The ‘Multiplier Effect’ of BRICS+

The possibilities offered by the “integration of integrations” track for BRICS+ are substantial, provided that such a platform is open, inclusive and ensures connectivity across regional integration arrangements – this will deliver the much needed “multiplier effect” in the process of economic cooperation and can set off a new process of globalization that connects regional arrangements in the developed and the developing world.

The main hallmark of China’s chairmanship in the BRICS grouping in 2022 has been the unveiling of plans to institutionalize the BRICS+ format and to explore the possibilities of expanding the core of the BRICS bloc. The current debate regarding the future trajectories of the BRICS+ format centers on whether the expansion of the bloc is to proceed one by one by adding new countries to the BRICS core, or via the format of “integration of integrations”, namely the creation of a platform for the cooperation of regional arrangements in which BRICS countries are members. At this stage, it appears that both tracks are possible and have their pros and cons. But there is one factor in the regional “integration of integrations” model that has particular merit – it is the “BRICS+” multiplier that allows for a significant extension in the outreach undertaken by core BRICS economies with respect to the rest of the Global South.

The possibilities offered by the “integration of integrations” track for BRICS+ are substantial, provided that such a platform is open, inclusive and ensures connectivity across regional integration arrangements – this will deliver the much needed “multiplier effect” in the process of economic cooperation and can set off a new process of globalization that connects regional arrangements in the developed and the developing world, writes Valdai Club Programme Director Yaroslav Lissovolik.

The main hallmark of China’s chairmanship in the BRICS grouping in 2022 has been the unveiling of plans to institutionalize the BRICS+ format and to explore the possibilities of expanding the core of the BRICS bloc. The current debate regarding the future trajectories of the BRICS+ format centers on whether the expansion of the bloc is to proceed one by one by adding new countries to the BRICS core, or via the format of “integration of integrations”, namely the creation of a platform for the cooperation of regional arrangements in which BRICS countries are members. At this stage, it appears that both tracks are possible and have their pros and cons. But there is one factor in the regional “integration of integrations” model that has particular merit – it is the “BRICS+” multiplier that allows for a significant extension in the outreach undertaken by core BRICS economies with respect to the rest of the Global South.

In terms of scale, the effects of the two formats of BRICS expansion may be mathematically illustrated by the difference between the arithmetic and geometric progression. If the one-by-one expansion in the core of the BRICS grouping represents the minimalism of the arithmetic progression, the BRICS+ format of integration of integrations can be seen as a far more extensive and ambitious undertaking characterized by a geometric progression. With respect to the arithmetic progression, the waves of the expansion in the BRICS core may involve a sequential addition of one or several countries representing the most significant heavyweights (possibly members of G20 from the Global South). The alternative is the aggregation of the regional integration blocs of all of the five BRICS members – represented by the BEAMS platforms consisting of BIMSTEC, Eurasian Economic Union, the ASEAN-China FTA, Mercosur and the South African Customs Union – leading to the addition of up to 25 members (the 5 times 5 geometric progression – or the 5 BRICS taken to the power of 2) of the BRICS+ circle that are the regional neighbors/partners of BRICS economies.

This BRICS+ geometric progression can be taken further to the next level whereby a wider circle of countries is included into the enlarged platform that comprises the African Union in Africa, CELAC in Latin America and the Eurasian economies from the Global South. The Eurasian constellation of developing economies can be formed on the basis of the aggregation of the main regional integration blocs such as the Shanghai Cooperation Organization (SCO), the Gulf Cooperation Council (GCC), ASEAN, SAARC, EAEU. Such an extended platform across all three continents of the Global South may be termed as TRIA (Trilateral Intercontinental Alliance) and it comprises nearly 125-130 developing economies (depending on the exact methodological approach of including the Eurasian economies). This second sequence of extending the BRICS+ platform results in a “5 times 5 times 5” geometric progression – or the 5 BRICS economies taken to the power of 3.

These stages of progression in the extension of the BRICS+ circle can be taken to an even higher level if one is to account for all of the bilateral/plurilateral trade deals, digital alliances and other accords that may be multilateralized on the basis of the BRICS+ platform. For example, the Israel-Mercosur FTA or the SACU-EFTA FTA could be extended to include more developing countries from the BRICS+ circle. At this stage the combinatorics of matching and aggregating the multitudes of alliances along the BRICS+ platform kicks in – each of the main regions and regional integration grouping from the Global South has its own cob-web of alliances that can be shared throughout this extended network of Global South.

Such additional multiplier effects will be all the more powerful, the greater the openness and inclusiveness of the aggregated BRICS+ platform and the more connectivity there is across the alliances concluded by developing economies with their partners from across the globe. In other words, in order for the multiplier effects to be increased the BRICS+ platform of integration of integrations needs to be predicated on alliances that are scalable and capable of connecting with other regional blocs (regional alliances that can be “globalized”). This in turn may be facilitated by particular emphasis placed on building platforms for regional development institutions (with standardized protocols for investment projects, including with respect to PPPs); greater scope for digital economic alliances that may be particularly amenable to scale and replication.

Potentially this sequential approach to building alliances across the Global South on the basis of the BRICS+ “integration of integrations” could become a basis for re-starting the globalization process in the world economy bottom-up (from the level of countries and regional blocs) rather than top-down (solely from the level of global organizations). In fact, this “integration of integrations” sequence may prove superior to the previous attempts at top-down wholesale liberalization via “Washington consensus” for the following reasons:

• Greater gradualism and connectivity of country and regional integration roadmaps with the resulting global pattern of liberalization

• Greater flexibility: there may be room for revision and corrections to the resulting global pattern at the local level

• Greater accordance of the global pattern of alliances and integration with local/country-level and regional peculiarities and exigencies

• Greater political sustainability and feasibility of the resulting global pattern of alliances that is predicated on the cooperative network of regional alliances

This greater sustainability and flexibility of the bottom-up globalization process as a network of alliances rather than a rigid framework that is to be implemented across the globe without due account of the regional and country-level peculiarities argues in favor of looking for ways to render such a model of globalization more feasible and effective.

Under this scenario of a network-type globalization what would be the role of global institutions such as the WTO, IMF, World Bank? In many ways it would remain crucial for the sustainability of the construct of the reshaped global economic architecture. The global institutions would receive the additional mandate of coordinating the regional networks and development institutions:

• IMF: coordination of regional financing arrangements (RFAs)

• World Bank: coordination of regional development banks

• WTO: coordination of regional integration arrangements

There will also be a need for global institutions to focus more on resolving global issues, including global imbalances. This in turn would allow the global economic system to overcome the current problem of regional and global institutions/organizations operating frequently as substitutes rather than mutually reinforcing complements.

In sum, the BRICS+ track of country-by-country additions to the BRICS core if pursued solely on its own without building a broader network of alliances may result in minor alterations to the status-quo and a missed opportunity for the Global South and the broader global economy. At the same time, the possibilities offered by the “integration of integrations” track for BRICS+ are substantial, provided that such a platform is open, inclusive and ensures connectivity across regional integration arrangements – this will deliver the much needed “multiplier effect” in the process of economic cooperation and can set off a new process of globalization that connects regional arrangements in the developed and the developing world. Such a paradigm may be the real mission of BRICS after all – the value of BRICS is not in each of them taken separately, but rather in them being connected together to form a construct that supports the edifice of the global economic architecture.