No intention to overturn
Believing current rating agencies are assigning them unfair credit ratings, BRICS members have been in discussions to support the establishment of their own rating service. During the 2016 BRICS Summit in Goa, India, the BRICS economies reached a consensus in this regard. They further discussed the possibility of such an independent agency this June when the Second BRICS Finance Ministers and Central Bank Governors Meeting was held in Shanghai.
To further push forward BRICS cooperation and play a greater role in the global financial market, BRICS members should establish a trustworthy rating agency independent from the dominating big three. To this end, they should stick to some basic principles and have a clear objective.
First, the ultimate goal is not to overturn current counterparts, but to offer a better and fairer credit rating service alternative.
Second, the new rating agency co-founded by BRICS can learn from the mature practices of the big three and develop innovations to surpass them. Over the past decades, the growth rate of BRICS countries outpaced that of developed nations. Their global GDP share is also on the rise. But it still takes time for them to catch up with developed economies that are expected to dominate the international financial markets in the long term. The developed nations still spearhead finance and investment theories, innovation as well as manpower resources. It is not realistic or smart to try to bypass the big three that have accumulated experience of more than 100 years. Learning, reforming, then innovating is a more feasible and practical path.
Last but not least, the new rating agency should seek a higher and broader vision and focus more on communication and cooperation with various international and regional organizations and NON-BRICS nations. After all, a new rating agency is not just to do business with BRICS nations, but to break the current monopoly and offer a trustworthy credit rating service alternative for developing nations as a whole, as well as developed ones. (The author is a research fellow with the Beijing Academy of Social Sciences)