BRICS ratings agency to counter ‘unfair’ treatment of SA

The ANC has renewed its call for the establishment of a BRICS ratings agency at its policy conference this weekend, saying that it has become a necessity that needs to made official party policy.

Speaking to the Mail & Guardian at the conference,  international relations subcommittee chairman Edna Molewa said the ratings agency needs to be made ANC policy and pushed through in government.

The BRICS ratings agency was first brought up at a 2016 BRICS summit, but has recently gained traction through business groups like the Black Business Council, following three downgrades by global firms – two of which were to junk status.

The South African government and some business bodies feel that global firms – Fitch, Moody’s and S&P Global – are unfair on emerging economies, and look for any reason to downgrade them.

The ‘big three’ have also been criticised for pushing a western agenda, as well as their part in the 2008 global economic crisis, which was, in part, directly as a result of poor ratings actions from the groups.

Both Brazil and Russia have also been downgraded by Moody’s in recent times, adding fuel to the desire for an alternative ratings firm that can give investors insight into different metrics and opportunities in developing markets.

However, the concept of a BRICS bank has also faced its share of criticism – specifically its use as political tool, or channel of propaganda.

Analysts have said that it is naive to think emerging markets need a special set of economic rules to operate in, and that despite the complaints and feelings of unfairness held by nations such as South Africa, Russia and Brazil, many emerging markets hold strong ratings with the global firms.

Others have welcomed the ‘competition’ another ratings firm would bring.

Read: South Africa is scaring investors away, ratings firms warn

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BRICS ratings agency to counter ‘unfair’ treatment of SA