Information Bulletin of the BRICS Trade Union Forum
Issue 45.2017
2017.10.30— 2017.10.05
International relations
Foreign policy in the context of BRICS
Sudan: Al - Jazz - Sudan Keen to Strengthen Cultural, Popular Relations With BRICS Countries (Судан: Аль-Джаз - Судан стремится укрепить культурные, народные отношения со странами БРИКС) / South Africa, October, 2017
Keywords: BRICS_Sudan, cultural_relations
South Africa

Khartoum — The Deputy Chairman of the National Higher Committee for Supervision on File of Sudan's Relations with the BRICs countries, Dr. Awad Ahmed al-Jaz, asserted the Sudan's keenness to strengthening its cultural, popular relations with BRICs group, and to boost the people's friendship between nations.

Following his meeting with the Secretary General of the People's Friendship Council, engineer Abdul- Moniem al- Sunni, he noted that the Sudanese- Chinese developed relations, indicating readiness to participate in the upcoming Chinese, Arab forum for the enhancement of the two countries relations.

Dr. al - Jaz, has congratulated the Chinese government and peoples on the success of the party's general conference, and the renewed confidence in the Chinese leadership for a new session, wishing it would be a good opening to cement Sino-Sudanese relations for the benefit of both countries.

Engineer al- Sunni pointed out to importance of activation of nation's relations, especially the popular and cultural relations between the Sudan and BRICs countries.

The meeting has tackled the second Chinese- Sudanese cultural week scheduled for next march, under the supervision of dr. al- Jaz.

He noted that the meeting has reviewed the Sudanese- Russian relations of strategic depth, referring to administrative procedure would be made for the realization of the popular dimension of the Sudanese civil society organizations with the world nations.
Why China cannot be India's friend (Почему Китай не может быть другом Индии) / United Kingdom, November, 2017
Keywords: India_China, Xiamen_Declaration, expert_opinion
United Kingdom
Author: Harsh V Pant

Surprise, surprise! China for the fourth time blocked India, the US and other nations' bid to list Pathankot terror attack mastermind Masood Azhar as a global terrorist, arguing that 'there is no consensus' within the members of the sanctions committee.

New Delhi's reaction was pointed. 'Deeply disappointed that once again a single country blocked international consensus on designation of an acknowledged terrorist Masood Azhar.

'India strongly believes that double standards will only undermine international community's resolve to combat terrorism,' the ministry of external affairs said, adding that 'India hopes there will be realisation that accommodating with terrorism for narrow objectives is shortsighted and counterproductive.'


China was the only member in the 15-nation UN Security Council last year to put a hold on India's application despite all the other members supporting New Delhi's bid to place Azhar on the 1267 sanctions list that would subject him to an assets freeze and travel ban.

Despite the latest block, Beijing's chutzpah is to be admired. It has gone ahead to suggest that it is 'ready to work with India to promote constant progress of bilateral relations guided by this diplomacy with Chinese characteristics for the new era,' by highlighting China's efforts at making consistent efforts to promote bilateral relations and develop mutual political trust with its neighbours over the past few years.

The BRICS' declaration of 2017 issued at Xiamen, China, had generated significant euphoria in India. The 43-page declaration, adopted by the five-member states of the BRICS grouping, took a strong stance against terrorism for the first time since its inception, expressing 'concern' over the security situation in the region and the violence caused by the Taliban, ISIS, Al Qaeda and its affiliates including Eastern Turkistan Islamic Movement, Islamic Movement of Uzbekistan, the Haqqani Network, Lashkar-e-Tayyeba (LeT), Jaishe-Mohammad (JeM), Tehrik-i-Taliban Pakistan (TTP) and Hizbut-Tahrir.

This was a remarkable turnaround for a grouping that was unwilling to talk of groups like LeT and JeM based in Pakistan till last year.

Indian Border Security Force (BSF) soldiers patrol along the India-Pakistan border

At the 2016 Goa summit of BRICS, China had led the way in scuttling any mention of these groups in the declaration despite India making it a priority issue.

This had caused considerable dismay in India with many observers questioning the very utility of BRICS platform for India of even on issues like terrorism there was little or no convergence among the five member states.

This year's BRICS summit happened under the shadow of Sino-Indian stand-off at Doklam and so China's acceptance of India's case has come as a surprise to many.

New Delhi successfully managed to convey its strong feelings on the issue of terrorism to Beijing and Xi Jinping, who wanted to make the BRICS summit a success, had no compunction in taking on the issue as part of the declaration.


Chinese foreign ministry spokesperson Geng Shuang justified his country's stand by suggesting that with this declaration, BRICS countries have, 'shown their concerns to the violent activities raised by these organisations… These organisations are all sanctioned by the UN Security Council and have a significant impact for Afghanistan issue,' Geng underlined.

That Pakistan saw this as a real challenge was evident in foreign minister Khawaja Asif's remarks: 'We (Pakistan) need to break our false image. We have no stake but there is baggage. We need to accept the history and correct ourselves.' Islamabad was worried about China's stance and Asif made it clear that Pakistan needed 'to tell our friends that we have improved our house. We need to bring our house in order to prevent facing embarrassment on an international level.'

While there is much to commend in the way Indian diplomacy managed to get Chinese support on this issue and the likely pressure it put on Pakistan to clean up its act, it should have also been evident that it won't change much on the ground in so far as Sino-Pak ties were concerned.

Indian Army personnel patrol near the Air Force Base in Pathankot on January 2, 2016 during an ongoing attack on the base by suspected militants

Days after the declaration, Beijing assured Pakistan that there is 'no change' in its policy with Chinese Ambassador to Pakistan Sun Weidong underscoring that 'the BRICS declaration mentioned organisations which are already banned.'


Pakistan's foreign minister too paid a visit to China when he was reassured by the Chinese counterpart, Wang Yi, that 'there has been no change in Chinese policy regarding Pakistan... Pakistan and China are in constant contact regarding regional challenges'.

He further stressed that China supports Pakistan's stand on terror. The two nations also joined hands to rebuff the Trump Administration's new Afghanistan policy.

US President Donald Trump (R) and Chinese President Xi Jinping (L) shake hands during dinner at the Mar-a-Lago estate in West Palm Beach, Florida, on April 6, 2017

Taking a contrary stand to that of Trump's, Wang suggested that Pakistan has not been given 'full credit' for its efforts to battle terrorism by 'some countries.' Weng said, 'When it comes to the issue of counterterrorism, we believe Pakistan has done its best with a clear conscience. In comparison, some countries need to give Pakistan the full credit it deserves.'

Given China's and Pakistan's close ties, this should hardly be a surprise. China's support for the BRICS declaration was merely a tactical ploy to make the summit a success given New Delhi's categorical stand on the issue but its long-term strategic interest has always been to build Pakistan as an equal to India to block New Delhi's ascent in global hierarchy.

And that long-term strategy is not going to change any time soon.

With its recent action on Masood Azhar's case, China has once again made it clear that it doesn't see good Sino-Indian relations as a priority. It is guided by its shortterm tactic of scuttling India's regional and global rise.

India should prepare itself economically, militarily, and diplomatically for a long-term rivalry with China.

The writer is Professor of International Relations, King's College London
OPINION: Significant deepening of co-operation within Brics (Мнение: значительное углубление соsтрудничества в БРИКС) / South Africa, November, 2017
Keywords: 5th_Brics_International_Competition_Conference, competition_policy, Xiamen_Declaration, Working_group
South Africa
Author: Hardin Ratshisusu

JOHANNESBURG - This year, Brasilia will bring together the heads of competition authorities within Brics as Brazil's Administrative Council for Economic Defence, the equivalent of our Competition Commission, hosts the 5th Brics International Competition Conference on November 8 to 10.
When South Africa hosted the 4th conference in Durban in November 2015, the focus was on the role of competition policy in promoting inclusive growth in our economies. Since then Brics competition authorities have made significant progress through practical co-operation on investigations and general research.

Under the theme, Towards a Successful Second Decade of Co-operation, the conference agenda this year aptly focuses on deepening co-operation in merger regulation, approaches to the 4th industrial revolution and broad competition policy developments within Brics. Competition policy and enforcement takes centre stage within Brics as it is regarded as an integral tool for growth and development.

At the 9th Brics Summit held this year in Xiamen China, the Xiamen Declaration of the leaders of the Brics nations recognised "the importance of competition protection to ensure the efficient social and economic development of our countries, to stimulate innovative processes and to provide quality products to our consumers."

The Xiamen Declaration further noted "the significance of the interaction between the competition authorities of our countries, in particular, in identifying and suppressing restrictive business practices that are of a trans-boundary nature."

Central tenet

Co-operation among Brics competition authorities is a central tenet premised on the understanding that competition policy and regulation is essential in seeking to achieve common goals such as less concentrated markets, competitive rivalry in which firms freely enter or exit markets, innovative firms and inclusive growth.

Following the signing of a memorandum of understanding in 2016 by the heads of Brics competition authorities, the commission participates in various working groups in important sectors including pharmaceuticals, automotive and food value chains alongside its Brics partners. Some significant work programmes from these working groups are worth mentioning.

The working group on pharmaceuticals seeks to address and facilitate access to affordable healthcare.

This is a priority in developing nations, particularly as these nations are likely to be net importers of originator medicines which are protected by intellectual property. This invariably raises the cost of healthcare which has a domino effect across the entire economy.

The Brics working group on pharmaceuticals is undertaking work in relation to the global cost of essential medicines based on different disease burdens experienced by Brics nations with the view to drawing up solutions on preventing bottlenecks and ensuring that the interplay between intellectual property and competition regulation does not stifle competitive rivalry but also yields fair and affordable prices for medicines.

In the automotive markets, the commission drew lessons from the Federal Antimonopoly Service of Russia in developing a draft code of conduct to reduce barriers to entry relating to access to services and parts in the entire automotive supply chain. This draft code of conduct was recently published in the government gazette calling for comments. There is undoubtedly further scope for close co-operation with other competition authorities. South Africa is particularly affected by this conduct as the government has committed significant incentives through the Automotive Production and Development Programme to attract global carmakers to our shores.

Value chains

The conference will also see the launch of a study into global food value chains which will encompass work relating to genetics, animal feed, seeds, technology and innovation and retail, all within the context of global mergers and acquisitions.

This work was conducted by various academics in Brics nations who have developed the study, mainly attached to the University College London's Centre for Law, Economics and Society, the HSE-Skolkovo Institute of Law and Development and the University of Johannesburg's Centre for Competition, Regulation and Economic Development.

It has become evident that Brics nations have the potential to influence the global agenda and narrative in relation to competition regulation and policy and its role in seeking to achieve developmental goals.

The response of Brics nations to issues such as global consolidation in markets relating to seeds and agro-processing has the potential to signal and drive competition policy towards a developmental agenda. Mega-mergers such as those between Dow/DuPont, ChemChina/Syngenta and Bayer/Monsanto, allow for Brics nations to consider competition within a broader but complementary context recognising that such transactions may, for instance, impact jurisdictions in Europe significantly differently than it would Brics economies.

In January 2018 South Africa will become chair of Brics and in assuming this role, the commission will play its part in promoting the competition agenda, including the need to promote approaches to competition policy and regulation which align to specific needs and demands in emerging markets such as Brics.

The commission will seek to pursue this agenda by reinforcing the need for deeper co-operation in relation to, among other goals, global competition developments and policy, investigations into cross-border anticompetitive conduct and the establishment of the Brics Competition Research Centre.
It is with great pleasure that we head to Brasilia to gain knowledge and experience as well as share developments from our jurisdiction on competition policy and regulation. Brics competition authorities are indeed deepening co-operation.

Hardin Ratshisusu is deputy commissioner, Competition Commission of South Africa
Investment and Finance
Investment and finance in BRICS
On the Paradox of Global Economic Integration (О парадоксах глобальной экономической интеграции) / Russia, October, 2017
Keywords: Yaroslav_Lissovolik, expert_opinion, economic_integration
Author: Yaroslav Lissovolik

Yaroslav Lissovolik - Programme Director of the Foundation for Development and Support of the Valdai Discussion Club, Chief Economist of the Eurasian Development Bank.

Resume: Concerns over the global economic slowdown appear to be gradually receding this year as the global economy is set to muster an acceleration in growth on the back of a strong showing by the Eurozone, the US and China.

Concerns over the global economic slowdown appear to be gradually receding this year as the global economy is set to muster an acceleration in growth on the back of a strong showing by the Eurozone, the US and China. Nonetheless many observers rightly point to the persistence of the global economy's fundamental ills that accounted for the slowdown of the past decade, most notably the high levels of inequality within and across countries.

The important point to be made is that this inequality is further compounded by a widening gap across countries in terms of their involvement in economic integration through free trade agreements as well as other types of regional trade and investment alliances. The ones that are most isolated in the process of frenetic creation of a cob-web of economic alliances are the least developed economies as well as developing nations without access to ports and seashore. Hence the paradox, with which the global economy continues to grapple – the economies most in need of economic integration are the ones that are the most left out from regional and global economic alliances and "clubs".

The way to gauge the "inequality in integration" is to compare the average number of integration agreements per country for the disadvantaged (landlocked economies and those with low levels of income per capita) with the developed economies rest or the rest of the world. So let's look at the figures – within the category of landlocked economies that does not include the 7 European countries that are members of either EU or EFTA, the average number of Free Trade Agreements (FTAs) reaches just 2,5 (on the basis of the WTO dataset on integration arrangements), while for the rest of the world economy the average is 7,5 (i.e. a 3-fold differential). If other types of economic alliances are counted, then the difference remains sizeable – 4 agreements on average per country for landlocked developing countries and 9 for the rest of the world.

The difference is even more staggering when least developed nations are compared with the advanced economies (according to World bank definition) – the average number of FTAs for the least developed is 0,3 agreements per country, while for the most advanced economies this measure reaches 14,7 (a difference of more than 40 times). If other types of integration arrangements are included into the calculation, then the corresponding figures are 1,6 and 16,8 respectively, leaving a more than 10-fold differential between the two groups of countries.

Another way to assess the problem of inequality in economic integration is to look at the WTO membership – of the 21 observers that are still outside the organization, a third is accounted for by landlocked countries, including the likes of Serbia, Belarus in Europe (the latter of the two is the largest landlocked economy in Europe), Uzbekistan in Asia (the only country separated from the seashore by more than one country), and Ethiopia in Africa (the largest landlocked economy in terms of population). Five years ago the presence of landlocked economies was even less significant – their share in the number of WTO observers reached nearly 40% of the total, which compares with a roughly 20% share of the number of landlocked countries in the global economy.

This paradox of global economic integration may be added to a number of anomalies and paradoxes in the global economy along the North-South divide, such as the Lucas paradox, which points to the prevalence of outward investment from developing economies into the developed world contrary to the theoretical constructs that suggest that the direction of the net outward investment flow should be the reverse. To reverse the widening gap between the well-off and the less fortunate economies a different approach to economic integration is needed that is predicated on considerations of sustainability and greater balance across countries. The new paradigm needs to be based on new types of integration arrangements that focus more on issues of connectivity that in turn are paramount for landlocked developing countries.

One such project is the Belt and Road initiative (BRI), which includes more than 30% of all landlocked economies in the world and 75% of landlocked economies in Eurasia. Another such regional integration grouping is the Eurasian Economic Union, in which 4 out of 5 members are landlocked (Kazakhstan being the largest landlocked economy in the world by territory), with Russia having the longest land border in the world. Going forward, one way to add to the economic connectivity of the developing countries is to replicate China's Eurasian BRI project in other continents via similar infrastructural efforts in Africa and Latin America, with all such continental connectivity projects pursued through the extended BRICS+ framework.
Banks for Brics Economic Devlopment (Банки для экономического развития БРИКС) / Russia, November, 2017
Keywords: expert_opinion, research, financial_markets, international_economic_relations
Author: Irina Yarygina, Galina Panova

Department of Banks, Monetary Circulation and Credit, Moscow State Institute of International Relations under the Ministry of Foreign Affairs of the Russian Federation (MGIMO)

Actually, BRICS play the key role in global economy and finance. There is no denying the fact, that effective banking strategy depends on accurate assessment of common problems and a search for mutual solutions to increase quality of life in member countries. From experience, fast liberation of financial-economic relationships leads to decline in some areas of economy, including strategically important ones, and to slowdown of government regulation of key industrial areas, which leads to increase of bank speculations and high-risk level of economic environment. To find the way in turbulence is the main task for the government that has to use different vehicles, intergovernmental monetary and fiscal measures including. The study of financial institutions' role in BRICS is based on complex research methods, on gathering and analyzing data, theoretical background including.

The theory of fiscal federalism identifies main functions for the public sector: macroeconomic stabilization, income distribution and resource allocation (Oates, 1999). The problem of fiscal decentralization in developing countries are carefully studied by Fukasaku and de Mello (1999), Manor, Crook and Manor (1998 - 1999), that tried to give reason to the restructuring of government and market functions. Some scholars within the public choice school consider that decentralization tends to increase competition among jurisdictions (Brennan and Buchanan, 1980; Breton, 1989) . Anyway, in globalized economy developing countries (Ahmad, 1997) require the mechanism of intergovernmental grants transfers.

Thus, the intergovernmental financial institutions can contribute to it, supplying the country-members with unconditional, conditional and equalization grants (Brosio, 2000). There is no denying the fact, that only international experience can provide useful methods for policy makers (Bird and Vaillancourt 1998), but the approachof laissez-faire or market fundamentalism has a week potential to solve most economic and social problems (Stiglitz, 1998). Market fundamentalism was popularized by George Soros in "The Crisis of Global Capitalism" (1998) with its trust in a free market mechanism. That is a privilege of a genius, but practice has proved the approach of J. E. Stiglitz, who criticized the IMF, advocating a set of policies, which is generally referred to the market fundamentalism, "based on an incorrect understanding of economic theory and as an inadequate interpretation of the historical data."

The correct understanding means reasonable regulation and cooperation in solving mutual problems and meeting new challenges. There is an on-going process of reengineering international cooperation within globalized economic environment. The speed of cooperation depends on macro and microeconomicfactors, as well as participation in the global market, supply of the products and political support. Mutual aims of any government are linked with economic and social developments, as well as successful production, safe banking, financial stability and effective debt management that is the main feature of globalization. The goals can be reached within BRICS cooperation.

Mostly used were qualitative and mixed methods. Within these categories, more specific approaches, including an array of options, case studies, self-reporting and surveys were applied. The mixed methods of research, that included contextual understanding like interviews or observations, were combined with facts and statistics, that contributed to the investigation of the subject on multiple levels, gaining different views and a comprehensive look at the research, An applied mixed methodology led us to the integration of different theories and ideas.

While carrying out the qualitative research, there was a goal to explore specific phenomena, not to prove a prediction, according to qualitative research methods. The assessment of interviews, focus groups and observation of main developments and contract arrangements were also used to collect data. Used qualitative methods provided rich, contextual explorations of the topic that is culturally meaningful. BRICS developing economies play a special role in contemporary world. They are characterized by a dynamic development, which is particularly important in situations of post-crisis development. BRICS have advantages in economic activity which is distinguishing them from the other countries, including big human potential; vast reserves of natural resources (water, forest, bio-resources, minerals, energy, etc.); large domestic market, etc. In Brazil there are about 180 private commercialbanks. Federal Savings Bank (Caixa Economica Federal), founded in 1861, is the second largest bank in the country at the 100% owned by the state. The third position is held by Bradesco Bank, founded in 1943, that is a universal banking institution. Russia since 1987 has a two-tier banking system provided by the Central Bank of the Russian Federation (Bank of Russia) and credit organizations. In April, 2017 the State Duma adopted the Federal law on the division of banks of the second level of banking system: a) with the base license and b) banks with universal license that allows commercial banks to carry out a specific (under license) a list of banking operations and services. The Bank of Russia is implementing now a differentiated supervision of these banks in accordance compliance with prescribed them obligatory standards of banking activities. India operates a two-tier banking system. The first level of which is the Central Bank - Reserve Bank of India. It manages the public debt of the Central Government and State Governments, holds hard currency reserves of the country and oversees the repatriation of export proceeds, the return of invested capital abroad for investments inside its country and payments for imports.

The banking system of the Republic of South Africa is well-developed and effectively regulated. In recent years many foreign banks and investment companies began to work in South Africa. In South Africa operates: 17 registered banks, 3 credit union banks, 1 cooperative bank and 14 branches of foreign banks. Analysis of national banking systems of BRICS countries allows to draw some conclusions. Firstly, all BRICS countries are characterized by significant government involvement in the banking sector. The largest banks, which define the state and development of banking systems of the five BRICS countries, are under the control of governments. This feature allowed for BRICS credit organizations to overcome global financial and banking crisis 2007-2009 easier than the developed countries.

Financial markets are of particular importance for the development of the economies of the BRICS. They has constantly improved, actively developing. Experts believe that in the nearest future due to the growth and development of financial and credit institutions of the BRICS the world economy and stockmarkets will grow rapidly. In this regard, of particular interest is the banking sector. On the form of ownership of the banking sector introduced the BRICSby private banks, public (which occupy leading positions on deposit and loan transactions), as well as banks with foreign capital. Recommendations on BRICS banking are presented in the research material. Key words:international economic relations, banks, financial instruments, public support. BRICS developing economies play a special role incontemporary world. Theyare characterized by a dynamic development, which is particularly importantin situations of post-crisis development. BRICS have advantages in economic activity, which is distinguishing them from the other countries, including big human potential; vast reserves of natural resources (water, forest, bio-resources, minerals, energy, etc.);large domestic market, etc. Financial markets are of particular importance for the development of the economies of the BRICS. They has constantly improved, actively developing. Experts believe that in the near future due to the growth and development of financial and credit institutions of the BRICS the world economy and stock markets will grow rapidly. In this regard, of particular interest is the banking sector. On the form of ownership of the banking sector introduced the BRICSby private banks, public (which occupy leading positions on deposit and loan transactions), as well as banks with foreign capital.

In Brazilthere are about 180 private commercial banks. One third of these banks have deposits of more than 100 billion. dollars. United States. Along with commercial banks operate about 30 commercial government development banks and public banks, savings and loans, investment banks and 20 others. A key part of Brazil's banking system is the Banco Central do Brasil (Central Bank of Brazil), founded in 1808. It is considered to be the oldest Bank in Brazil and one of the oldest in Latin America. The Bank is a company with mixed capital, 68.7% of shares belongs to the Federal Government of Brazil. The Bank's shares are traded on the San Paulo Stock Exchange. Currently, the Bank has 9200 branches in Brazil and 32 representative offices abroad. The size of Banco do Brasil's assets exceeds 17% of banking assets in the country.

Federal Savings Bank (Caixa Economica Federal), founded in 1861, is the second largest bank in the country at the 100% owned by the state. The third position is held by Bradesco Bank, founded in 1943. Currently the Bank is one of the largest banks in Brazil. The Bank Bradesco offers its customers a wide range of banking operations and services in Brazil and abroad. Ten largest banks in Brazil include have assets over 100 billion dollars. The State controls 10 Brazilian banks, 6 of which are owned by the Federal Government and the 4- Governments of states. Under the supervision of the State are the biggest credit institutions (in particular, Banco do Brasil and Caixa Economica Federal), while the others run by private capital-Brazilian and foreign Russia since 1987 has a two-tier banking system provided by the Central Bank of the Russian Federation (Bank of Russia) and credit organizations. In April, 2017 the State Duma adopted the Federal law on the division of banks of the second level of banking system: a) with the base license and b) banks with universal license that allows commercial banks to carry out a specific (under license) a list of banking operations and services. The Bank of Russia is implementing now a differentiated supervision of these banks in accordance compliance with prescribed them obligatory standards of banking activities.

In Russia prevail joint-stock commercial banks: a) the state-controlled banks); b) controlled by foreign capital; c) major private banks; d) medium and small regional banks. The number of state-controlled banks include: Sberbank (Savings bank), VTB, Rosselkhozbank (Russian agricultural bank), Gasprombank, etc.Over the past 10 years (from 01.01.2007 to 01.01.2017) number of Russian banks has fallen almost doubled from 1143 to 575. At the same time:

• the proportion of top-5 banks in total assets increased from 42.5% to 55.3% (a percentage of banks with 201 seats and below dropped from 8.2% to 2%);

• the ratio of large credit risks to the capital remained almost unchanged (240.6% and became


• capital adequacy has declined from 14.9% to 12.7%; return on assets fell from 3.2% to 0.9%;

• the percentage of credit as a source of capital investment fell from 8.7% to 5.9%;

• asset dynamics completely unfolded: with + 43.3% to-3.5%;

• the proportion of established reserves for possible losses increased from 3.2% to 7% of the total volume of banking assets.

The state-owned banks account for the major proportion of the total banking assets (about 50%)/ These credit institutions occupy a significant share of the market of bank services. In particular, according to the Central Bank of Russia, at the beginning of 2017, they accounted for about 45% of all deposits and other borrowed funds of companies and 70% of deposits of the population. Now about 100 banks, controlled by non-residents operates in Russia. They have 25% of all bank assets. This is mainly credit institutions with 100% foreign participation. A total of 136 large private banks The most numerous group-medium and small regional banks. But despite their dominant numbers, they occupy a modest place in the banking sector, focused 5.4% of all assets, about 3% of the deposits of enterprises and organizations, 7% of deposits and loans to corporate borrowers and to the population, make up less than 5%.

Russia's banking sector for a number of reasons the macroeconomic and national level (including the change of economic formation in the 1990-ies, the successive economic crises (1998, 2005), the global banking crisis 2008-2010, Ukrainian and Crimean crisis(2013-2014) and subsequent sectoral sanctions) is behind in the development of the leading countries in Western Europe and the United States as well as China, India and Brazil. A key issue for the development of the Russian banking system is the slow growth of GDP in Russia, the country's sovereign rating, low volatility in the financial markets and a high level of risk.

Indiaoperates a two-tier banking system. The first level of which is the Central Bank - Reserve Bank of India. It manages the public debt of the Central Government and State Governments, holds hard currency reserves of the country and oversees the repatriation of export proceeds, the return of invested capital abroad for investments inside its country and payments for imports. Reserve Bank provides short-term loans to State Governments and registeredbanks, and provides short-and medium-term credit to cooperative banks in the states and to financial and industrial institutions. The banking sector of India includes commercial, cooperative, regional rural banks and non-bank financial institutions. Commercial banks are divided into state-controlled, private and foreign. Of commercial banks 27% are state-controlled, 30% private banks and 40% are foreign.

In India there are restrictions on the participation of foreign capital in Indian banks. Non-resident shareholders may have up to 74% of shares. Currently, non-residents own ICICI Bank, which controls a quarter of the entire market of banking services in India, 68% of shares. For the state banks of India the proportion of foreign shareholders is limited and may not exceed 20%. State-controlled banks dominate the banking sector in India, they account for about 75% of assets, 79% of deposits, 78% of loans, 79% of banking capital. State banking sector comprises 28 credit organizations, led by State Bank of India (State Bank of India, SBI). On the sizes of the leading Indian banks are not inferior to the world-class banks. India currently operates 36 foreign banks, as well as 68 corporate banks (small companies serving predominantly farmers, artisans and small entrepreneurs; issue is usually short-term and medium-term loans).

China's banking system is represented by the Central Bank, banks for special public funding, state commercial banks, joint-stock banks, city commercial banks and non-banking financial institutions (urban and rural credit cooperatives, trust investment companies).

Credit organizations for special public funding are specialized banks to support the economic policy of the Government. Among them are China Development Bank, Export-Import Bank of China and Agricultural Development Bank of China. Through them, the State allocates funds to stimulate the development of priority sectors or objects.

There are four largest bank in China with state capital: the Bank of China (Bank of China), Industrial and Commercial Bank of China (ICBC), the Agricultural Bank of China and China Construction Bank (CCB).

More than 10 joint-stock commercial banks were opened in China mainly by enterprises on a mutualbasis. In most cases, a majority stake is owned by the State, represented by the Government agencies or state enterprises. Total assets of the commercial structures represent 15% of the total banking assets. The main objective of urban commercial banks issuing loans to support and develop local infrastructures.

Similar financial institutions exist only in major cities (Shanghai, Beijing, Zhengzhou). There are more than 100 urban cooperative banks or urban commercial banksin China, whose activities are limited to these cities. Their total assets account for 10% of all bank assets. These credit unions have a long history and have developed branch network in China and a large number of affiliates abroad.

Other financial institutions include urban and rural credit cooperatives, rural commercial banks, investment, finance and credit trust companies, foreign banks and others. The non-bank institutions segment occupies a significant place in the financial markets of China, there are more than 36 thousand (they accounted for 27% of all bank assets).

The pillars of the banking system of the Republic of South Africacan be attributed to South African Reserve Bank (Central Bank), commercial banks and specialized financial institutions (the State Development Bank of Southern Africa (financing of infrastructure projects in the region SADC (the Southern African development community), the Industrial Development Corporation (industrial projects),Land and Agricultural Bank (agricultural lending).

The banking system of the Republic of South Africa is well developed and effectively regulated. In recent years many foreign banks and investment companies began to work in South Africa. In South Africa operates: 17 registered banks, 3 credit union banks, 1 cooperative bank and 14 branches of foreign banks.

Major Banks in South Africa are: ABSA (Absa Group Limited), FirstRand Group, FNB (First National Bank), Standard Bank Group, South African Reserve Bank.

ABSA (Absa Group Limited) is one of the leading financial groups in South Africa, formed in 1991; the Bank serves more than 11.7 million customers and is a division of Barclays Bank from 2005, 55.2% of shares belongs to the group.

FirstRand Group (founded in 1988) has assets of more than 125 billion dollars, provides investment banking, asset management, wealth management and advisory services.

FNB (First National Bank) is the oldest South African Bank, founded in 1838. It is part of the "big four" banks in South Africa and has branches in Mozambique, Botswana, Namibia, Swaziland and Zambia Currently is a division of FirstRand Group.

Standard Bank Group (Standard Bank) from 1862 is the largest bank in South Afrikan Republic in terms of assets and profits. The Bank operates in 33 countries around the world, including 17 African countries and has more than 600 offices in South Africa and more than 400 outside the country within the continent. The Bank employs over 50 thousand employees worldwide, of whom about 35 thousand are in South Africa.

South African Reserve Bank is the Central Bank of South Africa established by Parliament in 1921. The primary function of a bank is to provide financial stability for the achievement of sustained economic growth in the country.

Analysis of national banking systems of BRICS countries allows to draw some conclusions. Firstly, all BRICS countries are characterized by significant government involvement in the banking sector. The largest banks, which define the state and development of banking systems of the five BRICS countries, are under the control of governments. This feature allowed BRICS credit organizations to overcome global financial and banking crisis 2007-2009 easier than the developed countries.

Secondly, it is clear that different scales, structure and degree of involvement in transnational activities on the world markets characterize these countries' banking systems.

Research proves that banks of emerging markets are in a race towards "fast profits" and cut down on traditional operations (project financing, loans, etc.). Vast amount of operations is attributable to expatriation of capital into offshore zones. According to the World Bank, absence of banking support for economic development in ex-USSR countries lead to manufacturing decline of 65%. However, in countries with government involvement and gradual market transformation - economy recovered faster (Belorussia, Kazakhstan, Uzbekistan). Use of reasonable government regulation of economy, as a whole, is a vital condition of development and formation of new approachto the realisation of commercial relationships and aids development of international banking. Effective cooperation between participants of BRICS countries is also influenced by the amount of government support given to economy during formation of market relationships. Under growing economic co-operation manufacturing feel pressure from their clients that require quality goods and services and from competition, which are able to offer better quality at a lower price. Sensible regulation of inter-state relationships encourage economic co-operation. In its tern, creation of common legislation base, which provides effective banking servicing of BRICS economy, will create stable foundation for collaboration. Establishment of essential conditions for interaction between credit institutions requires time and political power.

The analysis of current developments of emerging markets has proved that banks are able to support economy sectors during growth of partnership by backing economic interest of countries and encouraging trade development that increases cooperation. Banking support for the least protected market participants - SMEs, entrepreneurships – driver and buffer of any economy will create favourable conditions for effective economic operations, creating employment, production ofgoods that are under market demand. Effective global cooperation of BRICS countries connected with necessary design of common banking support strategic developments. Consequently, creation of a reasonable international strategy is possible by using holistic analysis of economic demands of each member-country. Reality has shown that absence of economic forecasting in banking activity leads to negative consequences. For example, "tax holiday" policy, granted to banks by state of Brazil when dealing with foreign investors caused overproduction of cars, which created stagnation of number of economical segments. According to world practice, it is important to provide legal coverage for property of economic partners – a key business component taking into consideration specifics of each country. Formation of mutual economic strategy increases importance of banking intermediary, especially in the area of financial risk management, liquidity financing and management of financial capital. Country's economic development depends on the level of banking business involvement, attributable to customers and market partners. Rating of market demands of BRICS member countries shows that implementation of joint growth programme demands long-term financing, project financing, inclusive of syndicates and constant information flow in all segments of economy. Effective relationships betweenentities are built on foundation of common economic interests and governmental support. Expertise of many countries from Central and Eastern Europe has proved that public support and substantial banking activity desire to minimise change and promote progressive actions in restoration of economic ties.

During the formation of a mutual economic strategy, it is important to consider the experience of CEE countries, which overcome the consequences of market reforms in the economy, which showed that countries are not concerned with prospect of banking reform but how they are going to be implemented in reality. In this regard, presence of objectivity in progressive actions towards available financial resources is very important. Governments support of entrepreneurs who are dealing in area of international trade, unification of banking activity and policies will create favourable conditions for economic cooperation within BRICS.

Growth of economic ties of member-countries based on common values and development goals suggests a long-term strategic alliance of private credit institutions in the field of international trade, taking into account customer flexibility. Sound financial management, modernisation of banking technology will also contribute to the development of the BRICS market. Support of the balance of interests of public and private structures, growing capacity of joint investment financing, strengthening the legal framework and improving the legal support of business - processes contributes to the development of economic

cooperation of economic entities. In addition, banks' activities supporting economic cooperation among BRICS countries should be transparent and accessible to the customer, regardless of the place of accreditation if their business activities executed in the economic environment of these countries. Currently, one of the important directions of banks - participants of international economic cooperation is a support programme of trade relations («Trade - Finance Promotion»), which assists customers in selecting contractors for International Cooperation. Currently, small and medium-sized enterprises of BRICS member- countries have to apply adverse cooperation schemes, including an advance payment for imports. In other cases, the completion of foreign trade contracts is prevented by excessive pricing conditions for underwriting and insurance payments. In this regard, using interstate status, a number of banks - members of the BRICS can help to achieve favourable agreements with banks - exporters to improve the conditions for international cooperation One of the most important trends of banks is to provide payment guarantees to exporters, ensuring pre-export financing and cooperation with insurance companies. It seems appropriate for BRICS international banks to move towards the development of special operations primarily related to export - import activities of economic entities and to provide customers and their counterparties with a variety of banking services on the agreed "flexible" terms of cooperation. Namely, it can be provision of documentary operations, organisation of the bank syndicate to finance exporters / importers, financial market transactions, advising stakeholders during contract finalisation. Banks can also assist clients in calculating the limits for dealings with exporters and importers, confirmation of letters ofcredit and guarantees, issuance of guarantees and counter-guarantees, use of intergovernmental opportunities, taking into account documentary instruments, promissory notes, drafts, etc. In order to maximise demand of economic entities, BRICS banks are expedient to: acceptance of drafts drawn by exporter / importer, financing exporters against documentary letters of credit, provision of agreed overdrafts, insurance of credit lines for exporters / importers, financing of drafts drawn by exporters, financing of collection documents with recourse to the borrower, provide trade financing against contract documentation. Financing of goods supply in the initial stage of the implementation of contracts (for up to 180 days), financing of importers/exporters, financing of the fulfilment of contractual obligations, financing documents against acceptance, implement pre-export funding are of an interest to BRICS banks' clients. It is worth, while mentioning, that BRICS balance of payment specificity contributes to cooperation, based on national currencies, namely: clearing payments and services, multicurrency accounts facilities, with thepossibility of strengthening account liquidity in national currencies from the surplus balances and manage clients' short-term liquidity, as well as management of accounts through mutual telecommunication system, maintain escrow accounts, etc.

Considerable attention is to be payed to corporate clients and consultancy on monetary and financial conditions and payment of export-import contracts in national currencies, as well as to BRICS currencies regulation and control. Administration of short and medium term financing, transactions in national currencies, syndicated loans, hedge currency risk management, provision of trust operations in national currencies and other currencies on behalf of BRICS banks clients can be of an interest to consumers. An important component of creating a common economic space for BRICS countries is a presence of an intergovernmental insurance programme with participation of intergovernmental agencies for export insurance and guarantee of international operations. Specialised agencies of BRICS are able to promote effectively multilateral cooperation of business partners. Banks involvement in encouraging formation of joint leasing companies with the public support also contributes to international relations. An important area of governments – sponsored cooperation is financing of innovative and knowledge-intensive projects, as well as socio - economic programmes: environmental protection, infrastructure development, energy – supply and health programmes, etc. At the same time, an important activity of BRICS banks can be linked with modernisation and engineering support of innovations, as well as in supporting joint credit lines in order to ensure the economic benefits and enhance the living standards of citizens of BRICS countries - members. In turn, the formation of the multilateral clearing system stimulates the development of BRICS' payment system. At the same time, BRICS monetary cooperation ameliorates the global financial infrastructure and makes it more reliable. Currently, the main priority of the BRICS group is the formation of a common currency and investment reserves, as well as the development of mutual settlements in national currencies, that involves not only the currency instability on world markets, but also because many states out of BRICS want to develop business ties with the countries of this group.This, in turn, necessitated the establishment of the General monetary reserve and the BRICS Investment Bank in conjunction with the development of mutual settlements in national currencies and the need to increase competitiveness. BRICS has initiated a number of global proposals aimed at strengthening the stability of world financial markets, including the creation of Development Bank BRICS, BRICS Reserve Monetary Fund, Insurance Pool BRICS, Exchange Alliance BRICS, etc.

The creation of a Development Bank BRICS is key to the successful development of the real sector of the economy and further industrialization of the BRICS. One of the priority objectives of the Bank is toprovide systemic support to medium and small businesses, as well as public sector organizations and enterprises under the private-public partnership. These projects benefit all member countries of the group. Declaration on the establishment of a Development Bank BRICS with a capital of $100 billion was signed by the member countries of the Organization in 2014. And it is expected that in the future the Bank may become a rival to the World Bank and other international and regional banks. Currently, the Development Bank BRICS mainly specializes in infrastructure projects in the territories of the countries participating in the BRICS. The first President of the Bank became the representative of India. In addition, its headquarters is located in Shanghai.

The creation of a Development Bank BRICS is key to the successful development of the real sector of the economy and further industrialization of the BRICS. One of the priority objectives of the Bank is to provide systemic support to medium and small businesses, as well as public sector organizations and enterprises under the private-public partnership. These projects benefit all member countries of the group. In recent years, the Development Bank of the BRICs(and worldwide) is being actively discussed the problem of bad debts, which is impossible without post-crisis recovery, sustained growth and development of the credit market of the countries members of the BRICS. Among the urgent problems which are to be resolved - the crisis of confidence that must be overcome together, otherwise enterprises without credit will continue to build problematic debts.

In the expert community active debates on the possibility and feasibility of alternative banking system BRICS are in progress; consultations on the establishment of a multilateral system of information similar to SWIFT are held. Finance Ministers and Central Bank Governors of the countries BRIC are discussing the whole range of issues, including the organization of payment systems and the prospects for increase transition to payments in national currencies. The purpose of the establishment of such a system is care in international payments from the control of the United States and the EU. This would result in greater independence and, more accurate, creates a certain guarantee for countries from the risks associated with arbitrary decisions in this area, which could be taken by the countries in whose jurisdiction the current payment system is located.

During anti-Russian sanctions war, it became clear that SWIFT could become one of the levers of pressure upon Russia. When the West addressed packages anti-Russian sanctions, there has been a lot of talk that Russia could be disconnected from the SWIFT system, as in 2012 it was done with Iran. Such deactivation and now is considered in predictions of Russian analysts as a possible measure to reinforce sanctions pressure on Russia. Disconnecting Tehran West happenedbecause there was a UN Security Council resolution imposing sanctions against Iran, which was supported by the majority of UN member countries. SWIFT joined the resolution. In the case of Russia, this is not possible, because the Russian Federation is a member of the UN Security Council with veto power. However, risks remain for us. For example, disable from SWIFT can separate Russian banks.This can happen if the EU and the UnitedStates include these banks on sanctions lists, and then would require SWIFT to terminate their service. These risks have resulted in over 4 years of sectoral sanctionswhile Russia has established a national payment system "Mir" (Peace) and overcome the threat of disconnection from international payment systems. Now we are talking about the expansion of the independent "interbank space to the scale of BRICS. More importantly, the "Mir" system is part of a future single financial space in the Eurasian Economic Union, because without such a system it is difficult to establish integration of currency policies of the Eurasian Union, and subsequently move to a single currency system. In recent years, the idea of creating a similar system for the BRICS is discussed. Moreover, in July2014 Summit in Brazil BRICS countries leaders signedan agreement on a new Development Bank BRICS, as well as an agreement that involves the mutual opening of credit lines in the national currencies of the central banks of the BRICS countries to each other. Asa result, the BRICS have arisen purely technological need for SWIFT's analogue. SWIFT currently works mostly with reserve currencies. The share of the dollar payments going through the system is approximately 68%. Dollar is followed by the Euro, Japanese yen, Swiss franc, British pound, Australian and Canadian dollars. Chinese currency (Yuan) took around 2% of the SWIFT operations, the ruble is 1.7%. We can say that SWIFT has certain problems with transactions in the Indian rupiej, the Brazilian real, South African rand. In this regard, it is intended to establish a new system of financial telecommunications and information exchange for the BRICs, which focused primarily on financing and crediting of projects Development Bank BRICS. An alternative system to facilitate mutual settlements will play a role as a backup platform on which you can optionally go. In the long term, this will lead to further de-dollarization netting in member countries the BRICS. In recent years, however, this process is inhibited by objective factors, in particular, the instability of currencies in developing countries. For Russia, to accelerate the transition to payments innational currencies with the BRICS countries, it is necessary to overcome the unhealthy volatility in the currency, which was demonstrated in 2013-2015. To meet the challenges it is important to adapt the principles of the state monetary policy. Influence of negative externalities (falling world prices for commodities, economic sanctions, the instability of world financial markets) has required prompt and innovative solutions in the field of macroeconomic regulation to intensify investment activities, processes, import substitution and accelerated development of the domestic financial market. Previously the policy pursued by the Central Bank of Russia (CBR) exchange rate targeting has provided virtually no impact on inflation. One of the main reasons for unwinding of inflationary processes was unwarranted growth of tariffs of real monopolies (in particular, the cost of rail transport, housing and communal services). High key rate of CBR in December 2014, slowed down lending to the economy and prevented the decrease of inflation processes. Based on the world experience, Russia is able to follow its own model of monetary policy aimed at targeting not only inflation but also economic growth through effective interest rate policy. The US FED and the ECB, as well as the People's Bank of China implement this model. Since 2015, Central Bank of Russia moved to politics of the floating ruble exchange rate and inflation-targeting regime with simultaneous cancellation of the bilateral currency corridor and a waiver of regular currency interventions. This decision reflects the exhaustion of economic growth model, based on the receipt of income from trade in natural resources, and the gradual transition to the model of economic growth based on new technological way. Feature of macroeconomic management in modern conditions is becoming increasingly intensive use of new information technologies. Overall, inflation reduction and stabilization helps to improve the investment climate, creates new opportunities for economic growth and has a beneficial effect on enterprises of the real sector of the economy. At the expense of deposit operations and issuance of bonds, Bank of Russia withdraws the excess liquidity from circulation. The goal of 4% inflation for 2017-2018 reduces the risks for financial stability. The policy of the Bank of Russia to reduce inflation and maintain its low helps to reduce the risk and vulnerability of the financial stability of the Russian economy from financial risks. Actually, BRICS market participants assess the role of public institutions in modern economy: either it is a "pilot star" of the risky market or a bureaucraticvehicle, that enforces economic entities for non –profit behavior. What is it? History has given examples of a reasonable contribution of governments to economic progress. The experience of countries, bridged over transformations, pushes forward the idea of fruitful correlation of public and private entities, achieving economic development and profitable activity. Actually, the government of the Russian Federation is keeping the way of economic supervision, not for the sake of reforms but in order to improve standard of living. Starting from the nineties of the XX century Russia entered the period ofreforms. Within next fifteen years the market economy and its transparency has been growing. During the period of2000-2007, standards of living have been improved because of a reasonable state participation in economic developments. International experience has been approved in the RF:

1.Uncontrolled market (1991-1999) has brought the country to social tension, polarization and unemployment. Based on international experience reasonable measures has contributed to the positive effect on price formation and structure of the economic development. The world economic crisis has also proved the hypothesis of the predominate role of the state in regulation of the market economy.

2.Market participants are doing their best in achieving short-term results, guided by "selfish" demand of profit, that sometimes contradict the socio – economic interest. Thus, it is impossible to back totally on the "wheels" of the market.

3. Spontaneous change of the market economy is linked with financial discrepancies and accompanied by systemic and functional risks. To ensure social demand under these circumstances public institutions cannot, but support private entities to manage risks.

4. Public supervision does not mean involvement into activities of private entities - intention is to challenge society interests, such as: - economic growth, production increase, development of innovations, improvement of supply and demand structure;

- decrease of unemployment rate, support of price level;

- social responsibility: respect of regulation and profitable activity within the market environment.

There is no denying the fact, that the challenge of any government isthe efficiency of macroeconomic supervision, provision of flexible rates for the economic growth, improvement of legislation, unification of business standards and increase of living standards. Main problems to be solved by any government are insurance of economic development; stimulation of public private partnership; reasonable regulations. Actually, Russia is adopting to international standards, taking into consideration current economic environment that contributes to easy BRICS business contacts. To ensure positive developments Russian Duma adopts laws on the market development and its supervision, which protect economic entities make their activity transparent.

New challenges for public and private entities within the market are linked with responsibility of its activity: financing and insurance of export credits, production/promotion of goods and services, intellectual property and innovations.

Private entities of the Russian Federation take into consideration the international experience: special attention is paid to the early European capitalism in Germany, for example, that has proved the effectiveness of a centralized control over prices, quality of goods and services, tax and rates regulation.

The historic "merry-go-round" produces lessons that should be put into local environment in accordance with its specificity. For example, there is a variety of proportion of monopolism and liberalism in different states and sometimes the necessity of state regulation of economy is considered to be doubtless.

At the same time, the succession of economic cycles shows that self-curing of the recession is impossiblewithout public finance involvement. More than that, during the crisis the ties between the state and its entities deepens. Within the economic breakdowns or sustainable development, any state bears responsibility for its economic and social background. Public authorities have a vast range of instruments to influence the situation: taxation, monetary policy, legislation, etc. For example, the government of the Russian Federation pays great attention to implementation of efficient fiscal policy initiating the economic growth, such as:

- state expenses on social programs;

- maintenance of strategic development;

- reasonable taxation.

The main challenge of the government of Russia is to improve living standards, backed by the steady economic growth. An important role in providing financial support play financial intermediaries - banks. At the same time an efficient banking, strategy depends on the adequate estimation of economic peculiarity of its clients. Practice shows that speculative banking activity makes great problems: cutback of production, abrupt economic deregulation, etc. Being in pursuit of fast earning, private banks often cut down traditional banking and capital outflow to offshore zones starts to grow. Reasonable regulation and supervision of the banking sector helps to reinstate economic background that is reinforced be international cooperation.

At the same time, efficient international cooperation of private and public entities depends on instruments of economic and financial support.

There is no denying the fact, that market participants are under pressure of client's demand of high quality goods and services and the competitors are able to offer consumers goods of a better price and quality. Under these circumstances, equal treatment of all market participants and transparent determination of general principles of activities can push forward international cooperation. Unified legislative base, efficient bank support of economic entities creates steady background for regionalcooperation within the integrated economic area. However, formation of effective conditions for cooperation takes time. In general, underdeveloped countries are too enthusiastic and they underestimate the period of adoption to the level of the industrial growth. At the same time, some researches point out the lack of a "political will" that usually spoils the situation. Actually, it reveals through economic sanctions that are not productive for the market participants. But the grate impulse for import products substitution activity in Russia, for example contributes to its economic development and international cooperation on the regional and politico – economic "club" level. EBRD experts conclude, that, for example, the some of the CIS members are facing considerable decline of standards of living. This fact requires immediate action within the programs of international economic cooperation of the countries that have deep economic and cultural roots. Some of the post-soviet countries are suffering from bankruptcy, merges, acquisitions, lack of resources, etc. Solid banking support can help to recover. Regional programs of public support of non-protected participants of the market - small and medium enterprises (SME), for example, create favorable conditions for enterprises, capable to reach economic goals with public support. Unification of financial and banking rules helps to implement efficient support of SME's activity and effective international cooperation is connected with the unanimous international banking strategy. Putting it into action depends on a complex analysis of economic demands and challenges of market participants. The lack of economic estimation of the environmental peculiarities leads to harmful consequences. For example, "tax holidays" for foreign investors evoked an over-production of automobiles in Brasilia and caused stagnation of some branches of economy The analysis confirms also, that there is a stable tendency within the emerging financial markets: mergers of institutions, based on different motives. In general, the possibility of future profits is the most common motive for a merger. Firms will perform certain measures if it is the most profitable way of enhancing capacity, entering new product or geographic areas, acquiring new knowledge or skills, or reallocating assets into the control of the most efficient managers or owners. International experience suggested motives for mergers and acquisitions include efficiencies, financial and tax benefits, market power effects, management greed, obtaining a good buy and stakeholder expropriation. In terms of efficiencies firms and banking institutions of BRICS can combine their operations through mergers of firm's/bank's assets in an effort to reduce production costs, increase outputs, improve product quality, acquire new technology and/or produce new products. Aside from the new and improved products and output possibilities, mergers can create a market for corporate control, which can safeguard against inefficient management. This can be made possible by reallocating resources from firms with inefficient management to firms with efficient management especially in turbulent ages. This helps to keep profits stable and reduce the risks. Another well-known motive refers to is stakeholder expropriation where shareholders gain at the expense of stakeholders. An example of this would be if a firm is looking to be acquired in order to escape financial problems or to back out of unfavorable labor contracts. One of the basic motives for BRICS mergers is the consolidation of ownership. In advanced market economies, this can be seen through takeovers in Central and Eastern Europe. There is no denying the fact, that takeovers help to solve corporate governance problems and due to the merger, the firm values actually increases in the process, suggesting that profits may increase afterwards. An important factor of mergers is that they requirea liquid capital market in order for the bidder to have access to large amounts of capital in the short term in order to manage it in common interests. The only one thing worthwhile mentioning: acquisitions and mergers announced in a hot merger market can end up having declines in the bidder's stock price in the long run. This can be tempting for managers to make bad acquisitions if they are rewarded with short-term performances. Sustainable banking activity and their support of BRICS economic entities will also expand the economic ties. The results of the study provide a strong case for banking support of BRICS economic developments, which should be taken, into consideration while creating mutual approach to the restructuring of global infrastructure. Economic needs and mutual interests are certainly a step in the right direction of cooperation. However, setting and meeting the needs depend on banking and finance. It is also recommended to take into consideration the international experience and to introduce the required instruments and harmonized regulation for BRICS banking.

Presented results of the study can benefit regulators and banks by providing new vehicles for BRICS economic cooperation. A further novel concept introduced in this study is the use of techniques to distinguish between short-term and long-term relationship and to formulate corporate strategy, based on real requirements of economic entities. The concept can be generalized infuture studies of BRICS and their entities in assessing probabilities and the ways of cooperation. One of the most important topic for BRICS Is the optimization of financial cooperation on the basis of negotiated principles, backed by international regulation and agreed privileges for BRICS economic entities. It is worthwhile mentioning, that BRICS Stock markets agreements, signed in February 2017 contributes greatly to BRICS Financial Centers development, that meets new challenges for the restructuring of the global finance.

Finally, the study provides the insight into how mutual interests affect banking and BRICS economic.

NDB plans to expand lending by 60 percent (НБР планирует расширить кредитование на 60 процентов) / China, October, 2017
Keywords: NDB, Zhu_Xian, quote
Author: Chen Jia

The New Development Bank is planning to expand lending by 60 percent in 2018, aiming to grow to about $4 billion in loans from the $2.5 billion total anticipated this year, a member of the bank's top management team told China Daily in an exclusive interview.

That growth would come on top of a 60 percent increase in lending this year, if pending projects are approved as expected, according to Zhu Xian, vice-president and chief operations officer of NDB, a multilateral development bank established by the BRICS countries.

Four new projects totaling more than $1 billion are being prepared, in addition to projects approved prior to the 2017 BRICS Summit in Xiamen in September. If the four are all approved by December, "the bank's total lending in 2017 will exceed $2.5 billion," compared with $1.56 billion last year, Zhu said.

"Our goal is for all loans to be appraised in about six months, from the date of project identification to the date of approval by the board of directors, which is faster than most of the traditional international multilateral financial institutions," said Zhu, who has been a senior executive at World Bank Group and the Asian Development Bank.

The NDB's new projects will focus on sustainable infrastructure development, and the range of its financing products is expected to expand from long-term sovereign loans to nonsovereign loans to the private sector, said Zhu, who is responsible for the bank's lending operations. It also would involve exploring more innovative tools as well, including more national currency products, which will help to broaden both financing resources and the types of projects offered, he said.

The bank was founded by Brazil, Russia, India, China and South Africa, with the agreement creating the bank entering into force in July 2015. The bank, headquartered in Shanghai, is the first development institution of potentially global scope set up exclusively by emerging market countries with no participation of advanced economy countries in the initial stage.

The fast development of emerging economies and the middle-income countries means the services they need from international development financial institutions are no longer limited to the type of low-interest, conditional loans that are often classified as official assistance, Zhu said. Also, such economies and nations deserve a greater voice and equality of rights in the international economic governance structure, he said.

"The NDB is considering balancing its functions of financing and development ... which can provide alternate practice models for international economic governance reform."

Meanwhile, innovative financing products and services need to be designed to satisfy the different and changing requirements of recipient countries, depending on their various development stages as well as a balance between their short-and long-term development goals, he said.

According to the NDB's General Strategy 2017-2021 report, the bank "aims to be fast, flexible and efficient by designing a more streamlined project appraisal and implementation oversight without unnecessary bureaucracy".

Plans call for its financing instruments to also include guarantees, equity investments, project bonds and cofinancing arrangements with national and multilateral development finance institutions.

By September, the bank's approved loans amounted to $3 billion in 11 projects since it opened. In 2016, the NDB approved seven loans, six of which were in renewable energy, including subsectors such as solar, wind and small hydropower projects and green energy transmission. One project was to support improvement of roads, according to its annual report.

Comprehensive reports, BRICS research materials
International Organisations Research Journal. Topic of the issue: G20, BRICS and Global Governance in the Era of Rising Divergences (Журнал исследований международных организаций. Тема вопроса: G20, БРИКС и глобальное управление в эпоху растущих расхождений) / Russia, November, 2017
Keywords: expert_opinion, International_Organisations_Research_Journal

Cooperation to Ensure Economic Growth and International Security

Jan Wouters, Sven Van Kerckhoven
The G20 and the BRICS on Trade and Investment: Trends and Policies

International trade and investments declined sharply in the aftermath of the 2008 financial crisis. To coordinate policy responses in the wake of this crisis, the Group of Twenty (G20) was elevated to the leaders' level and the BRICS grouping of Brazil, Russia, India, China and South Africa was founded as a summit to gather leaders from the most important emerging economies. This contribution reviews the work of both fora to restore trade and investment. We show that, despite efforts to stimulate cross-border trade and investments, neither has returned to pre-crisis levels. This is especially the case regarding international investment for the G20 members, although the data show a revival of trade. In general, BRICS members have been able to recover more quickly. Although their decisions have not always been implemented by members, the G20 and BRICS have proven to be effective fora for coordinating efforts and compliance has been rather high. However, this contribution argues that more can be done, especially regarding investments. The future will tell whether these two bodies will continue to be complimentary and whether they will be able to withstand protectionist and nationalist reflexes.

Adriana Abdenur
Can the BRICS Cooperate in International Security?

The BRICS have made considerable strides in economic and development cooperation, yet the coalition has not been as successful in formulating and implementing an agenda of its own to address international security despite clear signs that the coalition wishes to promote cooperation in this area. Why, then, have the BRICS been slower to cooperate on security issues, and what are the prospects for intensifying cooperation in this area? This article analyses BRICS cooperation agenda-setting in international security against the backdrop of the coalition's efforts to institutionalize itself as a flexible yet coherent entity and an influential collective actor in international affairs. Drawing on key BRICS documents and reports related to security meetings, I examine three types of security-related efforts that have been made since the first summit, in 2009.

These include attempts to coordinate positions on specific security issues, namely armed conflicts, and related normative stances; efforts to coordinate policies; and institution-building initiatives. I find that the bulk of BRICS security discussions have focused on the first category, with some effort to coordinate policy and minimal progress in institution-building in the security arena. This finding shows that international security has not, thus far, been among the "paths of least resistance" that the grouping's diverse members have found in their efforts to deepen intra-group collaboration—a fact that can be explained by citing internal differences as well as contextual factors. However, the hurdles to a more cohesive BRICS security agenda are not insurmountable, although they may restrict the gamut of topics addressed by the coalition's cooperation efforts. In particular, there is an unexplored area in which the five states could enhance their security cooperation while drawing on their development and peace-building experiences and preferences: that of conflict prevention.

Olga Biryukova, Tatiana Vorobjeva
The Impact of Service Liberalization on the Participation of BRICS Countries in Global Value Chains

This article deals with the nature and degree of influence of service liberalization on the participation of BRICS countries in global value chains (GVCs). The authors used econometric analysis to determine the inverse relationship between barriers in infrastructure services and the degree of countries' participation in global value chains. Using data on the structure of trade in goods and services in terms of value added, they analyzed the situation of developing countries through the example of the BRICS countries of Brazil, Russia, India, China and South Africa in production and service GVCs. They found China and India to be the most deeply integrated in the international production and service chains. Russia, Brazil and South Africa are included in production value chains more as suppliers of raw materials and intermediate goods with low added value, but nonetheless have significant potential to expand their participation in international production systems, in particular by improving the infrastructure necessary for GVCs.

Based on the study of liberalization of certain service sectors in BRICS countries, the authors noted the positive impacts of reducing barriers in maritime, rail and air transportation and of finance for improving the quality and reducing the cost of services. In many respects, these effects were the result not only of reducing barriers in services, but also of implementing measures to increase a country's investment attractiveness. The article concludes that the liberalization of infrastructure services industries can become one of the tools for integrating the BRICS countries into GVCs. However, this liberalization should be part of a broader development strategy that includes trade and investment policy measures to increase participation in global production and the overall economic development of the country.

Andrei Shelepov
Indonesia and the BRICS: Implementing the BEPS Action Plan

Tax base erosion and profit shifting (BEPS) is a global problem. Finding solutions is a challenge for most countries. The global economic crisis led to a new environment and requirements for doing business. These requirements have been developed by two key international institutions: the Organisation for Economic Co-operation and Development (OECD) and the Group of 20 (G20). This approach has engaged the developed and developing countries that are members of these institutions, as well as a significant number of partner countries. As a result, the number of countries that have confirmed their commitment to the BEPS Action Plan exceeds 100.

This article assesses the level of implementation of the BEPS Plan in Indonesia and in the BRICS countries of Brazil, Russia, India, China and South Africa. The author monitored their activities for 13 of the 15 actions (excluding Actions 11 and 15). He has also identified several best practices that can be used by Russia.

Monitoring considered implemented and planned actions, primarily amendments to and new norms in relevant national legislation, as well as the expected implementation time for all BEPS actions. In addition, the author assessed institutional environments created to implement the provisions of the Action Plan, consultation processes and mechanisms for informing stakeholders.

Analysis shows that approaches to implementing the BEPS Action Plan differ among the six countries. Although several lag behind in terms of their implementation schedule, each country has demonstrated some efforts that can be considered as best practices. Russia has succeeded the most in implementing the Action Plan.

Tatyana Lanshina
Implementing the G20/OECD Principles of Corporate Governance: What is the Progress in BRICS and Indonesia?

This article analyzes the implementation of the G20/OECD Principles of Corporate Governance by Russia compared to other BRICS countries and Indonesia. Originally, these principles were adopted by the Organisation for Economic Co-operation and Development (OECD) in 1999. The last (third) version was developed in 2014–2015, with the active involvement of the Group of 20 (G20), and was adopted at the G20 Antalya Summit in Turkey in November 2015. There are no dramatic changes in the new document, although it contains several new recommendations that became necessary after the 2008 global financial crisis.

The article focuses on the actions of six countries and on real changes in these countries. The author assesses the OECD recommendations on implementing the G20/OECD principles. According to these recommendations, researchers should not pay much attention to quantitative analysis, because many important issues are unobservable for them. The author thus accentuates qualitative research methods and comparative analysis. The results of the study show that Brazil, Indonesia and Russia were most active in implementation, and South Africa and China did not act, and India achieved only partial implementation.

Despite the vast documentation on the formal implementation of corporate governance principles in Russia in recent years, there has been little real improvement in terms of information disclosure (including data on management remuneration), gender diversity on corporate boards and the share of independent directors. Moreover, Russian companies are characterized by a high concentration of capital, and the role of boards is often reduced to formalities. Still, the author assesses Russia's efforts as "substantial implementation," mainly for its initiative (and not results). The study also concluded that similar limitations are found in the other countries it researched.

Andrey Sakharov
BRICS Investment Policies through the PFI Perspective

OECD Policy Framework for Investment (PFI), containing recommendations and best practices in 12 investment-related policy areas, is widely perceived as the world's most comprehensive and authoritative instruments on international investment regulation. Topicality of PFI recommendations for OECD members and other countries, including Russia, is dictated by the competition in international investment markets. The instrument's implementation can significantly boost national jurisdiction's attractiveness to investors and increase its economic competitiveness.

The experience of BRICS countries as large developing economies, involved in collaboration with the OECD, could be of great value from the standpoint of the PFI implementation in Russia.

This article analyses investment policies of Brazil, India, China and South Africa from the perspective of PFI recommendations, organized in four major categories: general characteristics of investment regime and investment stimuli, national investment regulation regime, trade policy, overcoming structural limitations. The analysis forms the basis for recommendations on improving investment policy regime in Russia.

Maria Raquel Freire
EU Relations with the BRICS: Strategic Partnership or Structural Disjunction?

The international system is characterized by increasingly interdependent and asymmetrical relations between the constellations of actors that compose it. While the state remains a central reference in international relations, multilevel and multidimensional relationships make the system very complex. The state, international organizations, non-state actors, club diplomacy and groups of states (e.g., the Group of 20 [G20] and the BRICS grouping of Brazil, Russia, India, China and South Africa) all contribute to this complexity and make the global governance system increasingly multifaceted. In this context, this article examines the relationship between the European Union and the BRICS — two very different actors, pursuing formal and informal integration processes, respectively — and assesses the possibilities and limits of cooperation. This article seeks to understand whether the EU–BRICS relationship reflects a strategic partnership or a structural disjuncture. It starts by discussing multilateralism as a cooperation-oriented but sometimes interest-driven tool in a diverse and multilevel governance system. It then analyses EU–BRICS relations, identifying the main drivers and highlighting how complex context both facilitates and hinders the constitution of this relationship. The article concludes that the EU–BRICS relationship is informed by asymmetries and ambivalence that reflect their different sizes, capacities and approaches. Moreover, although there is a shared understanding that cooperation might be beneficial, contradictory rules and perspectives on international order mean this potentially positive relationship is nevertheless embedded in fundamental structural constraints.

New Growth Drivers: Innovations and Digital Economy

Christine Han
Trilateral Cooperation with China: Sharing China's Development Experience through Innovative Partnerships

China has recently become a key provider of development cooperation in the world. Its development cooperation budget has increased on average 12% annually since 2003. The Chinese government has increased its contribution to United Nations agencies and made several major development cooperation commitments including the pledge of multibillion U.S. dollar support for African countries. China has also led in establishing new regional and global initiatives such as the Asian Infrastructure Investment Bank and the BRICS New Development Bank.

China pays close attention to trilateral development cooperation and has increased the number and the scale of its trilateral partnerships. Trilateral cooperation helps China expand its scope and has the potential to increase the effectiveness of its development cooperation. China is carrying out several trilateral cooperation projects with UN agencies and traditional bilateral development partners. These projects cover different sectors such as agriculture, food security, health, education, disaster management, trade and investment. China contributes knowledge, expertise and technology and provides full or partial financial resources.

UN agencies are considered to be neutral partners to China that have global networks of country offices with direct links to governments. Special attention is paid to trilateral cooperation with the United Nations Development Programme (UNDP) and China. The parties jointly developed the first project in 2011 and currently have projects in five countries in Asia and Africa. There are two main models in China-UNDP partnership. The first model provides for joint funding from China and UNDP with Chinese experts playing a key role throughout the projects. The second stipulates funding from a third donor with China providing technical expertise and experience.

Given the experience to date, China's trilateral partners cite several common benefits and challenges. Trilateral cooperation with China is considered beneficial for development partners to strengthen relationships and promote mutual learning with their Chinese counterparts. However, it is more complicated than bilateral cooperation in which higher transaction costs could incur. It is therefore important for all parties involved to identify common interests from the very beginning and be patient in day-to-day communication and coordination. Strong knowledge of local contexts and implementation capacities also help reduce transaction costs.

The author made some recommendations for developing trilateral cooperation with China. Current projects should be scaled up to larger and more complex projects, which requires further and continued resources from all sides. Given the complicated nature of trilateral cooperation, the roles, responsibilities and procedures need to be clearly defined. The specific monitoring and evaluation system for trilateral cooperation should be set out so that each partner's added value, mutual learning and policy impact could be assessed.
Special issue: 2017 The BRICS countries nursing forum health and nursing policies, laws and regulations, governance and management, nursing leadership in Brazil (Специальный выпуск: 2017 год. Политика стран БРИКС в области здравоохранения и ухода за больными, законы и правила, управление и менеджмент, лидерство в сестринском деле в Бразилии) / Netherlands, October, 2017
Keywords: healthcare, expert_opinion, research
Author: Dra Irena Ferreira

1. Strong points

- Existence of laws that govern the Councils and that regulate Nursing
- Law 5905/86 - Creates the Federal and Regional Nursing Councils;
- Law 7498/86 - Regulates the exercise of Nursing;
- Decree 94406/87 - Regulates the law 7498/86;
- Resolutions, Decisions, normative opinions issued by the Councils with the purpose of disciplining activities.
- Organizational structure defined;
- Decision making in a collegial manner;
- Plenary cohesive;
- Public Employees with a good level of training and diversity of knowledge;
- Agreement between Cofen and Coren-s
- Good financial health of Cofen;
- Strategic and budget planning

2. Weak points

- Poor external articulation;
- Delay in administrative procedures;
- Loss of public employees to other public and private institutions;
- Health policies focused on hospital-centered models;
- Lack of clarity of some Resolutions of the Cofen-Coren System;
- Decentralized management;
- Alternate management (3 years mandate);

3. Opportunities

- Approval of the working day and 30 h a week;
- Approximation of the nursing professionals to Coren-s;
- Growth of the Nursing Professional Category(100 thousand/year);
- New Management
- Involvement in social causes;
- Partnerships with other National and International Councils;

4. Threats

- Amendment of norms and laws;
- Crisis of the labor and financial market of the country;
- EAD nursing courses;
- Wrong Judicial Decisions;
- Divergence with other nursing institutions;
- Inflation;
- Political interests of the Federal Government contrary to the Cofen-Coren System;
- Fall of the country's economic growth;
- Syndication of the Cofen-Coren System;
- Absence of political representation and articulation;
- Poor Legislation;
- Miscellaneous categories that make up the profession.

5. Results achieved

- Elaboration of strategic planning for Cofen;
- Elaboration of methodology for elaboration of Strategic Planning for the System Cofen-Coren-s;
- Elaboration of Cofen's Annual Training Program (PAC);
- SWOT Analysis of the Cofen-Coren System;
- Leadership Course;
- Elaboration of the assignments of the Cofen/Coren System
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