Research on the Impact and Pathways of BRICS Mechanism on Multilateral Development Financial System Reform under the Context of Global South Financial Cooperation

DOI: https://doi.org/10.62517/jel.202514606

Author(s)

Rong Ye 1,2, Ziyuan Zhou3, Muquan Zou1,4,*, Sunyan Hong5, Haixia Shan1

Affiliation(s)

1School of Information Engineering, Kunming University, Kunming, Yunnan, China 2Postdoctoral Research Station, Fudian Bank Financial Research Institute, Kunming, Yunnan, China 3The Hong Kong Polytechnic University, School of Computing and Mathematical Sciences, Hong Kong, China 4Yunnan Key Laboratory of Intelligent Logistics Equipment and Systems, Kunming, Yunnan, China 5Yunnan Key Laboratory of Cross-border Digital Economy, Kunming, Yunnan, China *Corresponding Author

Abstract

Against the backdrop of the global economy facing the "3D challenges" of population aging, debt expansion and anti-globalization, and the intensification of the financial predicament of global South countries by the hegemony of the US dollar, global South financial cooperation has shifted from a stopgap measure of "mutual assistance among poor countries" to institutional cooperation. As the core carrier of global South financial cooperation, the BRICS mechanism Its evolution and practice are of crucial significance to the reform of the multilateral development financial system. This study elucidates the collaborative connotation and developmental trends of Global South countries in the financial sector, positing that it represents an extension of the 'Bandung Spirit' within this domain. Currently, the mechanism exemplified by the New Development Bank of the BRICS has established a cooperative network spanning Asia, Africa, and Latin America, with a focus on infrastructure, green energy, and other critical areas, thereby providing a comprehensive analysis of the multilateral development financial system. Despite achieving significant outcomes in bridging funding gaps, mitigating risks, and establishing norms, this system continues to confront notable challenges, including an inequitable governance structure, restricted fundraising capabilities, and inadequate applicability of regulations. Consequently, this paper centers on how the BRICS mechanism can supplement and innovate the multilateral development financial system to better address the actual needs of the Global South. Finally, the paper proposes directions for reform from both theoretical and practical perspectives. Guided by the theory of inclusive governance, it advocates for enhanced internal financial coordination within BRICS, deeper collaboration between the New Development Bank and existing institutions, elevation of the Global South's voice, improvement of the governance of the New Development Bank, and the advancement of institutional upgrades for BRICS financial cooperation. Through these measures, the BRICS mechanism is poised to emerge as a financial beacon for the development of the Global South, thereby injecting momentum into the diversification of the international financial order.

Keywords

BRICS Mechanism; Multilateral Development Finance; Global South; Financial Cooperation; System Reform

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