gross domestic product] measured in purchasing power parity of countries such as India and China is already greater than that of the United States. And a similar calculation with the GDP of the BRIC countries — Brazil, Russia, India and China — surpasses the cumulative GDP of the EU. And according to experts this gap will only increase in the future. There is no reason to doubt that the economic potential of the new centres of global economic growth will inevitably be converted into political influence and will strengthen multipolarity. (Putin 2007) Small wonder that the BRICS very soon acquired great significance in ­Russia’s foreign policy strategy. Because of the confrontation with the West and imposed sanctions, Russia began to rely on Asia and the BRICS to a greater extent (TASS 2015). For the BRICS, Russia was a bridge leading to the West and East, and to the North and South. Participation in the BRICS could enable it not to feel opposed to the existing world system, but, on the contrary, to present new opportunities. Russia must use these opportunities with a view to strengthening its global positions and lessening its confrontation with the West. In an article on the eve of the 2012 elections, Putin (2012) said that Russia would continue to place a high priority on its interaction with its BRICS partners and that this unique structure, created in 2006, most vividly symbolized the transition from unipolarity to a more equitable world order. Putin approved the concept of participation in 2013 that emphasized the BRICS as “one of the most important geopolitical events since the beginning of the new century” that had rapidly become “a significant factor in global policy” (quoted in Toloraya 2014). The BRICS reflects polycentric international relations, as a new model for global relations that transcends old East–West/North–South polarities. The Concept of the Russian Federation’s Presidency in the BRICS in 2015–2016 indicated that strengthening the forum was one of Russia’s foreign policy priorities (Russia’s BRICS Presidency 2014). One of its objectives

200  Georgy Toloraya was the gradual transformation of the BRICS from a dialogue forum into a full-fledged mechanism for strategic and current interaction on key political and economic problems. Russia wanted to bolster its position in the BRICS and contribute to improving and strengthening the prestige of this organization in the international arena, as well as to help reform the international monetary system, contribute to the creation of the BRICS’s own financial mechanisms and develop new activities for the group. Better coordination of the world’s financial structures in the context of the G20 and IMF reform were priorities. The creation of national payment systems and rating mechanism within the BRICS format was also of interest. Cooperation with the BRICS countries was important for the development of ­Russian provinces, especially for Siberia and the far eastern region. Today, the efforts of the BRICS countries are aimed at giving the international monetary system a more just, stable and efficient character with a view to creating conditions to overcome the global crisis and to develop the economy and financial systems of the group’s member states. Russia is also interested in promoting a dialogue and, if possible, coordinating positions on strategic stability, international and regional security, the nonproliferation of weapons of mass destruction, settlement of regional conflicts, and the maintenance of regional stability. The concept notes that work continue to strengthen the UN’s central role in ensuring global stability and preserving and consolidating the UNSC’s role. It is necessary for a country to find its niche in cooperation in economic sectors. For example, it would be in Russia’s interests to expand trade in aviation, energy engineering, metallurgy, electronic industry, transport engineering and ICT. Although Russia’s strategic goal in the BRICS is the creation of a fullscale mechanism for strategic cooperation for increasing BRICS clout in global governance, not all members share this point of view equally. There are some concerns among the countries in the “southern wing.” However, Russia considers cooperation within the BRICS a foreign policy priority and intends to strengthen its position in the group and improve its authority in the international arena. Russia’s 2015 presidency of the BRICS brought that policy to its zenith. In a speech to the Federal Assembly, Putin (2015) noted that in a difficult political and economic situation, Russia has allies and partners, particularly the BRICS countries. Russia continued to play a proactive role in the BRICS after the end of its presidency. As Rajiv Bhatia (2016) notes, “it is the old RIC (Russia, India, and China) that may guide and shape the destiny of the new BRICS.” He concludes: Although the BRICS caravan is passing through difficult times, its major leaders appear determined to continue their journey as in the/their collective interest. Indeed, the world is likely to hear more, and not less, about BRICS in the foreseeable future.

The BRICS for better global governance  201

BRICS expert dimension—on the lookout for a new place in global governance From the very moment of its creation, the BRICS has always been a kind of an intellectual product. Everything began with a purely intellectual act— the invention of the term itself by Jim O’Neill (2001). The role of research and expertise in the BRICS is noteworthy—it might be one of the few international associations where a joint research mechanism in fact preceded the creation of official structures. In each member country, there is a national research coordination centre uniting the national expert community. In March 2013, a pentalateral meeting of representatives of the BRICS expert centres was held in Durban, where a declaration on the organization of the BRICS Think Tanks Council (BTTC) was signed (BTTC 2013). The issues of the role and future strategy of the BRICS in global governance occupy an important place in the research on the group. In the joint research undertaken in 2014–15, the BTTC focused on five pillars, namely: • • • • •

the promotion of cooperation for economic growth and development; the maintenance of peace and security; social justice, sustainable development and quality of life; political and economic governance; the achievement of progress by sharing knowledge and innovation.

The BTTC has organized international expert consultations and round ­tables and has become an international scientific research network exerting a great influence on the evolution and coordination of strategy. Academic forums are held annually on the eve of each BRICS summit in the presiding country, with a view to find a consolidated position on the key challenges of cooperation. Leading experts of all five states take part. The decisions of these forums and their final documents largely contribute to broadening high-level discussions and developing and deepening the BRICS agenda. The seventh BRICS Academic Forum, attended by more than 160 delegates from the five countries, was held on May 21–23, by the Russian ­National Committee on the BRICS Research, ahead of the Ufa Summit. The forum approved recommendations for the BRICS leaders on the group’s further growth and advancement. The final document, presented to the leaders at Ufa in 2015, was named Towards a Long-Term Strategy for BRICS (BTTC 2015). It contains a separate chapter on the strategy of BRICS in global governance. The joint document stresses: In terms of economic cooperation and growth, BRICS countries should fully participate in the formulation of international financial standards and rules, make the best use of international financial reforming achievements and implement international standards to achieve internal reforms and to improve their own robust financial standards.

202  Georgy Toloraya To be able to achieve these goals, BRICS countries consider two conditions fundamental: reform of the governance of multilateral institutions, and the establishment of international peace and security (BTTC 2015, p. 12). Among the chief issues are reforming the Bretton Woods institutions (especially the IMF and the World Bank) and the UN (especially the UNSC) and creating a new configuration of the WTO and other international organizations (such as dealing with climate change) to increase the BRICS countries role. The experts’ recommendations include: • • • •

• • • •

•

The BRICS should do work with other economies that are part of the G20 to align policies and positions for an optimal outcome. BRICS central banks should tailor their regulatory frameworks and coordinate closely to engage in the global regulatory agenda-setting process. The BRICS should promote the inclusion of the currencies of emerging market economies and developing countries that meet the current criteria for the IMF’s special drawing rights in its currency basket. The BRICS should set an independent rating agency to prevent a build-up of unsustainable corporate debt levels, maintain a check on banking assets, mitigate the negative effects of the largely unregulated shadow banking sector and monitor the performance of the global economy. The BRICS should conduct the value-laden conditionality discourse through collective resolve and close collaboration complementing the international safety net with initiatives such as the CRA. The BRICS should develop a long-term strategy provision for concessional lending to respond to the development needs of least developed countries (LDCs). The BRICS should further its cross-region monetary cooperation and enhance the CRA’s effectiveness, supplementing global financial safety nets. The BRICS should coordinate interests on climate adaptation at the UN Framework Convention on Climate Change. The technology mechanism established at the 16th Conference of the Parties meeting in ­Cancun should be leveraged to enhance action on technology development and transfer, and a commensurate share of the resources of the Green Climate Fund should be channelled toward adaptation activities. The BRICS should coordinate its position within the WTO to ­w ithstand pressure from developed countries on the basis of existing and projected achievements and domestic viability. Duty-free, quota-free ­market access is a crucial measure to help LDCs leverage the opportunities ­offered by the multilateral trading regime.

The BRICS for better global governance  203 •

The BRICS should commit to having a stronger and rules-based multilateral trading system at the heart of world trade governance and to bring more transparency to regional agreements at the WTO (BTTC 2015).

Prospects for the BRICS To increase the role of the BRICS in global governance, the level of interaction within the group must also increase. For this purpose, it is advisable to set up managerial and coordinating bodies, at least a technical secretariat. Not all the BRICS members are ready for this, but this step may proceed at different pace in different sectors. Changes of both substantive and institutional character are needed for the group’s further development. Substantive changes include not only broadening the sphere of cooperation, but also deepening it, shifting from declarations and programs to real action. At the next stage, the BRICS can formulate its own global governance agenda and could endorse plans and road maps that could pursue certain aims, for example: • • • • • • • •

creating a permanent mechanism for foreign policy consultations; preparing a BRICS declaration on peace and cooperation with a possible future adoption of a basic treaty of peace, friendship and cooperation founded on UN principles; reforming the UN with the promotion of collective BRICS voice and a mechanism monitor implementation; creating a permanent BRICS secretariat and other coordinating bodies; completing IMF reform, including the election of BRICS representatives to leadership posts; achieving a greater role for BRICS financial institutions and their interaction with international financial organizations; respecting trade regimes based on the WTO, to prevent the creation of isolated, nontransparent trade and economic areas; acquiring a prominent role as a major stakeholder in internet governance.

Institutionalization faces considerable difficulties because the BRICS countries resist supranational bureaucracy. However, there is a need for a coordination mechanism that could systematically control the implementation of decisions and follow up on their execution. The current mechanisms of summits and interministerial consultations are unable to fulfil those functions on a daily basis. The virtual secretariat that now exists only serves as an information exchange. BRICS sectoral bodies with global outreach are already appearing spontaneously. For example, after discussions in Moscow in October 2015 on the creation of a BRICS energy association or energy agency (the idea was expressed by Russia in 2014), the process entered the registration stage

204  Georgy Toloraya (Toloraya 2015; Shahvaliev 2016). After their first meeting in July 2015 in Moscow, representatives of BRICS science and technology funding agencies decided to implement the BRICS STI Framework for science, technology and innovation for financing multilateral joint research projects, projects in technology commercialization and innovation projects (National Committee on BRICS Research 2015a). They also agreed to create the BRICS research and innovation networking platforms, to provide a more thorough and coordinated approach within the BRICS scientific community and to attract high-tech industry enterprise. They also decided to create the BRICS Network University. Sectoral coordination centres appear as “initiatives from below,” which suggests the unification of such activity in the interest of a common approach (National Committee on BRICS Research 2015b). There are indeed disagreements on some issues among the BRICS countries and sometimes their interests do not coincide. It is necessary to ensure coordination on a systematic basis, to coordinate plans for implementing agreements and monitoring that implementation on a global scale, including interactions with other countries. The BRICS is not a supranational body, to which all the five countries are allergic. However, some kind of structure that would allow agreements to be registered (and ensure that all countries understand them uniformly) and would monitor their implementation seems necessary. One possibility is the creation of a multilateral intergovernmental commission on economic, scientific and technical cooperation headed by deputy prime ministers. It should direct corresponding subcommissions and working groups meeting regularly. It would bring together all the many interministerial tracks, which today are often uncoordinated. It is also possible to create the basis of a permanent technical secretariat for the BRICS, although members remain wary of too much formalization and bureaucratization. The intercivilizational potential for cooperation among the BRICS members is only becoming evident. Broadening the BRICS by bringing in new members is not currently on the agenda, and, in any case, the number cannot be big given that the BRICS unites prominent powers that are influential in their respective regional context. Instead, a system of observers and dialogue partners should be created, formalizing the spontaneously formed outreach practice of inviting regional countries at each rotating BRICS summit. The BRICS has become one of the important features of the emerging polycentric world. It is thus mostly a political project, not a purely economic global project. The more economic difficulties its members experience, the more—contrary to popular opinion—those members need to coordinate their policies so that the synergy of their combined efforts could help solve problems that would be difficult to tackle single-handedly. For the millennia of human history, the method of rebalancing power between the outgoing and incoming centres of power has been war. The current hostilities in Eurasia, the Middle East and Asia, as well as the rising wave of aggressive nationalism giving birth to separatism, terrorism and

The BRICS for better global governance  205 religious extremism (which is, in fact, a form of armed struggle of different societies for political purposes), may signal that such a danger exists now as well. However, in the twenty-first century, given the existence of weapons of mass destruction, such a scenario is absolutely unacceptable, for there will be no victors in World War III. It is thus necessary to look for compromise, using negotiation mechanisms and diplomatic possibilities—in other words, to exercise the function of effective governance. The BRICS might become a mechanism of such redistribution of roles in the global village. The degree of importance of BRICS in the process of global changes is far from being determined, but it is nonetheless a phenomenon that is here to stay.

Note 1 At the meeting of the BRICS leaders’ personal representatives in February 2017, Yang Jiechi (2017), China’s state councillor, suggested that we should carry out more outreach dialogue to benefit more parties with our cooperation, foster a “BRICS+” model of open cooperation, and set up a more broad-based South-South cooperation platform for the common development of emerging market economies and developing countries.

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The BRICS for better global governance  207 Putin, Vladimir (2015). “Presidential Address to the Federal Assembly.” Kremlin, 3 December. http://en.kremlin.ru/events/president/news/50864 (September 2017). Rewizorski, Marek (2015). “G7/8 – G20 – BRICS: A New Triad in Global Governance?” International Organisations Research Journal 10(4): 29–48. https://iorj.hse. ru/en/2015-10-4/170084358.html (September 2017). RIA Novotni (2015). “Lukov: Zapad prodolzhayet davit’ na BRIKS po reforme MVF i teme Ukrainy.” [“West Continues to Put Pressure on the BRICS for IMF Reform and the Issue of Ukraine.”] 25 May. http://ria.ru/world/20150325/1054360737.­html# ixzz3x2YDWpFo (September 2017). Russia Today (2014). “BRICS Establish $100bn Bank and Currency Pool to Cut Out Western Dominance.” 15 July. https://on.rt.com/afyr6y (September 2017). Russia’s BRICS Presidency (2014). “Concept of the Russian Federation’s Presidency in BRICS in 2015–2016.” Moscow, http://en.brics2015.ru/russia_and_ brics/20150301/19483.html (September 2017). Shahvaliev, Nail (2016). “Glava SNR: energeticheskaya assotsiatsiya stran BRIKS registriruyetsya, v neye voydet ‘Tatneft’.” [“BRICS Energy Association Would Include ‘Tatneft’.”] TASS, 24 May. http://tass.ru/ekonomika/3308413 (September 2017). Sharma, Ruchir (2012). “Broken BRICs: Why the Rest Stopped Rising.” Foreign Affairs 91(6): 2–7. www.foreignaffairs.com/articles/brazil/2012-10-22/broken-brics (September 2017). Stuenkel, Oliver (2015). The BRICS and the Future of Global Order. Lanham: ­Lexington Books. TASS (2015). “BRICS Countries Support Russia in Conditions of Western Sanctions.” 1 April. http://tass.com/russia/786301 (September 2017). Toloraya, Georgy (2014). “BRICS: Future Checkpoints.” Russia in Global Affairs, 2 July. http://eng.globalaffairs.ru/book/BRICS-Future-Checkpoints-16761 (September 2017). Toloraya, Georgy (2015). “Vopros o sozdanii energeticheskogo agentstva stran BRIKS nazrel.” [“The Question of Establishing a BRICS Energy Agency Is Imminent.”] National Committee on BRICS Research, Moscow, 19 November. http://nkibrics.ru/posts/show/564df951627269490c2a0000 (September 2017). Weiser, Daniel (2015). “Does the US Fear the Asian Infrastructure Investment Bank?” Investopedia, 9 April. www.investopedia.com/articles/investing/040915/ does-us-fear-asian-infrastructure-investment-bank.asp (September 2017). WikiLeaks (2016). “May 2016 TiSA Publication.” 25 May. https://wikileaks.org/­ tisa/#May%202016%20TiSA%20Publication (September 2017). Yang, Jiechi (2017). “Remarks by H.E. Yang Jiechi State Councilor of the People’s Republic of China at the Opening Ceremony of 2017 First BRICS Sherpa Meeting.” Nanjing, 24 February. https://brics2017.org/English/Headlines/201702/t20170224_ 1456.html (September 2017).

11 The BRICS agenda in the Asia-Pacific region Haibin Niu

The BRIC group of Brazil, Russia, India and China—before South Africa was included in 2011 to make the BRICS—was originally an investmentrelated concept created by Jim O’Neill (2001) to refer to these major emerging economies. From then on, the term “BRICs” was widely used to recognize the shift of international economic power from the advanced economies to major developing ones, especially China and India. Given the perception of these countries as emerging economies, the international community began to think of the role of the BRICs in global governance from an economic perspective. For example, the Group of Eight Plus Five (G8+5) processes explored mainly the potential for economic cooperation with the five major developing countries—China, India, Brazil, Mexico and South Africa—on sustainable development. The upgrading of the Group of 20 (G20) ministerial meetings to leader-level summits in 2008 was mainly to deal with the global financial crisis by mobilizing the resources and wisdom of major emerging economies, which included the BRICS countries. Noneconomic factors played an important role in influencing global perceptions of these major emerging economies when they were involved in global governance. The G8+5 institutionalization process under the leadership of Germany ended, and any formal enlargement of the G8 was not a realistic political option, as the United States and Japan were against enlargement, with the United Kingdom and France actively in favour, and Italy, Germany and Canada undecided (Navarrete 2008). However, the G8+5 process promoted cooperation among major developing countries and generated the intention of building an equal partnership because they all felt they were not treated as equals when they were invited to attend the G8 summits. Against the background of the 2008 global financial crisis, the first BRIC summit in Russia signified the beginning of the collective use of the group’s economic power globally. Most of the BRICS members were well known as regional players rather than global ones before the creation of the BRICS and its deep involvement in the global economic agenda. The BRICS is increasingly examined as a club with potential to influence international order (Stuenkel 2015a). As Ian Taylor (2016, 64) writes, “sharing costs and getting the contender states on board in

The BRICS agenda in the Asia-Pacific region  209 relation to the extant world order is at the heart of the core’s American approach to the BRICS.” China’s international role was mainly found in its responsible performance in helping regional countries dealing with the 1997–99 Asian financial crisis. South Africa’s membership was mostly because of its regional influence rather than as a globally influential emerging economy. It is easy to understand why the 2013 and 2014 BRICS summits in South A ­ frica and Brazil invited African and South American leaders, respectively, to engage in dialogue with BRICS leaders. Russia invited its co-members of the Eurasian Economic Union and partners from the ­Shanghai Cooperation ­Organisation (SCO) to the BRICS summit in Ufa in 2015. Such initiatives involving dialogue between the BRICS leaders and their regional counterparts reflected the intention of the host country to strengthen its regional leadership through its BRICS membership. However, none of the Asian members did so when they hosted their summits until Russia’s presidency. The reasons for this lack of a regional engagement approach to Asia are worthy of exploration, considering the current importance of the region. This chapter explores the potential role of the BRICS in Asia-Pacific affairs. Given the increasing dynamics of the Asia-Pacific region on the global stage, it is time for a common Asia-Pacific agenda for the BRICS. Both China and India are key players in Asia’s future growth, and Russia is actively involved in regional security in the Middle East. All BRICS countries are founding members of the Asian Infrastructure Investment Bank (AIIB), which shows their financial commitment to the region’s growth. The headquarters of the New Development Bank (NDB), created by the BRICS countries, is in Shanghai. Plans for economic cooperation initiated by BRICS members, including China’s One Belt One Road initiative, are reshaping the economic map of the region by making it more balanced and dynamic. All this progress clearly indicates an increasingly strong role for the BRICS in the Asia-Pacific region.

Asia’s weight within the BRICS One prominent feature of the BRICS is that three of its five members are from Asia: China, India and Russia. This reflects Asia’s dynamic in the current international system. Both Russia and China are permanent members of the United Nations Security Council (UNSC), and India is a strong candidate for a seat. The international role of China and India as rising powers has been widely discussed by international relations scholars in the past decade (see Prashad 2011; Xiao 2013; Li and Shaw 2014). China and India are currently performing economically better than most emerging economies. Global economic weight will continue to shift toward China and India if these two countries continue their domestic economic reforms. By 2030, Asia will surpass the combined power of North America and Europe in economic might, population size and military spending; China and India

210  Haibin Niu will increasingly dictate the terms of global governance (Manuel 2016, 2–3). The importance was also reflected in the organization of the NDB with its headquarters in China and first president from India. Therefore, the BRICS is useful for observers to examine the intention and policy choices of these Asian rising powers in dealing with regional and global issues. Although the BRICS focused on global economic governance by dealing with the post-2008 global financial crisis and promoting the reform of decision-making structures of established international financial institutions (IFIs), including the International Monetary Fund and World Bank, it did not explicitly include Asian economic affairs on its agenda because the 2008 financial crises happened mainly in developed countries. Russia, Brazil and South Africa have experienced several economic growth challenges in recent years because of their strong dependence on the energy sector and raw materials exports. There are growing pessimistic views on the future of the BRICS based on its members’ domestic challenges, especially the economic growth difficulties. Some research reports claim that the BRICS seems like a sinking ship, even as other global economies continue to recover and grow (Degaut 2015). Given the uncertain domestic situations in Brazil, the economic performance of the Asian BRICS members is increasingly important for the group’s international profile. One concern is whether the change in the global balance of power will create a new world order that replaces the existing one. There is still debate over whether such transformations represent only a functional redistribution of comparative advantage within the existing world order or indicate more serious structural changes (Christensen and Li 2016a, 3). To examine this concern, it is important to assess the international issues in Asia that need to be solved and how the new international institutions such as AIIB and NDB work. In addition to economic opportunities, there are mounting security challenges in broader Asia, including the nuclear crises in Iran and North Korea, maritime security, territorial disputes and the rise of terrorism in the Middle East. The AIIB and NDB were not created to challenge the existing Bretton Woods system, because they focus on infrastructure and sustainable development, and identify their role as additional or complementary to the existing institutions. However, these new IFIs do have some competitive aspects and reflect some shortcomings in the established institutions. To what extent the existing international order is being reshaped by emerging powers depends on its ability to accommodate multiple players and to deal with emerging challenges. Even though Asian economic affairs were not included, the six BRICS declarations up to 2014 did show some concerns for Asian security. It is necessary to clarify that Asia here includes East Asia, West Asia, Central Asia and South Asia, because scholars sometimes focus only on East Asia when talking about the region. Most of the issues relate to security in the greater Middle East, namely West Asia and Central Asia. Since the beginning, BRICS countries have expressed concern about security and security topics expanded to include Iran’s nuclear projects, the postwar construction

The BRICS agenda in the Asia-Pacific region  211 of Iraq and Afghanistan, the situation in Syria, and so on. Based on the growing dependence of both China and India on oil supply from the region, economic interests are increasingly important for understanding the BRICS’s concerns about the Middle East. China finds itself forced to become a “reluctant imperialist,” a guarantor of peace and stability in those war-ridden regions such as the Middle East, where China depends heavily on resources and materials (Li 2016, 47). Terrorism also caught the attention of the BRICS from the first summit hosted by Russia in 2009. Terrorist attacks in Russia and India were mentioned in summit documents in 2010. BRICS leaders, when they gathered in China in 2011, also showed their support for disaster relief such as the earthquake and tsunami in Japan earlier that year. To some extent, relations among Asian BRICS members are key to building a stronger role in the security area. The regional role played by the Asian BRICS members and their geopolitical ambitions is also central (Degaut 2015). Regional rivalries are important in the attitudes of Russia and India toward China’s One Belt One Road, which covers Central Asia and South Asia. India’s bid to join the Nuclear Suppliers Group suffered a setback in 2016, when China, among others, insisted it sign the Nuclear Non-­Proliferation Treaty. China’s increasing economic and strategic influence in Asia is also a concern for India and Russia. India’s willingness to build a strategic partnership with the United States is mostly because India is equally worried about China (see Manuel 2016). Chinese senior diplomats have noticed that China’s rise has produced some discomfort in Russia, where some people have had difficulty adjusting to the shift in relative power between China and Russia (Fu 2016, 99). After the Russian annexation of Crimea in 2014, China’s Ministry of Foreign Affairs stated unequivocally that Ukraine’s independence, sovereignty and territorial integrity should be respected. These difficulties in China’s relationship with India and Russia make it clear that security cooperation among them is difficult to achieve in the short term. Given that India, Brazil and South Africa are trying to play a larger role in the UNSC, their views on global security challenges including those in Asia are important for the rest of the world. Brazil’s influence expanded to Africa and the Middle East during Lula’s presidency through an increasing number of Brazilian diplomatic institutions and Brazil’s efforts together with Turkey to solve the Iranian nuclear crisis in 2010. Both China and India expressed concerns over energy imports from Iran when the United States tried to impose economic sanctions for a solution to the Iran nuclear  crisis. Russia and China played an important role in reaching the nuclear deal with Iran in 2015 within the framework of UNSC’s Permanent Five (P5) members plus Germany. When the BRICS leaders talk about global issues, not necessarily Asian affairs, a perspective of Asian powers that includes China, India and Russia will partially emerge on the world stage. The rising importance of Asian powers on the global stage shows the trend of an Asian agenda within the BRICS framework, although the agenda on Asian affairs remains weak.

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Why is the BRICS’s Asian agenda weak? Three key factors are responsible for Asia’s weak presence on the BRICS agenda. First, all BRICS countries have a priority to raise their global status but lack a prominent global forum to do so, which makes them focus on global issues rather than regional ones. As a forum of rising powers in the current international system, the BRICS has the potential to support its members’ global status. Even though the logic of the forum and the future of members’ cooperation are often questioned, and the five countries differ on culture, economic size and structure, political systems and, especially, values, the BRICS has achieved institutional growth in the past six years, as demonstrated by the NDB. The overlooked reason behind this institutional growth is a structural factor, namely as rising powers the BRICS members share similar systemic interests in raising their international status through enhanced cooperation on global issues. In the broader global system, BRICS members have been partners more often than opponents because they are trying to build a better international system to pursue their own interests. Although both Russia and China are permanent members of the UNSC, they are not full-fledged powers, especially in the global economic governance system. Other BRICS members do not have a prominent international platform to demonstrate their international ambition. India, Brazil and South Africa are frequently elected to the UNSC, but the BRICS is an increasingly important multilateral platform for these rising powers to practise their international role. Against this backdrop, all BRICS members value the group’s high profile to demonstrate their approach to global issues and safeguard their broadened overseas interests. One theme of BRICS summits has been to promote the reform of the current international economic governance system, which reflects the BRICS focus on building its influence at the global level rather than the regional level. A global agenda could help BRICS members both raise their international profile and overcome the differences among them. Against this backdrop, in developing an engagement process with African and South American leaders, the BRICS have focused mainly on promoting international development cooperation. Second, although all BRICS members have an interest in Asia, it is hard to build a strong common approach to Asian affairs partially because of their weak capacity and strong attachment to sovereignty. Brazil’s economic ties with Asia have been growing rapidly in the past decade. China has been Brazil’s largest trading partner since 2009. The whole region of Latin ­A merica is looking to Asia as an important economic partner represented by the establishment of the Pacific Alliance and the Forum of China and the Community of Latin American and Caribbean States (Marczak et al. 2016). Russia is trying to engage with more Asian countries other than

The BRICS agenda in the Asia-Pacific region  213 China against the backdrop of the Ukraine crisis. India’s Prime Minister Narendra Modi is turning the “Look East Policy” into “Act East Policy” (Taw 2014). China also began adjusting its periphery policy in response to the rebalance strategy of the Obama administration in the United States. It is fair to say that a stable and prosperous Asia is important for the development of all BRICS countries. All BRICS members value Asia’s stability and prosperity, which does not mean they have either the capacity to achieve them or that they have made doing so a priority. The post–Second World War order in Asia was firmly dominated by the so-called “hub and spoke” system featured by bilateral relationships between the United States and Asian countries. The international order of East Asia was described in terms of regional security ties to the United States and economic ties to China (Ikenberry 2004). That means neither China nor India had enough influence on Asia’s security affairs. ­Although the rise of China and India might be attractive in economic terms and might bring new security arrangements to the region, security initiatives launched by either China or India would not likely replace the role of the United States in the near future. In 2014, Chinese president Xi Jinping argued at the Conference on Interaction and Confidence-Building Measures in Asia (CICA) that Asian affairs should be solved by Asian people. He suggested that CICA be a platform for Asia’s security dialogue, and a new framework on regional security cooperation should be built on it. A CICA-based regional security framework would differ from an American-dominated hub-and-spoke one. However, neither China nor India, both powerful BRICS members, could build a sufficiently strong and inclusive regional security framework in the short term, given the difficult relationship among China, Korea and Japan over historical issues. Controversial territorial issues in the Indian Ocean also make it difficult to build a high level of strategic trust between China and India, which needs time to develop over the next decade. India’s membership in the SCO might be an opportunity to develop such a relationship with China. Brazil tried to solve the Iran nuclear crisis in 2010 under Lula’s presidency but failed to get support from the UNSC’s P5. Dilma Rousseff made economic cooperation and domestic issues higher priorities than foreign policy. Furthermore, neither Brazil nor South Africa has very strong influence outside its own region. Besides insufficient capacity, BRICS countries espouse a strict sovereignty concept in dealing with regional issues, which makes them either adopt strictly national positions or develop purely defensive positions (Laïdi 2012). Even though China has been Brazil’s largest trade partner since 2009, the historical ties between these two countries are very weak. In Brazil’s foreign policy strategy since 2003, relations with China were seen as particularly important at the multilateral level as a way to advance ­Brazil’s economic and political rise; however, China’s interest in Brazil focused mainly on ­bilateral economic issues (Christensen 2016, 104).

214  Haibin Niu Due either to low priority or lack of capacity, BRICS members collectively do not currently play a strong or effective role in shaping Asia’s security agenda. Third, an obvious fact is that Asia lacks the institutional achievements in regional integration similar to institutions in South America and ­A frica, which has prevented the BRICS from establishing a regional agenda on Asia. Brazil and South Africa take a greater leadership role in their respective regions than India and China do in Asia. Instead, the Association of S ­ outheast Asian Nations (ASEAN) plays the leading role in regional ­integration. There is no trend of a peaceful regional system for economic integration or an ambitious agenda for political union such as the European Union. Both Brazil and South Africa have competitors from their regions  respectively claiming regional leadership, but all countries in those regions have a consensus to develop a regional integration agenda, which is different from Asia. Russia invited Central Asian leaders to the Ufa Summit in 2015 to engage in dialogue with the BRICS leaders, and India invited the leaders of the Bay of Bengal Initiative to the Goa Summit in 2016. However, it is difficult to bring Asian leaders beyond subregional level to a BRICS summit or to develop a broad Asian agenda similar to the African agenda for discussion at the summit. Because of the dominance of the United States in regional security in Asia and the region’s diversified economic dynamics, Asian BRICS members prefer their own multilateral initiatives in shaping regional order. Most academic analysis on China’s approach to the BRICS has shown little evidence of China using the BRICS to shape order in Asia (Cheng 2015). Two key differences between regional integration in Asia and in South America and Africa are the deep distrust among Asian regional powers and the strong presence of the United States. In terms of security, China is seen as the only serious threat to India, and the expansion of its ties with India’s immediate neighbours in South Asia has been a cause for concern, so much so that India even considers China’s improvements of roads and railways in Tibet a security threat (Pedersen 2016, 123). India is also concerned about the negative aspects of a Chinese-dominated international economic system, as well as the one dominated by the United States. As Steen Fryba Christensen and Li Xing (2016b, 261) write, BRICS members continue to conduct their common relations in a largely instrumental way of promoting their own interests, and it is not clear whether the geopolitical alignment of recent years will be maintained; a self-interest strategy may not necessarily continue to be seen to be in their common economic and security interests. This instrumental way, rather than identity or value, prevents BRICS members from collaborating in long-term and institutional ways. The strong economic and security presence of the United States in Asia also reduces the potential influence of Asian BRICS members in shaping the regional order.

The BRICS agenda in the Asia-Pacific region  215

Recent dynamics of the BRICS in Asia The current absence of a strong BRICS economic and security agenda in Asia-Pacific reflects two dimensions of the group. First, the Asia-Pacific region is full of competition among major powers with weak mutual strategic trust. Second, most of the BRICS members are not used to employing their power directly in dealing with regional issues. However, BRICS members are becoming more active in Asia-Pacific affairs based on their expanding interests in the region. Brazil unexpectedly received Syrian refugees because of domestic demand for English-speaking labour and its experiences in receiving refugees from Haiti, and Russia is directly involved in anti-terrorism activities in the Middle East (Stuenkel 2015b). Xi Jinping’s visit to Iran and Saudi Arabia in 2016 raised expectations of China’s role in importing most of the region’s oil. Some strategic analysts argue that China, which has serious economic and energy interests in the Middle East but carries no political baggage, would have high stakes in reinforcing stability there (Brzezinski 2015). A meaningful Asia-Pacific agenda should reflect BRICS interests in the region and its members’ aspiration to shape the future world order. To some extent, BRICS cooperation shows a model for Asian countries for how to engage with each other. Both BRICS members and Asian countries are very diversified, and all of them need to follow a spirit of democracy, justice and reciprocity to deal in their relationship. One senior Chinese official has said that Beijing hopes that China and Russia can maintain their closer relationship in a way that will provide a safe environment for each to achieve its development goals and to support each other through mutually beneficial cooperation, which can offer a model for how major countries can manage their differences and work together in ways that strengthen the international system (Fu 2016). As a matter of fact, despite their different diplomatic styles and priorities, both Russia and China coordinate their positions well in dealing with global affairs. Negotiations for the Trans-Pacific Partnership (TPP) led by the United States raised concerns in China and India. As a response, both China and India joined the process of building the Regional Comprehensive Economic Partnership (RCEP) initiated by ASEAN. RCEP involves less economic integration than TPP, but is more adaptable to the different levels of Asian countries’ development. China, Russia and India are gradually coordinating their individual regional economic initiatives in the region. China’s One Belt One Road was resisted by both Russia and India, concerned about the initiative weakening their strategic influence in Central Asia and South Asia, respectively. With Chinese diplomacy consistently clarifying China’s intentions and increasing western economic sanctions on Russia because of the Ukraine crisis, Russia and India are becoming ever more responsive. China’s economic success has mainly been achieved by integration into the current global economy. The country is therefore committed to safeguarding the international order and the Asia-Pacific regional order, which

216  Haibin Niu is also key for the development of both Russia and India. China recognizes that the current international order is the cornerstone of global stability but it is not perfect, and this perception is shared by other BRICS members. One Belt One Road is intended to create more mutual beneficial opportunities within the current regional and international order rather than challenge it, so it can be attractive to other BRICS members to join. There is a possibility of trilateral cooperation among China, Russia and India in dealing with Asian affairs. Both China and India were founding members of the AIIB in 2014, and Russia signed in 2015. India was supported by both Russia and China as a member of the SCO, which is increasingly influential in promoting subregional economic and security cooperation, and joined in 2016. In February 2015, the foreign ministers of Russia, India and China (2015) agreed to establish a trilateral consultation mechanism on Asia-­Pacific affairs. Both China and Russia expressed their readiness to coordinate the ­Moscow-backed Eurasian Economic Union with the Chinese Silk Road Economic Belt in 2015. The Bangladesh, China, India and Myanmar Economic Corridor is another initiative to enhance subregional economic cooperation under the leadership of China and India. This recent consensus on coordinating Asian affairs among the three Asian BRICS members might help the BRICS to develop a stronger Asian agenda. These interactions add new momentum to the subregional economic integration of Central Asia, South Asia and the Far East region beyond East Asia.

A possible Asian agenda for the BRICS The BRICS countries have accumulated sizable material wealth, but they still lack enough legitimacy or soft power to achieve great power status. In the eyes of others, on practical security matters the BRICS members rarely act as a group and therefore have minimal collective leverage in multilateral forums and are particularly ineffective on military and security matters (see van Ham 2015). Unilateral behaviour usually lowers an actor’s legitimacy, and multilateral behaviour increases the actor’s legitimacy in international relations. As an important emerging forum to provide international public goods and promote reform of the international system, the BRICS faces competition from established multilateral institutions. There are many subregional or trans-regional great powers-led institutions including ASEAN, the East Asia Summit, the Asia-Pacific Economic Cooperation (APEC) ­forum, CICA and the Six-Party Talks on North Korea. The weakness of the BRICS is that it lacks legitimacy and concrete areas and projects in Asia to get involved in. The NDB is active in financing regional infrastructure construction, which overlaps with the AIIB. The Contingent Reserve Arrangement, similar to Chiang Mai Initiative, mainly serves BRICS members. The first challenge for the BRICS in building an Asian agenda is to find an area for cooperation.

The BRICS agenda in the Asia-Pacific region  217 On Asian security and institution building, although most BRICS members do not have much influence, it is possible for the group to influence the approaches and solutions by expressing their relevant views. BRICS countries support a peaceful, safe, open and cooperative information space, an inclusive and peaceful Afghanistan dominated and owned by Afghanistan people, a comprehensive and long-term solution to the Iran nuclear issue, a UN-dominated solution for the Israeli and Palestinian relationship, a pol­ itical solution to Syria’s domestic conflict, and a stable and inclusive Iraq. These views are attractive because they were born in the real situations of these countries and are based on a comprehensive security outlook, which is vital for maintaining the long-term stability and security of Asia. As influential emerging powers in the post–Second World War order, BRICS countries have a common interest in maintaining the authority of the UN Charter and building an international security order with fairness and justice. BRICS support for a regional security framework for Asia will add legitimacy to that framework. There are two examples that are helpful for understanding a common BRICS approach to members’ security concerns. The first is the BRICS’s opposition to restrictions on Russian president Vladimir Putin’s participation in the 2014 G20 summit in Australia and abstention from the UN ­General Assembly resolution criticizing the referendum on Crimea’s status in March 2014, which undermined the West’s attempts to isolate Russia (see van Ham 2015). Although China and India have their own domestic threats from separatists, their positions on the Ukraine crisis showed that realpolitik appeared to be the order of the day in the BRICS capitals (Hett and Wien 2015). The second is the BRICS position on the South China Sea dispute. As the United States rebalances its approach to Asia, China feels increased pressure in its immediate periphery from Washington’s enhanced military deployment and needs international support from its BRICS partners on its position on the South China Sea. Russia, India and China addressed this issue in their trilateral statement in April 2016 by saying they are committed to maintaining a legal order for the seas and oceans based on the principles of international law, as reflected notably in the UN Convention on the Law of Sea (UNCLOS). All related disputes should be addressed through negotiations and agreements between the parties concerned. In this regard the Ministers called for full respect of all provisions of UNCLOS, as well as the Declaration on the Conduct of Parties in the South China Sea (DOC) and the Guidelines for the implementation of the DOC. (Foreign Ministers 2016) These two cases show that BRICS members are considering their security concerns but still have a long way to reach effective actions.

218  Haibin Niu BRICS countries have shown divided positions on Russia’s initiative to create a BRICS defence council (see Degaut 2015). However, if they can reach consensus on an individual member’s security concern, that will provide valuable international legitimacy support for relevant members. There is a continued struggle for maintaining or reshaping the regional order in Asia. In his 2015 State of the Union address, U.S. president Barack Obama (2015) said that China wants to write the rules for the world’s fastestgrowing region but it is the United States that should write those rules. In fact, neither the United States nor China can write the rules for Asia; the rules should be written by all the stakeholders of the region. The BRICS might be interested in a more open and future-oriented Asia-Pacific strategy for economic cooperation or a free trade agreement. India is still not a member of APEC, but Russia and China have expressed their support for it to play a larger role. All BRICS countries share a concern of being isolated by any updated economic cooperation agreements such as the Transatlantic Trade and Investment Partnership. Furthermore, in East Asia, nearly every country considers itself to be rising, which drives disagreements to the edge of confrontation (Ischinger 2015). Against this backdrop, BRICS countries especially hope to maintain open Asia-Pacific markets and to be involved in reshaping regional economic rules. It is not an easy job for the BRICS to do so, given that no free trade agreement exists among its members and the level of their internal economic cooperation is still very low. The BRICS needs to improve its internal economic depth before it can lead Asian economic cooperation. Furthermore, economic cooperation between the BRICS countries and Asia also faces the challenge of finding a sustainable way. The 2008 global financial crisis not only affected the economic growth model of developed countries, but also challenged the economic cooperation model among BRICS countries. Even though their trade relationships include some hightech products such as aircraft and satellites, most of their trade is raw materials for manufactured goods. The greatest challenge is how China can use its high-tech and capital advantage to help the rest of the group to make economic cooperation more sustainable. Apart from China, the other BRICS members are not involved in the Asian production chains, which prevents the BRICS and Asia from developing high-level economic cooperation. The good news is that the BRICS is aiming to build a closer, more sustainable economic relationship. To deepen economic ties between the BRICS and Asia, BRICS members need to open their domestic markets to Asian capital and goods on one hand, and on the other hand invest more into Asian countries as well as accelerate the construction of mutually connected infrastructure. The NDB might be a useful tool for enhancing the economic ties between the BRICS and Asia by providing more intellectual and capital support. Besides financing infrastructure, it could prioritize sustainable projects in Asia, thus avoiding unnecessary competition with the AIIB. With the exception of Russia, it is the first time for emerging powers to act as real global players. China’s previous dominant influence was

The BRICS agenda in the Asia-Pacific region  219 mainly established in East Asia during an era that preceded the modern system based on state sovereignty. China’s Asia strategy needs to be updated to today’s situation, with strong U.S. external power in the region and an equally capable Japan. India is trying to be accepted as a true Asian power. Unlike Brazil and South Africa’s preference for using regional multilateral institutions to solve regional security issues, China and India have resorted to bilateral means to deal with security challenges. The regional influence of Brazil and South Africa has also been limited in recent history. Domestic debates about their global role, especially in Asia, are now emerging without a mature international relations theory yet to support it. Brazil’s concern for Latin America’s turning to Asia was mainly about any effect on weakening South American integration (Abdenur 2015). In this historical background and current situation, it is necessary to make more societal connections at the level of intellectuals, students and think tanks for the BRICS to build up a solid and suitable Asian policy. The BRICS Think Tank Council should develop a theme on the group’s Asian agenda. Such an Asian agenda would not be an anti–United States one. Most of the BRICS countries still value the role of the United States in maintaining the region’s stability and prosperity for various, sometimes contradictory reasons. First of all, Asia’s economic rise was cultivated in the post–­Second World War order, in which the United States played an important leading role. For China, the U.S. military alliance with both Japan and Korea provides a security guarantee that prevents both from becoming nuclear powers. India is trying to balance the rise of China by building a closer relationship with the United States. The United States will certainly play an important role in any new international order, and the BRICS countries need to cooperate with it within existing international institutions to deal with the current global agenda, which makes any anti-U.S. strategy irrational. The strategy of any Asian BRICS member should be to avoid opposing the United States, which might not only stop its rise but might also harm a peaceful transition of the regional order in Asia. However, as rising powers and new economic growth engines, Asian BRICS countries might encourage more independent mechanisms or options for solving regional issues. As rising powers, all three hope to play a larger role in dealing with Asian affairs. Chinese president Xi Jinping made special visits to Korea and Mongolia. Indian prime minister Narendra Modi made neighbouring countries and Japan a diplomatic priority. ­Russia’s engagement with North Korea shows its geopolitical ambition in Asia. The trilateral meeting of Chinese, Indian and Russian foreign ministers in Beijing in 2015 endorsed their countries’ support of an open, inclusive, indivisible and transparent security and cooperation architecture in Asia. These multiple actions clearly show a multipolar order emerging in Asia, which requires both the United States to accommodate rising powers and rising powers to assume more regional responsibilities.

220  Haibin Niu The other important aspect of Asia is its relevance to the enlargement of BRICS membership. Asia has more emerging economies than other regions. It is highly possible for the BRICS to recruit new members from Asia in the near future. BRICS members might only consider including developing countries in the region as new members based on the identity of the group as a South-South cooperation forum. It is important that the BRICS opens its door wider to include Indonesia, as well as both Korea and Mexico, given their role in promoting international development cooperation. A more diversified membership with successful development experience will increase the attractiveness of the BRICS in Asia and beyond. In the long run, a stronger NDB also needs financial support from dynamic Asian economies.

References Abdenur, Adriana (2015). “Brazil as a Rising Power: Coexistence Through Universalism.” In The BRICS and Coexistence: An Alternative Vision of World Order, Cedric De Coning, Thomas Mandrup and Liselotte Odgaard, eds. Abingdon: Routledge, pp. 49–74. Brzezinski, Zbigniew (2015). “Why We Need a U.S.-China ‘Pacific Charter’ for Global Stability.” New Perspectives Quarterly 32(1): 25–27. doi:10.1111/npqu.11496. Cheng, Joseph Y.S. (2015). “China’s Approach to BRICS.” Journal of Contemporary China 24(92): 357–75. doi:10.1080/10670564.2014.932518. Christensen, Steen Fryba (2016). “How Prioritized Is the Strategic Partnership Between Brazil and China?” In Emerging Powers, Emerging Markets, Emerging Societies: Global Responses, Steen Fryba Christensen and Xing Li, eds. New York: Palgrave Macmillan, pp. 87–109. Christensen, Steen Fryba and Xing Li (2016a). “The Emerging Powers and the Emerging World Order: Back to the Future?” In Emerging Powers, Emerging Markets, Emerging Societies: Global Responses, Steen Fryba Christensen and Xing Li, eds. New York: Palgrave Macmillan, pp. 3–29. Christensen, Steen Fryba and Xing Li (2016b). “Emerging Powers, Emerging ­Markets, Emerging Societies: Global Responses.” In Emerging Powers, Emerging Markets, Emerging Societies: Global Responses, Steen Fryba Christensen and Xing Li, eds. New York: Palgrave Macmillan, pp. 259–66. Degaut, Marcos (2015). “Do the BRICS Still Matter?”, October, Center for Strategic and International Studies, Washington DC. www.csis.org/analysis/do-brics-stillmatter (September 2017). Foreign Ministers of the Russian Federation, the Republic of India and the ­People’s Republic of China (2015). “Joint Communiqué of the 13th Meeting of the Foreign Ministers of the Russian Federation, the Republic of India and the People’s Republic of China.” Beijing, 2 February. www.fmprc.gov.cn/mfa_eng/ wjdt_665385/2649_665393/t1233638.shtml (September 2017). Foreign Ministers of the Russian Federation, the Republic of India and the People’s Republic of China (2016). “Joint Communiqué of the 14th Meeting of the Foreign Ministers of the Russian Federation, the Republic of India and the People’s Republic of China.” Moscow, 18 April. www.fmprc.gov.cn/mfa_eng/zxxx_662805/ t1356652.shtml (September 2017).

The BRICS agenda in the Asia-Pacific region  221 Fu, Ying (2016). “How China Sees Russia.” Foreign Affairs, 14 December. www.foreign affairs.com/articles/china/2015-12-14/how-china-sees-russia (September 2017). Hett, Felix and Moshe Wien, eds. (2015). Between Principles and Pragmatism: Perspectives on the Ukraine Crisis from Brazil, India, China and South Africa. Berlin: Friedrich Ebert Stiftung. http://library.fes.de/pdf-files/id-moe/11354.pdf (September 2017). Ikenberry, G. John (2004). “American Hegemony and East Asian Order.” Australian Journal of International Affairs 58(3): 353–67. doi:10.1080/1035771042000260129. Ischinger, Wolfgang (2015). “The World According to Kissinger: How to Defend Global Order.” Foreign Affairs, March/April. www.foreignaffairs.com/reviews/ 2015-03-01/world-according-kissinger (September 2017). Laïdi, Zaki (2012). “BRICS: Sovereignty Power and Weakness.” International Politics 49(5): 614–32. doi:10.1057/ip.2012.17. Li, Xing (2016). “From ‘Hegemony and World Order’ to ‘Interdependent Hegemony and World Re-order’.” In Emerging Powers, Emerging Markets, Emerging Societies: Global Responses, Steen Fryba Christensen and Xing Li, eds. New York: Palgrave Macmillan, pp. 30–54. Li, Xing and Timothy M. Shaw (2014). “‘Same Bed, Different Dreams’ and ‘Riding Tiger’ Dilemmas: China’s Rise and International Relations/Political Economy.” Journal of Chinese Political Science 19(1): 69–93. doi:10.1007/s11366-013-9276-9. Manuel, Anja (2016). This Brave New World: India, China and the United States. New York: Simon and Schuster. Marczak, Jason, Samuel George, María Fernanda Pérez Argüello et al. (2016). “Pacific Alliance 2.0: Next Steps in Integration.” May, Atlantic Council and ­Bertelsmann Foundation, Washington DC. http://publications.atlanticcouncil. org/pacific-alliance/AC_PA_en.pdf (September 2017). Navarrete, Jorge Eduardo (2008). “G8 and ‘The Other Five’: Creating a Constructive Relationship—The Role of Mexico.” FES Briefing Paper 5, April, Friedrich Ebert Stiftung, Berlin. http://library.fes.de/pdf-files/iez/global/05339.pdf (September 2017). Obama, Barack (2015). “State of the Union Address.” White House, Washington DC, 20 January. https://medium.com/@ObamaWhiteHouse/president-obamasstate-of-the-union-address-remarks-as-prepared-for-delivery-55f9825449b2 (September 2017). O’Neill, Jim (2001). “Building Better Global Economic BRICs.” Goldman Sachs Global Economics Paper No. 66. www.goldmansachs.com/our-thinking/archive/ archive-pdfs/build-better-brics.pdf (September 2017). Pedersen, Jørgen Dige (2016). “India as an Emerging Power in the Global Order: On Geopolitics and Geo-economics.” In Emerging Powers, Emerging Markets, Emerging Societies: Global Responses, Steen Fryba Christensen and Xing Li, eds. New York: Palgrave Macmillan, pp. 110–31. Prashad, Vijay (2011). “Quid Pro Quo? The Question of India’s Subordination to the ‘American Narrative’.” Monthly Review 63(5). October. https://monthlyreview. org/2011/10/01/quid-pro-quo/ (September 2017). Stuenkel, Oliver (2015a). The BRICS and the Future of Global Order. Lanham: ­Lexington Books. Stuenkel, Oliver (2015b). “The Refugee Crisis Presents a Chance for Emerging Countries Like Brazil to Be Players.” New York Times, 15 September. Opinion

222  Haibin Niu Pages: Room for Debate. www.nytimes.com/roomfordebate/2015/09/15/what-cancountries-do-to-help-refugees-fleeing-to-europe/the-refugee-crisis-presents-achance-for-emerging-countries-like-brazil-to-be-players (September 2017). Taw, Naw Pyi (2014). “‘Look East’ Policy Now Turned into ‘Act East’ Policy: Modi.” The Hindu, 13 November. www.thehindu.com/news/national/look-east-policynow-turned-into-act-east-policy-modi/article6595186.ece (September 2017). Taylor, Ian (2016). “BRICS and Capitalist Hegemony: Passive Revolution in Theory and Practice.” In Emerging Powers, Emerging Markets, Emerging Societies: Global Responses, Steen Fryba Christensen and Xing Li, eds. New York: Palgrave Macmillan, pp. 55–84. van Ham, Peter (2015). “The BRICS as an EU Security Challenge: The Case for Conservatism.” Clingendael Institute, The Hague. www.clingendael.nl/pub/2015/ the_brics_as_an_eu_security_challenge/ (September 2017). Xiao, Ren (2013). “The Rise of a Liberal China?” Journal of Global Policy and Governance 2(1): 85–103. doi:10.1007/s40320-013-0030-7.

12 South Africa in the BRICS Last but not least Vladimir Shubin

The foundations of South Africa’s foreign policy In 2014, South Africa celebrated 20 years of the eradication of apartheid and the country’s creation as a democratic state. One of its distinct features is its foreign policy, which differs drastically from that of the previous regime. Its key foreign policy priorities were highlighted in Nelson Mandela’s (1993) article in Foreign Affairs: “the interests of the continent of Africa should be reflected in our foreign-policy choices; that economic development depends on growing regional and international economic cooperation in an interdependent world.” Indeed, since its birth as a democratic state, South Africa has pursued closer bilateral ties with other African countries and has emphasized the developing world as a whole—especially the countries representing the global South, including Brazil, India and China, which would later join with ­Russia to be known as the BRIC. Joining this club of strong non-western counties would be perfectly in line with South Africa’s foreign policy. It took an important step in this direction in June 2003 with the creation of the India, Brazil and South Africa (IBSA) Dialogue Forum. In fact, South Africa considered inviting China and then, with Chinese assistance, Russia to join.1 Nevertheless, in June 2009, when the first BRIC summit took place in Yekaterinburg, South Africa’s newly elected president Jacob Zuma was not there. That was met with disappointment in South Africa and, because the meeting took place in Russia, some blamed Moscow. However, it appears only South Africa could be held responsible. The first practical step on the road to the group’s formation had been taken in September 2006, when, on the initiative of Russian president Vladimir Putin, the foreign ministers of Brazil, Russia, India and China met in New York during the United Nations General Assembly. South Africa did not take part in these meetings. It only expressed its clear interest in being part of the emerging group several weeks before the Yekaterinburg Summit.2 However, Zuma and his minister of international relations and cooperation, Naite Nkoane-Mashabane, were determined to bring South Africa

224  Vladimir Shubin into the new group. In 2010, Zuma visited the capitals of all four BRIC members (on a tour that was dubbed “the charm offensive”) to win their support for South Africa’s membership. On her part, Nkoane-Mashabane, soon after Yekaterinburg, sent an official letter to her counterparts and then, on a visit to Beijing in 2010, emphasized that “if you want to build houses, you need more than one BRIC” (Cheng 2010). On December 23, 2010, Nkoane-Mashabane received a call from her ­Chinese counterpart, Yang Jiechi, who told her on behalf of the four countries that South Africa was officially invited to join the BRICs and Zuma was invited to its next summit in Sanya in April 2011 (Ministry of Foreign Affairs of the People’s Republic of China 2010).

Why did South Africa want to join the BRIC and why was it admitted? Why was South Africa so eager to join and why did the BRIC invite it to join, even though the country had a smaller population, territory and gross domestic product (GDP) than any of the other members? At the time, Mandisi Mpahlwa, South Africa’s ambassador to Moscow, said that for his country “it was never about the size of the economies, populations or landmasses of the BRIC member countries” (Department of International Relations and Cooperation of the Republic of South Africa [DIRCO] 2011). He made it clear that for Tshwane (the administrative capital of South Africa) the BRIC’s importance went beyond economics and was viewed as “an association of like-minded countries with a reputation for being independent and committed to reforming global decision-making structures”—a political and moral force for change that can help to create a better world. On the regional level, South Africa was interested in strengthening cooperation between the BRIC members and African countries. In Zuma’s (2011) first speech at the Sanya Summit, he spoke about the $480 billion needed for investing in Africa’s infrastructure and urged the companies from the members of the BRICS (now with South Africa a full member) to collaborate with the New Partnership for Africa’s Development (NEPAD). That South Africa is often called a gateway to the continent probably played a role in its admission to the BRICS. Speaking in Parliament in June 2011, Zuma referred to BRICS membership as strengthening “our position as a gateway to Africa” (Olivier 2013, 407). The validity of this concept was confirmed by Rob Davies, minister of trade and industry, who called South Africa “a driver of regional integration as well as being a major investor. It is a gateway to the region, though not a gatekeeper” (Joffe 2015). However, as Narnia Bohler-Muller (2013, 370) wrote, “the problem is that South Africa has not been mandated to be the lead representative of African interests on the global stage or, in fact, the AU [African Union] itself.” Prestige also played a role in South Africa’s desire to join the BRIC. Zuma (2011) said: “We are now co-equal co-architects of a new equitable international system.”

South Africa in the BRICS  225 As to the question of why the BRIC members agreed to invite South Africa, there were several reasons. South Africa was not the only country in the (informal) list of candidates, some of them with bigger economies. At that time, the GDP of Indonesia was $847 billion, Mexico’s was $1.155 billion, Turkey’s was $773 billion and Korea’s was $1.116 billion, ­c ompared to South Africa’s $408 billion (Centre of Humanitarian Technologies 2014). Clearly, however, the size of GDP was not the main criterion. The desire to have members of the group on every continent, thereby eliminating the geographical divide, was more important. There is a rapidly growing competitor to South Africa on the African continent: Nigeria. In 2013, two years after the Sanya Summit, its GDP overtook South Africa’s to reach $488 billion (Magnowski 2014). Thus other arguments worked for BRICS membership: South Africa has an excellent infrastructure that makes it a real portal to the continent, universally recognized as an important element for the world economy. Political instability and growing terrorist activity in Nigeria also did not play in its favour. In addition, South Africa enjoys a high moral authority on the international scene, having rid itself of apartheid, which it sustains by remaining active in peacekeeping and mediating various conflicts. One example is the successful facilitation of the political solution to the crisis in Zimbabwe and efforts to stop the war in the Darfur region of Sudan and in South Sudan. Unfortunately, South Africa’s image was later marred, in April 2015, by the wave of xenophobia in two provinces directed against migrants from other African countries that resulted in the death of four foreigners and three nationals before the government took urgent steps to stop it (Winsor 2015). Global perceptions of South Africa remain positive, but have been declining since 2014 (BBC World Service 2017).

South Africa’s goals within the BRICS Many in South Africa regard joining the BRICS as a triumph of foreign policy, but some, especially in the academic community, disagree. South ­African economists Mills Soko and Mzukisi Qobo (2011), whose article in the Mail and Guardian was titled “Creating More Walls than BRICS,” regarded the prevailing feelings that accompanied South Africa’s admission as “an affront to our national pride.” They added: “It is not evident what South ­Africa’s strategy to the Brics is and how this fits into the country’s wider global strategy … The notion of Bric as an analytical category is problematic and has outlived its usefulness.” This view follows Joseph Nye, professor of international relations and a former U.S. assistant secretary of defence and chair of the U.S. National Intelligence Council, who was always critical of the BRIC. He called the 2013 BRICS summit in Durban an “apparent success” but remained “skeptical,” with his attitude clear in the title of his article: “BRICS without Mortar” (Nye 2013).

226  Vladimir Shubin Bohler-Muller (2013, 368) wrote: Critics have pointed out inconsistencies in South Africa’s foreign policy engagement and have raised questions about its membership with BRICS that is seen to be compromising South Africa’s commitment to international human rights laws. As trade-offs are made for the sake of economic growth and development. However, the reality was the opposite: as the only member to support the notorious United Nations Security Council (UNSC) Resolution 1973 in 2011, South Africa facilitated (although of course unintentionally) gross human rights violations by the North Atlantic Treaty Organization (NATO) in Libya. Those critics reflected the position of those who do not want South Africa to be closer to the so-called non-western world. However, all the BRICS members aspire to maintain good relations with the West (it is not their fault if those relations are sometimes fraught, as in the case of Russia since the Ukraine crisis), and Tshwane’s affiliation did not interfere with this vector of its foreign policy. Zuma (2015b) confirmed this approach in his 2015 State of the Nation address: “countries of the developed North remain important strategic partners for South Africa through which the country is able to advance its national and foreign policy.” However, the criticism of the BRICS continues to be heard from the left or, rather, the leftist part of the South African political spectrum, where the group is considered “sub-imperialist” (Bond 2013a). Patrick Bond (2013b, 2) even writes about South Africa serving “deputy sheriff” duty within BRICS.

How South Africa’s foreign policy works toward the BRICS On the eve of the BRICS summit in Durban in 2013, the South African government designated the Human Science Research Council (HSRC) as the incubator of the South African BRICS Think Tank. Research on the BRICS in South African academia is now coordinated by the National Institute of Humanities and Social Sciences under the Department of Higher Education and Training. South African academics are active in the BRICS Think Tanks Council, which was launched at the 2013 Durban Summit on the initiative of South Africa. Nevertheless, the HSRC retains the BRICS Research Centre, which incorporated the Africa Institute of South Africa (AISA). In 2013, ASIA and the BRICS Research Centre published Laying the BRICS of a New Global Order. From Yekaterinburg 2009 to eThekwini 2013, edited by Francis ­Kornegay and Narnia Bohler-Muller (2013) with contributions by researchers from all five member states including five Russian academics. In addition to the AISA and HSRC, several other South African institutions are doing research on the BRICS, including the South African Institute of International Affairs (SAIIA) and the Consumer Unity and Trust Society (CUTS) International. On the eve of the Durban Summit, SAIIA and CUTS

South Africa in the BRICS  227 International issued The BRICS and the New World Order: A Beginner’s Guide, by Suresh Singh and Memory Dube (2013). The Centre for Conflict Resolution ([CCR] 2014) organized a policy advisory group seminar on “South Africa and the BRICS: Progress, Problems and Prospects” in August 2014.3 As distinct from most of the other BRICS members, parliament plays a significant role in South Africa’s foreign policy, in particular its portfolio committees on international affairs and cooperation and on trade and industry. Both executive and legislative powers are active on the projecting the BRICS as a vital group for the country. In particular, the Department of International Relations and Cooperation (DIRCO), and its head Maite ­Nkoana-Mashabane, and the Department of Trade and Industry and its head Rob Davies, as well as other government bodies, do their best to project the benefits of BRICS membership for South Africa. For example, at a meeting organized by business associations just before the Durban Summit, Richard Vries, CEO of Gibb Engineering and Architecture, referred to the challenging competition for infrastructure projects that South Africa’s construction firms face from their BRIC counterparts (Fabricius 2013). He reflected the views of those who worried that by joining the BRICS and facilitating the entry into Africa of the competitors from the other four members of the group, South Africa would reduce prospects for its own companies in this market. Nkoana-Mashabane responded that instead of focusing on the challenges of competing with the other BRICS members, ­ frica’s membusinesses should seize the opportunity presented by South A bership, given that South Africa was already part of the BRICS: she wanted to “spend more time, not listing challenges, but talking about how we can get the most out of Brics,” because business should “not spend so much time talking about our smallness” (Fabricius 2013). DIRCO’s (2014b) official statement sets out the following (rather ambitious) goals: South Africa seeks to achieve through BRICS, among other things: • At domestic level: addressing poverty, inequality and job creation. • At a regional level: gaining tacit support from BRICS partners… for the promotion of the African Agenda and to ensure synergy among BRICS partners, as far as feasible, regarding their engagement with Africa. • At an international level: to obtain increased support for the reform of International Financial Institutions (IFIs), the revival of the Doha Development Agenda, as well as the reform of the United Nations (UN) including the United Nations Security Council (UNSC). It also expected that the BRICS-Africa cooperation would “support ­A frica’s efforts to diversify and modernise its economies through infrastructure development, knowledge exchange, increased access to technology, enhanced capacity-building and investment in human capital” (DIRCO 2014b).

228  Vladimir Shubin

Has South Africa realized its hopes? During the first years of its BRICS membership, South Africa proved to be an integral part of the BRICS and not a second-class member. This status was confirmed when it hosted the fifth BRICS summit on March 26–27, 2013, in eThekwini, the municipality that includes Durban. Unfortunately, the Russian media concentrated on misunderstandings between local officers and Putin’s security at the expense of more important issues.4 South Africa’s BRICS experts believed that the summit helped broaden the country’s focus from mainly economic cooperation to development cooperation (CCR 2014, 9). The five leaders established the BRICS Business Council, composed of prominent entrepreneurs from each country, and committed support to African infrastructure projects, as proclaimed in the eThekwini declaration and action plan (BRICS 2013). In addition, on the eve of the summit, the BRICS Business Forum, established in 2010, met on March 26 in Durban. Industry leaders from all five business communities took part. Another important decision was the establishment of the BRICS Think Tanks Council, uniting research institutions in the five countries to provide a critical analysis and policy advice to BRICS leaders. The Durban Summit’s main theme, suggested by Tshwane, was “BRICS and Africa: Partnership for Development, Integration and Industrialisation.” In addition to discussions at the top level of the leaders of the five states, South Africa organized a “retreat,” with the participation of heads of African continental and regional organizations. This clearly demonstrated its claim to be a leading country of the continent, even if not everybody in Africa agrees.5 South Africa’s membership in the BRICS offers an opportunity to deepen and broaden its bilateral engagement with the other four members, even if “South Africa’s private sector—business as well as academia—has maintained a focus on developing external relations with partners in Europe and the United States” (CCR 2014, 16). India and South Africa have traditional historical ties. Both countries were colonies of Britain, which led to a large Indian diaspora in South Africa of about 1.3 million people. Mahatma Gandhi began his political career in ­Natal, and the Indian National Congress subsequently influenced the creation of the African National Congress (ANC). India has actively supported the ANC and there has been an ANC office in New Delhi since 1967. The first head of that office was the future South African foreign minister Alfred Nzo. Contemporary South Africa–India relations are regarded as a strategic partnership, established in March 1997. Zuma took part in the third ­India-Africa Forum Summit, held in New Delhi on October 28–30, 2015, and ahead of it had bilateral talks with India’s Prime Minister Narendra Modi. The two leaders discussed their progress in implementing the decisions of the Joint Ministerial Commission, the importance of economic

South Africa in the BRICS  229 cooperation, global governance reform and India’s hosting the IBSA Dialogue Forum that year (SA News 2015). Speaking at a business lunch in New Delhi during the Third Africa-India Forum Summit in 2015 Jacob, Zuma underlined his government efforts “to remove hurdles in doing business in South Africa” and in particular its decision to award a 10-year BRICS business visa for qualifying business people (SA News 2015). The history of South Africa’s relations with China is more controversial. The ANC established links with China in the 1950s. However, with growing Sino-Soviet differences, China considered the ANC too close to its rival and froze relations with the organization for two decades. These circumstances delayed the establishment of diplomatic relations for a long time. The ANC-led government inherited close ties with Taiwan and kept them until January 1998. Nevertheless, China became South Africa’s biggest bilateral commercial partner. Trade turnover has been growing significantly annually, and among African countries South Africa is the biggest exporter to China and importer (Olsen 2013; China-Africa Research Initiative 2017). However, South Africa has a high trade deficit with China, and it exports mostly primary products to China and imports manufactured goods. A distinctive feature of South African–Sino relations is an intensive exchange of high-level visits. South Africa’s entry into the BRIC was discussed and, one may say, predetermined during Zuma’s trip to China in August 2010, when the Beijing Declaration on the Establishment of a Comprehensive Strategic Partnership Between the People’s Republic of China and the Republic of South Africa and a number of other bilateral agreements were signed. Then in July 2012, Zuma led a South African delegation that included Nkoana-Mashabane, Davies and Collins Chabane, the minister of public service and administration, to the Forum on China-Africa Cooperation (FOCAC) in Beijing (SAPA 2012). In December 2014, Zuma went again to China, this time with government ministers and 100 South African business representatives. Speaking at Tsinghua University, he underlined that China helped his country “to belong to the BRICS family” and that South Africa counted “on this formidable friendship, including within the south and BRICS framework, as we deepen our relations and forge ahead with our developmental agenda” (Zuma 2014a). He praised the role of China in Africa: “the emergence of China as a power among others gives or offers an opportunity to African countries to be able to free themselves from the shackles that are really colonially designed” (Agence France Presse 2014). A framework for cooperation between the two countries has been established, including a binational commission involving seven sector-­specific committees (diplomacy, economy and trade, science and technology, ­e ducation, energy, minerals and defence), the Interministerial Joint ­Working Group and the Five to Ten Year Framework on Cooperation (DIRCO 2014a).

230  Vladimir Shubin One of the themes of Zuma’s discussions in Beijing was the BRICS’s New Development Bank (NDB). Both parties agreed on its establishment and operationalization as soon as possible. In his speech to the South Africa– China Business Forum, Zuma said: South Africa is keen to ensure that the Bank’s African Regional Centre provides further impetus to the strategic relationship that was forged between the BRICS and African leadership in 2013 in Durban, to enhance economic development for the continent. We will cooperate with China to ensure that the Shanghai Headquarters and the African ­Regional Centre in South Africa are established as per agreed timelines. We have prioritised the ratification of the agreement establishing the Bank. South Africa has also instituted committees to make the African Regional Centre operational. (SA News 2014b) Later, former finance minister of South Africa Nhlanhla Nene was earmarked by Zuma to head this centre, although many regarded the appointment as a “fig leaf” to cover up a surprise dismissal of Nene from his ministerial post (Sole 2015). In December 2015, Chinese president Xi Jinping paid a state visit to South Africa, and the two presidents hosted the FOCAC meeting in Johannesburg (Brand South Africa 2015). One important sector of the South African economy is tourism, and here the importance of China is growing as well: the number of tourists from China to South Africa more than doubled between 2010 and 2013, from 68,000 to 152,000 (South African Tourism 2012, 18; 2014, 11). By 2014, five Confucius Institutes had been established in South Africa to promote cultural and educational ties between the two countries. The history of South Africa’s relations with Russia is well known. The analysis of the current stage would require a separate chapter. South ­A frica’s accession to the BRICS no doubt enhanced these relations. Putin’s participation in the Durban Summit was preceded by his working visit to South Africa. Although the visit lasted only a few hours, Putin and Zuma signed the Joint Declaration on the Establishment of a Comprehensive Strategic Partnership, which outlined the terms for bilateral cooperation in trade, investment and humanitarian intervention (Kremlin 2013). That meeting was followed up in May 2013 by Zuma’s visit to Sochi and then by three more visits: an official visit to Moscow in August 2014, in May 2015 for the 70th anniversary of Victory Day and in July 2015 for the seventh BRICS summit in Ufa. However, commercial and cultural ties between South Africa and Russia are still weak compared to the excellent relations in the political sphere. The development of these ties is not helped by a distorted picture of Russia often painted by South African media and some academics.

South Africa in the BRICS  231 For example, Gerrit Olivier (2013, 411), a former diplomat in the “old” Pretoria regime to Moscow, regards Russia as a variation “of non-­ democratic authoritarian regimes.” There were unwarranted attacks on Russia in South African mass media after the two countries signed a bilateral framework agreement on strategic cooperation in the nuclear field in September 2014. Relations between South Africa and Brazil were actively developed after Luiz Inácio Lula da Silva came to power in 2003. He played a key role with South Africa’s President Thabo Mbeki in founding the IBSA Dialogue ­Forum. Brazil is South Africa’s largest trading partner in Latin America: trade is growing and reached 21 billion rand in 2013 (CCR 2014, 15). However, these relations were marred by a dispute initiated in 2012 by Brasilia at the World Trade Organization ([WTO] 2012) following the ­i mposition of antidumping duties by South Africa on imports of ­Brazilian poultry. Fortunately, it was resolved within the framework of the WTO. A number of Brazilian firms maintain offices in South Africa. These serve mainly as headquarters for their operations in other African countries (CCR 2014, 15). Emerging areas of cooperation between South Africa and Brazil include nuclear technology and defence. Lula’s successor, Dilma Rousseff, visited South Africa in October 2011 to take part in the IBSA Summit and returned in March 2013 for the BRICS summit. Zuma participated in the BRICS Fortaleza Summit in July 2014, combined with his working visit to Brazil. When Zuma arrived in Fortaleza for the 2014 summit, South Africa declared it had “fully implemented” the eThekwini Action Plan (DIRCO 2014b). The country had hosted several ministerial meetings including the BRICS national security advisors and the ministers of trade, finance, ­agriculture, education, health, social security, and science, technology and innovation. The economic performance of all five BRICS members’ has changed in ­recent years. Brazil and Russia are facing a downturn: with negative growth of 3.6 percent and 0.2 percent in 2016 (FocusEconomics 2017a, 2017d). ­India’s growth is still impressive, at 7.1 percent in 2016 (FocusEconomics 2017c). The figure for China at 6.7 percent is similar, but indicates a ­slowdown from 7.9 percent in 2012 (FocusEconomics 2017b). South Africa’s economic growth dropped to 0.3 percent in 2016 but is projected to rise to 2.2 percent by 2019 (Statista 2017). However, if the economic aspect of the BRICS is not as promising as before, intra-BRICS cooperation has been expanding. It now covers more than 30 issues, ranging from health and education to science and technology, and South Africa plays an active role in all of them. Nevertheless, at least for South Africa, the finance and trade agenda has remained the most important. In this field, South African authorities single out the creation of the NDB.

232  Vladimir Shubin On his return home from the 2014 Fortaleza Summit, Zuma hailed the NDB’s establishment as “an everlasting legacy that will change the face of global economics and the face of all the developing world for better” (SA News 2014a). Tshwane was satisfied with the decision that the five founding countries contribute equally to the bank’s initial subscription of $50 billion. South African analysts believed that the NDB could be an alternative to the World Bank for funding critical infrastructure projects. Trade minister Davies made it clear on the eve of the Fortaleza Summit: “On the African continent, [the NDB] can certainly play a very important role in funding infrastructure projects across the continent. I think particularly those that link up different countries from the African continent and support regional integration” (SABC 2014). Some analysts emphasized that the gap between the demand for infrastructure and the supply of investment was estimated to be about $35 billion in Africa (CCR 2014, 18). They had been worried whether the NDB would become operational by 2016 as planned, because its initial $50 billion capital base would have to be accumulated over seven years, with each BRICS member paying 20 percent of its contribution ($2 billion) in installments during this period, with the remaining 80 percent ($8 billion) in callable capital (pledged funds that would be provided if needed) (BRICS 2014). However, it launched as scheduled and signed its first loan agreement in December 2016, and the African Regional Centre opened in Johannesburg in August 2017 (NDB 2016, 2017). When talking of BRICS prospects, South African scholars speak about the need for the NDB “in contrast to the Bretton Woods institutions” to retain its commitment “to non-conditionality and non-interference in the policymaking space of borrowing countries” (CCR 2014, 33). They are discussing to what extent the NDB can have an impact on transforming development cooperation by applying “a more concrete alternative strategy to challenge the dominance of the World Bank’s approach” to development issues (CCR 2014, 29). Greater internal cohesion is needed, as demonstrated by the fact that the “five BRICS countries were unable to unite behind a common candidate to fill the top posts at the International Monetary Fund and the World Bank” (CCR 2014, 19). South Africa also supported the creation of the BRICS Contingent ­Reserve Arrangement (CRA), also finalized at the 2014 Fortaleza Summit. Yet it was noted at the time that the CRA had just $100 billion compared to $806 billion in the reserves of the International Monetary Fund (IMF), while BRICS members collectively had about $5.2 trillion in foreign currency reserves (Stuenkel 2013). Many observers doubted the ability to reduce dependence on the World Bank and the IMF. The fact that the CRA would allow member countries to borrow only 30 percent of their quota (just $3 billion in the case of South Africa) and then they would have to turn to the IMF was particularly criticized (CCR 2014, 25).

South Africa in the BRICS  233 South Africa expects more efficiency from the structures created within the BRICS in these fields. In his State of the Nation speech in 2014, Zuma (2014b) said that South Africa would “continue to deepen economic development, trade, and investment partnerships with the BRICS through the work of the BRICS Contact Group for Economic and Trade Issues.” Another important aspect of South Africa’s membership in the BRICS is strengthening the group’s stand on peace and security matters. Up to 2015, the issue of defence was not highlighted in BRICS documents (apart from the meetings of officials responsible for security matters). For example, the action plan adopted at the Ufa Summit in 2015 referred to the “BRICS Dialogue on Peacekeeping” as one of the “areas of cooperation to be explored” (BRICS 2015a). However, the potential importance of this area of cooperation cannot be overestimated. Anton Kruger (2011) noted that South Africa needed to increase defence spending to be on an equal footing with the other BRICS members. Along with South Africa’s commitments to peacekeeping through the AU, he emphasized the country’s unique location “on 3 essential shipping routes from West to the East.” In his opinion, this fact, combined with the resources of South Africa, “would allow BRIC to better compete with the G7 [Group of Seven] in global issues.” Analysts’ attention is often drawn to the UN and the role of BRICS members in it. In 2011, there was a unique situation when Russia and China—two permanent members of the UNSC—were joined by South Africa, India and Brazil. However, this opportunity to collaborate on issues of common concern in pursuit of greater influence over the international security agenda was missed. The responses of the BRICS countries to the crises facing the UNSC in 2011—particularly over Libya—“raised serious questions about the bloc’s ability to craft cohesive foreign policy positions” (Piccone and Alinikoff 2012; Daniel and Daniel 2015). It is admitted in South Africa (even informally by the government officials) that it was a mistake to vote for UNSC Resolution 1973, which authorized intervention in Libya, just as it is admitted in Russia (again informally) that President Dmitry Medvedev made a similar mistake by ordering not to use Russia’s veto. There are differences also within the BRICS on the issue of the responsibility to protect (R2P). Although South Africa is prepared to support the concept (it was included, although in different words, in the Constitutive Act of the African Union), China and India are strong supporters of the principle of nonintervention and oppose external military interventions. Brazil has proposed a new and very interesting concept of “responsibility while protecting,” which South Africa supported (CCR 2014, 3). Criticism of R2P grew in South Africa after the mission creep in Libya in 2011, when NATO abused the unfortunate Resolution 1973 to pursue a “regime change” agenda against Muammar Qaddafi (CCR 2014, 21). South ­A frica’s

234  Vladimir Shubin deputy minister for international relations and cooperation ­Ebrahim I. ­ brahim (2011) stated that “many countries, including South Africa, feel E betrayed by ­Western powers on resolution 1973.” This sense of betrayal prevented South Africa from supporting some other UN resolutions proposed by major western countries. South Africa, as well as Brazil, China and India, opposed the introduction of sanctions on Russia after the crisis in Ukraine in 2014. This was regarded in South Africa as “an ability to forge cohesion in resistance to Western hostility towards one of their own members” (CCR 2014, 22). Together with other BRICS members in 2015, South Africa underlined in the Ufa Declaration the intention to strengthen the principle of equitable and mutually respectful cooperation of sovereign states as the cornerstone of international activities to promote and protect human rights … We will take every effort to bolster constructive and non-politicized human rights dialogue at all relevant international fora, including the United Nations. (BRICS 2015b) South Africa actively participates in the UN and AU peacekeeping operations in Africa. Facing delays in creating African Stand-By Force, since 2013 South Africa has been involved in creating the African Capacity for Immediate Response to Crises (ACIRC) as a temporary solution. During Z ­ uma’s visit to Beijing in 2014, “President Xi Jinping declared that China was prepared to assist the African Union in its peacekeeping missions and was ready to discharge resources to the continent’s peacekeeping mechanisms particularly the African rapid response forces” (DIRCO 2014a). In December 2015, South Africa’s Lieutenant General Derrick Mbuyiselo ­Mgwebi was appointed force commander of the UN Organization Stabilization Mission in the Democratic Republic of the Congo with nearly 20,000 uniformed personnel on the ground (UN News Centre 2015). South Africa, like other BRICS members, fully understands that it is impossible to create a better world (to borrow words from Mandisi Mpalhwa) without reforming “Western-dominated institutions of global governance,” even if they “do not necessarily agree on how the architecture of global governance should be reshaped” (CCR 2014, 24). One broad issue hotly debated in South Africa is whether BRICS members “are status quo powers, or revisionist actors with a transformative vision for an alternative world order,” not to say about “a third and far more critical view regarding the BRICS countries as a group of ‘sub-imperialist’ collaborators within the Western-­ dominated system” (CCR 2014, 24). As already mentioned, BRICS members are divided on the issue of the election of the top officials at the IMF and World Bank. In relation to the IMF, in 2011 South Africa opposed the appointment of the managing director on the basis of nationality (a French woman succeeded a French

South Africa in the BRICS  235 man). In the case of the World Bank, in 2012 South Africa and Brazil unsuccessfully supported Nigerian finance minister Ngozi Okonjo-Iweala, while Russia openly—and China and India more discreetly—backed the winning candidate, who was the American Jim Yong Kim. There was more cohesion in 2013 when Roberto Azevêdo, Brazil’s WTO ambassador, was elected director-general. Both government and civil society in South Africa are unhappy with a very slow rate of the UN reform, especially of the UNSC. South Africa seeks a permanent seat, as do India and Brazil, but their plans differ on how to achieve this goal. While India and Brazil, along with Germany and Japan, have formed the so-called Group of Four in mutual support of their candidacies, South Africa is bound by the Ezulwini Consensus, reached by African countries in 2005, and must therefore favour the unrealistic demand for two seats of permanent members for Africa with a veto power, although now along with Nigeria it agrees to drop the African insistence on the veto (CCR 2014, 26–27). One recommendation by South African scholars is to open up the BRICS’s engagement with non-governmental organizations beyond think tanks in order to exert more influence on western-dominated debates on development, climate change and human rights (CCR 2014, 31). In this respect, the Congress of South African Trade Unions (COSATU), the country’s biggest federation of trade unions, takes an active (and realistic) position on South Africa’s membership in the BRICS. It noted: On the one hand, the rise of BRICS has the potential to tip the balance of forces more towards the South, and has facilitated opportunities for regional integration that are not based on the neoliberal model … However, at the same time, it has facilitated the outwards expansion of multinationals based in those countries. These realities prompt a deeper discussion about our understanding of the architecture of imperialism, particularly in light of South African capital on the African continent. (COSATU 2012, 10) Another issue widely discussed in South Africa with respect to the BRICS is its correlation with IBSA. When South Africa was invited to join the BRIC, Nkoane-Mashabane said: We believe that the IBSA will get a better balance, and become even stronger, with South Africa now as a member of the BRICS. We remain convinced that South Africa’s diversified foreign policy objectives and interests allow for both groupings (IBSA and BRICS) to co-­exist. It is our belief that the mandates of BRICS and IBSA are highly complementary. (DIRCO 2010)

236  Vladimir Shubin However, not everybody—either within South Africa or outside—is so sure. The proclaimed principles, norms and values underpinning the IBSA Dialogue Forum are participatory democracy, respect for human rights, the rule of law and the strengthening of multilateralism (IBSA Dialogue Forum 2013). This creates a tendency to pit the three IBSA members with so-called common democratic values against China and Russia. More significantly, the older organization provided a framework for cooperation among its three members in a range of sectors, including health, education and defence. IBSA has been considered a more substantive partnership with a real focus on each other (Arkhangelskaya 2011). However, the rapid expansion of sectoral cooperation among the BRICS members means a certain duplication and increases the chance of IBSA’s demise. For example, each country contributes $1 million per year to the IBSA Fund, created in 2004, but it can hardly compete with the NDB. Significantly, there has not been an IBSA summit since 2011. Some analysts argue also that IBSA versus BRICS represents India versus China, but this juxtaposition is rather artificial (Arkhangelskaya 2011). The dominant view in South Africa is still that the BRICS and IBSA do not exist in opposition to each other, but are complementary.

BRICS challenges It is true that South Africa was a latecomer to the BRICS, but the expression “last but not least” adequately characterizes its role in the bloc. This has been proven not only by South Africa’s successful hosting of the D ­ urban Summit, but also by the activities of South African governmental, academic, business and other structures since 2011. It would be wrong, however, to anticipate immediate tangible benefits of South Africa’s membership in the BRICS. The development of sectoral cooperation and, in particular, the establishment and operationalization of the BRICS financial institutions takes time and effort. So far, the five member countries have managed to overcome or alleviate existing and arising contradictions among themselves and find common approaches to major political and economic problems. An important side effect of South Africa’s membership is the strengthening of its relations with the other four prominent countries that lead in their respective regions. The importance of South Africa’s membership in BRICS was underlined by Zuma (2015a) at the Ufa Summit. He said that the new threats “have radically challenged the traditional discourse on international law and security,” and their nature, “coupled with resource limitations, requires BRICS partners to work more closely together, notably in the context of the United Nations and relevant regional bodies.” Zuma (2015a) stated that “both South Africa and the African continent have benefitted from our economic cooperation with our BRICS partners.” South Africa is “eagerly looking forward to working together

South Africa in the BRICS  237 with our fellow BRICS countries” to implement the Strategy for BRICS Economic Partnership to provide a platform for “further intensifying our economic cooperation, in all identified priority sectors.”

Notes 1 Author’s discussion with a member of the South African Cabinet, Pretoria, April 26, 2005. 2 Author’s discussion with a senior official of the DIRCO, Pretoria, March 31, 2012. 3 The author took part in this seminar, and this chapter benefited from the seminar report and deliberations. 4 However, it is hardly accurate to speak about the “Russian media,” given that, according to Vyacheslav Nikonov, 62 percent of media outlets are owned by non-Russian citizens and are therefore very vulnerable to any trends that may be contrary to Russia’s national interests (Barshchevsky 2012). 5 The author recalls how, some years earlier, Alfa Umar Konare, chair of the AU Commission, declared that “South Africa does not adequately represent Africa.”

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South Africa in the BRICS  239 FocusEconomics (2017b). “China Economic Outlook.” Barcelona. www.focuseconomics.com/countries/china (September 2017). FocusEconomics (2017c). “India Economic Outlook.” Barcelona. www.focuseconomics.com/countries/india (September 2017). FocusEconomics (2017d). “Russia Economic Outlook.” Barcelona. www.focuseconomics.com/countries/russia (September 2017). India-Brazil-South Africa Dialogue Forum (2013). “About IBSA: Introduction.” www.ibsa-trilateral.org/component/content/category/89-home (September 2017). Joffe, Hilary (2015). “World Economic Forum: SA’s Team Effort.” Financial Mail, 30 January. Kornegay, Francis and Narnia Bohler-Muller, eds. (2013). Laying the BRICS of a New Global Order: From Yekaterinburg 2009 to eThekwini 2013. Pretoria: Africa Institute of South Africa. Kremlin (2013). “Joint Declaration on the Establishment of a Comprehensive Strategic Partnership between the Russian Federation and the Republic of South ­A frica.” 26 March. http://en.kremlin.ru/supplement/1428 (September 2017). Kruger, Anton (2011). “From BRIC to BRICS and South Africa’s military.” Institute for Security Studies, Pretoria, 27 May. www.issafrica.org/iss-today/frombric-to-brics-and-south-africas-military (September 2017). Magnowski, Daniel (2014). “Nigerian Economy Overtakes South Africa’s on Rebased GDP.” Bloomberg, 7 April. www.bloomberg.com/news/articles/201404-06/nigerian-economy-overtakes-south-africa-s-on-rebased-gdp (September 2017). Mandela, Nelson (1993). “South Africa’s Future Foreign Policy.” Foreign Affairs 72(5). www.foreignaffairs.com/articles/south-africa/1993-12-01/south-africas-futureforeign-policy (September 2017). Ministry of Foreign Affairs of the People’s Republic of China (2010). “Foreign Minister Yang Jiechi Holds Telephone Conversation with South African Counterpart Maite Nkoana-Mashabane.” Beijing, 24 December. www.fmprc.gov.cn/mfa_eng/ wjb_663304/zzjg_663340/fzs_663828/gjlb_663832/3094_664214/3096_664218/ t781693.shtml (September 2017). New Development Bank (2016). “BRICS New Development Bank Signs First Loan Agreement.” Shanghai, 21 December. http://ndb.int/BRIC-SNew-DevelopmentBank-signs-first-loan-agreement.php (September 2017). New Development Bank (2017). “NDB Launches Africa Regional Center in Johannesburg, South Africa.” Shanghai, 17 August. www.ndb.int/press_release/ndblaunches-­africa-regional-center-johannesburg-south-africa/ (September 2017). Nye, Joseph (2013). “BRICS without Mortar.” Project Syndicate, 3 April. www. project-syndicate.org/commentary/why-brics-will-not-work-by-joseph-s--nye (­September 2017). Olivier, Gerrit (2013). “South Africa within BRICS: Substance or Piggybacking?” In Laying the BRICS of a New Global Order: from Yekaterinburg 2009 to eThekwini 2013, Francis Kornegay and Narnia Bohler-Muller, eds. Pretoria: Africa Institute of South Africa, pp. 399–417. Olsen, Kelly (2013). “New Leader’s African Trip Highlights China’s Influence.” Mail & Guardian, 21 March. https://mg.co.za/article/2013-03-21-xi-trip-highlights-­ chinas-africa-influence (September 2017). Piccone, Ted and Emily Alinikoff (2012). “Rising Democracies Take on Russia and China” National Interest, 17 February. http://nationalinterest.org/commentary/ rising-democracies-take-russia-china-6525 (September 2017).

240  Vladimir Shubin SA News (2014a). “BRICS Development Bank to Change Global Economics.” South African Government News Agency, Pretoria, 17 July. www.sanews.gov.za/ south-africa/brics-development-bank-change-global-economics (September 2017). SA News (2014b). “President Zuma Lauds China Visit.” Pretoria, 7 December. www. sanews.gov.za/south-africa/president-zuma-lauds-china-visit (September 2017). SA News (2015). “SA Looks for More Trade Chances with India.” 30 October. www. sanews.gov.za/world/sa-looks-more-trade-chances-india (September 2017). SABC (2014). “Zuma Arrives in Fortaleza Ahead of BRICS Summit.” 14 July. www.sabc.co.za/news/a/c96c2f8044b9d52b9ec4ff3bfe17c0b1/Zuma-arrives-in-­ Fortaleza-ahead-of-BRICS-20141407 (July 2017). SAPA (2012). “Zuma Jets Off to China for Partnership Talks.” Mail and Guardian, 18 July. http://mg.co.za/article/2012-07-18-59-zuma-jets-off-to-china (September 2017). Singh, Suresh P. and Memory Dube (2013). The BRICS and the New World Order: A Beginner’s Guide. Pretoria: South African Institute of International Affairs and CUTS International. www.gegafrica.org/doc_download/2-the-brics-and-thenew-world-order-a-beginner-s-guide (September 2017). Soko, Mills and Mzukisi Qobo (2011). “Creating Economy Overtakes than BRICs.” Mail and Guardian, 11 January. http://mg.co.za/article/2011-01-07-creating-morewalls-than-brics (September 2017). Sole, Sam (2015). “Comment: Will the ANC Stand Up to Zuma?” Mail and Guardian, 10 December. https://mg.co.za/article/2015-12-10-editorial-will-the-­anc-stand-upto-zuma (September 2017). South African Tourism (2012). “2011 Annual Tourism Performance Report.” South African Tourism Strategic Research Unit, June. http://welcome.southafrica.net/ uploads/files/2011_Annual_Report_v9_0607201211.pdf (September 2017). South African Tourism (2014). “2013 Annual Tourism Performance Report.” South African Tourism Strategic Research Unit, September. https://live.southafrica. net/media/26971/2013-annual-tourism-report-2014-09-12.pdf (September 2017). Statista (2017). “South Africa: Real Gross Domestic Product (GDP) Growth Rate from 2010 to 2020 (Compared to the Growth Rate).” www.statista.com/statistics/370514/gross-domestic-product-gdp-growth-rate-in-south-africa (September 2017). Stuenkel, Oliver (2013). “Does Intra-BRICS Cooperation Make Sense? The Case of Public Health.” Post-Western World (Blog), 27 May. www.postwesternworld. com/2013/05/27/does-intra-brics-cooperation-make-sense-the-case-of-publichealth (September 2017). UN News Centre (2015). “South African Special Forces Commander Appointed to Lead UN Troops in DR Congo.” United Nations, 29 December. www.un. org/apps/news/story.asp?NewsID=52917&&Cr=democratic&&Cr1=Congo#. WZNBb3eGNE5 (September 2017). Winsor, Morgan (2015). “South Africa Xenophobia 2015: Victims’ Names and Nationalities Released.” International Business Times, 28 April. www.ibtimes.com/ south-africa-xenophobia-2015-victims-names-nationalities-released-1900755 (September 2017). World Trade Organization (2012). “South Africa: Anti-dumping Duties on Frozen Meet of Fowls from Brazil.” Dispute no. DS439, Geneva, 27 June. www.wto.org/ english/tratop_e/dispu_e/cases_e/ds439_e.htm (September 2017).

South Africa in the BRICS  241 Zuma, Jacob (2011). “Address by President Jacob Zuma to the Plenary of the Third BRICS Leaders Meeting.” Department of International Relations and Cooperation of the Republic of South Africa, Sanya, 14 April. www.dirco.gov.za/docs/ speeches/2011/jzuma0414a.html (September 2017). Zuma, Jacob (2014a). “Lecture by President Zuma at Tsinghua University on the Occasion of the State Visit to the People’s Republic of China.” Department of International Relations and Cooperation of the Republic of South Africa, Beijing, 5 December. www.dirco.gov.za/docs/speeches/2014/jzum1205a.html (September 2017). Zuma, Jacob (2014b). “State of the Nation Address.” Cape Town, 17 June. www. thepresidency.gov.za/speeches/state-nation-address-his-excellency-jacob-g-­ zuma%2C-president-republic-south-africa-2 (September 2017). Zuma, Jacob (2015a). “Remarks by President Zuma at the 7th BRICS Summit during the Plenary Session, Ufa, Russia.” Ufa, 9 July. www.thepresidency.gov. za/speeches/remarks-president-zuma-7th-brics-summit-during-plenary-session %2C-ufa%2C-russia (September 2017). Zuma, Jacob (2015b). “State of the Nation Address.” Cape Town, 12 February. www.gov.za/president-jacob-zuma-state-nation-address-2015 (September 2017).

13 BRICS regional policy in Africa Tatiana Deych

What is in Africa for the BRICS? In the last decade, Africa has become a focus for the BRICS group of Brazil, Russia, India, China and South Africa, becoming the base for implementing the group’s efforts to change the existing world order. Africa is a treasure trove of natural resources, which particularly interest China, India and Brazil. It is also a conglomeration of countries in need of assistance. The emerging economies of the BRICS, by positioning themselves as the defenders of the interests of developing countries, are pursuing a complex aim: to satisfy their own need for natural resources and commodity markets while also promoting the sustainable development of African countries—and, at the same time, improving their image and showing what South-South cooperation means. Among the reasons for the BRICS involvement in Africa is the growing influence of African countries in the global economy and contemporary international relations. The BRICS’s interest in Africa is dictated, to a large extent, by the economic successes of African countries. Six African countries were among the 10 fastest growing world economies between 2001 and 2010. According to the International Monetary Fund (IMF), 14 of the 22  countries that will expand by at least seven percent a year on average between 2014 and 2019 will be in Africa (Marlier 2014). The first BRIC summit—with South Africa not yet a member—took place in 2009, and there has been one stand-alone summit each year since then. The theme of the fifth summit, which was in Durban, South Africa, in 2013, was “BRICS and Africa: Partnership for Development, Integration and Industrialization.” It produced the eThekwini Declaration, which showed that African problems are among the priorities of BRICS policy (BRICS 2013). At the following summit, in 2014 in Fortaleza, Brazil, the leaders discussed strengthening their cooperation with African countries, primarily in infrastructure and industrialization (BRICS 2014). The seventh BRICS summit, in Ufa, Russia, in 2015, had the theme of “BRICS Partnership: A Powerful Factor of Global Development.” The summit issued the Ufa Declaration, the Ufa Action Plan and the Strategy for

BRICS regional policy in Africa  243 BRICS Economic Partnership. A major event at the summit was the establishment of the New Development Bank (NDB). The next step was to set up the first regional bank to be housed in South Africa. Advances were made in setting up the Contingent Reserve Arrangement (CRA). According the South African minister of trade and economy, Rob Davies at the time, “BRICS is becoming a forum for cooperation in a range of areas. Its economic program is continuing to create progress” (Africa News Agency 2015). One of the proclaimed aims of Russia’s 2015 BRICS presidency was to ensure a qualitatively new level of external relations for the group. It planned a program of regular consultations with the heads of leading international and regional organizations, including the African Union (AU), the League of Arab States and the Organisation of Islamic Cooperation, to establish the practice of sending messages from the presidency to the international organizations on the most pressing issues on the world’s political, financial and economic agenda (Russia’s BRICS Presidency 2014). The BRICS programs, adopted at each summit, provide aid to Africa in the form of implementing strategies for sustainable development, including food and energy security, new technologies and innovation policy, assisting in building infrastructure, pursuing a joint search for models of political systems and modernizing social structures. They also include issues important for Africa, such as the environment, climate change, crises and conflict response.

Growing trade between the BRICS and Africa The BRICS countries are redrawing the economic landscape of the ­A frican continent. Total BRICS trade with Africa rose from $22 billion in 2000 to $340 billion in 2012; it reached nearly $350 billion in 2013 and was projected to reach $500 billion by 2015 (United Nations Economic Commission for ­Africa 2013). In 2014, total BRICS trade with Africa hit $376 billion (­Strausau 2015). The Standard Bank of South Africa estimated that trade would rise to between $400 billion and $420 billion in 2015, a decrease from the $500 billion estimated in 2009 (Odendaal 2014). In 2013, BRICS members traded more with Africa than they did among themselves. China’s share of the BRICS-Africa trade in 2013 was 61 percent, India’s was 21 percent, ­Brazil’s was eight percent, South Africa’s was seven percent and ­Russia’s was three percent (Gumede 2014, 2). The proportion of gross domestic product of trade with Africa for India and China in 2012 was 1.4  percent and 1.6 ­percent respectively; for Brazil, it was 1.2 percent, Russia 0.3 percent and South Africa four percent (in 2011) (Sandrey et al. 2013). China has now surpassed the United States to become Africa’s largest trading partner. China’s trade with African states grew from $10 billion in 2000 to $220 billion in 2014, and rose to $300 billion in 2015. According to former Chinese deputy foreign minister Yang Fuchang, China intends to increase its trade with Africa to $500 billion by 2020 (Xinhua 2015b).

244  Tatiana Deych India-Africa trade multiplied 20 times over 15 years to reach $72 billion in 2014 (Swaraj 2015). At the second meeting of Africa-India trade ministers in 2012, the target for bilateral trade for 2015 was revised to $90 ­billion from $70 billion, set at the first meeting the year before (AU 2011; India, Ministry of Commerce and Industry 2012). The top six African exporters account for 89 percent of total African exports by value to India, thanks mainly to the export of oil, ore and gold (Gakhar and Gokharn 2015). However, 40 of the 54 African countries had a negative balance in trade with India (Confederation of Indian Industry [CII] and World Trade Organization [WTO] 2013, 16). In 2014, India expanded its scheme for least developed countries (LDCs) to include 98 percent of tariff lines; it allowed African countries to increase their export to India (Gakhar and Gokharn 2015). A trade surplus of Africa with India was estimated at just over $6 billion in 2014 (KPMG and CII 2015, 6). Since 2005, Africa has become one of Brazil’s fastest growing trade partners. Brazil’s trade to the continent expanded from $4.3 billion in 2000 to $28.5 billion in 2013 (Muggah and Thompson 2015). Lusophone Africa accounts for just 12.6 percent of exports and 5.5 percent of imports (mostly from Angola) (George 2014, 6). Brazil’s trade deficit with Africa averaged $2.5 billion per year between 2004 and 2013 (George 2014, 4). Africa is an important supplier of natural resources for the BRICS countries. From 2005 to 2011, mineral fuels accounted for 70 percent of Africa’s exports to China, 80 percent of exports to India and 85 percent of exports to Brazil (CII and WTO 2013, 19). China was the second export market for Africa after the European Union, with India the fourth and Brazil the sixth (CII and WTO 2013, 18). China, India and Brazil accounted for almost 22 percent of African imports (compared to 13 percent in 2005). African imports from India grew annually by 23.1 percent, from China by 25.6 percent and from Brazil by 12 percent (CII and WTO 2013, 18). Russia lags behind other BRICS countries in trade with Africa. According to the statistics produced by the Russian Federation, its trade turnover with Africa amounted to $9.6 billion in 2013 and $12 billion in 2014 (in 2013, exports were $7.1 billion and imports were $2.5 billion). In 2012, Russia’s main import partners were South Africa (22 percent), Morocco (19 percent) and Egypt (13 percent); its main export partners were Egypt (48 percent), Morocco (16 percent) and Tunisia (12 percent) (Green 2012). Russia introduced a preferential trade system for African exporters of traditional export goods to remove import duties and restrictions. In 2013, South Africa’s trade with rest of Africa reached $25 billion (exports were $16 billion and imports were $9 billion) (Odendaal 2014). But trade ­ outhern statistics excluded South Africa’s trade with its partners in the S ­African Customs Union (SACU). If trade with the four markets of S ­ waziland, ­Botswana, Lesotho and Namibia in SACU is included, then trade between South Africa and Africa rose to $38 billion in 2013 (Odendaal 2014).

BRICS regional policy in Africa  245

The BRICS as a donor in Africa The BRICS has become an important actor of development aid to Africa. China is a leader in this area of cooperation. It provides assistance to almost all African states, although the main beneficiaries are the resource-rich countries. According to the white paper titled “China-Africa Trade and Economic Co-operation” published by the State Council of the People’s Republic of China (2013), between 2010 and 2012 China approved concession and soft loans to 92 African projects in the amount of $11.3 billion ($4.7 billion per year). Most were granted by the Export-Import Bank of China (China Exim Bank). Between 2000 and 2011, China carried out 1,673 non-­investment projects in infrastructure, transport and energy worth $75.4 billion in 50 ­African countries (UN Integrated Regional Information Networks 2013). At the fifth ministerial conference of the Forum on China-Africa Cooperation (FOCAC) in Beijing in 2012, China pledged to provide Africa loans worth $20 billion—twice as much as pledged at the 2009 meeting. During his visit to Africa in 2014, China’s Premier Li Keqiang announced the new loans to African countries in the amount of $10 billion (Blanchard 2014). China also cancelled $30 billion in debts of 35 African countries. After the United Nations declaration of the Sustainable Development Goals (SDGs) in 2015, Chinese president Xi Jinping pledged China’s support, saying that it would set up a $2 billion fund for South-South cooperation and would increase investment in the LDCs to $12 billion by 2030 (Bräutigam 2015). At the opening ceremony of the FOCAC meeting in ­Johannesburg in December 2015, Xi announced that China would offer $60 billion for African countries during the next three years, three times as much as committed at the 2012 meeting (Xinhua 2015c). This package included $5 billion in aid and interest-free loans, $35 billion in preferential loans and export credits, and $20 billion in capital divided among three Africa-focused funds (Desjardins 2015). Areas that would receive funding included industrialization, agriculture, infrastructure and drought-stricken countries. China promised to cancel debts for Africa’s LDCs in zero interest loans that matured at the end of 2015. Africa accounts for more than 60 percent of the credits offered by the ­Export-Import Bank of India (India Exim Bank). By 2010, India had ­provided funds worth $3.4 billion in 93 lines of credit to 47 African countries. From April 2009 to June 2014, India provided Africa $4.2 billion in loans, with 36 percent in agriculture and 23 percent in energy (Jacob 2015). At the third ­Africa-India trade ministers meeting in Johannesburg in 2013, South ­Africa’s trade minister Rob Davies said that “India is ideally placed to help Africa industrialization to move beyond the extraction and export of commodities to the production of value-added goods” (SA News 2013). India has given credit lines up to $7.4 billion, of which at least $3.5 billion has been disbursed to support 137 projects in 41 countries (Vines 2015).

246  Tatiana Deych More than half of Brazil’s technical cooperation resources were directed toward the continent in 2011. The Brazilian Cooperation Agency (ABC) had developed 77 technical cooperation projects, with more than half in Africa, with particular attention paid to the agricultural sector (Marcondes de Souza Neto 2013, 84–85). In 2010, Africa accounted for 60 percent of the aid allocated by the ABC (Marcondes de Souza Neto 2013). In 2012, Brazil set up a national program for farm development that increased family-based agriculture and extended its experience to the African countries. The ­Brazilian Agricultural Research Corporation (EMBRAPA), which has 47 research centres and 14 technology transfer centres, provides financial and ­ ozambique credit support to farmers (Juma 2013). With offices in Mali, M and Senegal, it helps to develop production of soybeans, sugar cane, corn and cotton in Tanzania and established an agency of agricultural technologies in Ethiopia. EMBRAPA is implementing a cotton-growing project in Mali, Benin, Burkina Faso, Chad and Togo. A recent field of Brazil activity in Africa is biofuel production (Stolte 2012, 12, 16). Russia renders assistance to Africa mainly through international organizations and foundations. Russia has cancelled $20 billion in African debts. From 2009 to 2012, it provided $100 million to LDCs (RT 2012). Since 2005, Russia has been making regular payments to the World Food Programme to ensure food security ($244 million) (Korendyasov 2013, 109). Since independence, South Africa has positioned itself as a partner of African countries. President Thabo Mbeki was one of the initiators of the New Partnership for Africa’s Development (NEPAD). Sven Grimm (2013), director of the Centre for Chinese Studies at Stellenbosch University, called South Africa a “medium-size” donor. Its advantageous financing facilities include regional organizations, primarily the AU and the Southern Africa Development Community (SADC). South Africa also provides humanitarian assistance to LDCs. The African Renaissance and International Cooperation Fund provided funding of $45–$75 million annually for approximately 20 projects, in particular to support states emerging from conflicts (­Democratic Republic of Congo [DRC] and Sudan) (Tjønneland 2013).

BRICS-Africa investment cooperation In 2010, the BRICS’s share in inward foreign direct investment (FDI) reached 14 percent, and FDI inflows to Africa reached 25 percent. Among the top 20 investors in Africa in 2011, China, India, South Africa were ranked fourth, fifth and 17th respectively in terms of FDI flows; and South Africa, China, India and Russia were the fifth, sixth, seventh and 15th largest holders of FDI. In 2014, foreign investment in Africa reached $80 billion (Stevis 2014). Investments held collectively by the BRICS countries totalled $67.7 billion; China alone invested $27.7 billion—almost half of the BRICS total. For some experts, BRICS engagement in Africa is driven only by the continent’s natural resources. However, according to the UN Conference on Trade and Development ([UNCTAD] 2013), 75 percent of the value of

BRICS regional policy in Africa  247 BRICS FDI in Africa between 2003 and 2012 was in manufacturing and services. Only 10 percent of projects and 26 percent of their value were in the natural resources and agricultural sectors (African Development Bank 2013). BRICS FDI in African projects in the manufacturing and services sectors promoted job creation and industrial growth. China is the top investor among the BRICS countries. By September 2013, China had increased its outbound FDI by 17 percent since 2012, in contrast to global foreign investments, which declined by the same amount. Its direct investment in Africa grew to $32.4 billion by 2014, which it planned to increase to $100 billion by 2020 (FOCAC 2015). In the decade ending 2015, Indian investments in Africa rose to as much as $35 billion (Roche 2015). At the nine India-Africa Conclave meetings held by the Confederation of Indian Industry (CII) and the India Exim Bank between 2005 and 2013, there were 1,985 projects worth $172 billion discussed (CII and WTO 2013, 52). This partnership promotes the development of small and medium-sized enterprises in Africa. Brazilian investment in Africa has remained relatively limited—between $10 billion and $20 billion in 2011. Among the top investors are ABC and EMBRAPA (Muggah and Thompson 2015). Brazil’s investments in Africa are concentrated in mining, construction, agriculture, energy and pharmaceutical industries. They go mainly to Lusophone Africa (Angola and ­Mozambique) and to oil suppliers (Algeria and Nigeria). Brazil has expanded its business in the ethanol industry in Angola, Ghana and M ­ ozambique (UNCTAD 2013). The direct investments of Russian companies in Africa were estimated at $9 billion in 2012. The volume declared for 2013–20 was $17 billion. Russian investment in Africa accounted for 2013 to approximately four percent of its FDI ($362 billion) and three percent of all FDI in Africa ($560–570 ­billion) (Korendyasov 2013, 101). Up to 80 percent of Russian investment was directed to exploring and extracting natural resources. South Africa has become a visible investor in Africa, particularly in the form of public-private partnerships. In 2012, it invested in 75 projects in Africa, which totalled $1.4 billion and constituted 12 percent of total FDI for the continent (Mail and Guardian Africa 2015). Only China, ­I ndia, the United States, the United Kingdom and Canada invested more in terms of value. South African firms invest mostly in services and consumer goods. Although the BRICS’s investment policy is welcomed by African countries, some aspects are criticized by Africans. As far as China is concerned, critics say that low prices for contracts signed by Chinese firms make ­African companies noncompetitive and low wages force local workers to go on protest strikes. Chinese companies bring workers from China, instead of engaging local personnel, and ignore measures to protect the environment. But Beijing has been taking steps to change the situation, for example through its anticorruption campaign and in its environmental protection. Today, more and more local workers are getting jobs in Chinese firms. China is also training local specialists in different professions.

248  Tatiana Deych

BRICS companies on African markets More than 2,500 Chinese companies are doing business in Africa. Among them are the China Harbor Engineering Corporation, which is building bridges and ports, and the China Railway Construction Corporation. The Road and Bridge Construction Company Limited is the 109th among the top 225 corporations in the world and is engaged in approximately 500 projects in Africa. China’s leading oil companies are very active in Angola, Nigeria and Sudan. Among them are the China Petroleum and Chemical Corporation (Sinopec), which is in the top 10 Asian oil corporations, the China National Petroleum Corporation (66 percent of China’s oil and gas production and 42 percent of processing) and the China National Offshore Oil Corporation (Deych 2014, 166–67, 185). Despite the accusations that Chinese companies use their workers instead of hiring locally, according to Chinese sources more than 85 percent of workers engaged in Africa by Chinese corporations are Africans (APC Communiqué 2012). Indian companies are active in telecommunications, pharmaceuticals, construction and resources. Public sector enterprises include Indian Telephone Industries, Rail India Technical and Economic Services and K ­ onkan Railways. Major private sector corporations include Tata, Mahindra and Mahindra, Ranbaxy Laboratories and Bharti Airtel. In March 2014, the state-owned Oil and Natural Gas Corporation Limited and Angola’s ­Sonangol signed an agreement to develop oil found on the sea shelf. Indian companies participate in developing coal and gas deposits in Mozambique. India uses local staff in its African projects, so its policy is less criticized on the continent. Brazilian companies are also visible in Africa. Vale do Rio Doce has invested about $2.5 billion, mostly in mining projects in Africa, and was planning to scale up investment to $15–20 billion between 2010 and 2015. Vale operates in a coal project in Mozambique, responsible for creating 4,500 jobs. Petrobras is one of the world’s leading oil companies, the largest company in Brazil and the third largest industrial company in Latin ­A merica with revenues close to $100 billion. Petrobras invested $3 billion in ­Africa between 2009 and 2013, and operates in Angola, Gabon, Nigeria and ­Tanzania. The construction company Odebrecht has completed projects in Congo, Botswana, South Africa, Gabon and Djibouti. It employs local workers: in Liberia, people came for hundreds of kilometres to work on its railway construction project. Odebrecht is also involved in biofuel production in Angola, Libya, Liberia, Mozambique and Ghana. Its first plant, producing ethanol, was built in Sudan. Eighteen major Russian companies have 40 projects in Africa, mainly in mining. Rusal, one of the world’s leading aluminum producers, has operations in Namibia, Guinea, South Africa, Angola and Nigeria. ­Lukoil invested in oil exploration in Côte d’Ivoire, Sierra Leone and Ghana. The important projects are the development of manganese and vanadium in

BRICS regional policy in Africa  249 South Africa by Renova and Evraz; iron in Liberia, Congo and Gabon by Severstal; diamonds in Angola by ALROSA. Gazprom is developing oil fields in Algeria, Nigeria, Namibia and Equatorial Guinea. South African companies play important roles in the energy, mining and food sectors in Africa. Sasol, a global player in energy and chemical industries, is active in Mozambique, Botswana, Gabon and Nigeria. Anglo Gold Ashanti, the first South African gold extractor, operates in Ghana, Mali, Namibia and Tanzania. The agribusiness firm Tiger Brands has made acquisitions in Nigeria, buying Deli Foods Nigeria in 2011 and a 63.5 percent stake in Dangote Flour Mills in 2012 (Mthembu-Salter 2013).

Focus on African infrastructure Poor infrastructure is a major impediment to faster economic development in Africa. Xhanti Payi, a Johannesburg-based economist, said in 2015 that Africa needed in $90 billion a year to meet its infrastructure development needs (Al Jazeera 2015). Infrastructure is among the priorities of BRICS African policy. The eThekwini Declaration declared: “We will seek to stimulate infrastructure investment on the basis of mutual benefit to support industrial development, job-creation, skills development, food and nutrition security, poverty eradication and sustainable development in Africa” (BRICS 2013). In 2012, China became the number-one foreign investor in African infrastructure, with $13 billion invested. The next largest investor was the World Bank with about $4 billion (Frimpong 2014). China participated in more than 500 infrastructure projects. It followed the principle of using raw materials in exchange for infrastructure: its agreements included investing not only in resource extraction but also in railways and roads, dams, power stations and buildings. At the 2012 FOCAC meeting, Chinese president Hu Jintao declared that China would shift development assistance for Africa from “hard” to “soft” infrastructure (Zhang 2013). Hu said that 100 schools, 30 hospitals, 30 anti-malaria clinics and 20 centres for demonstrating agricultural technologies had been built in Africa with Chinese aid (Ighobor 2013). The new AU headquarters in Addis Ababa, Ethiopia—“China’s gift to Africa”—was built free of charge. The Chinese telecommunications ­g iant Huawei Technology signed contracts for $400 million to provide mobile links for Kenya, Zimbabwe and Nigeria. ZTE invested in the modernization of television and telephone networks in Africa. WeChat Africa pledged to invest $3.5 million in tech startups in Africa to support and development information technology (Africa Business Central 2015). By the end of 2013, the projects contracted by Chinese companies in ­Africa included the construction of more than 2,200 kilometres of railways and 3,500 kilometres of roads. During his visit to Kenya in January 2015, Chinese Minister of Foreign Affairs Wang Yi said that China would help Africa to realize its dream of building a high-speed railway connecting the

250  Tatiana Deych continent’s capitals (Hou and Zhao 2015). Kenya received $3.75 billion for the construction of Mombasa-Nairobi-Malabo railway, a key project in its Vision 2030 national development strategy (Ndonga 2013). The MombasaNairobi line was completed in May 2017 with further extensions planned for Uganda, the DRC, Rwanda, Burundi and South Sudan (Parke 2016). China has awarded contracts for restoring the Benguela railway in Angola, for constructing the railway system from the interior of Nigeria to the coast. Chinese companies are building railways in South Africa and Mozambique, the highway in Rwanda. China intends to combine the Tanzania-Zambia Railway Authority it built in the 1960s, which connected the copper belt of Zambia to the Indian Ocean, with the Benguela railway to create an east– west corridor across the continent. India invested $2.6 billion in 20 infrastructure projects in Africa between 2005 and 2007 at about $500 million per year. In 2010, $263 million was provided to finance new hydroelectric dams and an urban railway in Kinshasa. In September 2015, India extended a line of credit of $24 million to the Côte d’Ivoire for an electricity interconnection project between it and Mali that would add 60 megawatts to Mali’s networks (KPMG and CII 2015, 20). Indian firms play a significant role in Africa’s telecommunications industry. Brazil has been involved in 38 infrastructure projects in Africa since 2000 (United Nations, Office of the Special Adviser on Africa 2015). Among them are the transformation of the Nacala air force base at the international airport and an infrastructure in Moatize coal mine in Mozambique, as well as a highway to connect Mozambique and South Africa that is involved in nine major projects across the continent as part of the Presidential Infrastructure ­Champion Initiative (PICI), fully funding two of them. Its projects include the Dar es Salaam terminal, the Port of Durban and a railway line in Zimbabwe. South Africa is involved in nine major projects across the continent as part of NEPAD’s PICI, which it chairs (Deych and Usov 2015; NEPAD 2015). South Africa’s Transnet Group is investing $39.1 billion for seven years to develop South Africa’s port and railway infrastructure. Spoornet, with shares of 80 percent in African railways, has been reconstructing the rail line linking Ethiopia and Eritrea. The South African government has allocated $1.5 billion for constructing the railway between South Africa and Swaziland, which costs $2 billion (Phatkathi 2012). MTN, the main South African telecommunication company, is working in 21 countries across ­Africa and the Middle East.

The banking sector as a coordinator of financial and economic cooperation The banking sector plays a significant role in financial cooperation between the BRICS and Africa. Chinese financial institutions participate actively in aid and investment in African countries. The state-owned China

BRICS regional policy in Africa  251 Development Bank (CDB) oversees government equity support for ­Chinese corporations in Africa. In 2007, the CDB launched the China-Africa ­Development Fund to support Chinese companies operating in Africa. In 2013, Wang Yong, the fund’s executive vice president, declared that in six years it had committed $2.4 billion in 64 projects in more than 30 African countries (Wakaba 2014). The China Exim Bank has become the world’s largest export credit agency with significant and expanding operations in Africa. Ethiopia’s president Mulatu Teshome said that these banks “are playing a very significant role in Africa’s economic development” (Moody and Chao 2014). The India Exim Bank also manages loans and credits to African countries. Asian banks are working closely with the African banks: the African ­Development Bank (AfDB), the African Export-Import Bank (Afreximbank), the ECOWAS Bank for Investment and Development, and the East ­African Development Bank. The Asian Infrastructure Investment Bank (AIIB) opened in January 2016 in Beijing. Its 57 member states have contributed $100 ­billion in its capital. The AIIB is the first multilateral bank that does not have the United States and Japan as partners. The World Bank and the AfDB have stated that they would cooperate with the AIIB. ­China’s share of the AIIB’s capital is $30 billion, and it is willing to invest $50 ­m illion more for infrastructure projects in LDCs (Dasgupta 2016). In 2009, the Brazilian Development Bank (BNDES) started a line of credit worth $265 million. It started another in 2010 worth $360 million. These funds are for companies willing to conduct business in Africa (Instituto de Pesquisa Econômica Aplicada and World Bank 2012, 6). BNDES disbursed $2.9 billion to underwrite projects in Africa between 2007 and 2014 (­Muggah and Thompson 2015). In 2013, it opened an office in Johannesburg. Russia’s Vneshtorgbank opened the first bank in Angola to have predominantly foreign ownership and then moved into Namibia and Côte d’Ivoire. Renaissance Capital owns 25 percent of the shares in Ecobank, one of the largest banks in Nigeria (UNCTAD 2013). South Africa is also engaged in BRICS banking with Africa. The continent’s five biggest banks are South African, and all of them finance African projects. Standard Bank plays an important role in financial assistance to African countries. South Africa also invests in Africa through its Industrial Development Corporation and the Development Bank of South Africa. The NDB, with an initial capital of $50 billion that will grow to $100 billion, may contribute to Africa. It aims to mobilize resources for infrastructure projects and sustainable development in BRICS countries, other emerging economies and developing countries, including Africa. The NDB and its reserve currency pool of $100 billion are alternatives to the World Bank and the IMF, where the North countries play the decisive role. The recent establishment of the NDB demonstrates the changes taking place in the world. “Ten years ago the creation of such banks would have been greeted with open derision and laughter in Washington, London, Paris, and other Western capitals. They’re certainly not laughing anymore” (Adomanis 2014).

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Soft power as an important tool for the BRICS After the end of the Cold War, the “non-violent” foreign policy tool of soft power emerged, which was the “ability to get what you want through attraction rather than through coercion” (Nye 2004, x). There are three basic ways to affect the behaviour of others to get what one wants: coercion, payment and attraction (Nye 2009). The first two ways constitute hard power. If a state can affect other states’ preferences or direct the agenda through soft power, as Joseph Nye (2009) writes, it can “save a lot on carrots and sticks. But rarely can it totally replace either.” Smart strategies that combine both hard and soft power—two sides of the same coin—are therefore needed to achieve the same goal (Nye 2009). Chinese scholars have interpreted the concept of soft power within a cultural and ideological framework (Fijałkowski 2011). They state that China’s main source of soft power can be seen in the country’s development model, foreign policies and institutions, whose activity has various aspects, including cultural diplomacy, multilateral diplomacy and assistance programs. Chinese scholars interpret anything other than military coercive measures as soft power—economic aid, debt relief, greater access to Chinese markets, cultural cooperation, scientific cooperation and so on. These tools are widely used in China’s foreign policy in recent years, including its African policy. The BRICS actively uses soft power, in its usual interpretation, in its ­African policy. The BRICS embraces such areas as health care and education. On October 24, 2014, Xi Jinping announced an assistance package of $81.7 million to fight Ebola (Shan 2014). The action plan for 2016–18 issued at the 2015 FOCAC summit in Johannesburg included cooperation between 20 hospitals from China and Africa to train doctors, nurses and public health workers (FOCAC 2015). At Johannesburg, Xi (2015a) also promised to provide assistance to help upgrade African healthcare facilities, train a thousand media professionals and provide satellite reception in 10,000 ­African villages. China pledged to support the building of an AU disease control centre and regional medical centres. The long-term goal of BRICS countries is to form African elites, oriented on South-South cooperation. To assist the development of human resources in Africa, China proposed the African Talents Program to provide training for 30,000 professionals in various fields. Between 2012 and 2015, China trained 30,173 specialists in different fields (Zhang 2015). At the 2015 ­FOCAC summit, China declared it would offer 2,000 opportunities for ­African students to pursue a degree in Chinese universities and 30,000 government scholarships to African countries (FOCAC 2015). Beijing created 46 Confucius Institutes in Africa, where students learn the Chinese language, history and culture. Programs for scientific exchanges and common research projects are also being developed. India is investing in the development of human potential. In 2012, it announced plans to create more than 100 research and innovation centres and

BRICS regional policy in Africa  253 human resource development institutions—planning and management in education, information technology, etc. The quota for African students studying in India has been increased to 22,000, and an Indian–African “virtual university” has been set up as part of the 2008 Pan-African ­Network Project, with the quota for Indian experts teaching African students using distance learning methods being increased to 10,000 (Deych and Usov 2015). Between 2008 and 2015, India provided 40,000 scholarships to ­Africa, with 24,000 scholarships granted between 2011 and 2015 (Swaraj 2015). I­ ndia is engaged in the Pan African e-Network to establish a single system of ­fibre-optic and electronic communications to provide educational and medical support to African countries remotely via satellite technology. By 2013, 12 super specialty hospitals were connected to 48 African hospitals where 460 tele-consultations and 2,500 medical education sessions had been conducted. Simultaneously, 47 training centres were connected to five Indian universities, and nearly 10,000 students had signed up for various courses and more than 3,500 tele-education sessions had been conducted (Mullen et al. 2014, 5). Now the Indian-managed network for education and health is functional in 48 countries (Vines 2015). In 2011, Brazil signed 53 bilateral agreements on health care with 22 African countries. With its rich experience in tropical medicine, it has invested in specialized health centres on the continent. With the assistance of the Oswaldo Cruz Foundation, Brazil invested about $23 million to create a factory to produce generic drugs for treating HIV/AIDS. The factory started operations in 2012. It produces 21 types of medicines to fight HIV/ AIDS, first for Mozambique and later for other African countries (Stolte 2012). Brazil has provided scholarships for African students for education in Brazilian institutions. It helped Cape Verde to create its first public higher education institution and inaugurated the University of International Integration of the Afro-Brazilian Lusophony, open to African students and professors. Students from the DRC, Nigeria and Tanzania study EMBRAPA’s innovative agricultural technologies. By 2016, Russia had contributed $317 million to the Global Fund to Fight AIDS, Malaria and Tuberculosis (2017). In 2009, it contributed $20 million to the World Bank (2009) against malaria in Zambia and Mozambique, and at the summit of the Group of Eight that Russia hosted in St. Petersburg in 2006, it pledged $18 million to support the Global Polio Eradication ­Initiative (G8 2006). In 2014, Russia paid $19 million to the fund to fight the Ebola (Moscow Times 2014). In 2015, Rusal opened the Centre for Microbiological Research and Treatment of Epidemic Diseases in Guinea (­Ministry of ­Foreign Affairs of the Russian Federation 2015). Although Guinea was among the most risky locations in terms of exposure to the Ebola virus, none of the staff, including Russians and Guineans, contracted the deadly virus. Russia is also involved in educating and training professionals. It allocated $43 million for a World Bank program to improve the quality of basic education initiated by Russia (Vasilyev and Korendyasov 2014). Some 8,000

254  Tatiana Deych African students were educated at Russian universities, half of whom were paid by the Russian government (UN Economic Commission for A ­ frica 2013, 16–18). Russia grants 750–800 scholarships to African students annually to study at Russian universities (Vasilyev and Korendyasov 2014). The South African insurance firm Sanlam and the media firm Naspers are also active in Africa. In 2003, Aspen Pharmacare launched the first anti­ retroviral drug developed and manufactured in Africa. Aspen is now one of the leading global players in generic antiretroviral drugs (Maritz 2014).

The BRICS and Africa’s security BRICS members have a common interest in creating a just and democratic world order based on a collective approach to resolving international problems and the rule of international law. The BRICS rejects the attempts of one country or a limited number of countries to impose their will on the rest world. The Fortaleza Declaration states: “We condemn unilateral military interventions and economic sanctions in violation of international law and universally recognized norms of international relations … No State should strengthen its security at the expense of the security of others” (BRICS 2014). BRICS countries are active in UN peacekeeping (see Table 13.1). On June 30, 2017, India contributed 7,676 peacekeepers, Brazil contributed 1,284, South Africa contributed 1,428, China contributed 2,515 and Russia contributed 95 (UN Peacekeeping 2017a). Many of these peacekeepers were posted to missions in Africa. China is the highest contributor of peacekeepers among the five permanent members of the UN Security ­Council. The South Sudan crisis illustrated China’s emergent peacekeeping role. The team of 331 officers and soldiers made a significant contribution to the c­ onflict-ridden country in 2011. When China contributed nearly 400 personnel to the UN mission in Mali in 2013, it was the first time it sent security forces (CCTV Africa 2014). During a conflict in South Sudan in May 2014, Beijing sent 850 soldiers (Sapa-AFP 2014). China has signalled the desire to extend its military presence in Africa. This desire is connected with the need to defend Chinese citizens from becoming victims of terrorists abroad. For example, top managers of the Table 13.1  B  RICS Contributors to UN Peacekeeping Operations on June 30, 2017 Country

Total

Police

Military experts

Staff officers

Brazil China India Russia South Africa

1,284 2,515 7,676 95 1,428

7 155 760 38 56

22 33 67 52 12

21 50 94 5 30

Source: United Nations Peacekeeping (2017a).

Troops 1,234 2,277 7,655 0 1,330

BRICS regional policy in Africa  255 China Railway Construction Corporation were among those murdered by terrorists in Bamako in Mali on November 20, 2015. Xi Jinping (2015b) announced at the UN General Assembly in 2015 that China would contribute 8,000 troops to a peacekeeping standby force. He pledged $100 million over five years in military assistance for AU peacekeeping missions and committed $1 billion over 10 years to a joint China-UN peace and development fund (South China Morning Post 2015). China’s first military strategy white paper outlined a new policy of “active defense” (State Council Information Office of the People’s Republic of China 2015). It said that the Chinese army would “adapt itself to tasks in different regions, develop the capacity of its combat forces for different purposes, and construct a combat force structure for joint operations.” China’s navy would “shift its focus from ‘offshore waters defense’ to the combination of ‘offshore waters defense’ with ‘open seas protection.’” In November 2015, China signed a 10-year contract with Djibouti to establish a military base, which would make it less expensive for Chinese ships to conduct naval patrols and would also give China an airfield to improve its intelligence-gathering capabilities in the Arabian Peninsula, Egypt, Eastern Libya and Central Africa (Wong 2015). India’s contribution to peacekeeping is the third largest in the world and the top among BRICS members. It renders aid to African countries in the struggle against terrorist threat. It is training the Nigerian soldiers for participating in operations against Boko Haram (Salau 2017). India and China are engaged in the struggle against piracy on the coast of Somalia. Three ships of the Indian Navy patrol the Gulf, the Arabian Sea and the area near the Seychelles at any given time. Brazil also participates in UN peacekeeping in Africa. As of June 2017, it has 12 peacekeepers in South Sudan, 10 peacekeepers in Western Sahara, six in the Central African Republic, two in Abyei in Sudan and one in the DRC (United Nations Peacekeeping 2017b). Russia is not among the leading actors in UN peacekeeping, although its peacekeepers take part in all the UN missions in Africa. Russia participates in African peacekeeper training. The number of Africans annually trained in Russia has increased to 400. South Africa ranks third among the BRICS countries in the number of peacekeepers it provides to UN missions. It also uses its diplomacy and political influence by sponsoring peace talks and participating in the settlement of conflict situations on the continent.

The BRICS in Africa: problems and prospects Since 2014, the forecasts for the BRICS and its policies in Africa have grown pessimistic. Goldman Sachs economists predicted in 2003 that BRIC countries would be collectively larger than the six leading industrial economics combined by 2039 (Wilson and Purushothaman 2003, 3). However,

256  Tatiana Deych growth  in BRICS countries has slowed, especially in Brazil and Russia. There has been a downturn in the Chinese economy, which previously enjoyed extremely high rates of growth. In 2014, it grew 7.45 percent, which was the weakest growth in 24 years; in 2015, its growth was 6.9 percent. The IMF considers “geopolitical risks,” and Ukraine and the Middle East, as major threats to global economic recovery (Walker 2014). However, despite a notable slowdown, the BRICS’s overall output jumped from $9.5 trillion to $15.5 trillion within five years, with its contribution to global output increasing from 15 percent in 2009 to 20 percent in 2014 and was set to jump to 25 percent by 2018 (Odendaal 2014). In seeking a more sustainable model of development, China adopted a new economic strategy. Chinese companies are changing from being global manufacturers to being global investors. China’s outward FDI is shifting from natural resources to high technology and consumption-oriented sectors. Chinese investors are diversifying their portfolios, previously focused on the energy and mining sectors, to include the technology, agriculture and real estate sectors. In line with China’s outward FDI growth, the number and size of Chinese privately owned enterprises are also growing, and investment from them currently accounts for half of China’s FDI (Ernst and Young 2015). India seems to be causing less anxiety in financial markets and international economic institutions. Many investors have welcomed the new government of Narendra Modi, who took office in 2014. That year, Jim O’Neill, who coined the term “BRIC,” said: “I am more optimistic than I have been for some time about India” (Walker 2014). Each BRICS country has its advantages in Africa. China is the largest partner of African countries in trade, investment and development aid. There are significant financial possibilities for it to participate in many projects in Africa, particularly in infrastructure. Unlike China-Africa ­cooperation, where state corporations play the leading role, India-Africa cooperation is mainly at the level of large and medium-size private business. India provides less financial aid to Africa than China does, but is the first among the BRICS countries in technologies and services transfer. China and ­India have the potential to become the leaders in manufactured goods and services. Brazil has potential in agricultural products, minerals and transport equipment, and South Africa has advantages in natural resources. For ­Brazil, Africa is a place for promoting the next generation of energy. It gives Africa less funding than China and India; it focuses on technical aid and transfer of technologies, services and expertise, particularly in the agricultural sector. Brazil’s agricultural model includes vertical integration, state support and a high level of mechanization. Brazil also has traditional ties with the continent, with a population of African descent greater than anywhere outside the continent. Brazil focuses on Lusophone Africa, and these relations are based on a common language. It tries to avoid the mistakes that other BRICS countries made in Africa: its companies use local staff, addressing the issue of unemployment.

BRICS regional policy in Africa  257 Russia’s advantage is its rich experience of cooperation with African countries, accumulated during the Soviet period. Many former Soviet students occupy leadership positions in Africa, and Russia can use these ties in order to improve Russia-Africa relations. South Africa considers its participation in the BRICS as an opportunity to raise its role as a regional leader of Africa. Its membership in the BRICS has been criticized. The Sustainable Governance Indicators study by the Bertelsmann Foundation found that economic and social governance appears sustainable in Brazil and China, India is in the middle, and Russia and South Africa have the least sustainable economic and social policies among the five BRICS members (Reisen 2013). However, according to Bheki Lang, South Africa’s ambassador to China, South Africa’s participation in the BRICS is justified because it plays a role as the “financial and logistical gateway to Sub-Saharan Africa” and has more economic potential than other African countries (Tang 2013). Its advantages are its strong financial and banking sectors, and its experience in developing economic strategies (NEPAD) and regional economic integration (SADC). South Africa is also the only country on the continent to have global-level high technologies. Although the BRICS countries have declared their willingness to ­cooperate, they still often act as rivals in Africa. India competes with China for access to African markets. Major Chinese investment in African infrastructure and recently in technology has forced India to seek opportunities to outstrip China. Brazil’s and India’s aspirations to join the UN Security Council also make them competitors. China, India and Brazil compete in African agriculture. Brazil is trying to counter China and India in ­Lusophone Africa, which it regards as its sphere of influence. Nevertheless, there is a broad range of global problems where the interests of the BRICS and Africa coincide and many fields where they can cooperate. There are joint initiatives such as the India-Brazil-South ­A frica Fund (IBSA Fund) managed by the UN Development Programme’s ­Special Unit for South-South Cooperation, providing funding for projects in ­A frican LDCs. In 2015, the BRICS ministers of science and technology signed a memorandum of understanding on science, technology and innovation. The BRICS countries have identified five priority fields in scientific cooperation. China and Brazil may work together to bring electricity to several areas of Africa. According to the Africa Progress Panel (2017), 620 million people in Africa still do not have access to electricity. The situation poses an opportunity to invest in the energy market on the continent. China already made investments to bring electricity to rural African villages. ­Brazil’s historic connection to Africa and its use of renewable energy make it an important player in this market (Xinhua 2015a). The BRICS countries offer a new model of infrastructure co-funding, which can help them to work together in Africa. At Russia’s Ufa Summit in 2015, the BRICS (2015)

258  Tatiana Deych agreed on a strategy for multilateral economic cooperation. In preparing the strategy, Russia had proposed a road map of investment cooperation with 37 projects in various areas (Mcilhone 2014). When Russia assumed the BRICS presidency at the end of 2014, it said it considers the BRICS to be a model of global relations and hoped that the five countries would work in Africa jointly (Russia’s BRICS Presidency 2014). The BRICS is not only an economic entity: it is also important in terms of politics and soft power. The diversity of political systems and cultures in the BRICS, as well as the affinity of views and interests, makes this group well suited to foster new ways of engaging in international relations. The BRICS can use its collective voice to influence decision-making processes of major international institutions in interests of the countries in the South, including those in Africa. The presence of the BRICS in Africa balances the West’s traditional supremacy on the continent. It creates new opportunities for African economics: Africa’s growth is greatly influenced by its relationship with the BRICS. Africans appreciate the advantages of cooperation with the BRICS. The five BRICS members bring new bilateral cooperation and can help Africa overcome some challenges and achieve the SDGs.

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Part V

Conclusion

14 Looking into the future of the BRICS Marina Larionova

An analysis of the first sequence of summits of the BRICS group of B ­ razil, Russia, India, China and South Africa provides a sufficient foundation for an outlook on the next sequence of summits. That sequence began with ­Fortaleza in 2014, Ufa in 2015, Goa in 2016 and Xiamen in 2017, and it continues with South Africa in 2018, Brazil in 2019 and Russia in 2020. This prediction builds on evidence from the BRICS performance viewed through the fundamental premise of rational choice institutionalism that institutions are created by states because they see benefits accruing from the functions those institutions perform (Hall and Taylor 1996). The BRICS members came together to establish a platform for dialogue and cooperation to promote peace, security and development in a multi­ polar, interdependent and increasingly complex, globalizing world, on the basis of universally recognized norms of international law and multilateral decision making (BRICS 2012, paras. 3, 4). Since its inception, the group has produced some meaningful achievements. Most notable are the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) (see Table 14.1). The summitry nature of the group will likely persist, resisting BRICS bureaucrats’ push for institutionalization. This would have the double advantage of retaining summit-fostered personal ties among the leaders and building members’ national capacities for dealing with the preparatory processes. Such a combination can be a solid base for the heads of state and government to exert political leadership and also for improved performance of the BRICS as an institution in terms of its capability to respond to arising challenges, deliver on collective decisions and engage with other stakeholders, including international organizations, non-BRICS countries and social partners. BRICS engagement with social partners should evolve to help the group respond better to their expectations and also nurture better understanding among BRICS societies. The BRICS Business Forum and the BRICS Business Council, established in 2010 and in 2013 respectively, should build their capacity for an effective dialogue between business and the governments of the BRICS countries, expanding beyond the nominated five companies per

Table 14.1  BRICS Main Achievements Presidency period/ summit date

Summit venue

Host country

Key topics/achievements

2009–10 June 16, 2009

Yekaterinburg

Russia

2010–11 April 15–16, 2010

Brasilia

Brazil

2011–12 April 13–14, 2011

Sanya

China

2012–13 March 28–29, 2012

New Delhi

India

2013–14 March 26–27, 2013

Durban

South Africa

• Energy and food security • Statement on the BRIC mission: multilateral diplomacy; proactive, pragmatic, open and transparent cooperation; serving common interests of emerging market economies and developing countries; and also to building a harmonious world of lasting peace and common prosperity • Agriculture and energy, Iran’s nuclear program, current economic situation, reform of international financial institutions • First meeting of development banks • Launch of outreach (first business forum) • South Africa invited to join • Reinforcement of BRICS mission (see BRICS 2011, para. 6) • Support for infrastructure development in Africa and industrialization within NEPAD framework • Agreement on using national currencies for economic cooperation • Mandate to report on setting up NDB and CRA • Master Agreement on Extending Credit Facility in Local Currency under BRICS Interbank Cooperation Mechanism • Multilateral Letter of Credit Confirmation Facility Agreement • Support for the Africa’s integration processes and African countries industrialization • Decision to establish the NDB

Looking into the future of the BRICS  269 Presidency period/ summit date

Summit venue

Host country

2014–15 July 15–16, 2014

Fortaleza

Brazil

2015–16 July 8–9, 2015

Ufa

Russia

Key topics/achievements • Mandate to the finance ministers and central bank governors to explore the construction of a financial safety net through the CRA among BRICS countries • Outreach with the African countries • Establishment of a BRICS Business Council and setting up a consortium of expert centres • Signing of agreement to establish the NDB • Signing of treaty to establish CRA • Outreach with Latin American countries • Security in MENA • Entry into force of the NDB and CRA • Adoption of strategy for economic partnership • Security in MENA • Outreach with EAEU and SCO leaders

Notes: CRA, Contingent Reserve Arrangement; EAEU, Eurasian Economic Union; MENA, Middle East and North Africa; NDB, New Development Bank; NEPAD, New Partnership for ­A frica’s Development; SCO, Shanghai Cooperation Organisation.

member to make the engagement more inclusive. The BRICS Academic Forum has been active since 2010, and the BRICS Think Tanks Council (BTTC) was set up in Durban in 2013; both can build on their experience and follow up on the BTTC’s long-term vision for the BRICS that it presented to the leaders in 2015 (BTTC 2015). The Civil BRICS, born in 2015, will need support from future BRICS presidencies to become a consistent contributor to the process and decision making. Given support, it can gradually build capacity to implement the ambitious goals of facilitating constructive dialogue between the BRICS governments and their civil societies, as well as among BRICS civil societies. In alliance, the BRICS Academic Forum and Civil BRICS can contribute to the group’s legitimacy and transparency though monitoring and evaluating the leaders’ implementation of their commitments. Over the mid term, expansion of the BRICS is unlikely, as it would come at a cost of efficiency and the ability to forge consensus. Meanwhile, the BRICS has developed various mechanisms for reaching out to other states using the platform of the Group of 20 (G20) and the BRICS+ mechanism and may continue to coordinate with the Shanghai Cooperation Organisation and other regional groups on members’ respective continents.

270  Marina Larionova The BRICS will retain its mission of building a multipolar, equitable and democratic world order, based on international law, and ensuring a fair representation of developing countries in the international institutions. Central to the BRICS mission, as reflected in its discourse, is “the concept of democracy at the international level, i.e. where states in the international system, like citizens at the national level, are equal before the law and have equal say in co-management of the international system” (de Coning 2015,  32). This is in contrast to the traditional western realist interpretation of the international system being in a state of anarchy with no authorities beyond the state, thus requiring those states with greatest power to manage the international system on behalf of the others (de Coning 2015, 33). Although the BRICS so far has not been able to redress the inequality in global governance, it has taken important steps forward, including gradually building its own ability to cooperate, forge and project collective decisions on sensitive political issues. The BRICS has been more successful on pushing for the reform of international financial institutions, in tandem with the G20, for addressing the issues of quotas and governance at the International Monetary Fund (IMF) to strengthen the voice and representation of emerging and developing economies. Nevertheless, the gap between the gross domestic product of BRICS members and their IMF quotas and voting power is but one example of the remaining incentives for the BRICS to address the persistent imbalance in global governance (see Table 14.2). With China’s economy increasingly driven by new sources of growth, ­India’s continued rise and the recovery of Brazil, Russia and South Africa in the mid term, all five countries are well placed to push for global governance reform and to take more responsibility for delivering global public goods through established intergovernmental organizations and their own institutions. The NDB can “provide a valuable platform for the BRICS advancing reform in the international financial and development architecture that favour developing and emerging countries” (Griffith-Jones 2014, 17). By recent estimates, the NDB would only contribute about 1.5 percent, or $34 billion of the annual $1.8–$2.3 trillion needed for investment in infrastructure by 2020 (Bhattacharya et al. 2012, 10; Griffith-Jones 2014, 16). However, that amount could double if NDB projects are cofinanced by the private sector—which is likely, as their attractiveness would be enhanced if the NDB receives high investment ratings from the three rating agencies (Moody’s, S&P and Fitch). Working in a network of existing multilateral, regional and national development banks, the NDB will augment its capacity to support productive development and play a vital catalytic role in the long-warranted reform of international financial and development institutions. Despite the historical, cultural, social and economic differences among the BRICS members, they are bound by the values they share and will continue to stand for: multilateralism, peace, development, the indivisible nature of security and inclusive decision making based on universally recognized

Table 14.2  BRICS Members’ Voting Power in the International Monetary Fund and Gross Domestic Product IMF quotaa

Brazil Russia India China South Africa Total

IMF voting power (%)a

2.32 2.71 2.75 6.04 0.64

2.22 2.59 2.63 6.07 0.63

14.46

14.14

World Bank GDP growth forecast (%)

IMF GDP growth forecast (%)

GDP (PPP) share of world total (%)

2014

2015

2016b

2017c

2018c

2014

2015b

2016b

2017c

2018c

2014b

2015b

2016b

2017b

2018b

0.5 0.7 7.2 7.3 1.6

−3.8 −2.8 7.9 6.9 1.3

−3.6 −0.2 6.8 6.7 0.3

0.3 1.3 7.2 6.5 0.6

1.8 1.4 7.5 6.3 1.1

0.1 0.6 7.3 7.3 1.5

−3.8 −2.8 8.0 6.9 1.3

−3.6 −0.2 7.1 6.7 0.3

0.3 1.4 7.2 6.7 1.0

1.3 1.4 7.7 6.4 1.2

3.00 3.48 6.66 16.56 0.65

2.80 3.27 6.97 17.15 0.63

2.62 3.17 7.22 17.76 0.62

2.54 3.10 7.49 18.31 0.60

2.48 3.04 7.79 18.76 0.59

30.35

30.82

31.39

32.04

32.66

Sources: International Monetary Fund (2010, 2015, 2017); World Bank (2017, 4); World ­E conomic Outlook Database (2017). a Once all member countries have paid their share. b Estimate. c Projection. GDP, gross domestic product; IMF, International Monetary Fund; PPP, purchasing power parity.

272  Marina Larionova norms of international law. The establishment and cooperation of the BRICS are an affirmation of a new world order where western summitry (itself rising to contain a hegemon) can no longer dominate. The macroeconomic, trade, investment, energy, climate and development policies stated in the BRICS documents reflect a strategy for a new world order that would respond to the needs of the North and the South in a balanced way. The BRICS vision for the political, economic and development dimensions of the new global order are closely aligned and reflect the members’ choice for the “strategy of coexistence,” defined as policy coordination for conflict ­management that develops into a system of governance (de Coning 2015, 45). The strategy of coexistence, intra-BRICS policy coordination and coordination with other actors for better governance, inclusive growth and sustainable development will remain central for the BRICS, whose commitment to inclusive governance was again spelled out in the 2017 Xiamen Declaration, in 23 commitments on international cooperation, which constituted 18 percent of the total commitments (BRICS 2017). The BRICS agenda integrates economic, social and political dimensions in a balanced way. Economic, financial and trade issues will likely remain the top three priorities. However, cooperation on social issues, including health, education and science and innovation, may expand, as all members are aware that investment in human capital is crucial for raising actual and potential output. BRICS members will increase their coordination on political issues and consolidation of efforts to resolve security problems, given their commitment to respond to security threats and support international efforts to address these challenges in a way that provides equal and indivisible security for all states. Cooperation on energy efficiency will broaden with the creation of new intra-BRICS coordination mechanisms. With the NDB now operational and investing in infrastructure in emerging markets and developing countries, BRICS development cooperation can be significantly reinforced. The BRICS would benefit from a change in the institutionalization pattern. A shift from an increasing number of coordination mechanisms to a focus on implementing decisions taken at summits will help enhance the group’s delivery-based effectiveness and legitimacy. Enhanced effectiveness and legitimacy in turn would maximize the attainment of BRICS priorities and consolidate the institution’s capability to fulfil its mission and the functions vested in it by the leaders. The global governance functions of deliberation, direction setting, decision making, delivery and development of global governance in the BRICS discourse are balanced, with decision making constituting almost 30 percent of the total. Deliberation and direction setting are no less important than decision making for the summit’s success, given their effect on the personal connections and mutual understanding among the summit participants and their subsequent decision making. The current distribution of almost equal

Looking into the future of the BRICS  273 shares of the three functions will be retained. So far, the share of delivery is low, but that will rise if the BRICS translates its awareness of accountability to the public into self-accountability mechanisms, which would increase BRICS compliance performance, especially for priority commitments. In engagement with intergovernmental organizations, the BRICS will continue to resort to the two models it has thus far favoured: catalytic influence (the stimulation and support of reform and changes) and parallel treatment (the creation of the forum’s own institutions). The choice of engagement model reflects the group’s role and place in the global governance architecture and depends on the policy area, phase in the cooperation development and perception of the organization’s relevance to the BRICS respective objectives. The BRICS will prioritize its engagement with the United Nations and its institutions, while at the same time trying to stimulate their reform. The BRICS support of G20 decisions will be a steady trend, reflecting the two groups’ shared objective of sustainable, balanced and strong growth. The BRICS will continue to promote the reform of the IMF and World Bank and support efforts to conclude the Doha round of the World Trade Organization. If it establishes new institutions, the BRICS will consolidate its cooperation with other organizations in their respective policy areas. While strengthening its own institutions, the BRICS will apply the model of “governance in alliance with multilateral institutions” to its cooperation with relevant international organizations. There are risks to the BRICS performance, such as the tensions among members, political differences on certain decisions at the UN and divergent stances on approaches to concluding the Doha round. However, there is more that brings the members together than divides them, including their common goals of innovation-driven growth and inclusive and sustainable development. The shared values and goals of the five members define the BRICS’s future cooperation as a concert of equals despite differing economic and political weights.

Acknowledgement This research was carried out with the financial support of the Russian ­Humanities Research Foundation within the framework of a research project “Models of international institutions engagement in the process of multilateral governance in the areas of macroeconomic policy, financial regulation, international trade, investment and infrastructure,” project No 15-07-00022.

References Bhattacharya, Amar, Mattia Romani and Nicholas Stern (2012). “Infrastructure for Development: Meeting the Challenge.” Centre for Climate Change Economics and Policy, Grantham Research Institute on Climate Change and the Environment in collaboration with the Intergovernmental Group of 24, June. www. lse.ac.uk/GranthamInstitute/wp-content/uploads/2014/03/PP-infrastructure-for-­ development-meeting-the-challenge.pdf (September 2017).

274  Marina Larionova BRICS (2011). “Sanya Declaration.” Sanya, 14 April. www.brics.utoronto.ca/docs/ 110414-leaders.html (September 2017). BRICS (2012). “Fourth BRICS Summit: Delhi Declaration.” Sanya, 29 March. www.brics.utoronto.ca/docs/120329-delhi-declaration.html (September 2017). BRICS (2017). “BRICS Leaders Xiamen Declaration.” Xiamen, China, 4 September. www.brics.utoronto.ca/docs/170904-xiamen.html (September 2017). BRICS Think Tanks Council (2015). “Towards a Long-Term Strategy for BRICS: A Proposal by the BRICS Think Tanks Council.” Institute for Applied Economic Research, Brasilia. www.ipea.gov.br/portal/images/stories/PDFs/livros/ livros/151104_brics_long_term_strategy.pdf (September 2017). de Coning, Cedric (2015). “BRICS and Coexistence.” In The BRICS and Coexistence: An Alternative Vision of World Order, Cedric de Coning, Thomas Mandrup and Liselotte Odgaard, eds. Abingdon: Routledge, pp. 25–48. Griffith-Jones, Stephany (2014). “A BRICS Development Bank: A Dream Coming True?” UNCTAD Discussion Papers #215, United Nations Conference on Trade and Development, Geneva. http://unctad.org/en/PublicationsLibrary/ osgdp20141_en.pdf (September 2017). Hall, Peter A. and Rosemary C.R. Taylor (1996). “Political Science and the Three New Institutionalisms.” Political Studies 44(5): 936–57. doi:10.1111/j.146-9248.1996. tb00343.x. International Monetary Fund (2010). “Illustration of Proposed Quota and Voting Shares—By Member.” International Monetary Fund, Washington DC. www.imf. org/external/np/sec/pr/2010/pdfs/pr10418_table.pdf (September 2017). International Monetary Fund (2015). “World Economic Outlook: Adjusting to Lower Commodity Prices.” International Monetary Fund, Washington DC, S ­ eptember. www.imf.org/en/Publications/WEO/Issues/2016/12/31/Adjusting-to-LowerCommodity-Prices (September 2017). International Monetary Fund (2017). “World Economic Outlook Update: A Firming Recovery.” International Monetary Fund, Washington DC, 24 July. www. imf.org/en/Publications/WEO/Issues/2017/07/07/world-economic-outlookupdate-july-2017 (September 2017). World Bank (2017). “Global Economic Prospects: A Fragile Recovery.” World Bank, Washington DC, June. https://openknowledge.worldbank.org/bitstream/handle/ 10986/26800/9781464810244.pdf (September 2017). World Economic Outlook Database (2017). “Gross Purchasing-Power-Parity on Purchasing-Power-Parity (PPP) Share of World Total.” International Monetary Fund, April. www.imf.org/external/pubs/ft/weo/2017/01/weodata/weorept.­aspx?sy= 2014&ey=2018&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=51&pr1.y=9&c= 223%2C924%2C922%2C199%2C534&s=PPPSH&grp=0&a=.

Index

ABC. See Brazilian Cooperation Agency (ABC) accountability 10, 272 Action Plan 2012–16 for Agricultural Cooperation of BRICS Countries 161 Action Plan on Base Erosion and Profit Shifting 58, 77 Action Plan to Support the Development of Local Currency Bond Markets 57 Adler, Emanuel 151 Afghanistan 56, 211, 217 Africa 65–66, 174, 242, 247, 249, 256; agriculture 257; banking 250–251; foreign direct investment (FDI) 246–247; infrastructure 224, 228, 232, 249–250 Africa Institute of South Africa (AISA) 226 Africa Progress Panel 257 Africa-India Forum Summit 229 African Capacity for Immediate Response to Crises (ACIRC) 234 African Development Bank (AfDB) 92, 94, 96, 97, 251 African Export-Import Bank (Afreximbank) 251 African National Congress (ANC) 228, 229 African Regional Centre 232 African Renaissance and International Cooperation Fund 246 African Stand-By Force 234 African Talents Program 252 African Union (AU) 11, 67, 138, 174, 224, 233, 234, 243, 246, 252; China 249; peacekeeping 255; references to 53, 65–66 agenda setting 75–79, 195

Agreement on the New Development Bank 66, 76, 109 agriculture 100, 151, 152, 155, 156, 159, 160, 161, 246, 257 Agriculture Expert WorkingGroup 161 al-Ashad, Bashar 138 Algeria 247, 249 Alliance of Civilizations 55 Amorim, Celso 137 Anglo Gold Ashanti 249 Angola 173, 244, 247, 248, 251 apartheid 223, 225 Argentina 111, 122, 132, 136 Asia 17, 82, 192, 199, 208–220; balance of power 209–210; regional integration 214; security 210–211, 217 Asia-Europe Meeting 34, 204 Asia-Pacific 215, 218 Asia-Pacific Economic Cooperation (APEC) 34, 216, 218 Asian Development Bank (ADB) 35, 92, 93–94, 97 Asian Infrastructure Investment Bank (AIIB) 12, 66, 86, 196, 198, 209, 210, 216, 251; New Development Bank (NDB) 216, 218 Asif, Farooq 85 Aspen Pharmacare 253 Assoociation of South East Asian Nations (ASEAN) 67, 83, 112, 214, 215, 216 astronomy 156, 169, 181, 182, 183 Australia 25 authoritarianism 170–172, 176, 191, 231 Azevêdo, Roberto 235 balance of power 80–81, 82, 132, 190, 194, 204–205, 209–210, 270 Bangladesh 216 Bank of Industrial Development 98

276 Index Bank of Russia 119 Basel Committee for Banking Supervision (BCBS) 60, 76 Bashkortostan 36 Basic Agricultural Information Exchange System (BAIES) 12 Bay of Bengal Initiative 214 Bazilian, Morgan 151 Beijing Declaration (health) 64 Beijing Declaration on the Establishment of a Comprehensive Strategic Partnership between the People’s Republic of China and the Republic of South Africa 229 Benin 246 Bernal-Meza, Raúl 24 Bertelsmann Foundation 257 Bhatia, Rajiv 200 Bilateral Local Currency Settlement Agreement (Russia-China) 125 biodiversity 152, 155 Biswas, Aparajita 130 BNDES. See Brazilian Development Bank (BNDES) Bohler-Muller, Narnia 224, 226 Boko Haram 255 Bond, Patrick 226 Botswana 174, 244, 248, 249 Brasilia Summit, 2010 (BRIC) 55, 58, 106, 107, 139, 169; United Nations 55 Brazil 110, 115, 136, 141, 143, 144, 172, 221, 254, 255; Africa 173, 246, 256; agriculture 106; Asia 212; businesses in Africa 248, 250; China 82, 106, 109, 213; climate change 182; Contingent Reserve Arrangement (CRA) 112; economic growth 115, 210, 231; economic transformation 172–173; foreign policy 137, 213; India 109; Industrial, Technological and Foreign Trade Policy 115; nonnuclear power 80; political crisis 193; population and territory 150; regional integration 214; role in Africa 170; Russia 106–107; South Africa 231; South America 174–175; Syria 215; trade facilitation 114–115; trade with Africa 243–244; trade with China 116; United Nations Security Council (UNSC) 136, 194, 212, 213 Brazil’s BRICS presidency 34, 53, 56, 137 Brazilian Agricultural Research Corporation (EMBRAPA) 176, 246, 247, 253

Brazilian Cooperation Agency (ABC) 246, 247 Brazilian Development Bank (BNDES) 98, 99, 115, 251 Brazilian Monetary Council 125 Brazilian Space Agency 177 Bretton Woods institutions 100–102 Brexit 191 BRIC (Brazil, Russia, India and China) 7, 255; agriculture 160; creation 23, 189, 208; G20 134; Hokkaido-Toyako Summit, 2008 (G8) 32; L’Aquila Summit, 2009 (G8) 33; United Nations 134 BRICS: as an institution 7–8; asymmetry 71, 79–83; causes of performance 32–34; club 35, 79–80; cohesion 24, 25, 77, 81, 84; common goals 130–133; consensus 137, 142, 269; creation 32; as donor in Africa 245–246; economic growth 24, 25, 109, 115–116, 124, 255–256; failure 23–24; founders’ intentions 6; G20 8, 11, 25–26, 29, 194; G7 8, 25–26, 194; global governance 13, 144–145, 201, 203, 208; influence 24–25; international image 48; international organizations 50–54; intra-BRICS exports 106, 107, 109, 116, 117–123; intra-BRICS relations 30, 85, 106, 123–124, 137–138, 183, 272; membership 208–209; ministerial meetings 27–28; mission 8, 29–30, 76, 130–131; normative principles 74–75; performance 6, 26, 28–34, 41; success 25, 27; working groups 12 BRICS Academic Forum 152, 201, 269 BRICS Agricultural Cooperation Working Group 161 BRICS agriculture ministers 63, 65, 155, 160 BRICS Bank Forum 109 BRICS Business Council 96, 109, 228, 267 BRICS Business Forum 109, 228, 267 BRICS Contact Group for Economic and Trade Issues 233 BRICS currencies 111, 114, 120–122, 124. See also individual currency BRICS Economic Cooperation Strategy 156 BRICS employment and labour ministers 9 BRICS energy ministers 9 BRICS Exchanges Alliance 109

Index  277 BRICS finance ministers 62, 66; G20 59; International Monetary Fund (IMF) 60; São Paulo, 2008 57, 109; World Bank 60 BRICS foreign ministers 52, 55, 59, 189, 223 BRICS health ministers 64 BRICS Interbank Cooperation Mechanism 109 BRICS Multilateral Cooperation and Co-financing Agreement for Sustainable Development 98 BRICS Multilateral Letter of Credit Confirmation Facility Agreement 98, 109 BRICS Network University 204 BRICS Research Centre 226 BRICS Roadmap for Trade, Economic and Investment Cooperation until 2020 96 BRICS science and technology officials 162, 204 BRICS science, technology and innovation ministers 156, 168–169. See also Cape Town Declaration BRICS STI Framework for science, technology and innovation 204 BRICS System of Agricultural Information 161 BRICS Think Tanks Council (BTTC) 201, 219, 226, 228, 269 BRICS trade ministers 52, 62, 63 BRICS Urban Infrastructure Forum 155 BRICS+ 197, 205, 269 BRICSMART 109 BRIS (Brazil, Russia, India and South Africa) 174 Brisbane Summit, 2014 (G20) 25, 59, 217 Burkino Faso 246 Burundi 250 Bush, George W. 132 Canada 208, 247 Cannes Summit, 2011 (G20) 59 Cape Town Declaration 168, 169–170, 182, 183 Cape Verde 253 capitalism 74, 111, 172, 173, 174 catalytic engagement 11, 13, 49, 50, 62, 64, 67 Central African Republic 56, 174, 255 Central Asia 81, 197, 214, 215, 216 Central Bank of Brazil 125

central banks 106, 122, 202 Central Europe 92 Centre for Conflict Resolution (CCR) 227 Centre for Microbiological Research and Treatment of Epidemic Diseases 253 CERN 184 Chabane, Collins 229 Chad 246 Chiang Mai Initiative Multilateralization (CMIM) 112, 216 China 28, 93, 110, 117, 139, 140, 143, 146, 157, 160, 172, 177, 213, 252, 254; Africa 173–174, 229, 244, 245, 247–248, 249, 254–255, 256; Asia-Pacific 216; Asian Development Bank (ADB) 93; Asian Infrastructure Investment Bank (AIIB) 216; banking in Africa 251; Brazil 82, 106, 109, 212, 213; as BRICS member 80, 81; businesses in Africa 248; climate change 182–183; Contingent Reserve Arrangement (CRA) 112; economic growth 24, 93, 114, 172, 173–174, 231, 256, 270; economy 81; energy 182; exchange rate 114; as export destination 116; financial crisis, 1997 209; foreign direct investment (FDI) 173–174, 256; foreign policy 215, 219, 252; gross domestic product (GDP) 169, 174; India 24, 82, 83, 174, 214; India-Brazil-South Africa Dialogue Forum (IBSA) 223, 236; International Monetary Fund (IMF) 195; intra-BRICS exports 106, 107, 109, 116; Iran 211; Middle East 215; Mongolia 37; New Development Bank (NDB) 33, 34; Nuclear NonProliferation Treaty (NPT) 211; population and territory 150; rising power 82; Russia 25, 81, 109, 125, 174, 211, 215; Shanghai Cooperation Organization (SCO) 27, 28, 216; South Africa 82, 83, 224, 229; Soviet Union 174; trade with Africa 243–244; Ukraine 211, 213; United Nations Security Council (UNSC) 80, 136, 212; United States 198, 218 China Development Bank (CDB) 98–99, 251 China Exim Bank. See Export-Import Bank of China China Foreign Exchange Trade System (CFETS) 110

278 Index China Harbor Engineering Corporation 248 China National Offshore Oil Corporation 248 China National Petroleum Corporation 248 China Petroleum and Chemical Corporation (Sinopec) 248 China Railway Construction Corporation 248, 254–255 China-Africa Development Fund 251 China’s BRICS presidency 144 China’s G20 presidency 58, 62, 144 Christensen, Steen Fryba 24, 214 Civil BRICS 269 climate change 151–152, 154, 155, 160, 161, 162, 176, 197 club 4, 35, 70, 75, 79, 84, 85, 208–209. See also BRICS, club club diplomacy 71 Cold War 151, 172, 173, 183, 191, 252 Colombia 80 commitments 6, 43 Committee on the Global Financial System 76 Committee on World Food Security 159 Common Reporting Standard for Automatic Exchange of Tax Information 58, 77 Commonwealth 34 Commonwealth of Independent States (CIS) 83, 95 Community of Latin American and Caribbean States 212 compliance 10, 30–31, 43–46. See also delivery Comprehensive Convention on International Terrorism 55 Computer Security Incident Response Team 142 Concept of the Russian Federation’s Presidency in the BRICS 67, 199–200 Concern Worldwide 158 concert diplomacy 72 concert equality model 32 conclusions 42 Confederation of Indian Industry (CII) 247 Confidence-Building Measures in Asia (CICA) 213, 216 Confucius Institutes 230, 252 Congo 248, 249 Congress of South African Trade Unions (COSATU) 235

constricted participation 34 Consultative Group on International Agricultural Research (CGIAR) 159 Consumer Unity and Trust Society (CUTS) International 226 Contingent Reserve Arrangement (CRA) 66, 67, 71, 76, 112–114, 124, 144, 196, 198, 202, 216, 232, 243, 267; alternative to existing institutions 11, 14; clearing mechanism 114; currency swaps 123; and other international financial institutions (IFIs) 58, 77; references to 53, 54 Cooley, Heather 152, 154 Cooper, Andrew F. 25, 72, 75–76, 85 Cooperation Agreement on Innovation 7, 98 Cooperative Memorandum for Economic Modernization 81 core group engagement 49, 50, 67 Core Principles for Systemic Important Payment Systems 125 core-group model 5, 11 Côte d’Ivoire 138, 248, 250, 251 Coutinho, Luciano 37–38 Cox, Robert 24 Crimea, 2014 25, 34, 139, 190, 193, 211, 217. See also Ukraine cross-border payments 110–114 currency appreciation 115. See also foreign exchange currency deviations 119, 124. See also exchange rate fluctuations currency swap agreement 110 currency swaps 106, 110, 112, 114, 123 currency trade settlements 106 cybercrime 140 cybersecurity 141–142 Dalai Lama 173 Dangote Flour Mills 249 Davies, Rob 224, 227, 229, 232, 243, 245 decision making 6, 8, 10, 30, 272 Deli Foods Nigeria 249 deliberation 6, 28–29, 272 delivery 6, 10, 30–31, 272. See also compliance Demidov, Oleg 146 democracy 8, 24, 86, 172 Democratic Republic of Congo (DRC) 55, 56, 174, 234, 250, 253, 255 Department of International Relations and Cooperation (DIRCO) (South Africa) 227

Index  279 Department of Trade and Industry (South Africa) 227 Destradi, Sandra 73 Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) 155 development 37–38, 58, 102, 162, 196; Africa 245–246 Development Bank of South Africa (DBSA) 98, 99, 251 development of global governance 6, 9–10, 31, 78–79, 272 direction setting 6, 10, 29–30, 272 Djibouti 248, 255 Dlamini-Zuma, Nkosasana 174 Doha trade negotiations 12, 32, 62, 63, 198, 273 domestic political cohesion 33 domestic political management 28 Donskoi, Sergei 156–157 Dube, Memory 226–227 Duggan, Niall 74, 76, 84, 151 Durban Summit, 2013 (BRICS) 26, 27, 36, 225, 226–227, 228, 230, 231, 236; Africa 209, 242; Contingent Reserve Arrangement (CRA) 76; development banks 98; G20 58; infrastructure 249; internet governance 142; New Development Bank (NDB) 76, 86, 91; terrorism 146; World Trade Organization (WTO) 62–63 East African Development Bank 251 East Asia 216, 218–219 East Asia Summit 216 East Asian Community (EAC) 83 East Timor 137 Eastern Europe 92 Ebola virus 56, 64–65, 252, 253 Ebrahim, Ebrahim I. 233–234 Ecobank 251 economic growth 24, 51, 60, 109 ECOWAS Bank for Investment and Development 251 Egypt 136, 244, 255 Embraer 177 EMBRAPA. See Brazilian Agricultural Research Corporation (EMBRAPA) environment 155, 156–157, 196–197, 247 Equatorial Guinea 249 Eritrea 250 Ethiopia 246, 250, 251 Eurasia 132, 204 Eurasian Economic Union 12, 67, 209, 216 Eurocentrism 191–193

Europe 146 European Bank for Reconstruction and Development (EBRD) 92, 94–95, 96, 97, 142 European Leadership in Cultural, Science and Innovation Diplomacy 169 European Union 38, 82, 138, 172; regional integration 214; Russia 198; science, technology and innovation 184 Evraz 248–249 exchange rate fluctuations 111, 119–120, 122. See also currency deviations; foreign exchange export similarity index (ESI) 117–118, 121, 125 Export-Import Bank of China 244, 251 Export-Import Bank of India 98, 99, 245, 247, 251 Ezulwini Consensus 235 Farooq, Asif 25, 75–76 Federation of Indian Export Organizations 122 Ferdinand, Peter 74 financial crisis, 1997 35, 209 financial crisis, 2008 24, 27, 32, 81–82, 189, 208, 210, 218 Financial Stability Board (FSB) 76 Financial Stability Forum (FSF) 60, 76 Finger-Kreinin Index 117 Five to Ten Year Framework on Cooperation 229 Flemes, Daniel 72 Fondo Centroamericano de Establización Monetaria 114 Food and Agriculture Organization (FAO) 65, 151, 155, 157–158, 159, 162, 163 food crisis: 1970s 159; 2007 32, 159, 160 food security 32, 63, 151, 152, 156, 157–162, 160–162, 163, 246 foreign direct investment (FDI) 246–247, 256 foreign exchange 106, 112, 122–123. See also BRICS currencies; currency deviations; exchange rate fluctuations Foreign Policy Concept of the Russian Federation 131; 2000 133; 2008 133; 2013 134; 2016 134 Fortaleza Action Plan 36 Fortaleza Summit, 2014 (BRICS) 34–36, 77–78, 98, 138, 140, 142, 196, 254; Africa 242; Contingent Reserve Arrangement (CRA) 66, 232; Crimea,

280 Index 2014 139; food security 162; G20 58; International Monetary Fund (IMF) 61; New Development Bank (NDB) 26, 66, 76, 91; science, technology and innovation 168; South Africa 26, 231; South America 209; United Nations 35, 56; World Trade Organization (WTO) 63 Forum of China 212 Forum on China-African Cooperation (FOCAC) 229, 230, 244, 249, 252 Framework Agreement on Financial Cooperation within the BRICS Inter-Bank Cooperation Mechanism 98 France 146, 208 G20 4, 5, 10, 11, 13, 23, 27, 28, 34, 49, 57, 58, 75, 77, 84, 134, 160, 189, 198, 200, 202, 208, 269, 270; BRIC 134; BRIC finance ministers 57; Contingent Reserve Arrangement (CRA) 76; decision making 4; economic growth 51; references to 52, 54, 57–59 G20 finance ministers, 2008 109 G20 Framework for Strong, Sustainable and Balanced Growth 77 G20/OECD Action Plan on Base Erosion and Profit Shifting 12 G7 4; performance compared to BRICS 31 G8 4, 23, 25, 27, 28, 32, 34, 130, 160, 208, 253; enlargement 208 G8+5 208 Gabon 248, 249 Galbraith, John Kenneth 183 Gandhi, Mahatma 228 Gazprom 249 Germany 138, 208, 211 Ghana 247, 248, 249 Gini coefficient 175 Glänzel, Wolfgang 178 Global Competitiveness Index (GCI) 172, 175 Global Competitiveness Report 175 global financial architecture 98, 100, 102, 123, 195, 196, 270; definition 7 Global Fund to Fight AIDS, Malaria and Tuberculosis 253 global governance 3–5, 13, 26, 49, 54, 71, 86, 131, 134, 136–137, 150, 160, 162, 163, 201, 270, 273. See also

development of global governance; alternative model 70, 81, 144–145, 189–190, 195–196, 205, 234; mechanisms 6, 67, 72–73, 77, 83–84; reform 144. see also development of global governance Global Innovation Index 177 Global Partnership for Agriculture and Food Security 159 Global Polio Eradication Initiative 253 Global Terrorism Index 140 Goa Summit, 2016 (BRICS) 214 Gorodnikova, Natalia 174 governance: definition 85–86 Gramsci, Antonio 24 Greater Brazil Plan 115 Green Climate Fund 202 Grimm, Sven 246 gross domestic product (GDP) 174, 175, 179, 199, 270. See also specific country; as criterion for membership 225 gross expenditure on research and development (GERD) 169, 177, 179 Group of 20. See G20 Group of 77 (G77) 159 Group of Eight. See G8 Group of Eight Plus Five (G8+5) 208 Group of Four (India, Brazil, Germany, Japan) 136, 235 Group of Seven. See G7 Guinea 253 Guinea-Bissau 56, 162, 248 Gulf states 141, 255 Gupta, Joyeeta 154 Haiti 138, 215 Hall, Peter 5 hegemony 72–73, 80, 85, 130, 132–133, 183 Heiligendamm-l’Aquila Dialogue Process 130, 208 Hewitt de Alcántara, Cynthia 73 HIV/AIDS 175, 253 Hokkaido-Toyako Summit, 2008 (G8) 28, 32 Hollanders, Hugo 183 Hong Kong 110, 112 Horizon 2020 Research and Innovation Programme 169 Hu Jintao 28, 249 Huawei Technology 249 Human Science Research Council (HSRC) 226 human security 151

Index  281 IBSA Dialogue Forum 26, 33, 35, 170, 223, 229, 231, 235–236; IBSA Fund 181, 236, 257; IBSA STI Agreement 181–182, 183; science, technology and innovation 181–182 ICANN 142 India 37, 93, 110, 117, 136, 139, 140, 141, 146, 147, 155, 172, 211, 213, 215, 216, 218, 236, 252–253; Africa 173, 245, 250, 256; Brazil 106–107, 109; businesses in Africa 248; China 24, 82, 83, 173, 174, 214; Contingent Reserve Arrangement (CRA) 112; economic growth 24, 115, 231, 256, 270; economic transformation 173; foreign policy 137; gross domestic product (GDP) 173; intra-BRICS exports 106, 116; population and territory 150; Russia 82, 146; Shanghai Cooperation Organization (SCO) 213, 216; South Africa 228–229; trade facilitation 114–115; trade with Africa 243–244; trade with China 116; United Nations Security Council (UNSC) 136, 194, 209, 212; United States 198 India Exim Bank. See Export-Import Bank of India India-Africa Conclave 247 India-Africa Forum Summit 228–229 India-Brazil-South Africa Dialogue Forum. See IBSA Dialogue Forum Indian Institutes of Technology 176 Indian National Congress 228 Indonesia 35, 168, 172, 225 Industrial Development Corporation 251 informal summit institutions 49 information and communications technologies (ICTs) 142, 179, 196, 200 infrastructure 35, 36, 60, 65, 66, 71, 76, 91, 92, 93, 94, 95, 96, 98, 100, 102, 155, 218, 224, 228, 232, 250, 251, 257; Africa 249–250; Brazil 115 institutionalization 9, 12, 84, 130, 144, 203, 212, 267 Inter-American Development Bank (IADB) 92, 95–96, 97 interbank relations 106, 107–109, 110, 111 intergovernmental organizations (IGOs) 4, 7–8, 10–13 Interministerial Joint Working Group 229 International Atomic Energy Agency 137 International Conference on Water Management and Ecology 156

international financial institutions (IFIs) 24, 113, 210; agriculture 159; reform 11, 26, 57, 60–62, 79, 101 International Fund for Agricultural Development (IFAD) 157, 158, 159 International Labour Organization (ILO) 12 international law 8, 11, 131, 134, 144, 254, 267, 272 International Monetary Fund (IMF) 10, 32, 35, 66, 72, 84, 93, 102, 112, 132, 159, 160, 194, 210, 242, 251, 256; 14th General Review of Quotas 11; Articles of Agreement 111; BRICS finance ministers 59, 60; Contingent Reserve Arrangement (CRA) 232; leadership selection 60, 234–235; Middle East 256; multilateral lending 112–114; references to 53, 54, 60–62; reform 60–62, 101, 195, 198, 200, 202, 203, 270, 273; special drawing rights 111 international organizations 47–48 International Poverty Reduction Center 158 International Telecommunication Union (ITU) 141–142 internet 141, 146 internet governance 141–142, 203 intra-BRICS exports. See BRICS. intra-BRICS exports intra-BRICS relations. See BRICS, intra-BRICS relations Iran 122, 137, 197, 210–211, 215, 217 Iraq 211 Ise-Shima Summit, 2016 (G7) 130, 146 Islamic State (ISIS) 140, 198 Israeli-Palestinian conflict 55, 217 Jacobeit, Cord 73 Japan 33, 172, 174, 208, 213, 219, 251 Joint Declaration on the Establishment of a Comprehensive Strategic Partnership 230 Jury, William 154 Kahn, Michael 83 Keck, Zachary 146 Kenya 249–250 Keukeleire, Stephen 86 Kim, Jim Yong 235 Konare, Alfa Umar 237

282 Index Korea 213, 219, 220, 225 Kornegay, Francis 226 Kruger, Anton 233 L’Aquila Summit, 2009 (G8) 33 Laïdi, Zaki 73 Lang, Bheki 257 Larionova, Marina 83–84, 160, 162 Latin America 67, 130, 133, 137, 212, 219, 231 Latin American Integration Association 112 Latin American Reserve Fund 112 Lavrov, Sergey 134 League of Arab States 67, 243 least-developed countries (LDCs) 181, 202, 244, 245, 246, 251, 257 legitimacy 5, 11, 24–25, 49, 72, 170, 216, 217, 218, 270 Lehman Brothers 32 Lesotho 174, 244 Li Keqiang 244 Li Xing 214 liberal capitalism 190 liberal internationalism 73 liberal principles 74 Liberia 248, 249 Libya 32, 55, 65, 80, 138, 226, 233–234, 248, 255; South Africa 174 Liu, J. 151 London Summit, 2009 (G20) 27, 57, 61 Los Cabos Summit, 2012 (G20) 59, 66, 76 Lukoil 248 Lukov, Vadim 193 Lula da Silva, Luiz Inácio 28, 211, 213, 231 Lusophony 173, 244, 247, 253, 256, 257 Macedonia 37–38, 254–255 Madagascar 56 Major Economies Meeting on Energy and Security and Climate Change 27 Mali 56, 246, 250, 254–255 Mandela, Nelson 223 Martins, Marco Antonio 151 Master Agreement on Extending Credit Facility in Local Currencies 98, 109 Mbeki, Thabo 231, 246 McGrew, Anthony 74 Medvedev, Dmitry 28, 134, 138, 233 Memorandum of Understanding on Cooperation among BRICS Export Credit Insurance Agencies 7

Memorandum of Understanding on Cooperation with the New Development Bank 66 Menon, Shivshankar 146 Mercosur 83 Mexico 58, 136, 168, 172, 208, 220, 225 Mgwebi, Derrick Mbuyiselo 234 Middle East 55, 204, 209, 211, 215 middle-income trap 98, 100 Middleton, Carl 151 Mielniczuk, Fabiano 72 Millennium Development Goals (MDGs) 36, 55, 77, 154 Modi, Narendra 213, 219, 228–229, 256 monetary cooperation 106, 107–110 Mongolia 37, 219 Morocco 244 Moscow Exchange (MOEX) 110 Mozambique 246, 247, 248, 249, 250, 253 Mpahlwa, Mandisi 224, 234 MTN 250 multilateral development banks (MDBs) 93, 97, 102, 270 multilateral institutions 71–72; failure 27, 32–33; financial 92–93; informal 4, 7–8 multilateralism 3, 8, 54, 67, 134, 236, 273; financial 107–109; United Nations 4 multipolarity 3–4, 6, 11, 72, 73, 80–81, 132–133, 134, 172, 267, 270 Myanmar 216 Namibia 174, 244, 248, 249, 251 Naspers 253 National Committee on the BRICS Research (Russia) 201 National Development Plan 2030 (South Africa) 115 National Infrastructure Development Plan (South Africa) 115–116 National Institute of Humanities and Social Sciences (South Africa) 226 National Security Strategy (United States) 132 Natoinal Exporter Development Programme (South Africa) 115–116 Nene, Nhlanhla 230 NEPAD (New Partnership for Africa’s Development) 65, 174, 224, 246, 250, 257; references to 53, 54 NETMundial 142 network diplomacy 71, 131, 134, 194

Index  283 New Delhi Summit, 2012 (BRICS) 36, 58, 63, 64, 76, 98, 155, 161; New Development Bank (NDB) 66, 76; United Nations 55–56 New Development Bank (NDB) 25, 67, 70, 76, 77, 79, 84, 91, 100, 122, 144, 157, 163, 196, 198, 210, 232, 236, 243, 267, 270, 272; Africa 251; Asia 218, 220; Asian Infrastructure Investment Bank (AIIB) 66, 86, 196, 216; capital 91; creation 32, 34–35, 66; development 26, 37–38, 102; Fortaleza Summit, 2014 (BRICS) 26, 34–35, 76; headquarters 33, 34, 209, 210, 230; infrastructure 35, 100; institutionalization 7, 14, 71, 211; national development banks 98–99; and other international financial institutions (IFIs) 11, 35, 58, 91, 100, 232; purpose 91–92, 96; references to 11, 31, 53–54; regional development banks 96; resource mobilization 66, 71, 98; South Africa 230, 231–232 New Growth Plan (South Africa) 115–116 New Partnership for Africa’s Development (NEPAD). See NEPAD (New Partnership for Africa’s Development) Nigeria 80, 136, 175, 225, 235, 247, 248, 249, 251, 253 Nikonov, Vyacheslav 131, 237 Nkoane-Mashabane, Naite 223–224, 227, 229, 235 nominal rate of exchange (NER) 111, 119–120, 125 Non-Aligned Movement 193 nonnuclear powers 82 nonproliferation 143 nontraditional security 151. See food security; security. nontraditional; water security North Africa 55 North Atlantic Treaty Organization (NATO) 32, 132, 146, 226, 233 North Korea 216, 219 North, Douglass 170 Nuclear Non-Proliferation Treaty (NPT) 137, 143, 211 nuclear powers 81 Nuclear Security Summit, 2014 59 Nuclear Suppliers Group 211 nuclear weapons 143, 177 Nye, Joseph 225, 252

O’Neill, Jim 25, 27, 130, 150, 168, 174, 181, 183, 201, 208, 256 Obama administration 213 Obama, Barack 132, 195, 218 Odebrecht 248 Okonjo-Iweala, Ngozi 235 Olivier, Gerrit 231 One Belt One Road 209, 211, 215–216. See also Silk Road Economic Belt Organisation for Economic Co-operation and Development (OECD) 12; Science, Technology and Innovation Directorate 177, 179 Organisation of Islamic Cooperation 67, 243 Organization of African Unity (OAU) 174 Orlov, Vladimir 141 Oswaldo Cruz Foundation 176, 253 Ozturk, Ilhan 152 Pacific Alliance 212 Pahl-Wostl, Claudia 154 Pakistan 37, 136, 173, 197 Palestine 56 Palma index 175–176 Pan African e-Network 253 Pan-African Network Project 253 Paraguay 132 parallel treatment 14, 49, 50, 62, 66, 67 Payi, Xhanti 249 peacekeeping 233, 254–255 People’s Bank of China 119, 125 Permanent Five (P5) 35, 80, 131–132, 136, 194, 209, 211, 213, 235. See also United Nations Security Council (UNSC) PESTEL (political, economic, social, technological, environmental and legal) analysis 170–176 Petrobras 248 Petropoulos, Sotiris 83 Petry, Daniel 154 Pittsburgh Summit, 2009 (G20) 57 Plano Brasil Maior 115 Plano Real 172 plurilateral summit institutions (PSIs) 7, 23, 26 political-security 29, 38, 138, 139, 141, 145 predominating, equalizing capabilities 33 Presidential Infrastructure Champion Initiative (PICI) 250 Primakov, Yevgeny 130, 133 protectionism 62, 64, 172, 198

284 Index publication counts 169, 177–178, 180–181, 183 Putin, Vladimir 134, 138, 157, 196, 199, 200, 217, 223, 228, 230 Qaddaffi, Muammar 233 Qobo, Mzukisi 225 rand 111, 120, 121 rational choice 5–6 real 111, 115, 119, 120, 121 real effective exchange rate (REER) 119–120, 125 Regional Comprehensive Economic Partnership (RCEP) 195, 215 regional development banks 96, 112; water security 155 Renaissance Capital 251 renminbi 111–112, 114, 119, 120, 121 Renova 248–249 Reserve Bank of India 110 responsibility to protect (R2P) 233–234 revealed comparative advantage (RCA) 118 rights, human 56, 57, 75, 86, 234 rights, sexual and reproductive 36 Road and Bridge Construction Company Limited 248 Rousseff, Dilma 28, 34, 193, 231 ruble 111, 121 rule of law 131, 134, 175, 236 rupiah 111, 119, 121 Rusal 248, 253 Russia 36, 37, 52, 62, 79–80, 93, 94–95, 110, 131, 134–135, 138, 139, 140, 143, 144, 146, 156, 174, 182, 189, 195, 198, 199–200, 211, 215, 216, 219, 223, 236, 253–254; Africa 173, 246, 247, 257; Asia 212–213; Brazil 106–107, 134; and BRIC creation 23, 26, 27, 130; BRICS Economic Cooperation Strategy 156; as BRICS leader 25; businesses in Africa 248–249; China 81, 109, 125, 134, 174, 211, 215; Contingent Reserve Arrangement (CRA) 112; Crimea 34, 190, 211, 217; economic growth 115, 210, 231; economic transformation 172, 173; foreign policy 133–135, 146, 199–200; G8 26, 33; gross domestic product (GDP) 173; India 134; intra-BRICS exports 106, 116; isolation 37; population and territory 150; position

within BRICS 81–82; sanctions 25; Shanghai Cooperation Organization (SCO) 27, 216; South Africa 230–231; trade with Africa 243–244; trade with China 116; Ukraine 78, 82, 139, 193, 226; United Nations Security Council (UNSC) 35, 80, 131–132, 136, 211 Russia-India-China (RIC) 27, 130, 133, 134, 140, 200; foreign ministers 219 Russia’s BRICS presidency 11, 37, 53, 67, 129, 144, 156, 200, 209, 243, 258; G20 58; World Bank 62 Rwanda 250 Ryabkov, Sergey 72 Sanlam 253 Sanya Summit, 2011 (BRICS) 27, 36, 55, 58, 65, 79, 98, 138, 211, 224; food security 161; South Africa 224; terrorism 139–140 Sasol 249 Saudi Arabia 215 science, technology and innovation 156, 169, 176–180, 204; “Grand Challenges” 182; agreements 181–182; strategies 177 Scopus 178–180 security 130, 139, 233; Asia 210–211; defined 151; human 151; nontraditional 150–152, 163 Senegal 246 Serbia 37–38 Severstal 249 Seychelles 255 Shanghai Convention on Combating Terrorism, Separatism and Extremism 140 Shanghai Cooperation Organization (SCO) 12, 26, 27, 28, 33, 134, 140, 197, 209, 213, 216, 269; Ufa Summit, 2016 (BRICS) 36–37 Shanghai Declaration on the Establishment of the SCO 140 Shaw, Timothy M. 151 Shelepov, Andrey 83–84, 160, 162 shock-activated vulnerability 32 Sierra Leone 248 Silk Road Economic Belt 195, 216. See also One Belt One Road Singh, Manmohan 28, 155, 172 Singh, Suresh 226–227 Sistema de Pagos en Moneda Local (SML) 111, 112, 122–123

Index  285 Six-Party Talks 216 small- and medium-sized enterprises (SMEs) 94, 98, 100 Snowdon, Edward 141 social constructivism 151 Soete, Luc 183 soft power 80, 216, 252–254 Soko, Mills 225 Somalia 255 South Africa 34, 36, 93, 94, 110, 140, 168, 174, 182, 183, 213, 224, 226, 227, 231, 233, 254, 255; “Gateway to Africa” 170, 224, 257; Africa 174, 199, 247; banking in Africa 251; Brazil 231; as BRICS member 26, 27, 75, 82–83, 150, 223, 225, 228, 235, 236, 257; businesses in Africa 249, 250; China 82, 83, 173–174, 229; Contingent Reserve Arrangement (CRA) 232; economic growth 115, 210, 231; economic transformation 172; foreign policy 223–224, 225–226; global governance 136–137; gross domestic product (GDP) 175, 224; India 228–229; intra-BRICS exports 107, 109, 116; Latin America 231; nonnuclear power 80; nuclear weapons 143; political crisis 193; regional integration 214; rights, sexual and reproductive 36; role in BRICS 170; Russia 230–231; tourism 230; trade with Africa 243–244; United Nations Security Council (UNSC) 136; Yekaterinburg Summit, 2009 (BRIC) 223 South Africa–China Business Forum 230 South Africa’s BRICS presidency 53, 65, 228, 236 South African Customs Union 174 South African Institute of International Affairs (SAIIA) 226 South America 132 South Asia 82, 214, 215, 216 South Asian Association for Regional Cooperation (SAARC) 83 South China Sea 174, 217 South Sudan 56, 174, 225, 250, 254, 255 South-South cooperation 205, 220, 242, 245, 252, 257 Southern Africa Development Community (SADC) 246, 257 Southern African Customs Union (SACU) 244

sovereignty 4, 73, 74–75, 79, 81, 83, 84, 85–86, 131, 134 Soviet Union 130, 132, 133, 172, 191 space 56, 143, 177, 182 special drawing rights 202 Square Kilometre Array (SKA) 181, 183, 184 St. Petersburg Summit, 2006 (G8) 253 St. Petersburg Summit, 2013 (G20) 59 Standard Bank of South Africa 243, 251 State of the Nation Address (South Africa) 226, 233 Stephen, Matthew 70, 74 Strategic Arms Reduction Treaty 143 Strategy for BRICS Economic Partnership 57, 64, 144, 198, 237 Stratfor Global Intelligence 132 Studwell, Joe 173 Sudan 138, 225, 248, 255 summit institutions 4–5 sustainable development 56, 57, 66, 71, 76, 77, 91, 96, 98, 99, 100, 160, 251 Sustainable Development Goals (SDGs) 36, 77, 245, 258 Sustainable Governance Indicators 257 Swaziland 174, 244, 250 SWOT (strengths, weaknesses, opportunities and threats) analysis 170 Syria 55, 56, 78, 80, 138, 140, 146, 198, 211, 215 System of Payments and Reciprocal Credits 112 systemic hub model 32 Taiwan 229 Tajikistan 37 Tanzania 246, 249, 250, 253 Tata Institute of Technology 176 Taylor, Ian 208–209 Taylor, Rosemary 5 Terrif, Terry 151 terrorism 55, 78, 139–141, 146, 197, 204–205, 211 Teshome, Mulatu 251 Thomson-Reuters: Framework Programme 7 180 Tianyan Radio Telescope 184 Tibet 214 Tiger Brands 249 Togo 246 Toronto Summit, 2010 (G20) 28 Towards a Long-Term Strategy for BRICS 201

286 Index trade 12, 25, 52, 62–64, 82, 85, 106–124, 158, 161, 172, 174, 181, 190, 195, 198, 213, 218, 229, 231, 243–244, 256; agreements 203; barriers 116–117, 119, 123–124; deficit 119; facilitation 123; surplus 114 Trade Facilitation Agreement 12, 63 Trade in Services Agreement 195 Trans-Pacific Partnership (TPP) 195, 215 Transatlantic Trade and Investment Partnership (TTIP) 195, 218 Transnet Group 250 transparency 75 Treaty for the Establishment of a BRICS Contingent Reserve Arrangement 66, 109 Trump, Donald 191, 195 Tsinghua University 229 Tunisia 244 Turkey 137, 168, 172, 211, 225 Turkey’s G20 presidency 58 Ufa Summit, 2015 (BRICS) 36–38, 37, 56, 58, 66, 77, 138, 141, 142, 144, 162, 194, 197–198, 201, 230, 233, 234, 236, 257–258; Africa 139, 242; Central Asia 214; Contingent Reserve Arrangement (CRA) 66; International Monetary Fund (IMF) 61–62; New Development Bank (NDB) 66, 196; Shanghai Cooperation Organization (SCO) 209; United Nations Convention on Trade and Development (UNCTAD) 64; United Nations Security Council (UNSC) 194; United States 61–62; World Trade Organization (WTO) 63 Uganda 250 Ukraine 78, 81, 82, 139, 146, 213, 215, 226, 256. See also Crimea, 2014 UN Water 163 UN Water Task Force 154, 155 UNESCO Institute for Statistics 179 Union of South American Nations (UNASUR) 137 United Kingdom 208, 247 United Nations 11, 28, 54–57, 67, 84, 134, 138, 140, 143, 162, 163, 177, 194, 200, 203, 217, 233, 234, 236, 254–255, 273; BRICS engagement 10, 54–57; Charter 56, 57, 78, 131, 139, 144, 217; global governance 160; references to 52, 54

United Nations Children’s Fund (UNICEF) 154 United Nations Conference on the World Financial and Economic Crisis 55 United Nations Convention on the Law of the Sea (UNCLOS) 217 United Nations Convention on Trade and Development (UNCTAD) 10, 12, 62–64, 246–247; references to 52, 54 United Nations Development Programme (UNDP) 154–155, 175, 257 United Nations Educational, Scientfic and Cultural Organization (UNESCO) 153, 154 United Nations Environment Programme (UNEP) 154 United Nations Framework Convention on Climate Change (UNFCCC) 55, 202 United Nations General Assembly (UNGA) 27, 52, 55, 59, 136, 138, 139, 162, 189, 255; Crimea 139, 217; references to 56–57 United Nations High Level Task Force on the Food Security Crisis 159 United Nations International Development Organization (UNIDO) 12 United Nations Security Council (UNSC) 23, 32, 35, 52, 55, 131, 138, 194, 200, 209, 211, 254–255. See also Permanent Five (P5); BRICS members as members (2011) 138, 233; Iran 137; Libya 233–234; references to 56; reform 78, 80, 131–132, 136, 202; Resolution 1973 138, 226, 233 United States 62, 121, 132–133, 141, 142, 144, 174, 180–181, 184, 193, 199, 208, 211, 215, 247, 251; Asia 213, 214, 217, 219; Brazil 199; China 81, 198, 218; hegemon 80, 132, 172, 183, 213; India 198; military alliance with Japan and Korea 219; Russia 25, 81, 198; trade with Africa 243 United States Agency for International Development (USAID) 155 United States Congress 11, 195 University of São Paulo 176 Uruguay 111, 122, 132 USSR. See Soviet Union

Index  287 Vale do Rio Doce 248 Vaux, Henry 154 Vnesheconombank (VEB) 98, 99 Vneshtorgbank 251 Vries, Richard 227 Wagner, Caroline 180–181 Wallis, John 170 Wang Yi 249–250 Wang Yizhou 151 Wang Yong 251 Washington consensus 76, 159, 172 Washington Summit, 2008 (G20) 4, 27 water security 151, 152, 153–157, 163 water-energy-food nexus 151, 160 Web of Science 177, 178–180 WeChat Africa 249 Weingast, Barry 170 Wendt, Alexander 151 Western Africa 112 Western Sahara 255 Wolfers, Arnold 151 World Bank 10, 32, 59, 60, 66, 84, 92, 93, 97, 151, 155, 158, 159, 163, 194, 210, 249, 251; Brazil 96–98; China 96–98; global financial crisis 102; India 96–98; leadership selection 60, 80, 234–235; New Development Bank (NDB) 32, 35, 232, 251; references to 53, 54, 60–62; reform 202, 273; Russia 96–98, 253 World Cup 34 World Economic Forum (WEF) 175 World Food Conference 159

World Food Programme (WFP) 157, 158, 159, 246 World Food Summit 158 World Health Assembly 64 World Health Organization (WHO) 10, 12, 155; references to 53, 54, 64–65 World Meteorological Organization (WMO) 155 World Trade Organization (WTO) 10, 12, 32, 62–64, 158, 160, 163, 190, 194, 198, 202, 203, 235, 273; Brazil 231; China 117; Dispute Settlement Understanding 63; India 117, 147; leadership selection 62–63; ministerial conference, 2015 195; references to 52, 54; Russia 52, 62; South Africa 231 Xi Jinping 28, 213, 215, 219, 230, 234, 245, 252, 255 Xiamen Summit, 2017 (BRICS) 272 Yang Fuchang 243–244 Yang Jiechi 205, 224 Yekaterinburg Summit, 2009 (BRIC) 7, 23, 27, 55, 57, 62, 71, 138, 139, 160, 197, 199, 211; South Africa 223 Yeltsin, Boris 133 Zambia 253 Zimbabwe 225, 249, 250 ZTE 249 Zuma, Jacob 28, 138, 146, 223–224, 226, 228–230, 232, 233, 234, 236–237