Brazil’s chairmanship in the G20 this year is a unique chance for the Global South to extend its representation in key global platforms as well as a crucial opportunity for the global community to overcome the divides between the developed and developing economies. Brazil’s Lula has been active in advancing projects and platforms that go precisely towards overcoming the divides between the North and the South, including in such crucial areas as environmental policy and economic and trade liberalization. Perhaps the most significant scope for bringing together organizations and institutions from the North and the South is via the regional track whereby closer cooperation within the G20 framework is forged among the regional development institutions and regional integration blocs. Brazil’s role in the MERCOSUR bloc as one of the key regional integration projects in the Global South with significant outreach efforts to the developed world (most notably via the MERCOSUR-EU FTA discussions) may serve as a precursor to launching new platforms of cooperation among regional arrangements within the G20 framework.
In the financial sphere a key focus for the G20 in the coming years will be bringing the Multilateral Development Banks (MDBs) (including mostly regional development banks) into greater coordination with each other as well as with the Bretton Woods institutions. The first steps in this direction have been undertaken last year when the World Bank created a platform for MDBs to coordinate policies and pool resources for purposes of financing priority projects in the environmental and other key spheres. Brazil is likely to build on these efforts and the work launched by India in exploring the possibilities for systemic improvements in the efficiency of MDB operations. There may also be scope to expand the array of regional development institutions and MDBs that are regularly within the framework of key G20 meetings.
One way to enlarge the platform for multilateral development banks and to bring them into closer cooperation with the Bretton Woods institutions and the G20 would be to invite institutions such as the BRICS New Development Bank (NDB) to G20 summits. The participation of NDB in G20 summits and key meetings has been one of my proposals in the past several years. In an interview to the Investment Monitor in the fall of last year I noted that “the NDB and IMF will soon participate together at the G20 summits and meetings dedicated to global financial stability”[1]. It is all the more gratifying then to see that Brazil has in fact opted to invite the New Development Bank to G20 meetings this year alongside the traditional participants among global and regional institutions, including the Bretton Woods organizations.
Apart from the regional and multilateral development institutions Brazil appears to also target greater participation of regional integration groups in the G20. After the accession of the African Union (AU) into the G20, there may be further scope for more regional integration blocs to be represented in the G20 platform. In particular, Brazil has opted to invite MERCOSUR as its key regional integration project to participate in the G20 meetings. Lula has been active in advancing the partnerships of MERCOSUR with other regional blocs, including within the framework of a MERCOSUR-EU trade agreement. While the modalities of MERCOSUR participation are not fully clear at this stage, at the very least the momentum for greater involvement of regional integration blocs in the G20 is sustained. There may be more to come on this front next year when South Africa takes over the presidency in the G20, with greater scope likely to be provided to the African Union in building cooperative networks with other regional blocs and organizations within the G20 framework.
Thus far, however, Africa’s representatives are raising questions on what the role and impact of regional blocs such as the African Union are likely to be in the G20 in the coming years. New initiatives from the African Union in the current context may include discussions on a coordinated framework for Africa’s debt sustainability. But the scope for greater activism within the G20 for the African Union would be unlocked with the creation of a platform for regional integration blocs (a regional 20) as an additional G20 engagement group. This in turn would open up new communication lines between regional arrangements at the global level and facilitate new initiatives such as common projects in the environmental sphere and transportation connectivity with the participation of the relevant regional development arrangements/banks. Brazil could provide some preparatory ground for these potential advancements via launching discussions within the G20 on the role of the African Union and other integration blocs in contributing to resolving some of the challenges for the global economy.
[1] https://www.investmentmonitor.ai/features/brics-bank-will-complement-not-challenge-imf-and-world-bank-expert/
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