BRICS Nations Collaborate to Address Financial Challenges

The Finance Ministers and Central Bank Governors of Brazil, Russia, India, China, and South Africa (collectively known as BRICS) have recently come together to endorse a Joint Finance Statement under South Africa’s Chairship. This significant milestone in international cooperation took place on August 15, 2023.

Priorities for the Year

The Joint Finance Statement outlines consensus on several priorities for the year, including global economic outlook and multilateral cooperation, BRICS Task Force on Public-Private Partnerships and Infrastructure, mutual cooperation in customs and tax, and the BRICS Think Tank Network for Finance.

Financial Foundation Strengthening

The Joint Finance Statement underscores the test run of the BRICS Contingent Reserve Arrangement (CRA) and sheds light on amendments to the Inter-Central Bank Agreement. In their pursuit of building a more robust financial foundation, the central banks of the BRICS nations have collaborated on key topics such as sustainable finance, payments, and information security, aiming to strengthen their resilience and cooperation.

Global Economic and Financial Risks

Together, the BRICS nations have identified global economic and financial risks that both advanced and developing countries should address. They have also successfully adopted programmatic approaches and guiding principles for infrastructure development and delivery in their respective countries.

Mutual Recognition Arrangement

Furthermore, they have made significant headway on finalizing the text for the BRICS Mutual Recognition Arrangement (MRA) of the Authorised Economic Operator Programme, with completion expected by the end of 2023.

Accomplishments

Another accomplishment worth mentioning is the endorsement of operational guidelines for the BRICS Think Tank Network for Finance. The statement also highlights the sixth CRA Test-Run and amendments to the Inter-Central Bank Agreement, which aim to improve the operational readiness and credibility of the CRA mechanism. Additionally, the BRICS nations have agreed to share information on cyberattacks and experiences under the BRICS Payment Task Force, focusing on the implementation of selected elements of the G20 Cross-Border Payments Roadmap.

New Development Bank

In a significant development, the New Development Bank (NDB), a key partner of the BRICS grouping, issued a ZAR bond in the South African bond market on the same day. This issuance marks the NDB as the highest-rated issuer in the market since 2015. The proceeds from the bond issuance will be utilized to fund infrastructure and sustainable development projects in South Africa.

Gratitude and Future Collaboration

South Africa has expressed its sincere gratitude to the BRICS member countries for their support during its tenure as Chair. The nation hopes that the same spirit of cooperation will be carried forward to the next Chair in 2024.

With these recent developments, the BRICS countries are paving the way for a future marked by increased collaboration and resilience in the face of economic and financial challenges. As this alliance grows stronger, the participating nations stand to benefit from expanded opportunities for trade, investment, and mutual support, ultimately contributing to a more prosperous and interconnected world.