BRICS was originally created as a constellation of the regional leaders of the developing world. The economic imperatives of BRICS development and the opportunities offered by its unique cross-continental/regional format imply that BRICS is in a position to co-integrate the respective regional integration platforms and development institutions, in which BRICS economies are playing a leading role. Without additional resources and spending a network BRICS+ format could launch the operation of platforms that include regional development banks (RDBs), regional financing arrangements (RFAs) and regional trade arrangements (RTAs).
The most important steps that the BRICS may undertake in building a more resilient international financial system is via bringing together the various regional development institutions of the Global South, where BRICS/BRICS+ countries are members. Indeed, rather than creating new institutions or relying mostly on IMF quota redistribution, BRICS economies can create a network of regional development institutions, including regional financing arrangements (RFAs), whose total resources exceed those of the IMF. Such an framework in effect already exists at the global level, whereby the IMF holds coordination/discussions with the main RFAs. The BRICS could hold similar activities with the RFAs of the developing world, with the coordination role reserved for the BRICS CRA – this would require minimal institutionalization and resources from BRICS members.
In the sphere of project financing a similar platform may be created by the regional development institutions of the Global South with a coordination role of the New Development Bank (NDB) – the NDB already has a similar mechanism for the national (rather than regional) development banks of BRICS members.
Perhaps the centerpiece within the set of BRICS+ platforms could be served by the platform for regional integration arrangements in which BRICS+ economies are members. The regional integration blocs forming such a platform could include MERCOSUR, ASEAN, Eurasia Economic Union, the African Continental Free Trade Area and other integration arrangements across the developing world. Such a platform may operate on the basis of annual BRICS+ summits and focus on issues ranging from BRICS+ trade liberalization to stabilization policies and regional monetary integration.
Another possible platform could be composed of the largest sovereign wealth funds (SWFs) of BRICS+ members. The significance of this framework is boosted by the entry of new members of the bloc such as the United Arab Emirates (UAE) that have some of the largest SWFs in the world. Such a platform may coordinate initiatives such as the greater use of national currencies and common initiatives to prioritize investment into environmental projects/assets.
Overall, making use of existing resources at the regional level in a more effective way is the key to boosting the resources available for Global South development without the need for creating new institutions, new layers of bureaucracy and other costly projects. These regional platforms built at the level of BRICS+ may cooperate with similar platforms launched at the global level:
- IMF to coordinate the cooperation among the regional financing arrangements (RFAs) (effectively in place since 2017)
- The World Bank to coordinate the co-financing from the regional development banks (RDBs) – in place since 2023
- The WTO to coordinate the cooperation among the regional trade arrangements (RTAs) (yet to be created)
The process of the formation of such platforms is in motion and BRICS have a comparative advantage in forming such inter-regional networks given that BRICS+ in effect harbors the vast majority of regions and regional arrangements across the developing world.
The BRICS should also support regional integration impulses in the Global South and the creation of regional currencies that surmount the high degree of fragmentation in the monetary systems of the developing world. In particular, there may be scope to explore the possibilities of creating regional currencies in Africa and other regions of the developing world where economic conditions for launching such common currencies are met and where public support is significant.
As regards the views of the business sector on regional integration and the possibility of launching regional currencies, of all of the regions of the Global South, Africa appears to have advanced the discussions on a common regional currency the most. In this respect, according to the third yearly Paftrac Africa CEO Trade Survey launched by the African Business and the Pan-African Private Sector Trade and Investment Committee (Paftrac), “40.3% of African financial services industry participants want to develop a single African currency akin to the euro”. At the same time, more than 50% of Africa’s businesses expressed the opinion that the African Continental Free Trade Area (AfCFTA) would have a positive effect[1].
Overall, the BRICS+ platform can deliver a unique contribution to building a more stable global economic construct by serving as an “integrator” for the multiple regional integration arrangements in the Global South. The latter may include platforms for RTAs/regional integration arrangements, regional development banks and regional financing arrangements, with a supplementary platform being also composed of the national sovereign wealth funds of BRICS+ economies. This “integrator” path for BRICS+ is arguably superior to the alternative tracks of intensive institutionalization of BRICS as well as the sole focus placed on the expansion of the BRICS core.