China
Source: www.scmp.com

Over the past decade, Indian Prime Minister Narendra Modi and Chinese President Xi Jinping have held hands at the annual BRICS
summit, a gathering of the world's emerging economies led by Brazil, Russia, India, China and South Africa. However, no public displays of unity are expected this year while relations between India and China are in free fall over the worst border dispute in decades
. The parallels between the Doklam stand-off in 2017
and the present conflict are revealing. On June 16, 2017, Chinese troops arrived with construction vehicles and road-building equipment to extend a road on Doklam, a plateau wedged in between China, India and Bhutan. Two days later, Indian troops arrived with weapons and bulldozers to stop the construction.
On June 16 this year, a violent clash between Chinese and Indian forces in the Galwan Valley
in the disputed Ladakh region ended, with at least 20 Indian soldiers later confirmed dead.

"Following the Doklam stand-off, there was a lot of talk in India that Modi might not go to the summit," said Dr Rajan Kumar, associate professor of international relations at Jawaharlal Nehru University in New Delhi.

The key difference this time is the intensity of the conflict, which has produced the first combat fatalities since 1962. Experts say relations between both countries will go past a point of no return if there is no permanent solution to the border dispute.

"Right now the mood in India will not allow business as usual with China, in any sector," said Madhav Nalapat, a professor of geopolitics at India's Manipal Academy of Higher Education.

For the past decade, BRICS has served as a key platform for cooperation between India and China. It was initially established in 2009 without South Africa, which joined the next year. The first joint statement made following the 2010 summit opened by expressing support for "transformations in global governance" and "multipolar diplomacy".

This year's BRICS summit is expected to start on November 13 in St Petersburg, Russia, after Covid-19 prompted Moscow to give up holding the summit in July as originally planned.

"BRICS is hinged on this broader idea of emerging market solidarity, of not letting the Americans and Europeans dictate rules of global finance," said Matt Ferchen, head of global China research at the Mercator Institute for China Studies in Berlin.

Regional security has usually been a secondary item in the BRICS agenda. Joint statements after every BRICS summit have always presented unified stances against global terrorism or civil war in the Middle East and parts of Africa, but not much else.

"When BRICS was first founded, many sceptics thought the border disputes between India and China would be a big roadblock but the grouping has succeeded precisely by avoiding these kinds of thorny bilateral issues," said Niu Haibin, a senior fellow at the Shanghai Institutes for International Studies.

However, some say the BRICS coalition is already playing a role in the present border dispute.

On Tuesday, June 23, at a virtual summit of the RIC forum – made up of foreign ministers from Russia, India and China – it was agreed that the three countries' heads of state would hold a sideline meeting at the G20 summit scheduled for November. Li Xing, professor of international relations at Aalborg University in Denmark, said Russia's role as a mediator in this conflict was because of its affiliation with China and India as a member of BRICS.

"This isn't saying that these talks were BRICS talks but that they took place under a BRICS framework," he said. "Otherwise why was the US or another European country not invited to help negotiate, but rather Russia."

After the conclusion of the RIC forum, Russian Foreign Minister Sergey Lavrov said Moscow "never had a goal to help India and China develop their bilateral ties".

Indian Prime Minister Narendra Modi and Chinese President Xi Jinping have previously overlooked border issues in BRICS discussions. A planned summit in November – alongside fellow BRICS nations Brazil, Russia and South Africa – may test the relationship. Photo: AP
However, Kumar from Jawaharlal Nehru University said Russia was clearly repeating the role it played after the Doklam stand-off. Kumar said that during conversations with Russian diplomats in 2017, he became aware that Russia had played a crucial role in easing tensions ahead of the BRICS summit.

"Through backchannel diplomacy, Russia, India and China resolved the issues and the BRICS meeting took place," he said.

Kumar said that if the current military conflict did not ease, the group's credibility would take a major hit.

"You cannot claim you are a global power willing to take on global governance while fighting on your border over minor issues," Kumar said.

Li of Aalborg University agreed, adding that China's staunch support of BRICS lay in the awareness that "the United States was able to shape the world order through international institutions and by forcing other countries to play by their rules of the game".

"China's bid for a leading role on the international stage is partly dependent on the continuity of BRICS," Li said. "BRICS is one of China's babies. If it disappears, it will be a big blow to China's foreign policy."

China
Source: www.globaltimes.cn

Chinese domestic currency's global footprint could be expanded further provided the implementation of more currency swap programs that allow the New Development Bank (NDB) to issue yuan-denominated loans to economies of the BRICS countries; that is, Brazil, Russia, India, China and South Africa, the NDB bank's vice president told the Global Times in a recent interview.

The vice president's comments came as the importance of the yuan's internationalization, which includes reducing an over-reliance by China on the US dollar-based system to contain the damage of potential US sanctions to Chinese institutions, has been repeatedly stressed by China's financial magnates in the past week.

The NDB is a multilateral development bank set up by the BRICS group of major emerging economics in 2014, with a focus on financing infrastructure development in emerging markets and developing countries.

The bank is equally owned by the five countries, meaning that each country has an equal say in the running of the institution and its lending activity.

"Theoretically the NDB could provide loans in yuan to South Africa, or to Brazil, but then we need to deepen the swap market between [BRICS] countries," Leslie Maasdorp, vice president and chief financial officer of the NDB, told the Global Times in a recent interview.

Maasdorp described the International Monetary Fund's inclusion of the yuan in its Special Drawing Rights in 2016 as a culminating moment for China's internationalization ambition for the yuan.

For the yuan to be an effective counterweight to the US dollars, the former needs to represent a much larger base, as the latter remains large in terms of its size in overall global foreign exchange activity, Maasdorp said.

Currently, around 65 percent of NDB's loans are denominated in US dollars, while 35 percent are in the domestic currencies of the BRICS countries, according to Maasdorp.

The importance of yuan's international drive was repeatedly mentioned by regulators and top think tanks recently as the China-US rivalry escalates to new heights almost every day.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission, called for effective planning and patience for the international environment to be ripe before further promotion of the yuan.

Fang said at a recent forum that China's dependence upon the US dollar for international payments put it in a position of vulnerability considering potential sanctions by the Trump administration.

Zhu Min, a top academic in China and dean of the National Institute of Financial Research at Tsinghua University, noted at a recent forum the importance to promote the yuan's use in projects under the framework of the China-proposed Belt and Road Initiative, of which most of the investment and loans still use US dollars.

In fact, the Chinese yuan already has the world's largest currency swap coverage, according to Zhu.

In recent few years, China's central bank has signed currency swap agreements worth a total of 3.47 trillion yuan ($490.4 billion) with 39 countries, according to domestic financial news site yicai.

However, there might be some risk related to the current period of potential decoupling between China and the US that might impact on the pace of the yuan's expansion, Maasdorp said.

"But for such a trend that takes a very long time to unfold its pattern, it would be too difficult to predict at this very early stage the impact of the changed global economic environment," noted the NDB executive.

The direction of change is clear: the Chinese yuan will continue to increase its use as a currency of reserves, and will only become more popular in international trade, investment scenarios, and foreign loans, noted Maasdorp.

USA
Source: seekingalpha.com

Summary
Over the past two decades, that promise that India's untapped economic potential held out went largely unfulfilled. While India's economy grew significantly, it was just the seventh-largest economy in 2018 (between France and Italy), and its per capita income is still far below the other BRICS countries.

In the past several years, however, numerous developments have reenergized the belief that India may be on the cusp of reaching a key point in its economic evolution.

The nature of the country's development means that identifying high-quality companies that can thrive in this new competitive reality is paramount.

In India 2020: A Vision for the New Millennium, A.P.J. Abdul Kalam and Y.S. Rajan detailed how India could become a developed country and one of the world's four largest economies by 2020. But how is the India 2020 vision holding up in 2020?

With the world's second-largest population, a democratic government, and a capitalist economy, India represented enormous untapped economic potential when India 2020 was written more than 20 years ago.

During the ensuing two decades, however, that promise went largely unfulfilled. While India's economy grew significantly, it was just the seventh-largest economy in 2018 (between France and Italy)¹, and its per capita income is still far below the other countries that comprise the BRICS countries (Brazil, Russia, India, China, and South Africa), as shown below.

Over the past several years, however, numerous developments have reenergized the belief that India may be on the cusp of reaching a key point in its economic evolution. While the effects of COVID-19 will impact the near term, massive advances in digital infrastructure and connectivity, coupled with a series of governmental reforms, have laid the foundation for long-term growth as India transitions to a more formalized economy.

Specifically, digital connectivity and policies supporting the move to a digital, rules-based economy are allowing strong companies to become stronger in India. The gap between leaders and laggards is expanding. Quality companies with proven management teams and durable, sustainable advantages are widening their competitive moats, gaining market share, and growing through consolidation.

At the same time, governmental reforms - and the resulting transition to a cashless economy and the shift away from crony capitalism - are creating a more level playing field for companies operating in India. This means companies are more likely to thrive or fail on their own merits, rather than on their connections to governmental officials or their ability to navigate an informal economy.

The transition will be far from smooth, however. Crumbling physical infrastructure (as shown in the chart below), poor air quality and other environmental concerns, unintended consequences of governmental policies and the challenges of overcoming a legacy of crony capitalism will slow India's growth.

In the following three-post series, we share our findings about recent changes in India that have sparked new optimism about the country's economic development - and also examine the headwinds that will likely impede this progress as these changes unfold (including the affects of COVID-19 on the domestic economy and global supply chains).

These obstacles are being addressed at drastically different rates and in a less-than-predictable fashion. That means that while India's transition to a more formal, organized economy is progressing, it will be a messy, non-linear process.

And while the country's total addressable market (TAM) is undeniably compelling, the ability to monetize that TAM will vary significantly by sector and from company to company.


The nature of the country's development means that identifying high-quality companies that can thrive in this new competitive reality is paramount. Ultimately, we are excited about India's potential, and we conclude that it is a textbook example of the importance of active management when investing in emerging markets - because the chaotic nature of India's development represents opportunity for active managers to capture alpha.

__________

¹ Source: The World Bank. December 31, 2018.

Russia
Source: www.mid.ru

The foreign ministers of the RIC countries (Russia, India and China) have held a meeting via video conference. The discussion was constructive, fairly intensive and useful.

Our three countries possess a serious economic, resource, scientific, industrial and financial potential and can do a great deal to ensure peaceful and steady development of humankind. Our leaders said this many years ago and this assessment has remained completely true to this day. We agree that the buildup of RIC cooperation in different areas is much in demand today, just like the concerted efforts of our three countries in a search for effective ways of countering numerous challenges in global politics and the economy.

The current year is the year of the 75th anniversary of the end of World War II and of the establishment of the United Nations, a fact that deserved special mention at our video conference. We supported the preservation and protection of truth about the events of the war years and noted that it is unacceptable to falsify history for transient considerations of expediency. I would like to thank our Indian and Chinese friends again for sending their military formations to Moscow to take part in tomorrow's Victory Parade on Red Square.

We discussed in detail the coronavirus pandemic and the global situation on a broader plane. We stated that the pandemic has had a substantial impact on many aspects of interstate relations, done serious damage to the world economy and considerably limited human contacts in general.

In this context, we expressed concern over the destructive line of a number of states which is aimed at dismantling the architecture of global security created in the postwar years on the basis of the UN Charter. We consider unilateral actions, illegal use of force, interference in internal affairs of sovereign states and attempts to use national laws exterritorialy to be counterproductive, and we told our colleagues about this once again and met with their understanding. I am convinced that our three countries will continue opposing these negative trends and promoting coordination at different multilateral venues.

We are already closely cooperating at the G20, the SCO, BRICS, and, of course, the UN. Our three countries coordinate their actions on many issues. This coordination will be more in demand in the next two years because in 2021 ̶ 2022 India will occupy a seat of a UN Security Council non-permanent member.

Today, we also spoke about the reform of the UN Security Council. As we mentioned more than once, India is a strong claimant for a permanent seat in the UN Security Council in the context of its reform. Russia supports India's nomination for a permanent seat. In principle, we believe that the main drawback of the current lineup of this structure is its obvious underrepresentation of the developing nations of Asia, Africa and Latin America. The reverse side of the coin is serious overrepresentation of our Western colleagues. Therefore, to make the UN Security Council more effective, and its membership more just and democratic, it is absolutely necessary to involve the three developing regions in its activities. Let me emphasise again that we support India's permanent membership of the UN Security Council in the context of its reform.

Today, we talked about cooperation not only on the global arena, but in the Asia-Pacific Region (APR) as well. We emphasised the need to continue to step up cooperation within the framework of the entities that have been created here in recent decades and which are in close contact with ASEAN. We consider it critically important to reinforce the ASEAN-centric interaction formats, including for the purpose of fighting the coronavirus infection. That is because ASEAN has a corresponding mechanism, in which ten ASEAN countries and their partners review problems related to the epidemiological situation and submit these issues for consideration, among other forums, to the East Asian summits, where ASEAN and its partners are represented at the top level. In addition, ASEAN has a tool such as an ASEAN countries and partners' defence minister meeting. Military medicine is also one of the items on this structure's agenda. Today, we agreed that we will support our ASEAN colleagues in their efforts to make the most out of these mechanisms.

We also talked about promoting cooperation in the RIC format along with the bodies, structures and mechanisms that are already operational in the economy, education and culture. We agreed to pay more attention to energy and political science contacts between the respective think tanks. There's a forum of political scientists. We decided that we would strongly encourage scientists, former diplomats and the military, as well employees of other areas of international activity, to generate ideas for further consideration with an eye towards use in our association's practical work.

Regarding additional concrete agreements and given the urgent nature of the matter, we decided to organise an online conference of representatives of the sanitary and epidemiological agencies from Russia, India and China. The participants supported Russia's proposal to supplement the subsidiary bodies of the RIC format with meetings of the defence ministers from Russia, India and China. The first such meeting, upon our proposal, will be held during Russia's chairmanship, that is, this year, the epidemiological situation permitting.

Overall, I think we did a very good job. Once again, we showed our three countries' overlapping or similar approaches to the key problems of our time. We also agreed that this online conference is not a replacement for a face-to-face meeting of foreign ministers, which should take place before the RIC summit. Our Chinese colleagues suggested holding the next summit on the sidelines of the G20 summit, as was the case in 2018 ̶ 2019, when the leaders of Russia, India and China held their traditional meetings.

Question: I would like to ask about RIC's "added value." Some experts have claimed that Russia is using this format in a search for the basis of an international relations system that would be an alternative to the present West-centric system. How workable are theses plans in view of the current escalation between India and China as well as the fact that both countries are not ready for a deadly embrace with the West?

Sergey Lavrov: I wouldn't call the current system of international relations West-centric. We have the UN Charter. Everyone, including the West, acknowledge their allegiance to this Charter, at least verbally, although obviously in reality steps are being taken which reveal the West's desire to change the international legal system to a "rules-based" international order. This is not a casual alteration of terminology because "international law" is an established term suggesting universal agreements which rest at the foundation of international and inter-state ties in all areas of activity – universal conventions and the UN Charter which is by definition a collective document signed and ratified by everyone. Overriding universal international legal instruments with rules devised by a narrow circle and later presented as a multilateral ideal to be accepted by all – this a trend.

I would prefer to say that the West is trying to preserve West-centricity even though the era of Western domination in world affairs in terms of international law, which lasted nearly 500 years, ended with the establishment of the UN, although it will take longer in practical terms. However, the principles underlying the UN remain unwavering. In its ambitions to impose its rules on everyone, the West has not yet reached the point of direct rejection of the principles of the UN Charter. I hope that responsible Western politicians realise, especially in view of recent developments on the international arena and the chaos wreaked by their rules each time they are concocted to suits certain interests, how greatly this chaos impedes development and cooperation for all.

Going back to your question, I see no grounds to call the present model West-centric. Attempts, at least by some western countries, to make it like that and to cling to the centuries when the West dominated world politics through colonial power, will certainly continue. We see this in concrete examples of our partners' actions.

When we boost cooperation within the SCO, BRICS or, as in this case, in the RIC format of Russia – India – China, we are not attempting to present an alternative to the current system of international relations. This system enshrined in the UN Charter directly promotes the development of regional cooperation structures. The UN Charter's Article 8 specially encourages such interaction. The SCO, RIC, the EAEU, the CSTO as well as European structures such as the European Union, NATO, the OSCE all fit what the UN Charter designates as regional agreements. The Charter directly encourages these regional associations to resolve issues related to specific ties between the participants of such a regional association within its competence. In this respect we are only following in line with the general trend defined during the formation of the United Nations.

Why was the three-nation association deemed promising? As you know, the idea was voiced by Yevgeny Primakov when he was foreign minister of Russia. Back in 1998, he gave reasons for the expediency of thinking about uniting the efforts of our three nations, taking into account the geographical and historical factors and the focus of the foreign policy of Moscow, Beijing and New Delhi. And this focus is largely distinguished by adherence to international law, UN Charter principles and a rejection of unilateral ways of solving global issues. This idea has acquired a life of its own. Several years have passed since Yevgeny Primakov voiced it in 1998, and in 2003 the RIC foreign ministers gathered for their first meeting. There have been 16 of them since. With the current videoconference it is the 17th meeting at the foreign minister level. Events are also held at the level of ministries and agencies.

Today, as I have said, our initiative to also launch defence ministers' meetings in the RIC format has been confirmed as acceptable, and the idea of enhancing contacts in economic, cultural, energy and educational ties was supported. I think that all this meets the interests of our nations. The fact that these initiatives are enthusiastically welcomed within the RIC confirms they are exigent.

As to India's and China's unwillingness, as you put it, "for a deadly embrace with the West" and the question whether it slows down the progress in our cooperation, we are also unwilling to get into a deadly embrace with the West, or with anybody else for that matter. We are just seeing that it is very hard to work with the contemporary West because some sort of diplomatic configuration is needed in order to work. So far, I see that some of our colleagues, especially among those who "call the tune" in the Western camp, lack the ability to develop diplomatic relations. They mainly operate via other methods, which does not mean that we are enjoying this.

President of Russia Vladimir Putin in his article on the 75th anniversary of Victory in the Great Patriotic War and World War II, stressed our commitment to cooperation both within any international structure (the UN, the G20 etc.) and in the context of the special responsibility of the five UNSC permanent members. We are in favour of any disagreements being discussed at the negotiating table, rather than becoming a matter for confrontation, but we would like to see them discussed honestly so that not only concerns are brought up but also the concrete facts which gave rise to such concerns, and not just accusations but rather substantiated ones. If our partners finally find the strength and begin respecting diplomatic proprieties, we are ready for such a conversation.

Question: As a RIC member, can Russia contribute to strengthening trust between India and China when these countries are confronting each other on their borders?

Sergey Lavrov: We have never set the goal of helping India and China improve their bilateral relations. These countries have everything they need to address and review any problems that arise in their relations, as problems can arise between any countries, including neighbouring states. I don't think that India and China need help and assistance aiming to somehow resolve their disputes or situations.

If you are referring to the events of the past 30 days, then, in my opinion, New Delhi and Beijing responded with specific actions to your question. Military commanders met on the ground immediately after the border incidents, and foreign ministers contacted each other, too. As far as I understand, these contacts also continue today. Neither party has made any statements about a reluctance to reach an agreement under mutually acceptable approaches. Naturally, we hope that this will continue in the future.

The very fact of contacts between our Indian and Chinese friends in various multilateral formats, including RIC, BRICS and the SCO, helps expand dialogue between the two countries. Apart from bilateral contacts, they work closely in the above multilateral associations, which both countries actively support as important mechanisms for advancing their foreign policy, and economic and other interests through collective formats. I believe that the acquisition of a full-fledged SCO member status by India, together with Pakistan, came as a highly important step in advancing this policy.

I would like to finish by reiterating what I said at the beginning. I see no reason for Russia or anyone else to offer their services to India and China in advancing talks to resolve any issues between them. Their relations have made great headway in the past few years. In 2005, bilateral relations received strategic partnership status at a regular summit involving Indian and Chinese leaders. This fact speaks for itself.

Question: US Secretary of State Mike Pompeo said the other day that Washington was preparing a list of sanctions against mainland China officials over the Hong Kong security bill. The United States is again threatening to use sanctions against foreign countries. The media have reported that the United States is also preparing new sanctions against Russia over Nord Stream 2. What can you say about this fixation on sanctions? Can American politicians be convinced to respect other countries' affairs?

Sergey Lavrov: As I have already mentioned, it is regrettable that not all of our partners respect the readiness of Russia, China and the overwhelming majority of other countries to work actively on multilateral platforms towards political and diplomatic agreements on disputable topics. In fact, our American colleagues seem to be abandoning diplomacy as a way of conducting international affairs. Or it is a highly specific diplomacy consisting of primitive simple moves. They advance a demand, and if it is not reciprocated with capitulation, they then threaten sanctions and set a deadline for accepting the ultimatum. If the country in question does not capitulate, the US administration imposes sanctions, adopts laws to formalise them and issues the related instructions.

I have lost count of such decisions. The Trump administration has long surged ahead of the Obama administration when it comes to the number of sanctions against Russia and the number of the sanctioned individuals and companies. We have grown used to this, and I think that you will have to adjust to this situation as well. Not that we want to pit the United States against China, absolutely not. In your first question you asked if cooperation within RIC could be hindered by China's and India's unwillingness to be locked in a deadly embrace with the United States. I would like to tell you once again that we have no desire to be locked in any deadly embrace with anyone. But some actions are directly affecting the fundamental legitimate economic and other interests of the nation concerned.

Just take a look at Germany's reaction. The Americans are planning to hand out a new portion of sanctions against any individual or company connected with Nord Stream 2 in one way or another, including the potential buyers of gas from that pipeline. The immediate reaction of the German political establishment shows that national pride exists in Germany and that it has been seriously hurt.

I believe that the door for negotiations with the United States should be kept open. We always do this, and we will never take offence at anyone. We will always remain open to dialogue, but it must be an equal dialogue aimed at finding a balance of interests, compromise and mutual concessions. I believe that any objective can be reached in an equal dialogue aimed at negotiating mutually acceptable solutions. I have no doubt that China has the same approach to international relations.

Question: A conference of participants in the Open Skies Treaty has been scheduled for July 6 in light of the planned exit of the United States. What will Russia propose to save the treaty? Do you expect the treaty participants to unilaterally support the preservation of the treaty after the United States' withdrawal?

Sergey Lavrov: I cannot decide for other countries. We do not believe that any of Russia's actions taken within the framework of the Open Skies Treaty in the past years could justify the United States' unilateral moves to destroy one more multilateral document underlying the system of strategic stability created over the past decades. We are not planning to take any new actions in this regard.

We are well aware of the certain complaints presented to us. They include the 10 km no-fly zone near the borders of Abkhazia and South Ossetia, but this procedure is stipulated in the treaty for flights near the non-signatory countries. Throughout all these years, we were ready to look for a compromise on this subject, provided Georgia stops violating the treaty and allows observation flights over its territory. It has not done this in direct and gross violation of the treaty. However, none of our Western colleagues have taken offence at Georgia. Anyway, we were ready to settle this problem.

Another complaint concerns observation flight distance over the Kaliningrad Region, which allowed our Western partners to look over 90 percent of the region's territory. This restriction is based on a precedent created by our American colleagues when they established the maximum flight distance for the Alaska semi-exclave. The West can still fly over 90 percent of the Kaliningrad Region as long as the treaty is effective in the United States. At the same time, observation flights cover less than 3 percent of Alaska, yet our European colleagues have had no questions about this. Throughout all these years, we have been holding technical consultations with an initiative group of Western countries. I believe this could have helped to settle the artificial problem concerning the Kaliningrad Region. A regular round of these consultations was held just days before the Americans announced their decision to withdraw from the treaty. According to our Western colleagues, it was a very fruitful round. I believe that this shows once again that the reasons advanced by the United States for exiting the treaty were created artificially.

As for our actions at the upcoming extraordinary conference of the signatory countries on July 6, we have announced that the main reason behind our ratification of the treaty was the ability to make observation flights over US territory. Everyone is well aware of this. We will look at the reaction of our Western colleagues at this conference and what Europe thinks about this. We do not rule out any option. We would like to hear what the others have to say.

Question: The military developments in Libya are quite dynamic. How do you estimate further prospects after Egypt's statement that it has full legitimacy to interfere militarily and that the city of Sirte and Jufra Province are a red line in terms of Egyptian national security? Is it likely that a clash between the Libyan sides will lead to a combat engagement between Turkey and the Turkish-Egyptian army that is supporting Field Marshal Khalifa Haftar's forces?

Sergey Lavrov: During the last few days, I discussed this matter with a number of colleagues. They agree with the fundamental point of our policy consisting in that there is no military solution to this conflict. This is the cornerstone of all UN Security Council resolutions and all declarations approved at numerous events, including the Berlin International Conference on Libya in January of this year.

During a situation where Libya's internal problems and settlement prospects hinge upon who captures more territory and regards themselves as having a bargaining chip, resembles a swing. One side's military edge over the other in recent years was always only temporary and followed by a response, with the developments on the ground changing on the basis of who was advancing and who was retreating. A retreating side was ready for talks, while an advancing side was reluctant to do so. Everyone has long been aware of this. I do not see any options other than an immediate ceasefire and a settlement of all remaining issues through negotiations based on the understandings sealed by the Berlin Conference declaration. This concerns Libya's political system. Its three historical regions should be equally represented at the negotiations and at the new government bodies, executive and legislative ones that will be formed as a result of the negotiations. The economic issues should also be addressed with regard to the balance of interests of these three parts of the country.

The matter of who will have the legitimate power to use military force in Libya is also subject to negotiations. The so-called 5+5 committee established in the wake of the Berlin Conference is supposed to achieve an understanding on the military aspect of the settlement. As I see it, the sides have expressed readiness in the last few days to use this mechanism.

We proceed from the assumption that there is no alternative to a political solution that will not be imposed from the outside and will be reached by the Libyans themselves with account taken, let me repeat, of the interests of these three state-forming regions of Libya. The outside players should do their best to help create conditions for an inclusive intra-Libyan dialogue.

Over a period of the last few days, I had telephone conversations with Foreign Minister of Turkey Mevlut Çavuşoglu and Foreign Minister of Egypt Sameh Shoukry, both of whom unequivocally supported this approach, which implies that all parties must admit that there is no military solution and it is necessary to sit down to the negotiating table and work to achieve generally acceptable agreements.