22 May 2020
CO20102 | BRICS in Time of Pandemic: Leadership from Emerging Economies?
SYNOPSIS
As international institutions come under fire for failing to adequately respond to the COVID-19 pandemic, BRICS has to navigate a post-COVID-19 world order. It can either consolidate the influence of member states for concrete action or succumb to the naysayers of its credibility as an institution of global governance. There are however some bright spots for BRICS leadership.
COMMENTARY
FOREIGN MINISTERS of the five large emerging BRICS economies ─ Brazil, Russia, India, China and South Africa ─ met for a video conference on 28 April 2020 to review the impact of the COVID-19 pandemic on trade and investment among BRICS member states. The meeting was ahead of the bloc’s scheduled July summit in St. Petersburg. This innocuous gathering comes at a time when established international institutions, designed to serve a United States-led liberal order, have lost their credibility.
The escalating row between Washington and Beijing over the role of the World Health Organisation (WHO) in handling the COVID-19 pandemic resulted in a last-minute cancellation of a second virtual summit of G20 leaders. The Trump administration has suspended funding to the WHO. The EU, the UN and G7 too have come under fire for their inadequate COVID-19 action plans. Meanwhile, the World Trade Organisation (WTO) struggles to maintain its relevance as its dispute settlement function is at risk of collapsing. Moreover, nations under lockdown have resorted to panicked protectionism to secure food supplies and medical equipment.
BRICS Response to COVID-19
Amidst the crisis, a concerted BRICS effort could offer a new paradigm for multilateral institutions and shape the discourse in global governance from an emerging countries’ perspective.
A BRICS-driven initiative could serve to underscore the potential of the bloc which not only spans across continents but makes up 42 per cent of the world population and 23 per cent of global GDP. Individual initiatives by BRICS member states are already underway.
India is already providing pharmaceutical assistance to nearly 85 nations on a grant basis to support their response to the pandemic. China has leveraged its manufacturing capacity to provide personal protective equipment to hotspots across the globe under its Health Silk Road diplomacy.
Russia has launched its air mission — ‘From Russia with Love’ — flying medical supplies to Italy while a Russian Antonov-124 packed with medical aid headed to New York. Meanwhile, South Africa is engaged in framing a pan-African response to COVID-19. Brazil is the only BRICS member state in need of a reassessment as President Bolsonaro continues to resist lockdown measures even as infections continue to soar.
Need for Overhaul
To supplement the individual efforts of BRICS countries, existing BRICS mechanisms have been activated. The ministers agreed to allocate US$15 billion to the Shanghai-based BRICS New Development Bank (NDB) towards a special loan instrument for BRICS economies to counteract the economic fallout of the pandemic.
The NDB has been moving quickly to help affected countries recoup some of their financial losses ─ the bank has already disbursed $1 billion emergency loan to China and India, and subsequently to South Africa. Moreover, BRICS countries are expecting to step up cooperation in the healthcare sector, accelerating the process of setting up the BRICS Vaccine Research and Development Centre.
The institutionalisation of BRICS – with the creation of the New Development Bank (NDB) which holds a lending portfolio of more than $15 billion and a Contingent Reserve Arrangement with a capital of $100 billion – alleviates some degree of scepticism towards the bloc which has often been dismissed as a non-starter.
Although BRICS has been lauded for attempting to provide emerging countries with Bretton Woods alternatives to existing multilateral development banks, the NDB has been criticised for lack of transparency and due diligence on its lending practices.
Need to Deliver on Results
Despite claiming to promote sustainable infrastructure and proper governance, the NDB met out a $200 million loan to Transnet – a controversial South African majority state-owned enterprise – to finance the expansion of the Durban port-petrochemical complex amidst fears that not enough due diligence was done in granting the loan.
Moreover, the NDB decided to loan $180 million to Eskom – a power utilities company which is severely in debt and mired in a corruption scandal. The NDB would do well to practice transparency and due diligence to assuage concerns and criticisms on project financing; more than 100 environmental activists led by four African Goldman Prize winners protested against the NDB at the start of the BRICS Johannesburg summit in 2018.
Besides an overhaul of its financial mechanisms, member states need to deliver on implementation of initiatives already in the pipeline. Although countering pandemics, vaccination, joint medical programs, including telemedicine, have long been prominent on the BRICS agenda, failure to follow through has marred the credibility of the bloc in the past.
Reformed Multilateralism
Noting that the pandemic and its subsequent ramifications highlight the need for reform of multilateral systems, Indian Foreign Minister S Jaishankar called for a ‘reformed multilateralism’ focused on the centrality of development and growth in the global agenda.
New Delhi has initiated a joint South Asian response to COVID-19 by activating the South Asian Association for Regional Cooperation (SAARC), despite the grouping being in a stalemate since 2016 with a cancelled summit as tensions heightened between India and Pakistan.
The BRICS foreign ministers’ pledge for a concerted effort by emerging economies in tackling the pandemic is a step in the right direction even as internal dynamics between member states are being navigated.
While India and China remain embroiled in a territorial dispute along the Himalayan frontier, the BRICS member states remain at odds over the expansion of the UN Security Council. With vested interests in the existing system, Russia and China frequently do not go beyond rhetoric in supporting Brazil, India and South Africa’s greater roles in the UN.
Even a decade after its inception, observers remain sceptical of this oddly divergent grouping with different socio-cultural and political systems, whose economies are in different stages of development, and who share some degree of ideological dissonance.
As BRICS seeks to influence and shape the norms of global governance, the onus falls on member states to preserve a modicum of policy coordination – at best a ragged unison – in order to outperform the other multilateral institutions of the liberal order.
About the Author
Nazia Hussain is a Senior Analyst with the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. This is part of an RSIS series.
As international institutions come under fire for failing to adequately respond to the COVID-19 pandemic, BRICS has to navigate a post-COVID-19 world order. Nazia Hussain, senior analyst with the Centre for Multilateralism Studies, RSIS, shares how this can be achieved.
SYNOPSIS
As international institutions come under fire for failing to adequately respond to the COVID-19 pandemic, BRICS has to navigate a post-COVID-19 world order. It can either consolidate the influence of member states for concrete action or succumb to the naysayers of its credibility as an institution of global governance. There are however some bright spots for BRICS leadership.
COMMENTARY
FOREIGN MINISTERS of the five large emerging BRICS economies ─ Brazil, Russia, India, China and South Africa ─ met for a video conference on 28 April 2020 to review the impact of the COVID-19 pandemic on trade and investment among BRICS member states. The meeting was ahead of the bloc’s scheduled July summit in St. Petersburg. This innocuous gathering comes at a time when established international institutions, designed to serve a United States-led liberal order, have lost their credibility.
The escalating row between Washington and Beijing over the role of the World Health Organisation (WHO) in handling the COVID-19 pandemic resulted in a last-minute cancellation of a second virtual summit of G20 leaders. The Trump administration has suspended funding to the WHO. The EU, the UN and G7 too have come under fire for their inadequate COVID-19 action plans. Meanwhile, the World Trade Organisation (WTO) struggles to maintain its relevance as its dispute settlement function is at risk of collapsing. Moreover, nations under lockdown have resorted to panicked protectionism to secure food supplies and medical equipment.
BRICS Response to COVID-19
Amidst the crisis, a concerted BRICS effort could offer a new paradigm for multilateral institutions and shape the discourse in global governance from an emerging countries’ perspective.
A BRICS-driven initiative could serve to underscore the potential of the bloc which not only spans across continents but makes up 42 per cent of the world population and 23 per cent of global GDP. Individual initiatives by BRICS member states are already underway.
India is already providing pharmaceutical assistance to nearly 85 nations on a grant basis to support their response to the pandemic. China has leveraged its manufacturing capacity to provide personal protective equipment to hotspots across the globe under its Health Silk Road diplomacy.
Russia has launched its air mission — ‘From Russia with Love’ — flying medical supplies to Italy while a Russian Antonov-124 packed with medical aid headed to New York. Meanwhile, South Africa is engaged in framing a pan-African response to COVID-19. Brazil is the only BRICS member state in need of a reassessment as President Bolsonaro continues to resist lockdown measures even as infections continue to soar.
Need for Overhaul
To supplement the individual efforts of BRICS countries, existing BRICS mechanisms have been activated. The ministers agreed to allocate US$15 billion to the Shanghai-based BRICS New Development Bank (NDB) towards a special loan instrument for BRICS economies to counteract the economic fallout of the pandemic.
The NDB has been moving quickly to help affected countries recoup some of their financial losses ─ the bank has already disbursed $1 billion emergency loan to China and India, and subsequently to South Africa. Moreover, BRICS countries are expecting to step up cooperation in the healthcare sector, accelerating the process of setting up the BRICS Vaccine Research and Development Centre.
The institutionalisation of BRICS – with the creation of the New Development Bank (NDB) which holds a lending portfolio of more than $15 billion and a Contingent Reserve Arrangement with a capital of $100 billion – alleviates some degree of scepticism towards the bloc which has often been dismissed as a non-starter.
Although BRICS has been lauded for attempting to provide emerging countries with Bretton Woods alternatives to existing multilateral development banks, the NDB has been criticised for lack of transparency and due diligence on its lending practices.
Need to Deliver on Results
Despite claiming to promote sustainable infrastructure and proper governance, the NDB met out a $200 million loan to Transnet – a controversial South African majority state-owned enterprise – to finance the expansion of the Durban port-petrochemical complex amidst fears that not enough due diligence was done in granting the loan.
Moreover, the NDB decided to loan $180 million to Eskom – a power utilities company which is severely in debt and mired in a corruption scandal. The NDB would do well to practice transparency and due diligence to assuage concerns and criticisms on project financing; more than 100 environmental activists led by four African Goldman Prize winners protested against the NDB at the start of the BRICS Johannesburg summit in 2018.
Besides an overhaul of its financial mechanisms, member states need to deliver on implementation of initiatives already in the pipeline. Although countering pandemics, vaccination, joint medical programs, including telemedicine, have long been prominent on the BRICS agenda, failure to follow through has marred the credibility of the bloc in the past.
Reformed Multilateralism
Noting that the pandemic and its subsequent ramifications highlight the need for reform of multilateral systems, Indian Foreign Minister S Jaishankar called for a ‘reformed multilateralism’ focused on the centrality of development and growth in the global agenda.
New Delhi has initiated a joint South Asian response to COVID-19 by activating the South Asian Association for Regional Cooperation (SAARC), despite the grouping being in a stalemate since 2016 with a cancelled summit as tensions heightened between India and Pakistan.
The BRICS foreign ministers’ pledge for a concerted effort by emerging economies in tackling the pandemic is a step in the right direction even as internal dynamics between member states are being navigated.
While India and China remain embroiled in a territorial dispute along the Himalayan frontier, the BRICS member states remain at odds over the expansion of the UN Security Council. With vested interests in the existing system, Russia and China frequently do not go beyond rhetoric in supporting Brazil, India and South Africa’s greater roles in the UN.
Even a decade after its inception, observers remain sceptical of this oddly divergent grouping with different socio-cultural and political systems, whose economies are in different stages of development, and who share some degree of ideological dissonance.
As BRICS seeks to influence and shape the norms of global governance, the onus falls on member states to preserve a modicum of policy coordination – at best a ragged unison – in order to outperform the other multilateral institutions of the liberal order.
About the Author
Nazia Hussain is a Senior Analyst with the Centre for Multilateralism Studies (CMS) at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University (NTU), Singapore. This is part of an RSIS series.
