Johannesburg II Declaration called for attention to economic vulnerabilities in emerging economies
BRICS summit 2023. Photo: @encanews / Youtube The 15th BRICS summit from August 22-24, 2023 in Johannesburg, South Africa expanded the group’s membership to a broader bloc of emerging market and developing countries (EMDC).
The BRICS countries extended the invite to Argentina, Egypt, Ethiopia, Iran and the United Arab Emirates (UAE) to become full members of the grouping.
BRICS, with 32.1 per cent global gross domestic product (GDP) at purchasing power, is set to surpass the 29.9 per cent GDP of the bloc of G-7 countries, according to an International Monetary Fund’s report released earlier this year.
More countries, especially the major oil-producing countries and OPEC members Iran, Saudi Arabia and UAE, joining the alliance will significantly enhance the group’s clout on the global stage.
China’s President Xi Jinping called the decision to expand “historic” and said it would recalibrate the world order with a stronger voice from countries in the Global South.
The summit’s outcome document, the Johannesburg II Declaration, called for attention to economic vulnerabilities such as high debt levels in some countries due to trade fragmentation and sharp monetary tightening in advanced economies.
Multilateral financial institutions and development banks need to build economic policies which safeguard long-term financial stability, the document stressed. It highlighted the key role played by the New Development Bank (NDB) or “BRICS Bank” in providing and maintaining effective financial solutions to sustainable development. NDB is described as “an institution created by EMDCs for EMDCs”.
BRICS member countries have also tasked their finance ministers and central bank governors to consider the issuance of local currencies, payment methods and platforms. This is done in light of the growing momentum to use local currencies and alternative financial arrangements to reduce vulnerabilities and increase reliability, stability and fairness — a growing call to reduce dependence on the US dollar.
Brazil’s President Lula da Silva in his end remarks announced the creation of a working group, which will “study the adoption of a unit currency as a reference point for the BRICS”.
The BRICS declaration emphasised the need for continued cooperation on transition finance along with leveraging technology to address climate data gaps.
While emphasising the importance of implementation of the Paris Agreement, the member countries reiterated the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC).
The declaration stated that they “agree to address the challenges posed by climate change while also ensuring a just, affordable and sustainable transition to a low-carbon and low-emission economy in line with the principles of CBDR-RC, in light of different national circumstances”. It added:
We advocate for just equitable and sustainable transitions… and we call on developed countries to lead by example and support developing countries towards such transitions.
In addition to this, the member countries have placed a reminder for the developed countries to honour their commitments such as mobilisation of $100 billion by 2020 and through 2025 to support climate action in developing countries, doubling of adaptation finance by 2025 from the base of 2019 and grant-based, concessional financial support.
The growing BRICS alliance could be a signal of shifting global power dynamics, even though the group does not have a legally binding mandate or institution. Since the decision to expand the alliance was the primary headline, not much was concretely discussed among the countries to further their climate action in a coordinated and specific manner. Their calls for fair and just treatment in all spheres including trade, technology, finance is, however, significant.
Essentially, they said that the developed countries need to enhance the adequate and timely flow of affordable climate finance, and transfer of fair and comprehensive technologies for climate action. There has also been unanimous opposition to trade barriers placed by developed countries using climate change as an excuse.
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