The Financial Crisis, Contested Legitimacy, and the Genesis of Intra-BRICS Cooperation

Abstract

The rise of the BRIC grouping (Brazil, Russia, India, China) is one of the most commented on phenomena in international politics of the past years. Yet little is known about how and why institutionalized cooperation between the BRIC countries began. This article makes two arguments. First, an unprecedented combination in 2008-a profound financial crisis among developed countries, paired with relative economic stability among emerging powers-caused a legitimacy crisis of the international financial order, which led to equally unprecedented cooperation between emerging powers in the context of the BRIC grouping. The BRIC countries were able to use their temporarily increased bargaining power to become agenda setters at the time-culminating in the International Monetary Fund quota reforms agreed on in 2010. This shows that even short periods of reduced legitimacy in global governance can quickly lead to the rise of alternative institutions-such as, in the case of the crisis that began in 2008, the BRIC platform-which now forms part of the landscape of global governance. Second, intra-BRIC cooperation in the area of international finance enhanced trust among the BRIC countries and led to a broader type of cooperation in many other areas, suggesting the occurrence of spillover effects. Intra-BRICS cooperation

Rising Powers and Multilateral Institutions

“…Pietertese, 2011;Stuenkel, 2013;Huotari and Hanemann, 2014), environmental politics Hochstetler, 2013), health policy and international governance (Gautier et al, 2014;Harmer and Buse, 2014;Kirton et al, 2014) and international security (Niu Haibin, 2013) and the securitydevelopment nexus (Abdenur and Neto, 2014).…”

South–south relationships and the transfer of ‘best practice’: the case of Johannesburg, South Africa

“…Countries such as China, India and Brazil have emerged as world powers, with a second tier of middle-income countries -including Turkey, Mexico, Venezuela, Chile, Indonesia, Malaysia and South Africa -also wielding growing influence within international affairs (Alden and Vieira, 2005;Stuenkel, 2013a). These changes have invariably disturbed established patterns in the manufacture, diffusion and uptake of 'best practice' in urban policy.'…”

“…Trade flows across the south have expanded rapidly during the past decade in particular, while multinational corporations (MNCs) headquartered in countries such as China, Brazil, South Korea and South Africa have invested heavily in other parts of the south (Stuenkel, 2013a). Economic change is also reflected in geopolitical transformations.…”

“…In 2010, South African was added as the fifth member to address an awkward lack of African participation, and BRIC became BRICS. The focus of collaborative effort then shifted from the IBSA alliance to BRICS, which accounted for around one-quarter of the world's economic output (Palat, 2008;Stuenkel, 2013a).…”

“…There are also significant inequalities within the BRICS network -with China, for example, having an economy that is more than twenty-five times the size of the South African economy. Within BRICS there is economic tension, as members compete for access to Organisation for Economic Co-operation and Devel opment (OECD) markets (Burges, 2007;Flemes, 2007;2010;Stuenkel, 2013a).…”