Файл: Na_puti_k_dolgosrochnoy_strategii_stran_BRIKS_angl.pdf

BRICS Long-Term Strategy

64 

|

common issues of concern including finance, technology and capacity-building.

8

The imperative for greater interest-based coordination within BRICS is exemplified 

by the fact that the BASIC countries – generating over 15 per cent of global GDP 

and over 25 per cent of greenhouse gas emissions by 2009 – are regarded as having 

a decisive voice in international negotiations (Qi, 2011). Intra-BRICS coordination 

on climate change issues also extends beyond the multilateral framework, particularly 

around key concerns such as energy access and energy efficiency (table 10).

TABLE 10

Key energy metrics

Country/Grouping

Energy access (electrification – 

% of population, 2005–2009)

Energy intensity  

(koe/$0.5p, 2009)

Energy consumption per capita 

(million btu, 2009)

OECD

100

0.15

187.850

Brazil

93

0.13

53.735

Russia

100

0.32

188.464

India

75

0.20

18.710

China

100

0.28

65.731

South Africa

66

0.31

114.437

Source: World Bank Data.

BRICS must move towards knowledge transfer for “shared prosperity”, based 

on the joint development and distribution of a range of technologies. In this context, 

China’s experience with both renewable energy and energy efficiency might provide 

a valuable learning opportunity. Additionally, Brazil already obtains much of its 

energy from sugar-based ethanol, specifically in its transportation sector. India has a 

comprehensive policy framework in place for enabling greater investments and focus 

on the renewable and energy efficiency sectors, as well as progressive market-based 

efficiency initiatives. South Africa has also put in place various corporate governance 

and sustainability norms to govern large corporate entities and enable a sustainable 

growth trajectory. These are positive examples. Energy conservation through green 

buildings is also an additional area on which BRICS can focus.

A key trend going forward will be the onset of major effects from climate 

change – including variability of rainfall patterns, disruption of hot and cold 

weather cycles, and others. The challenges presented by shifting climate patterns 

will disproportionately affect developing countries, which have comparably few 

resources to adequately address them. BRICS countries dependent on agriculture 

will be particularly vulnerable to climate variability. BRICS countries are also home 

to some of the world’s most valuable regions of biodiversity, which are vulnerable 

to temperature rises. 

8. Similar example of joint efforts, in this case to deal with security issues, is the Shanghai Cooperation Organization.

Political and Economic Governance

|

 65

2.4.3 World Trade Organization

The World Trade Organization (WTO), operationalised on 1 January 1995, is a 

“rules-based” organisation that provides a negotiating forum for trade liberalisation 

through multilateral agreements and trade dispute settlement. The WTO has grown 

from its 128 original members to 160 countries as of September 2014, with an 

additional 24 countries having applied to accede (WTO, 2015).

TABLE 11

BRICS membership of WTO/GATT

Country

WTO membership date

GATT membership date

Brazil

1 January 1995

30 July 1948

Russia

22 August 2012

-

India

1 January 1995

8 July 1948

China

11 December 2001

-

South Africa

1 January 1995

13 June 1948

Source:  WTO. Understanding the WTO: the organization – members and observers. Available at: <http://goo.gl/ODLDOO>. 

Accessed: 26 June 2014.

Past WTO negotiating rounds have displayed fundamental asymmetries in the 

negotiation position of developed and developing countries. The fact that developed 

countries account for a large share of world trade (for instance, just the USA and 

the EU account for 38 per cent of imports and 23 per cent of exports) gives them 

considerable bargaining power. Apart from having similar levels of per capita 

income, these countries also often exhibit a tendency for collective bargaining in 

international negotiations. In contrast, groupings of emerging and developing 

countries are often fragmented. BRICS nations would do well to be able to rally 

emerging and developing economies together for effective collective bargaining. 

For instance, the applied tariff rates within developing countries and BRICS are 

significantly lower than the bound rates (table 12). 

TABLE 12

Bound and applied tariff rates (2014)

Countries

Non-agriculture tariff rates

Agriculture tariff rates

Bound

Applied

Bound

Applied

China

9.1

8.7

15.8

15.6

India

34.5

10.4

113.1

33.5

Brazil

30.8

14.1

35.4

10.1

Russia

7.2

9.4

11.2

13.3

South Africa

15.8

7.4

39.6

8.4

USA

3.3

3.2

4.7

4.7

EU

3.9

4.2

13.7

13.2

Japan

2.6

2.6

22.1

16.6

Source: WTO statistics database.

BRICS Long-Term Strategy

66 

|

There is also significant disparity between developed and developing countries 

in terms of research capacities for strategic planning and knowledge generation.  

In addition to government bodies, developed countries also have a host of independent 

researchers, think tanks and private-sector interest groups which study intricate aspects 

of the negotiation process and the various agreements, to chart out favourable strategies 

As an illustration of this, there has been significant research in developing 

countries on the relative merits and demerits of mega Free Trade Agreements 

(FTAs), such as the Trans-Pacific Partnership (TPP) and the Transatlantic Trade 

and Investment Partnership (TTIP). While individual BRICS countries have 

deliberated on the possible implications of the emergence of mega FTAs, there has 

been little by way of a collective position or collective research on such issues. 

The central issue for the BRICS governments to consider in the context of both 

these agreements is the possible effects on non-member countries. Both agreements 

may undermine the export competitiveness of BRICS economies and set a new 

agenda for the international rules-based system on trade. 

TABLE 13

Proposed mega FTAs

Trade agreement

Value of bilateral goods 

(USD billions, 2011 or latest)

Date negotiations launched

Trans-Pacific Partnership (TPP)

1492.2

June 2005

Transatlantic Trade and Investment Partnership (TTIP)

618.5

February 2013

Source: The economist. The other conclave. 16 Mar. 2013. Available at: <http://goo.gl/1CYh01>. Accessed: 17 Sept. 2014.

3 RECOMMENDATIONS

It is in the collective interest of BRICS member nations to work together with 

other economies that are part of the G20, to align policies and positions for an 

optimal outcome. In this context, some of the immediately relevant areas are 

highlighted below.

BRICS central banks should tailor regulatory frameworks and coordinate 

closely to engage in the global regulatory agenda-setting process.

The IMF lacks the functions of a central bank and is unable to create 

additional liquidity in the international monetary system by issuing new SDRs. 

Moreover, even if the IMF were able to expand its mandate, it is unlikely to 

receive the additional finances to compensate it for portfolio losses and exchange 

rate fluctuations. BRICS would strengthen cooperation to promote the inclusion 

of currencies of emerging market economies and developing countries that meet 

the current SDR criteria into the SDR currency basket, in order to improve the 

representativeness, stability and attractiveness of the SDR. BRICS would do well 

to strengthen coordination on flexible and robust currency arrangements. 

Political and Economic Governance

|

 67

There is substantial scope to develop the capital markets in BRICS economies 

by broadening the range of asset classes on offer to efficiently channel household 

savings. Expansion of capital markets should be the foremost priority for the 

market regulators. BRICS stakeholders can share their experiences to enable a 

robust financial market through greater investor participation, by creating the 

facilitating regulatory frameworks and innovative financial products that can be 

accessible to low-income classes. 

BRICS should develop financial products that can target specific segments 

of the population, such as derivative products for farmers to provide agricultural 

insurance and innovative mutual funds for small-scale investment to develop small 

and medium enterprises (SMEs). 

To prevent unforeseen asset bubbles, and be better prepared to respond 

to externalities in the global financial architecture, an independent BRICS 

rating agency could be set up. The objective would be to prevent a build-up 

of unsustainable corporate debt levels, maintain a check on banking assets, 

mitigate the negative effects of the largely unregulated shadow banking sector 

and maintain a watch on the performance of the global economy.

It is incumbent upon BRICS to assume a leadership role in the global political 

and economic governance and seek greater equity for the developing world. 

Meanwhile, BRICS countries remain ready to contribute to the improvement and 

reinforcement of the global financial architecture. Reform of the Bretton Woods 

Institutions is central to this objective.

BRICS would do well to maintain its efforts to achieve a comprehensive 

reform of the UN, including its Security Council.

BRICS should empower civil society to supplement the calls from various 

stakeholders for accelerated reforms within the Bretton Woods Institutions. 

BRICS would do well to change the value-laden conditionality discourse 

through collective resolve and close collaborations complementing the international 

safety net with initiatives such as the Contingent Reserve Arrangement. 

Together with huge investments in physical infrastructure, there also needs 

to be commensurate financing to ensure sustainable development. In particular, 

the performance of BRICS countries in several aspects of social sectors such as 

health and education lags behind developed countries. Focused funding should be 

directed towards capacity-building and efficient delivery of basic services.

Debt issuance in local capital markets can help avoid currency mismatch 

arising out of such project funding, and help to develop nascent capital markets 

in developing countries.

BRICS Long-Term Strategy

68 

|

Provision for concessional lending should be developed for catering to 

development needs of Least Developed Countries (LDCs). This could take on the 

form of concessional lines of credit financed by partner countries and trust funds 

similar to the IDA. Such funds, however, should be prudently managed with a 

periodic review of the investment horizons and the risk–return profiles. 

Given the large, urgent infrastructure financing deficits in emerging and 

developing countries, the NDB could look to incorporate private capital in the 

financing mix. This could be facilitated by incentives in the form of risk mitigation 

guarantees and partnerships. Preferred creditor status and a cover for credit risk and 

political risk could similarly incentivise private lending. In addition, a mechanism 

for evaluations on a project-to-project basis could be created to ensure 

transparency and accountability.

BRICS countries need to further their cross-region monetary cooperation 

and enhance CRA’s effectiveness, supplementing the global financial safety net.

There is a need to coordinate interests on adaptation at the UNFCCC (particularly 

on finance and technology requirements for developing countries to adapt to 

climate change). The Technology Mechanism established at COP16 at Cancun 

should be leveraged to enhance action on technology development and transfer, 

and a commensurate share of the resources of the Green Climate Fund should be 

channelled towards adaptation activities. 

In international trade negotiations developed countries have focused on the 

bound rates and demanded drastic cuts, not easily facilitated given the domestic 

industrial competitiveness concerns in many developing economies. BRICS countries 

would do well to coordinate their positions within the WTO to withstand such 

pressures on the basis of existing and projected achievements and domestic viability.

Duty-free, quota-free market access

is a crucial measure to help LDCs leverage 

the opportunities offered by the multilateral trading regime. Such policy initiatives 

by BRICS countries will only enhance economic cooperation and consolidate 

support at multilateral trade talks.

To confirm their commitment to having a stronger and rules-based multilateral 

trading system at the heart of world trade governance, the BRICS countries must 

aim to bring more transparency to regional agreements at the WTO. 

One of the main results of the Uruguay round was the strengthening of the 

diplomatic–judicial pillar of the multilateral trading system with a robust dispute 

settlement mechanism – essential in reinforcing multilateral trade governance. 

The mechanism needs to be improved to reduce the costs and increase the benefits 

of participating in it, particularly for the poorest countries.