Reformulation of the global order

Reformulation of the global order

Publishing Date: 6/26/2018 10:00 AM

It would appear that with each Brics summit, lying at the flanks are naysayers criticising and counting down the days for the association – now in its 11th year of existence – to crumble and fall to pieces.

Dr David Monyae, the Co-Director of the University Of Johannesburg (UJ) Confucius Institute (UJCI), together with Bhaso Ndzendze, UJ Research Assistant penned an opinion piece entitled " Reformulation of the global order", published in The Cape Times, 21 June 2018.

Yet the grouping continually reaps outcomes, no matter how gradually, despite the mounting challenges from within and outside the club of emerging economies.

Perhaps the greatest signifier yet has been the New Development Bank which has in its infancy managed to issue its first green bond, and successfully raising RMB 3 billion in the Chinese bond market, enabled by the achievement of a triple-A domestic credit rating in China.

The NDB has also committed $1.5bn in loans to Brics countries so far, emphasising its investment in renewable energy.

In addition, plans are under way to reach the target of between $10bn and $15bn of loans by 2021, and to expand lending outside the Brics membership.

Ever ambitious, the grouping still has a number of plans on the drawing board and there is every reason to believe they will achieve a sizeable portion of them.

Likely to be on the cards this year is the development of the Brics Rating Agency. The time has never been riper for such a formation.

The cry for the rating agency stems from the fact that the post1945 world order is sapping under the weight of its own contradictions.

The need has never been starker for an alternative, or set of alternatives, from the Western-centred world order, and one of the sorest areas in need of this balancing is that of global financial institutions.

The rot is displayed most blatantly in the fact that the US ratings agencies Fitch, S&P and Moody's failed to predict the then oncoming global financial crisis of 2008/09, leading the second Basel Accords to discourage reliance on the ratings agencies by banks.

Further symptoms of decay are to be found in the fact that America is bent on a trade war with a myriad states, including China, Canada and the EU, its closest and most important trading partners. South Africa has not been spared, particularly its steel sector.

This lends all the more weight to the pragmatic quarters in South African foreign policymaking. The country needs both the Brics and the West, and therefore cannot afford over-reliance on either.

South Africa must hedge and formulate its foreign policy according to the dictates of its needs in this era.

What Brics represents, especially for Africa and the global south in general, is the reformulation of a global order along the lines of parallel institutions.

Indeed, some of the beneficiaries of this are the developed states themselves. With the world in such a fragmented state, the reality is that there has been, and there can be, no attempt at reform. The only option is the reformulation of the global order. This is part of what Brics represents.

For Africa this carries a lot of importance. Importantly, the Brics countries do more trade with African states (even excluding South Africa) than they do with one another. But if they are to represent a shift in the global order, that shift needs to be concomitant with a shift in relations vis-à-vis the continent.

As China and India (with Japan) propose grand plans of the Belt and Road Initiative and the Asia-Africa Growth Corridor, respectively, they should co-operate with African states so they can co-plan the infrastructural framework to prevent them from replicating the infamously extractive railways and port systems of the colonial era.

This is probably the last Brics summit before the formal declaration of a new Cold War. The contours of this are already apparent in the increasing rate at which many global players, including the Brics states themselves, are militarily posturing.

Notwithstanding the fact that three of them are nuclear powers, these states have got into the business of developing military bases overseas, and particularly in Africa.

At the same time, the North American Treaty Organisation has seen expansion into new territory into Latin America with Colombia joining the fold.

It is clear by now: we are on the brink of seeing the fabric of the international global order shaken as there is an increased fear of developing countries catching up, especially in the areas of hi-tech, artificial intelligence and other signposts of the fourth industrial revolution.

This summit holds a particular importance for South Africa on two fronts. First, this is to be President Cyril Ramaphosa's first chaired Brics session.

Further underlining this is the economic downturn in the country of -2.2% in a year-on-year basis despite "Ramaphoria" following his rise to the presidency earlier this year.

Unemployment figures are also looking dim, and the rand/dollar exchange reached a six-month low at ZAR14.00/US$1.00.

Second, South Africa has been elected on to the UN Security Council for the 2019/20 term.

This represents a golden opportunity for the country to be seized on. In this area, South Africa's interests include the unemployment crisis and need to be dealt with, and both the UN and the UNSC are potential avenues to be harnessed for growth.

At the same time, a point in need of constant awareness is the fact that Brics is not a revolutionary force in world politics, nor are there many indicators that it seeks to be.

Contrary to the views held by those in both the ultra-right and the ultra-left who (for different reasons) perceive Brics as bent on upsetting the global order of things, the latter inevitably reprimand it for not going far enough. In doing so they castigate it for not reaching standards it never declared as aspiring to.

In truth, these countries, however unevenly, are – as is the nature of states – only pursuing their national interests in the global arena.

They just happen to be formerly peripheral states now ascending to the core.

South Africa needs to be just as effective as its Brics counterparts at staking its own claim, with a conscience for the African agenda as well as matters of mutual concern and development that go back to Bandung in 1955, and which have remained at the front burner of the priority list for the global south.

Monyae is a senior political analyst and co-director at the University of Johannesburg Confucius Institute, and Ndzendze is a research co-ordinator at the same institute

Likely to be on the cards this year is the development of the BRICS Rating Agency. The time has never been riper for it

*The views expressed in the article is that of the author/s and does not necessarily reflect that of the University of Johannesburg

Dr David Monyae

Dr David Monyae

Bhaso Ndzendze 

Bhaso Ndzendze