China
Source: www.sciencedirect.com

Highlights

• Russia ranks last among the BRICS countries with an average efficiency of 0.0921.

• The highest average efficiency is found in Brazil at 0.5941.

• Brazil, Russia, and India lack of advanced key technologies.

• China and South Africa are facing the problems of diseconomy of scale.


Abstract

Improving the energy efficiency of emerging economies is the core of achieving efficient global development. This paper innovatively applies the slack based DEA to analyze the energy structure and energy-saving potential of BRICS countries in the past three decades. The results of empirical analysis show that, first, Brazil and Russia ranked first and last with the average efficiency of 0.5941 and 0.0921 respectively in the 30-year observation period. Second, the slack variable of each country is very large. For example, in 2018, India needs to reduce 436.17 Mtoe coal consumption, 105.65 Mtoe oil consumption, 25.39 Mtoe natural gas consumption, and 2038.05 million tons of carbon emissions to reach an effective state. Third, the reasons for inefficiency vary from country to country. Brazil, Russia, and India have low levels of energy management and lack of advanced key technologies. China and South Africa are faced with the problems of scale diseconomy and unreasonable resource allocation structure. The research results are helpful to understand the changing trend of energy efficiency and the reasons for low efficiency in BRICS, and can provide a reference for the formulation of scientific development strategy, which has important practical significance.

Russia
Author: Parv Aggarwal
Source: russiancouncil.ru

This article explores systemic and market barriers preventing the wider use of BRICS national currencies in trade, including currency swaps mechanisms and reasons for BRICS exporters' preference not to use national currencies. Design flaws are outlined in the New Development Banks' Contingency Reserve Arrangement (CRA) in the context of de-dollarizing BRICS trade, namely its IMF linkage requirements and limited scope, symptomatic of a lack of trust between BRICS member states. The current levels of de-dollarization in Russia's intra-BRICS settlements (as a representative sample) are used to find gaps between Russia's stated de-dollarization goals and current initiatives, and market barriers are identified to explain this gap. Finally, the components of market mechanisms needed to de-risk Intra-BRICS trade and overcome the identified barriers are outlined.

Background to Challenge

The 2017 BRICS New Development Bank's strategy report The Role Of BRICS In The World Economy & International Development detailed a long-term vision of the direction BRICS countries' economic cooperation was headed in. The strategy report made the case that reforms in the existing western institutions would not be in BRICS countries' favour in the near future, and hence emphasized the importance of a new Multilateral Clearing Union (MCU) which would serve as an intra-BRICS currency swap pool and tackle balance of payment shortcomings, trade finance, financial crisis aversion, and an overall restoration of sovereignty by de-dollarizing BRICS trade (NDB, 2017). This intention was also echoed in the 2017 BRICS Xiamen Summit declaration, which stated:

"We agree to …enhance currency cooperation, consistent with each central bank's legal mandate, including through currency swap, local currency settlement, and local currency direct investment….We commend the progress in concluding the Memoranda of Understanding among national development banks of BRICS countries on interbank local currency credit line and on interbank cooperation in relation to credit rating."

In parallel to the Xiamen summit, the R5+ (Real, Ruble, Rupee, Renminbi, Rand, in addition to the currencies of BRICS+ countries) currency initiative was launched, which sought to stimulate the use of national currencies for "investments, long-term projects, creation of common payment card systems and common settlement/payment systems, cooperation in promoting BRICS+ currencies towards reserve currency status."

The New Development Bank's proposed Multilateral Clearing Union was manifested in the form of a $100 billion Contingency Reserve Arrangement (CRA) that BRICS countries devised as a pool to swap currencies in times of need, increasing national currency settlement. The CRA included two currency swap instruments to support short-term balance of payment (BoP) pressures between a country's current and capital accounts: 1) a liquidity instrument to provide support in response to current BoP gaps, and 2) a precautionary instrument to buffer against future BoP gaps. A country's access to the shared capital funds was limited by conditionality, as only 30% of accessible funds ("de-linked portion") were available on demand, whereas the majority, 70% of accessible funds require on-track arrangements with the IMF, as the CRA's rationale document explains:

"Where financing in excess of this 30% limit is required, an 'IMF-linked portion' will be made available. This will allow the country access to the remaining 70%, provided that a conditionality-based agreement with the IMF is concluded" (Biziwick, M., Cattaneo, N. and Fryer, D., 2015 (p. 316)).

CRA Defects

Of importance, it is worth noting that rather than having a mechanism for direct currency swaps, a swap transaction was defined as "the Requesting Party's central bank purchases US dollars (USD) from the Providing Party's central bank in exchange for the Requesting Party Currency, and repurchases on a later date the Requesting Party Currency in exchange for USD" (Biziwick et al., 2015 (p. 316)).

As a result, the CRA's IMF linked component and USD reserve currency status raise questions about whether there is a potential mismatch between the stated goals of the MCU and the CRA's implementation mechanism. In the RISS Joint Research Paper Use of national currencies in international settlements: Experience of the BRICS countries, Karataev et al state:

"Though the BRICS countries have established a Contingent Reserve Arrangement… the currency swap under this arrangement is one between US dollar and local currencies of BRICS, not one among the BRICS currencies. Currently, there are few local currency swap agreements in force (between Russia and China, China and South Africa)" (Karataev et al., 2017 (p.110).

The key barriers hindering the CRA's success towards its stated goals, including the CRA's promissory model, limited size (mirroring the limited paid-in capital allocated to BRICS' New Development Bank), and IMF linking, stem from the CRA modelling itself after the ASEAN+3 Chiang Mai currency swap initiative, which had a limited scope, operated on a promissory model rather than an actual capital pool, and carried a significant IMF-linked portion due to the lack of financial surveillance capacity and moral hazard borrowing risk (Biziwick et al., 2015 (p. 318)). On a macro level, "the CMI/CMIM arrangement has been criticized as utterly ineffective (it did not play any role in the 2008 crisis, for example), and the concern is that, by adopting its form, the CRA is condemning itself to a similar fate. Size and IMF linking (along with the lack of a rapid response facility) seem to have been major problems with the CMI/CMIM arrangement…the IMF linking seems hard to reconcile with the intention to provide a counterweight to the IMF " (Biziwick et al., 2015 (p. 318)). Thus, as was the case with the Chiang Mai currency swap initiative, the BRICS NDB's CRA's promissory model, limited size (mirroring the limited paid-in capital allocated to BRICS' New Development Bank), and IMF linking all stem from a fundamental lack of trust between BRICS member countries on their self-reliance for monitoring and governance of each others' and common funds.

Despite their stated desire to break away from IMF's conditionalities and dollar-denominated trade, at least in the CRA, a greater trust has been placed in the IMF for monitoring conditions for credit swaps. BRICS countries have thus inadvertently followed precedents set by hegemons.

This status quo is not inevitable, and can easily be overcome by coordinated CRA reform to introduce an internal trust-ensuring credit mechanism amidst financial instruments in national currencies to build the foundation for true independence from IMF and dollar-denominated transactions.

Market barriers to BRICS Trade De-Dollarization:

In addition to the CRA design flaws, BRICS Trade De-Dollarization is also held back by market barriers. As a representative sample to measure progress in de-dollarization, the currency composition of Russia's publicly available intra-BRICS trade settlement since the launching of prominent de-dollarization initiatives in 2017 can be examined, as shown in figure 1 below. The percentage of Russian exports to BRICS countries settled in dollars has fallen from its peak of above 80% in Q1 2018 to 33.2% as of first quarter of 2020 (CBR, 2020). While Russian exports to BRICS have de-dollarized recently, it is apparent that rather than BRICS currencies, the Euro has replaced the dollar as the dominant export settlement currency (Russia is receiving only 13% of its exports in Rubles as of Q1 2020).

Figure 1: Settlement Currency Percentage for Russian Exports to BRICS (CBR, 2020)

This is due to Russian energy exporters preferring to denominate contracts in Euros rather than Rubles recently, for the same reason they previously preferred to denominate contracts in Dollars: greater volume of Rubles received in case of depreciation. By contrast, Russian imports from BRICS countries are still largely settled in Dollars as of Q1 2020, though there is a gradual de-dollarization trend present. The "other" currency slowly rising in imports settlements most likely being largely comprised of the Renminbi Yuan, as China and Russia have been accelerating ruble and yuan use in trade since 2019. Despite this, as demonstrated in Figure 1, it is worthy to note that Russia's inter-BRICS trade is by far settled mostly in Dollars and Euros rather than Rubles or any other BRICS currency, indicating a gap of between Russian traders' settlement currency choice and BRICS de-dollarization priorities.

To explain this phenomenon in greater detail, Karataev et al. outlined two key fundamental market barriers preventing the use of national currencies for BRICS trade finance specifically which need to be overcome as a supplement intra-BRICS currency swaps:

1. Currency Volatility:

Exchange rate fluctuations create uncertainty in optimizing settlement pricing and profitability at time of contract fulfilment from both exporters' and importers' perspective- "Exporters will seek to denominate their contracts in foreign exchange when their national currency is devaluing. It will allow them to receive additional profits in the national currency…(whereas) importers shall be encouraged to invoice a contract price in their national currency in order to reduce costs and prevent a decline in demand as a result of rising prices." (Karataev et al., 2017 (p.20)).

2. Global Commodity Benchmarks:

Dattesh Parulekar:
BRICS Should Avoid Becoming an anti-US Group
"Exporters of similar goods [i.e. commodities]… will seek to establish the contract price in the same currency as their competitors. That allows them to neutralize more successfully the adverse exchange rate fluctuations resulting in considerable price changes and therefore prevent the risk of reducing demand. As a result, the market price of such goods is denominated mostly in the US dollar….the global commodities exchange trade in these goods plays a significant role…if the global commodities market's impact on the pricing model will decrease, the use of the USD as invoicing currency will decline too." (Karataev et al., 2017 (p.19)).

Thus, the dominant factors preventing BRICS currency usage in trade were exchange rate fluctuations causing exporters to optimize profit margins by using foreign exchange (typically denominated in dollars), and industry benchmarks for export goods pricing, especially the influence of global commodities exchanges denominated in dollars. Amongst BRICS countries, this holds true for the largest Russian energy exporters, who often prefer to be paid in dollars or euros in order to maintain standardized price points and obtain additional rubles in case of depreciation.

However, empirical research demonstrated by Nakajima et al. with the vine copula method and value-at-risk model has found that using BRICS currencies in energy trade resulted in more stable prices and avoided translation risks compared to using dollars due to counter-balancing movements with oil prices (Nakajima et al, 2020). Thus, though dollar-denominated oil contracts may provide short-term gains for exporters, the overall commodity trade between BRICS countries would benefit from the use of national currencies. In addition, though the Euro is replacing the Dollar as Russia's preferred export settlement currency within BRICS, the Euro poses lesser but similar risks to being weaponized by sanctions, given that it is still a third party non-BRICS currency and European Union sanctions against Russia could be expanded in the near future in light of political events unfolding in 2020 (i.e. EU-Russia differences over Belarus protests, Navalny incident, etc.).

Current Steps:

To overcome the remaining barriers to using national currencies, current steps being taken in BRICS include developing an in-house settlement system for trade finance based on Russia's SPFS alternative to SWIFT, linking domestic payment systems to create the New International Payment System (NIPS), and researching feasibility requirements towards a common BRICS cryptocurrency. In addition, while progress has been made in diversifying the NDB's loan denominations to include more local currencies, with a goal of 50% project financing in the near future according to NDB's president, the more widespread internationalization of BRICS currencies would require mature bond markets to be created in all BRICS countries to compete with western bond markets. This was initiated by the creation of BRICS Local Currency Bond Fund during the 2017 BRICS Xiamen Summit declaration:

"We agree to promote the development of BRICS Local Currency Bond Markets and jointly establish a BRICS Local Currency Bond Fund, as a means of contributing to the capital sustainability of financing in BRICS countries, boosting the development of BRICS domestic and regional bond markets, including by increasing foreign private sector participation, and enhancing financial resilience of BRICS countries."

Though these steps are cumulatively designed to increase autonomy over intra-BRICS fund flows, they do not, however, address the fundamental gap in de-risking the barriers to using national currencies in BRICS settlements which are holding back their more widespread use. Central Bank of Russia Governor Dr Elvira Nabiullina echoed this sentiment in 2019 when she claimed that while gold-pegged cryptocurrencies are being researched, it was more important to develop international settlements using national currencies. Thus, while BRICS payment and settlement systems are being integrated, BRICS local bonds are being developed, direct currency swap lines are being expanded, and an intra-BRICS cryptocurrency architecture conceptualized and brought to market, a crucial intermediate supplementary step in de-dollarizing inter-BRICS trade finance is establishing de-risked and mutually trustable intra-BRICS trade contracts to expand national currency settlement, overcoming the market barriers mentioned previously.

Gap Identification: Steps Needed for De-Risking Trade

Karataev et al. proposed a multi-tiered circular system whereby national and intra-BRICS financial institutions complement and coordinate with BRICS trade settlement transactions to create a robust system for using local currencies. The components steps were outlined as follows: 1) direct currency trading expansion and lowering transactions costs 2) creation and use of hedging instruments in BRICS currency pairs which would reduce risk management costs 3) widening of Swap Agreements and limiting liquidity risk, 4) local currency bond market development in conjunction with trade and development goals 5) trade surplus re-investment into local bond markets 6) diversification of bond markets and BRICS policy coordination for using these instruments to achieve currency internationalization goals (Karataev et al., 2017 (p. 111)).

Out of these measures, the CRA was designed to meet the needs of step 3, whereas progress has been started on steps 4-6 by the New Development Bank based on initiatives launched during the Xiamen summit. However, concrete initiatives are needed to fulfil steps 1 and 2. Karataev et al. specified three key exchange mechanisms in particular which need to be established to lower transaction costs and de-risk the use of national currencies in intra-BRICS trade contracts to overcome the aforementioned barriers for steps the first two steps mentioned above:

1. BRICS Interbank foreign exchange market, whereby "companies should be able to purchase/sell a currency quickly and without additional costs to make settlements in such currency. This presumes the existence of a highly developed and liquid interbank and forex markets with large numbers of participants and convertible financial instruments" (Karataev et al., 2017 (p.18)).
2. Currency Hedging instruments — "It will be necessary to encourage trading directly in BRICS currencies that will significantly contribute to lowering costs. This step [BRICS Trading pairs] has to be augmented with the creation and use of hedging instruments in BRICS currency pairs which might allow to reduce risk management costs. During the first stage leading public banks of BRICS countries may function as market makers on currency pairs to provide necessary liquidity." (Karataev et al., 2017 (p.110)).
3. BRICS Commodify Exchange — "Launching of a Commodity Exchange or some type of an e-trading platform for trade in goods and derivatives of various kinds can be one more instrument contributing to enhancing LCY [local currency] use in settlements in the BRICS countries…raw material trade could be mediated by setting market prices denominated in local currencies. With appreciable quantity of foreign investors trading on the exchange, this will lead to the internationalization of contracts denominated in local currencies" (Karataev et al., 2017 (p.112)).

In addition to the above three suggested exchanges, intra-BRICS trade de-dollarization requires the IMF-linked portion of the CRA to be removed to enable direct currency swaps to take place, granted the existence of bilateral swap agreements between all BRICS countries. A necessary replacement for the IMF on-track arrangement must be established between BRICS countries: a counter-party de-risking mechanism which serves as an independent source of trust to validate the fulfilment criterion of trade-necessitated direct currency swaps, thus eliminating the need for IMF on-track arrangements and consequent USD conversion.

Currently, all BRICS countries are largely reliant on western facilities for the above four types of exchanges. SWIFT largely dominates international interbank transfer settlement, with the Russian and Chinese SWIFT alternatives operating mostly domestically, though there are plans for integration of BRICS settlement systems as mentioned previously. BRICS countries have yet to develop a comprehensive intra-BRICS hedging mechanism for mitigating currency volatility risk directly independent of dollar and euro-denominated western capital markets.

Conclusions and Recommendations:

BRICS countries have maintained a longstanding goal of de-IMFing and de-dollarizing their trade settlements and reserves in order to increase their sovereignty over transactions and avoid currency crisis, and proposed the creation of a Multilateral Clearing Union towards that goal. However, design flaws in the Multilateral Clearing Union, a lack of an independent credit monitoring mechanism, and lack of currently de-risking mechanisms in intra-BRICS trade finance prevented the wider use of national currencies.

To overcome the reluctance of BRICS traders to take trade finance loans and settle in BRICS national currencies, there is a need to introduce forward hedging options with minimal cost of carry so traders can avail direct hedging options simultaneously with trade contracts to de-risk their trade contract in national currencies. As Karatev et al. concluded, in the long term goal, boosting demand for direct BRICS currency settlement would itself partially smooth out some of the volatility experienced by cyclical western capital flight, thus lowering the risk premium and cost of carry for forward contracts, making BRICS currencies the natural preferred choice in trade finance (Karataev et al., 2017 (p.110).

After a currency options market, a BRICS commodity exchange specifically needs to be created in which commodity prices are denoted in national currencies, and are accompanied by derivatives and other risk hedging options that minimize the combined effects of currency and commodity price fluctuations, essentially serving as a favoured market for BRICS commodity importers and exports to set contracts in national currencies and have instruments to de-risk any expected volatility. The most significant example of a local currency commodity exchange within BRICS was the Petro-Yuan futures market launched in China in 2016, which served as a viable alternative to the dominant dollar-denominated WTI and Brent oil exchanges. Though Russia has set up a similar exchange in the form of the Ural Oil Futures market, work remains to be done to achieve maturity and usage to the level of established commodities exchanges.

Combined with direct currency swap lines and an intra-BRICS free trade zone, the implementation of the above mechanisms would lower the transaction cost of BRICS national currency trade settlement, by lowering the risk premium for importers and exporters to set contracts in national currencies amidst exchange rate uncertainty. Thus, these exchanges would fulfil the BRICS goals of "focus[ing] joint efforts on providing companies engaged in foreign trade from BRICS countries with the same, or lower transaction (compliance) costs, guarantees of settlement and risk management that they currently have in utilizing the dollar, euro or yen" (Karataev et al., 2017 (p.110-111)).

In 2018, export-oriented development banks from all BRICS countries signed a MoU to enhance understanding of distributed ledger or blockchain technology for solving challenges in trade finance, with the aim of identifying areas to improve operational efficiencies and tackle common financial challenges. In 2019, the BRICS Business Council formed a working group exploring how a special trade-facilitating BRICS crypto-currency could be created to ensure the smooth flow of paperless document flow for trade obligations.

In fact, creating a specialized crypto-currency for document flow is not necessary to meet the BRICS goal of de-risking national currency trade settlement. The simplest yet most advanced and low-cost blockchain feature to enable the above four exchanges to take place directly between BRICS traders and banks (and allow a seamless disintermediation of transactions between separate parties without the need for outside third parties such as IMF) are Smart Contracts, an original feature of Ethereum networks but later adapted by other blockchain networks. Smart Contracts allow for multiple parties to program and pre-set conditional criterion for contracts based on fulfilment of services or market conditions, and automate the verification of fulfilment criterion via decentralized external verification engines known as Oracles, which are blockchain middleware that create a secure connection between Smart Contracts and various off-chain resources required for fulfilment. Funds needed to execute the contract can be temporarily pre-stored in a linked virtual escrow-like account associated with the contract to guarantee fund availability at the time of execution. Once the contract execution date arrives and conditional fulfilment checks have been completed, Smart Contracts self-execute and disburse associated payments to the contracting parties, automating execution and settlement and eliminating contract disputes and counter-party non-fulfilment risks.

Due to their automated fulfilment capabilities and dis-intermediation of third party legal and settlement entities, Smart Contracts are starting to be gain traction in western consortiums for trade finance, currency trading, and commodity trading in the mainstream dollarized economy. Trade Finance systems based on Smart Contract are currently enabling on average a 35% reduction in costs and the elimination of the 1–2 weeks of processing time for settlements, in addition to removing room for manual errors.

The author has proposed a solution implementing the above exchanges using Smart Contracts to De-Risk and De-Dollarize Intra-BRICS Trade—further details on this solution beyond those mentioned in this article can be seen in the December 2020 issue of the BRICS Journal of Economics.

Printed Sources Cited:

Biziwick, M., Cattaneo, N. and Fryer, D. (2015) "The rationale for and potential role of the BRICS Contingent Reserve Arrangement." South African Journal of International Affairs. 22:3, 307-324.

Central Bank of Russia Trade Finance Settlement Data. "Credit Statistics" http://www.cbr.ru/vfs/statistics/credit_statistics/cur_str.xlsx translated into English, plotted in Excel.

Nakajima, Tadahiro, Yijin, He and Hamori, Shigeyuki. (2020). Can BRICS' currency be a hedge or a safe haven for energy portfolio? An evidence from vine copula approach. The Singapore Economic Review. 65(4) 805-836. https://doi.org/10.1142/S0217590820500174.

NDB - New Development Bank. (2017) "The Role Of BRICS In The World Economy & International Development" BRICS New Development Bank Strategy Report. https://reddytoread.files.wordpress.com/2017/09/brics-2017.pdf.

China
Source: www.ndb.int

February 3, 2021 – The New Development Bank (NDB) and the Black Sea Trade and Development Bank (BSTDB) signed a EUR 100 million Loan Agreement for the Russian Maritime Sector Support Program. The Loan Agreement was signed by Mr. Dmitry Pankin, President of BSTDB and Mr. Xian Zhu, Vice President and Chief Operating Officer of NDB. The Program will primarily focus on the development of Russia's trade-enabling infrastructure, including seaports and maritime vessels, but also will have a broader scope by including river transport and supporting railway infrastructure that in many instances serves as a feeder for maritime transport. BSTDB will on-lend the NDB funds to port owners and operators, as well as to maritime companies.

The Program is expected to facilitate economic growth in Russia by enhancing national competitiveness in international trade via increased cargo-handling capacity and efficiency. It will also improve water transport connectivity by expanding Russia's passenger fleet.

Mr. Dmitry Pankin, BSTDB President stressed that "seaport transport infrastructure is essential for the economic growth and regional cooperation that BSTDB is mandated to support. This operation demonstrates important synergies between our two multilateral development banks. We are using our comparative advantages to increase the developmental impact and efficiency of our operations to the benefit of member countries. The loan will support the enhancement of the current BSTDB's contribution to the implementation of the Transport Infrastructure Development Plan of the Russian Federation to over USD 130 million".

"We are delighted to sign the Loan Agreement with BSTDB for the Russian Maritime Sector Support Program. It is the first seaport infrastructure project supported by NDB in Russia, which marks a new stage in the diversification of the Bank's operations," said Mr. Xian Zhu, NDB VP & COO. "High-quality and efficient seaport transport infrastructure can unlock bottlenecks and enhance accessibility to markets, bringing about a wide range of socio-economic opportunities and benefits with positive multiplier effects."

Background information

The New Development Bank (NDB) was established by Brazil, Russia, India, China, and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. According to the NDB's General Strategy, sustainable infrastructure development is at the core of the Bank's operational strategy for 2017-2021. The NDB received AA+ long-term issuer credit ratings from S&P and Fitch and AAA foreign currency long-term issuer rating from Japan Credit Rating Agency (JCR) and Analytical Credit Rating Agency (ACRA).

India
Source: www.journalijdr.com

Abstract:
Comparisons between the growth rates of countries have been controversial due to the existence of the convergence effect. Convergence theory propounds that less developed countries are able to catch-up to their developed counter-parts when catered to the catch-up effect. Previous research has focused on convergence rather than comparative analysis focusing more on developed nations. This research extends the body of knowledge by focusing on BRICS nations with policy implications for India thus, tackling the question of how to compare nations when their initial stages of development are different. The growth rates of these economies were analysed by benchmarking it with the United States to understand the extent of catch up effect and the extent to which they need to grow to reach the same level as the United States. The study showed that US exceeds China in terms of growth by ~0.5 times, India by ~2 times, Brazil by ~8 times, Russia by ~7 times and South Africa by ~36 times. This paper also throws light on several areas of improvement in social sector (health and education) and economic sectors (agriculture, industries and services) which can spur economic growth in India and help it to catch up to the more developed economies.

South Africa
Source: www.iol.co.za

Johannesburg - Much as South Africa joins President Cyril Ramaphosa in welcoming the first consignment of the Covid-19 vaccines, it must be noted the country's vaccination targets are not quite within reach.


As South Africa is the only African member of the BRICS community, questions have been raised about why procurement of vaccines from member states such as China and Russia were not mentioned in the president's speech recently.

In his most recent address to the nation, Ramaphosa said in addition to the 1 million Covishield doses that were received another 500 000 doses from the Serum Institute of India were expected to arrive later this month.

President Cyril Ramaphosa has not mentioned South Africa's membership of BRICS in any announcements made about securing Covid-19 vaccines in the future. | Pictures: Nhlanhla Phillips African News Agency (ANA) "We have secured 12 million doses in total from the global Covax facility, which has indicated it will release approximately 2 million doses by March. We have secured 9 million vaccine doses from Johnson & Johnson, commencing with delivery in the second quarter. Johnson & Johnson has contracted Aspen, one of our pharmaceutical companies, to manufacture these vaccines in South Africa," said the president.

Ramaphosa said, in addition, Pfizer had committed 20 million vaccine doses commencing with deliveries in the second quarter and this must be lauded.

However, the issue is the loud silence about leveraging on close ties with Russia and China (BRICS allies) in order to widen the supply source for vaccines and maybe reduce the cost of procurement.

While the president stated the government was in advanced negotiations with manufacturers to secure additional supplies, there was no mention of the BRICS advantage enjoyed by the bloc's only African member.

Yet, the Russian Foreign Ministry has said that Russia was in talks with the African Union about its vaccine, which got the thumbs up from local scientists, and in bilateral talks with South Africa and several other countries on the continent.

Russia had initially attracted criticism that fuelled scepticism for releasing the Sputnik V vaccine to the general population before publishing the phase III trial data. The Lancet, however, found the Sputnik V vaccine was more than 91% effective against Covid-19, according to trial results that were published in its medical journal.

Russia's Sputnik V vaccine got a significant boost when analysis of an advanced clinical trial showed an efficacy of 91.6%.

And Health Department spokesperson Popo Maja has said: "Plans of procuring Sputnik V are in the pipeline. The feeling among our local partners and scientists about Sputnik V is mutual. Much as the World is facing a vaccine competition we are lucky to be part of the BRICS community and feel safe now that we have options such as those the Gamaleya Institute of Russia is developing. So yes plans are afoot to secure the Sputnik V as time goes by."

The European Union is reportedly making it harder for their locally produced vaccines to be sent outside the bloc. Other countries may be considering the same. Leaders have promised to inoculate large swaths of their populations, and there is a lot at stake if they fail.

Western pharma companies are also reported to be ramping up production to try and meet demand. And the need to be served first is opening the door to smaller states taking supply from wherever they can get it – from South Africa's BRICS allies China and Russia.

China has successfully developed its vaccine, known as Sinopharm, and Beijing has approved the general public use of the vaccine and it showed a 79% efficacy rate in phase three trials. The UAE and Bahrain have granted the emergency use of the Sinopharm vaccine for key workers.

Ambassador-designate of China to South Africa Chen Xiaodong said China would honour its commitment to make the Covid-19 vaccine a global public good. China is discussing vaccine co-operation with South Africa, he said.

China donated millions of rand in cash, more than 6 million masks, and hundreds of thousands of testing reagents, respirators, temperature guns, goggles, protective suits, surgical gloves and food packages to South Africa.

Wary of the increased demand for vaccines, Germany's Chancellor Angela Merkel was quoted as saying to German public broadcaster ARD: "Every vaccine is welcome in the European Union." Merkel said she recently spoke with Russian President Vladimir Putin about the vaccine.

This is really not a case of FOMO, but it has to be noted that the loud silence about what advantage we have as BRICS members during the fight of this pandemic is rather disturbing.

Maja said: "South Africa feels good about the development of Sputnik V. The talks we are currently having with the Russian representative are promising."

That is all well and good but the big question remains: Is South Africa really leveraging on its close ties with BRICS allies to widen the supply source for vaccines?

South Africa
Source: www.sabcnews.com

Russia has developed and is exporting to several countries its much-heralded Sputnik V vaccine
What is the moral worthiness of political and diplomatic networks to South Africa when the country fails to leverage on the evident success and progress of its allies in BRICS?

President Cyril Ramaphosa has done a sterling job in steering our ship amid the COVID-19 pandemic and socio-economic woes. Similarly, he has played a protagonist role through the African Union structures by mobilizing continental solidarity in the new global war for access to COVID-19 vaccinations.

In his address to the nation, President Ramaphosa implored all to join him in his joyous welcome of our country's first consignment of the COVID-19 vaccines.

The consignment consisted of one million doses of the AstraZeneca vaccine which had been produced by the Serum Institute in India, a member of the five-nation strategic bloc comprising Brazil, Russia, India, China and South Africa (BRICS).

A visibly elated President Ramaphosa told the nation: "The arrival of these vaccines contains the promise that we can turn the tide on this disease that has caused so much devastation and hardship in our country and across the world."

The President spoke about the "unprecedented speed and scale" at which the vaccines had been developed from multiple quarters, bringing humanity into closer cooperation in pursuit of the same objective.

President Ramaphosa further revealed that "we are sourcing our vaccines from a number of suppliers".

These include the "global COVAX facility, Johnson & Johnson, Pfizer and the African Vaccine Acquisition Task Team of the African Union". All this is well and good.

But throughout the entire African continent, South Africa is the only member of the strategic BRICS bloc. Within this five-member group two – China and Russia – are permanent members of the UN Security Council. They each possess an all-important veto power through which singularly or jointly, they can block any UN Security Council resolution they disagree with.

This is one of the rare strategic benefits South Africa is exposed to, an ally to both China and Russia within the framework of BRICS.

In the light of the above the big question then, is, why has South Africa not sourced the COVID-19 vaccine from either of her two BRICS allies?

Russia has developed and is exporting to several countries its much-heralded Sputnik V vaccine. For the uninitiated, Sputnik V is in fact the world's first registered vaccine against coronavirus infection.

A few weeks ago whilst making a presentation to the UN, scientists from Gamaleya Institute, which developed Sputnik V, revealed that preliminary orders have been placed totaling 1.2 billion doses.

About 40 countries representing more than half of the world's population had reportedly raised their hand for access to Sputnik V.

Countries at the front of the queue for Sputnik V include Israel, Hungary, Venezuela, the UAE, the Philippines and closer to home, Algeria and Morocco.

Zeev Rotstein, director of Jerusalem's Hadassah Medical Centre, one of Israel's largest hospitals, has dismissed Western objections to his placement of a huge order for Sputnik V as more political than scientific.

China, the world's second-largest economy after the US, which is anticipated to remain a super-power for the foreseeable future, has successfully developed their vaccine, known as Sinopharm. Beijing has already approved the general public use of the vaccine after it was granted an emergency license when it showed 79% efficacy rate in Phase Three trials. To date, the UAE and Bahrain have already granted the emergency use of the Sinopharm vaccine for key workers.

The vaccine has been developed by the China National Pharmaceutical Group and is the country's first general approval of a homemade vaccine, seen as a major step towards inoculating the world's largest population.

A bothering, lingering question, therefore, remains: Why are we not leveraging on our close ties with Russia and China in order to widen our supply source for vaccines?

Surely, logic dictates that? Unless of course, we are missing something in the complex world of diplomatic relations and the nature of strategic partnerships.

I think, quite frankly, if the government hasn't sourced the vaccines from its supposedly close allies it would do well by offering a public explanation.

Otherwise, why are we a member of BRICS and is it worthy of the paper it is written on?

India
Source: www.newsx.com

BRICS Chamber of Commerce & Industry in association with Start-Up India, a government of India initiative and Rising Bharat, a platform to encourage the Start up eco system in India through mentor ship and funding, organised the first BRICS CCI Startup series event. The event commenced on February 5, 2021, at the Hyatt Regency,New Delhi.

With an aim to support and encourage young entrepreneurs, the event gave an opportunity to 15 startups, to present their pitches to an esteemed jury. The brain child of the BRICS CCI Vice Chairman Mr. Sameep Shastri, the final start ups were selected from a pool of more than 250 start ups, who sent their pitches to the Chamber.


The panel of jury included Sameep Shastri (Vice Chairman, BRICS CCI), Avi Mittal, (CEO & MD, Golden Ace Ventures), Akshay Aggarwal, (Founder, Kafila Forge), Bibin Babu (Board Member, Innowork, BlocSpaze, Payiza,) Dhruv Khanna, (Co-Founder, Triton Foodworks), Pratham Mittal (Founder, Neta App), Dr. Vinay Agrawal (Chancellor, ISBM University), Ruhail Ranjan (MD, Chandrika Power) and Aditi Banerjee (Co-Founder & CEO, Magic Billion).

Dr Neha Prakash (IAS), Special Secretary, IT & Electronics, Govt. Of UP, Mr Sameep Shastri, BRICS CCI Vice Chairman, Dr BBL Madhukar, BRICS CCI DG, Mr Ashok Kumar Singh and Mr. Jitin Bhasin, CEO Savein, and Mr. Rana Sarkar joined as distinguished guests and esteemed speakers.

As part of the startup series, BRICS undertook a three-month process to identify budding startups, which had novel ideas and drive to lead a change, but required the investment, exposure and an added push for them to continue in their endeavour, lead innovations and pave the path towards Atmanirbhar Bharat.

Speaking about the vision of the program and how it gradually evolved, Sameep Shastri, Vice Chairman, BRICS CCI, told NewsX, "The initial thought-process since 2016, as our honourable prime minister has pushing towards startup, Atmanirbhar Bharat, is an ideology that we have been following. Being a young country, we have the mind; we have the jugaad, the innovating mind. It was just the right platform that was missing. What we are trying to do here is get the successfully settled young entrepreneurs who are in the top list of Forbes, they are all part of the chamber now and they are not just ready to put in the funds but mentor the upcoming innovations and startups. This is what the idea behind this is. We have tied up with one of my other initiatives, which is Rising Bharat, where we took it to tier 2 and tier 3 cities and funded more than 700 startups. I have continuously been associated with the startup community and what we have realised is mentoring is very important. Financial funding is something that everyone is able to acquire but right kind of mentorship with the right kind of team is missing. This was the gap that we identified and this is how the entire program evolved. In future, we would like to have at least four more rounds in 2021. As in, India is chairing BRICS this year so we are planning to make the best of it and give it the right platform, a global platform."

Ms Neha Prakash, (IAS), Special Secretary, IT & Electronics, Govt. Of UP, who joined the panel as a distinguished guest, expressed, "First of all, I would like to congratulate BRICS CCI for providing us this platform to connect with the potential startups and entrepreneurs and to connect them with the potential investors. This is a very noble vision. India is very conducive to the growth of startups because of our demographic, open economic culture and the psyche of jugaad, i.e the impromptu innovation, which is deeply embedded in the Indian psyche. Because India provides this potential for the growth of startups, it is with this vision that BRICS CCI has organised this event to bring us all together and to further promote and nurture the budding entrepreneurs."

When asked about his experience as one of the jury members, Ruhail Ranjan, MD, Chandrika Power, said, "With the vision of our honourable PM Shri Modi ji, the startups are really moving out. In 2014, the environment was not so conducive. Now, he has given us a few rules, which are very easy on startups. I am really looking forward to the next few years, which is going to a very good growth story for India. With these startups, we are really looking to handhold them and mentor them. They have good ideas but they need mentoring. When we started, we had no mentoring, nobody to go to, no knowledge about where to get money from, market was struggle. We really want them to focus on growth rather than struggle. We really want to incubate them and take them forward."

Dr Vinay Aggarwal, Chancellor, ISBM University, further, shared, "Entrepreneurs like these are young minds. I always say that they are like damp clay. The way we shape it, the way we mentor them will help them to nurture themselves and their businesses. These people coming out of nowhere, having creative minds and beautiful ideas, can be nurtured and mentored in a way that it can grow up to a multi-billion dollar organisation. For that, we heard many pitches today and made many investment commitments. It was wonderful. The overall experience was superb. This is just the start and we will have many more events like these where young entrepreneurs can come and pitch their ideas."

Mr. Jitin Bhasin, CEO Savein, emphasised on the need of proper mentorship to the budding entrepreneurs as equally important as fund raising. He also congratulated the Chamber for its initiative.