Opinion BRICS in the G-20 wall

Big emerging countries,as featured by the behaviour of the BRICS,have maintained an ambiguous relationship with summits at the hub of global governance. Although Goldman Sachs can be credited with the “BRICS” coinage over a decade ago,the consolidation of new habits of working together by the most prominent emerging countries came about through the so-called outreach process vis-à-vis the G-7/8 between 2005 and 2009. This mechanism opened up opportunities in terms of cooperation,but it also led to frustration about equality of standing. As Prime Minister Manmohan Singh stated at the 2007 Heiligendamm summit: “We have come here not as petitioners but as partners in an equitable,just and fair management of the global community of nations,which we accept as reality in the globalised world”.

The creation of the G-20 in 2008 amid the “made in the US” financial crisis enhanced confidence about the recognition of the global shift in economic power,marked by multi-polarity and a deepening systemic interdependence. Unlike other fora of global governance,the G-20 at the leaders’ level was based on formal equality of membership in terms of collective problem-solving.

Yet,in terms of practice,the big emerging countries retained a low-key,wait-and-see attitude to the G-20. Preferring to keep their options open,they sought parallel fora of activity to balance their involvement with the old establishment — notably via the gradual institutionalisation of the BRICS summit (India,China,Brazil along with Russia,plus South Africa added in 2011) that allowed both voice opportunities and selected forms of collective action.

The hedging function is magnified by the fact that until 2013,there has been only an indirect institutional connection between the G-20 and the BRICS,with no explicit mention of the BRICS by the G-20. The distinctive feature has been the positioning of a BRICS caucus on the edge of the G-20. BRICS leaders consulted together in Cannes before the 2011 G-20 summit,amid speculation that there would be a BRICS bailout fund for peripheral European nations. This was continued in 2012 at Los Cabos,Mexico,with BRICS leaders issuing a statement that addressed most of the key issues at the G-20 summit,with a focus on the euro crisis.

The lobbying function was apparent in the BRICS’s push for greater institutional reform,particularly at the IMF and the World Bank. Highlighting the shared sense of interest in this,the reform demand is framed under the need for the greater representation of the South in global economic governance while acknowledging the G-20 as the pragmatic conduit for that process.

Against this record of ambiguity,the St Petersburg summit signalled a marked change in attitude. If worried about contagion from the financial meltdown initiated in the North,the BRICS,in the immediate post-2008 period,could contrast the strength of their macroeconomic policy to effectively deal with the crisis. By contrast,in the run-up to the St Petersburg summit,the trajectory of the BRICS approach was more apprehensive,with the centre of attention being placed on the prospect of the US Federal Reserve tapering its policy of quantitative easing and its implications for emerging economies.

The first instinct of the BRICS has been to emphasise the parallel nature of their options,as signalled by the holding of a mini-summit just before St Petersburg. At the declaratory level,the BRICS have called for the US to be sensitive to global implications of its move to unwind monetary stimulus. Operationally,the emphasis has been on ramping up a collective attempt to protect the BRICS economies from global turbulence through the creation of a $100 billion reserve fund for currency swap arrangements among themselves.

Still,what is striking about the new crisis is that it has opened up a two-track approach. The reversal of economic fortunes has not only consolidated the BRICS,but has proved a catalyst for a greater intensity of engagement with the G-20. With double-digit growth and a sense of triumphalism with respect to the old establishment,the BRICS could afford to play a low-key,long game,placing the onus on getting further reforms in the global institutional architecture (with India also pushing the issue of UN Security Council membership),without putting a huge amount of effort into the shaping of the detailed G-20 agenda. While eager to host the BRICS,the heavy lifting for the organisation of the G-20 was left to others — including middle powers such as South Korea,Mexico and Australia.

With weakening economic conditions,there is an appreciation that the symbolic designation of the G-20 as the premier forum of economic global governance needs to be matched by a greater intensity of involvement and concerns about delivery. Hedging and the long game are no longer enough. A telltale sign of this different level of commitment comes with indications that China’s president,Xi Jinping,wants to host the G-20 in 2016 — a robust move at odds with the previous wait-and-see approach.

But this shift from ambiguity to engagement is also reflected in the new sense of privileging of the G-20 by India — concentrating,in the words of Singh,on means to promote “policy coordination among major economies in a manner that provides for a broad-based and sustained global economic recovery and growth” — as opposed to viewing the forum mainly as a mechanism to gain other forms of institutional reform.

Such a change in attitude will not only enhance the G-20’s capacity to deal effectively with collective global problems,but amplify the image of the big emerging countries as actors that take their instrumental as well as symbolic role as global change agents seriously.

Cooper,professor at the Balsillie School of International Affairs and the Department of Political Science,University of Waterloo,Canada,is the author,with Ramesh Thakur,of ‘The Group of 20’