The current juncture in the development of the world economy is characterized by unprecedented uncertainty and escalation in geopolitical and trade tensions. Against the backdrop of such challenges, the Global South needs to articulate an action plan for the coming years that is to assist the developing economies in mitigating the adverse effects of higher trade restrictions
The current juncture in the development of the world economy is characterized by unprecedented uncertainty and escalation in geopolitical and trade tensions. Against the backdrop of such challenges, the Global South needs to articulate an action plan for the coming years that is to assist the developing economies in mitigating the adverse effects of higher trade restrictions. With July’s BRICS+ summit in Brazil not too far off, the hope is that the decisions adopted will focus on the pragmatic and concrete steps that the Global South can jointly take in response to the emerging challenges.
In what follows a 10-point action plan is proposed that in my view reflects the current priorities of the BRICS bloc and takes advantage of the opportunities that emerge due to Brazil assuming chairmanship in COP and BRICS this year:
1. Expansion in BRICS membership: after the already significant expansion in the past several years, greater focus needs to be accorded now to balancing membership representation across the three main regions of the Global South: Africa, Latin America and Asia. With respect to core membership and the partnership belt greater priority needs to be given to the admission of new members from Latin America.
2. The expansion in membership has rendered the consensus principle difficult to achieve, which should lead the BRICS economies to provide more scope for plurilateral agreements within the BRICS circle.
3. The BRICS economies need to introduce platforms of development institutions (national and regional) that operate jointly with NDB (as part of the NDB+ format) to co-finance projects and create a joint portfolio of key development projects for the Global South economies.
4. Another possible track that enables the Global South to consolidate the available financial resources is via the creation of a platform for the Sovereign Wealth Funds (SWFs) of the developing economies; at this stage almost all BRICS economies have a Sovereign Wealth Fund, the corresponding platform could serve to align investment strategies of BRICS economies in the sphere of “green financing” and sustainable development. In order to coordinate the BRICS SWF financing across sustainable/environmental projects a set of guidelines/principles (analogous to the Santiago principles for SWFs, but with a greater focus on sustainable/environmental investments) could be adopted by BRICS/BRICS+ members.
5. BRICS economies need to develop a roadmap for trade liberalization that involves the discussions and participation of regional integration blocs as key agents in concluding South-South trade agreements; the roadmap needs to accord particular attention to addressing the needs of least developed economies, most notably from Africa.
6. The recently created BRICS platform for land restoration needs to be connected with a BRICS+ platform that brings together the regional development banks and NDB with the key focus directed at co-financing ecological projects – this would provide the resources needed to finance large-scale projects in the environmental sphere.
7. In the sphere of environmental policy, the BRICS could pioneer the participation of regional integration blocs (such as ASEAN and Mercosur) in policy coordination as well as in concluding “region-to-region” environmental accords.
8. In the macroeconomic sphere a revamping of the BRICS CRA mechanism should transform this facility into a fully operational mechanism for providing financial resources and technical assistance to BRICS economies.
9. In the monetary sphere, the Central Banks of BRICS economies need to step up discussions on CBDC inter-operability across members perhaps via a working group that could be launched after the BRICS Summit in July 2025.
10. In order to ensure policy continuity, the BRICS could launch a BRICS Troika mechanism (similar to the one operating in the G20) that brings together the current presidency in the bloc along with the presidency from the preceding year and the one from the subsequent year; the BRICS Troika mechanism could raise not only policy continuity but also the bloc’s connectivity/outreach to other forums/organizations/regional blocs.
Of the above recommendations, the most important steps relate to the creation of platforms for regional development banks as well as BRICS Sovereign Wealth Funds and connecting them with the platforms that target sustainable development, including the recently created BRICS platform for land restoration. Brazil’s chairmanship in COP and BRICS in 2025 should be taken as an opportunity to forge greater connectivity between the COP and the BRICS mechanisms.
Overall, the severity of the challenges facing the global community and the developing world raise the criticality of pursuing a more pragmatic and actionable approach to economic cooperation for the BRICS+ economies. In this respect, South-South trade and environmental cooperation need to be among the key priorities for BRICS in the coming years. During Brazil’s chairmanship this year, the BRICS economies need to explore the synergies that may be attained from their cooperation across the key international forums, including COP, WTO and G20.
Yaroslav Lissovolik is Founder, of BRICS+ Analytics.
