Vital issues for Brics summit
KEY: STRENGTHEN PARTNER RELATIONS
African infrastructure funding and reform of global economic governance bodies are also vital.
The 10th Brics (Brazil, Russia, India, China and South Africa) bloc summit to be hosted by SA will be closely watched. The summit will be held from July 25 to 27. It comes at a time when extraordinary global political and economic challenges are facing the world, from poverty, inequality and unemployment to climate change and a global economic system biased in favour of corporate interests, particularly in finance and technology.
One of the most immediate challenges relate to the changing dynamics in global economic governance.
The US appears intent on starting trade wars with China and the European Union. Africa can’t avoid being adversely affected by this as they are its three largest trading partners.
The US is also pulling back from multilateral governance arrangements that it created. And Washington is paralysing the World Trade Organisation (WTO) by refusing to agree to the appointment of new judges at the WTO appellate body.
These developments are creating an unpredictable situation. Small global players like SA face the prospect of becoming collateral damage in the destruction of the current global governance arrangements.
Given all these complex challenges, how should the success of the summit be judged?
One of its goals should be to strengthen the relationship between Brics partners.
Given the theme for this year’s summit is Brics in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the Fourth Industrial Revolution, it’s reasonable to expect it to produce benefits for Africa.
A signal from the leaders that Brics members are willing to commit to funding infrastructure projects in Africa would be beneficial.
This is important because Africa is putting in place a new Continental Free Trade Agreement. Implementation will require infrastructure that links the continent internally and with other parts of the world. Brics could play a critical role in the funding of these projects.
Two obvious vehicles for such funds are Brics’ New Development Bank and the funds China has created to support its One Belt One Road initiative. Thus, a test for summit success will be whether it generates new financing for infrastructure in Africa and the nature of the financing.
One goal shared by all Brics states is reforming global economic governance structures, like the International Monetary Fund (IMF). The bloc hasn’t been very successful in this mission. But this may be an opportune time to promote reform to make world bodies more responsive to the concerns of poorer member countries.
There is a long-standing call for a third African chair on the IMF board. SA should push Brics to stand behind this call.
Brics should also support making the IMF more accountable to countries affected by its operations by demanding it create an independent accountability mechanism. It is the only multilateral financial institution without one.
A key benefit is its potential to lead efforts to reform the global economic system. It therefore behoves citizens of Brics countries to hold their governments accountable for fulfilling this potential.
Danny Bradlow is Sarchi Professor of International Development Law and African Economic Relations at Pretoria University.