SAIIA

SAIIABRICS ROLE IN

GLOBAL GOVERNANCE

BRICS-TERN MeetingNew Delhi

27 March 2012

Outline Global governance and the BRICS

What is global governance? Focus on economics and trade Potential roles for BRICS

BRICS and G20 Governance of world trade and

investment Issues for the BRICS A possible common agenda

International Financial Institutions World Bank Presidency: A chance for

the BRICS?

2 BRICS-TERN MeetingNew Delhi March 2012

Global Governance Extremely broad – covers almost every

area where there is international cooperation e.g. Peace and security, environment, development,

Focus of BRICS is on economic and trade issues

UN is most widely referred to global institution in BRICS statement – initial priority regarding Security Council reform

G20, WTO and IFIs prioritiesBRICS-TERN Launch Shanghai 19 November

20113

Global Economic Governance WEF Global Risks 2011 two different

but connected global risks: economic disparity worldwide failures in governance

Growth of Asia and other developing regions is rebalancing economic power between countries but there is evidence that economic disparity within countries is growing

BRICS-TERN Launch Shanghai 19 November 2011

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Challenge for BRICS Balance between development

challenges and redressing global imbalances

National interests vs. Common objectives

Shared approach vs. Diversity of position Position with regards to other coalitions

e.g. IBSA Regional groupings for some members


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Potential Roles for BRICS

Rebalancing debate – voice of emerging economies

Development experience Resources and capacity Ideas and positions for mandating to

other institutions Coordination mechanism for

negotiationsBRICS-TERN Launch Shanghai 19 November

20116

G20 and BRICS G20 now established as major forum on

global economic governance matters BRICS coordination limited – dominance

of G7 ongoing? G2 axis of US-China? Agenda often set by chair as no

secretariat Crucial for coalitions to influence

development of G20 processes and to ensure legitimacy


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G20 and BRICS: Research Questions What are BRICS’ core strategic interests

in the G20? What influence, if any, have BRICS had

on G20 outcomes in areas of strategic interest?

How successful have efforts to consult other (including African) stakeholders been?

How could consultation efforts be improved?


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G20 and BRICS: Research Questions Have domestic agendas, policy making

processes, and legislation been – or are poised to be – altered by commitments taken by BRICS in the G20 so far?

Have the relationships between BRICS and the variety of International institutions tasked with the follow-up of G20 decisions as implementation watchdogs been altered as a result of the G20? Those Institutions “underlying” the G20 agendas are for instance: IMF, WB, OECD; IEA, OPEC, FSB, BIS.


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Trade and Investment Growing in terms of BRICS references Now have BRICS Contact Group on

Trade and Investment Trade flows Industrial policy Green industries Trade facilitation Services

BRICS Statement at WTO Ministerial 2011


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BRICS Trade Agenda

The WTO. India, Brazil, and South Africa have shown that they can collaborate on a common agenda and thereby shift the locus of negotiations e.g. G20 on agriculture.

A broader discussion, now including Russia and China, should be pursued with its core focus being on providing emerging market leadership to resuscitate the Doha Round. The future of the WTO should be an issue of core interest to all BRICS countries.


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BRICS Trade Agenda

China’s 12th Five year Plan should be explicitly engaged by BRICS, including currency reform.

Relevant for BRICS since each is keen to develop domestic manufacturing industries which are currently undercut by the ‘China price’ portion associated with the RMB’s peg to the US dollar.

Linked to ongoing trade demand from China through shift to domestic consumption growth from export driven growth


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BRICS Trade Agenda

Common BRICS position within the G20 on global economic imbalances and revival of multilateral trade talks

Recommendations to G20 on ways to break impasse on trade issues


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International Financial Institutions Traditional strong BRICS focus on

efforts to facilitate reform of IMF and World Bank

Some success in shift of voting power Change of leadership of IMF saw

BRICS fail to take common position Opportunity for BRICS with regards to

change of presidency of World Bank in 2012


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SAIIA

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