Information Bulletin of the BRICS Trade Union Forum
Issue 3.2018
2018.01.15— 2018.01.21
International relations
Foreign policy in the context of BRICS
BRICS 2018: South Africa sets the pace (БРИКС 2018: ЮАР задает темп) / Germany, January, 2018
Keywords: expert_opinion, rating, SA_chairmanship
Author: Jan Philipp Wilhelm

Big plans, little in the way of results. That is more or less the assessment many observers are making of BRICS, the exclusive club consisting of the emerging economies Brazil, Russia, India, China and South Africa. Founded with the aim of breaking the West's supremacy in the global economy, at the start of this decade the BRICS states had a plethora of ambitious plans.

They wanted to create a joint rating agency to counteract supposedly unfair treatment by agencies in the United States. The BRICS countries also wanted to lay their own underwater cable system to protect themselves against possible spying activity by the US and Europe. And a joint development bank was supposed to make the emerging economies more independent of the International Monetary Fund (IMF) and the World Bank.

However, owing to difficulties in reaching agreements, as well as economic stagnation in South Africa, not to mention recessions in Russia and Brazil, interest in BRICS has noticeably died down. Out of all the projects mentioned above, only the New Development Bank (NDB) seems to making some progress: Last year, the Shanghai-based bank approved projects worth $1.5 billion (1.2 billion euros). However, the NDB is still nowhere near becoming a true alternative to the IMF and the World Bank.

41 percent of the world's population

So has the concept of BRICS become outdated? Not at all, says Jakkie Cilliers, the head of the African Futures and Innovation Program at the Institute for Security Studies (ISS) in South Africa. He believes that, as an association of emerging economies, BRICS will play an active role in the future as well. "BRICS remains important on the global stage as kind of a balance within the G20 to balance the influence of the G7 grouping," he told DW.

How relevant are the BRICS?

Current economic figures show that there's really no getting around the BRICS countries. In 2017, their joint contribution to the world economy was 23.6 percent, and according to IMF predictions this is set to rise to 26.8 percent by 2022. The BRICS countries' share of the world's population is even higher: 41 percent in 2015.

What these figures conceal, however, is that there is a great imbalance between the BRICS countries themselves. China, the heavyweight, currently contributes almost two thirds of the group's economic performance — and that figure is growing. Every six months the Chinese economy grows by an amount equivalent to the whole of South Africa's economic output.

However, ISS expert Cilliers says that this is one of the reasons why the countries still have a clear desire to continue working together. "Certainly for South Africa BRICS remains important and if one looks at the other members of BRICS, Brazil, China, Russia, almost all of them have of course depended on the big heavyweight China which is the number one trading partner almost for all of these countries. And everybody tries to benefit from that special relationship that they have with China. For South Africa, BRICS is very important, we are something like 3 percent of the total BRICS economy, but we are considered by the partners to be the leader, a leader in Africa."

South Africa takes over BRICS chairmanship

In 2018 South Africa takes over the rotating presidency of the club — reason enough for some observers to question the legitimacy of South Africa's claim to leadership. Because if it were merely a question of economic performance, Nigeria and Egypt, as Africa's biggest national economies, should have joined BRICS long ago.

However, economic strength isn't everything, says Jakkie Cilliers. It's also about foreign policy orientation and the domestic situation in the respective countries. "I think that countries like Nigeria, which now has a larger economy than South Africa, have such an incoherent foreign policy and so many domestic challenges that I think the other members of BRICS may feel that Nigeria in particular probably brings little addition to BRICS."

At the moment, it seems more unclear than ever who exactly will preside over the upcoming BRICS summit in Johannesburg. President Zuma's time in office doesn't officially end until 2019, but it's looking increasingly likely that he will have to go prematurely and against his will. In mid-December Cyril Ramaphosa replaced Zuma as party chairman of the African National Congress (ANC). And last week the South African constitutional court ruled that parliament must initiate impeachment proceedings. The court deemed it proven that Zuma made illegal use of public funds while renovating his private house.

Jakkie Cilliers hopes Ramaphosa will be able to take over the presidency before the summit because with a new cabinet, fresh engagement on the subject of BRICS would also be possible. "That certainly would be quite important for South Africa."
The BRICS Chairmanship of South Africa 2018 (Председательство ЮАР в БРИКС в 2018 году) / Italy, January, 2018
Keywords: global_governance, speech, SA_chairmanship
Author: Anna-Marie Moulton

Ladies and gentlemen,

Good afternoon!

Dr Ricceri has asked me to share with you some general, basic information to introduce the issue of the incoming Chairmanship of South Africa of BRICS in 2018. I am not going to delve into the history of South Africa's joining of BRICS as I am sure you are all well-informed on that issue.

During its Chairship, China focused on the fact that the IX BRICS Summit ushered in the second decade of BRICS cooperation, i.e. ten years since the first meeting of the then "BRIC" Foreign/International Relations Ministers in New York in 2006.. 2018 will hold a special significance in the BRICS historical trajectory, as it completes the first decade of BRICS Summits.

To ensure maximum synergy and continuity for BRICS endeavours over the next two years (2017-2018), South Africa is working to strategically align its Chairship in 2018 with that of China in order to plan towards the goals of the next decade of BRICS cooperation. I am sure that you are all informed of the outcomes of the IXth BRICS Summit held in China earlier this year. On that occasion BRICS Leaders committed to redouble efforts to comprehensively deepen BRICS partnership and usher in the second "Golden Decade" of BRICS cooperation.


1 January to 31 December 2018?

It will be the responsibility of President Zuma to host the 10th BRICS Summit and preside over the related calendar of events to be hosted under the South African chairship.

Arrangements for the Summit date and venue are currently being finalised, as are deliberations around a possible theme, logo, substantive and sectoral outcomes and concrete deliverables, the envisioned Summit Declaration and Plan of Action and the overall programme and agenda.

Venues throughout SA should be utilised for the approximately 70-80 meetings under the various tracks/sectors/Ministerial groups.

The SA BRICS Strategy operates at four levels:

  • On the domestic front, to promote and advance our national interests notably through pursuing our core economic priorities as contained in relevant policy documents such as the National Development Plan and as related to addressing the triple challenges of poverty alleviation, job creation, reducing inequality. Therefore seek enhanced trade and investment relations with our BRICS partners.

  • In the regional context, the key objectives are to obtain support from BRICS partners for the promotion of the AU's Agenda 2063, and ensure synergy among BRICS partners as far as feasible regarding their engagement with Africa; emphasising the exponential growth potential of the Africa-BRICS relationship.

  • South-South cooperation – through BRICS, South Africa continuously endeavours to put the Agenda of the Global South on the forefront, and works to promote the implementation of the 2030 Agenda for Sustainable Development.

  • In the global context, BRICS Leaders are acutely aware of the skewed representation of emerging and developing countries in post-Second World War global governance structures, which also do not correspond to current and emerging geo-strategic realities, and are seeking to address the disparity.

At a broad level, the proposals to be explored during 2018 are geared toward generating value-addition for BRICS during South Africa's tenure as BRICS chair. Furthermore, the activities, new structure and institutions to be put forward are intended to leverage BRICS for the benefit of Africa, to strengthen BRICS multi-level governance, and to build a meaningful interface and exchanges between the various levels/tiers of BRICS.

The exponential institutional development of BRICS has yielded institutions including the New Development Bank (NDB), the Africa Regional Centre (ARC) and the Contingent Reserve Arrangement (CRA), amongst others, all of which are intended to make tangible and impactful contributions toward the development objectives of South Africa, the African continent and the Global South. South Africa will work to consolidate and strengthen these achievements, focusing particularly on the implementation of the BRICS Strategy for Economic Partnership adopted in Ufa in 2015.

The main BRICS activities take place at various levels:

i) The BRICS Leaders meet at the BRICS Summits on an annual basis as well as on the margins of the G20 Summits;

ii) The Ministers of Foreign Affairs/International Relations meet annually on the margins of the United General Assembly Sessions (UNGA) and, as required, the National Security Advisors meet annually, as well as the other Ministerial tracks as outlined in the Summit Action Plans (supported by preparatory Senior Officials meetings); BRICS Deputy Ministers of Foreign Affairs/IR also meet annually to discuss issues in respect of the Middle East and North Africa (MENA) – role of Sherpas and Sous Sherpas;

iii) Track 2 structures, i.e. the BRICS Business Council and BRICS Think Tanks Council;

iv) Track 3 and other structures, including fora for Civil Society, Youth, Academics, Business, Labour as well as Parliament

Approximately 40 separate tracks with approximately 120 meetings per year covering full spectrum of political, security, economic/financial and social sectors.


China in 2017 will ensure continuity, coordination and consolidation. This is to be followed through into South Africa's chairship in 2018. This will ensure synergy of BRICS actions.

Outreach dialogue sessions, e.g. the African Union and NEPAD (2013), the Shanghai Cooperation Organisation and Eurasian Economic Union (2015), and BIMSTEC (2016) will be continued.

BRICS will continue to serve as vanguard of the process of realignment in the new global order in cooperation with its partners in the Global South for the collective promotion of the interests of the Global South.

BRICS is a catalyst for foreign policy cooperation, esp. re South-South cooperation, and between emerging markets and developing countries. It has also led through advocacy and policy on key issues such as climate change and the SDGs.

Vastly different today compared to initial conception. It is not constructed in opposition or to counter anything else.

Press release on Deputy Foreign Minister Igor Morgulov taking part in events in the Republic of India (О мероприятиях в Республике Индии с участием заместителя Министра иностранных дел Российской Федерации И.В.Моргулова) / Russia, January, 2018
Keywords: mofa, top_level_meeting

On January 17-18, Deputy Foreign Minister Igor Morgulov held consultations with India's Foreign Secretary Subrahmanyam Jaishankar and met with Secretary (ER) Shri Vijay Gokhale and Secretary (East) Smt. Preeti Saran.

The parties highly praised the positive dynamics in the implementation of key joint projects in various areas and pointed out that the two countries were committed to further expanding their special and privileged strategic partnership.

The officials noted with satisfaction that Russia and India had similar approaches to current global and regional issues, including the shaping of security architecture and equitable cooperation in the Asia-Pacific region and efforts to counter terrorism and drug trafficking. They emphasised the intention of the two countries to continue to coordinate their efforts in the international arena, including at the UN and other forums, such as BRICS, RIC and the SCO.

Moscow and New Delhi reaffirmed their commitment to forming a multipolar world order based on fair and democratic principles and the supremacy of law.

Igor Morgulov also attended the Raisina Dialogue, an annual international political science conference, which New Delhi hosted on January 16–18, where he spoke in detail about Russia's approaches to the situation in the Asia-Pacific region and in and around Afghanistan.
    [Abstract] Foreign Minister Sergey Lavrov's statement and answers to media questions at a news conference on Russian diplomacy in 2017, Moscow, January 15, 2018 ([Отрывок] Выступление и ответы на вопросы СМИ Министра иностранных дел России С.В.Лаврова в ходе пресс-конференции по итогам деятельности российской дипломатии в 2017 году, Москва, 15 января 2018 года) / Russia, January, 2018
    Keywords: mofa, sergey_lavrov, speech

    Question: Mr Lavrov, you are probably aware that the media often publishes lists of key issues and expressions at the end of the year. If you were to compile such a list in the sphere of international relations for 2017, what key stories and phrases would you include in it?

    Sergey Lavrov: I'll stay away from the phrases, or else I may be misunderstood again.

    As for the stories, of course, it's Syria. This issue is a focal point for many interests of many actors. We are trying, as I said, to use the initiative of convening the Syrian National Dialogue Congress to harmonise the interests of all Syrian parties and all external players who have influence on the situation and want to secure their interests in this region, including as part of the Syrian settlement. This is a complex process. To reiterate, we have reasons to believe that the pro-active role of Russia, Iran and Turkey will remain unchanged. It made the Astana process possible one year ago, helped create de-escalation zones, which continue to operate despite individual violations and the attempts to thwart it. It is also important that the Astana process stimulated UN activity, which, prior to the meetings in Astana, remained, in fact, inactive for some ten months. I hope that the initiative of the Syrian National Dialogue Congress will also act as an incentive for the UN to step up its activities. In any case, the Congress in Sochi is aimed at promoting the Geneva talks. We are saying it unambiguously to all our colleagues, including the UN leadership and the countries involved in the Syrian settlement process in one way or another.

    The second topic, probably, includes everything else that concerns the Middle East and North Africa. The Syrian settlement process is only a part of the complex tangle of issues in this region. I will mention Libya and Yemen. I have already mentioned the Palestinian-Israeli settlement process, which has ended up at an impasse. I remain convinced that the dead-end in the Palestinian-Israeli settlement process, in moving towards creating a Palestinian state, has a part to play in radicalising the Arab street.

    There is another topic - Ukraine, which is artificially inflated to make it look bigger than it is, and is seen as a touchstone in the confrontation between Russia and the West in general. I consider this approach to be erroneous and absolutely politicised. If we were to abandon the assessment, the prism of confrontation between "authoritarian Russia" and the "liberal West" through which the Ukrainian crisis is being viewed, and focus instead on what's written in the Minsk Agreements (everything is clearly spelled out there and cannot be construed in more than one way), then, I think, the Ukraine crisis would have been settled a long time ago. This would mean that rejecting the ideology-driven interpretation of the situation as supposedly having global significance for relations between Russia and the West would allow our Western colleagues to move away from their thoughtless and reckless support of the policies pursued by official Kiev designed to shirk its commitments under the Minsk Agreements.

    Of course, we can talk at length about positive trends as well – there's no end to such conversations. They include promoting Eurasian integration, implementing the greater Eurasia project with the participation of the EAEU, the SCO, and ASEAN, its openness to new participants in the East and the West. Of course, it is also necessary to talk about integration processes on a broader scale - in the Asia-Pacific region, the activities of APEC, the G20, and BRICS. These associations embody major trends of the modern world, namely, the objective emergence of a polycentric system of international relations.

    I'm sure I forgot to mention a thing or two. I was speaking off the cuff about issues that we have on our desks on a daily basis.

    Question: Before the New Year the leaders of Russia and China announced that they would like to continue cooperating in international affairs. Could you name the main international issues on which Russia could maintain effective cooperation with China this year?

    Sergey Lavrov: I am very grateful that you were given the floor second because you raised the subject that I did not mention when answering the first question about what keeps us busiest.

    Of course, the nuclear problem on the Korean Peninsula is one of the most serious items on the international agenda. Russia and China are actively cooperating on this track. As you know we have a joint initiative with China on transitioning from confrontation to political settlement of the problem that has arisen on the Korean Peninsula. To begin with, we suggest that everybody calm down and freeze all confrontational activities, primarily those linked with military undertakings, whether missile launches, nuclear weapons tests or large-scale exercises that the United States has been holding in this region with the Republic of Korea and later on also with Japan. When these activities are frozen and a moratorium on hostile, confrontational steps enters in force, we will actively support direct contacts between the main stakeholders. Speaking about the nuclear issue, these are primarily Pyongyang and Washington but we will be ready to accompany their bilateral dialogue also in the framework of the six-party process with the participation of Russia, China, Japan and the Republic of Korea. This is probably the most important issue on the bilateral agenda that Russia and China are now working to resolve.

    I must say that the work on this issue is difficult. I have already said that the United States is almost openly talking about the inevitability of a military solution although everyone understands the disastrous consequences of such a venture. When there were conditions for transitioning to dialogue, provocative actions were undertaken in the vast majority of cases – increasingly large-scale military exercises around North Korea, which provoked another round of tensions. We have a joint roadmap with China and we will actively promote it.

    We are also cooperating on the problem posed by the Syrian settlement process. Our Chinese colleagues occupy the same positions as the Russian Federation. I am referring to the need for an exclusively political settlement on the basis of the resolutions of the UN Security Council, which provide for political dialogue without preconditions and with the participation of the full spectrum of Syrian society – both the Government and all key elements of the opposition representing the diversity of political, ethnic and religious groups in Syria.

    We have one more highly important joint initiative with China on the draft treaty on the non-deployment of weapons in outer space. It was submitted at the UN Disarmament Conference several years ago. Regrettably, this treaty has not yet been discussed due to the US position. All other countries understand the urgency of this problem but the United States continues nurturing plans to militarise outer space, I mean the deployment of weapons in outer space, which will, naturally, have very adverse consequences for problems of international security. Incidentally, speaking about the Disarmament Conference, China was our co-author in the drafting of another major document – the convention on the suppression of acts of chemical and biological terrorism. This draft is also being hindered by the United States, much to my surprise.

    The intensive process of consolidating integration efforts is underway in Eurasia. China has the One Belt One Road initiative. President of Russia Vladimir Putin and President of China Xi Jinping agreed to work toward conjoining Eurasian integration and the One Belt One Road initiative. The members of the Eurasian Economic Union (EAEU) are elaborating a treaty on trade and economic cooperation with China. In parallel, the EAEU and the SCO are maintaining contacts that ASEAN countries are welcome to join. Many ASEAN countries have already signed free trade area agreements with the EAEU or are negotiating them. What President Vladimir Putin called "the greater Eurasia project" is a very promising initiative. Needless to say, it will be necessary to take into account a large number of specific factors because too many economic interests overlap at this point. This is a winning initiative because it is based on reality. It is not being implemented via the initial formation of some framework and subsequent transition to practical action. Here is an illuminating example: pavement being laid in lawns in England. They first look where it is convenient for people to walk and then put down concrete or pave. Our processes that we call by the common name of the "greater Eurasia project" are proceeding in the same way.

    I could probably spend a long time listing the joint initiatives that Russia and China are undertaking in the international arena. But for the sake of brevity I wanted to highlight these major issues.
    Countries should be flexible to adjust to India's objections on BRI: Russian Senator (Российский сенатор: Страны должны быть гибкими, чтобы приспособиться к возражениям Индии в отношении БРИ) / India, January, 2018
    Keywords: quotation, expert_opinion
    Author: Dipanjan Roy Chaudhury

    Russia will not be jealous of India's growing ties with the United States, senator Konstantin Kosachev, head of Russia's senate committee on foreign relations, told ET, but said in the same breath that India should not be jealous of Russia's growing ties with China either.

    Kosachev said in an exclusive interview that Russia is helping address differences between India and China, and suggested that if India has objection to China's Belt and Road Initiative (BRI), countries (probable reference to China) should be flexible and cautious to address that.

    "India is today a global player and understandably a centre of attraction. Indo-Russian ties are working well enough. Having said that expanding US sanctions on Russia can impact Indo-Russian defence partnership. Russia is hopeful that India, like Germany, France, Italy and Austria, would make some public mention against US sanctions," Kosachev said.

    "Difficult and dangerous situations are arising out of sanctions. Such sanctions which impact Russia's trade with other countries are contradiction of WTO and free trade," he said.

    The senior Russian politician said that US-Russia ties are hostage to internal political schisms within America. "President Trump's outreach has been limited by US Congressmen... USA and Russia could have cooperated more in West Asia and Asia-Pacific. If the Iranian nuclear deal falls through, then negotiations with North Korea will be all the more difficult," he said.

    Kosachev was in India for the third edition of the Raisina Dialogue and was part of the panel on Tuesday with foreign secretary S Jaishankar. Led by Kosachev and Shashi Tharoor, chairman of joint standing committee on external affairs, India and Russia plan to hold a formal meet of two parliamentary foreign relations committees later this year.

    Referring to Indo-Russian bilateral cooperation at various multilateral forums including BRICS, RIC, SCO and Eurasian Economic Union, Kosachev said that India and Russia will be expanding their cooperation at the G20 platform.

    The Russian senator said he hoped that India would enhance its presence in the big Eurasian space and that the International North-South Transportation Corridor or INSTC could join existing corridors in Eurasia. "If India has objection to any part to any corridor (read BRI) then countries should be flexible and cautious to address Delhi's concerns," he said.

    Kosachev expressed disappointment over the fact that a global coalition in the fight against ISIS is missing. "We must guard against growth of radicalisation which leads to extremism and that leads to terrorism," he said.
    Investment and Finance
    Investment and finance in BRICS
    India's R&D spending is up but least among all BRICS nations (Расходы на НИОКР в Индии выросли, но остаются наименьшими среди стран БРИКС) / India, January, 2018
    Keywords: social_issues, innovations, investments, economic_challenges, research, rating

    A national survey on the status of research and development in the country has shown that India's gross expenditure on R&D (GERD) has more than tripled from Rs 2411.17 billion (Rs 24,117 crore) to Rs 853.26 (Rs 85,326 crore) in the decade from 2004-2005 to 2014-2015. It has also been estimated that it could have gone up to Rs 945.16 billion (Rs 94,516 crore) in 2015-2016 and crossed the Rs one trillion (Rs 1 lakh crore) mark in 2016-2017.

    The survey, conducted by the National Science and Technology Management Information System (NSTMIS) under the Department of Science and Technology (DST), has also shown that the per capita R&D expenditure increased to Rs 659 in 2014-2015 from Rs 217 in 2004-2005. It concluded that the GERD growth was driven mainly by the government. The central government accounted for 45.1%, state governments for 7.4%, public sector industries for 5.5% and institutions of higher education for 3.9%. Private industry accounted for the remaining 38.1%.

    Significantly, the share of business enterprises – from both the public and private sectors – has been on the rise. Their share of 43.6% in 2014-2015 was found to be fairly higher than the situation just five years prior: in 2009-2010, their share was just 34.2 %. The study also revealed that public sector R&D was led by defence-related and the fuel industries, while private-sector R&D was dominated by drug/pharmaceuticals and transportation.

    The survey compared the levels of participation of the government, business enterprises and institutions of higher education in R&D in India with those in 13 other countries: Australia, Canada, China, France, Germany, Italy, Japan, Mexico, Russia, South Korea, Spain, the UK and the US.

    The government's contribution in India sticks out when compared to these economies. According to the survey, the India government had the largest share of national GERD. On the flip side, the country hit the bottom in the 'participation of higher education institutions' bracket. Government participation in R&D in the other countries ranged from 7% in the UK to 38 % in Mexico, against India's 55%. In contrast, the share of institutions of higher education in R&D varied from 7% cent in China to 40% in Canada, against India's feeble 4%.

    Further, as much as 81.3% of R&D expenditure incurred by central government sources came from just eight major scientific agencies in 2014:

    Women's participation in extramural R&D projects has increased significantly – from 13% in 2000-2001 to 29% in 2014-2015. In absolute numbers, 1,301 women principal investigators had availed extramural R&D support during 2014-2015 as against just 232 in 2000-2001.

    In terms of personnel directly engaged in R&D activities, there were 39,388 women (13.9%) on April 1, 2015, out of a total of 282,000 (2.82 lakh).

    The NSTMIS also found that of the 27,327 doctorates awarded in the country in 2014, 15,246 (56.4%) were from science and technology disciplines. In the same year, India awarded the third-most number of S&T PhDs, after China (30,017) and the US (26,520).

    The number of researchers per million people in India has more than doubled, from 110 in 2000 to 218 in 2015. India's R&D expenditure per researcher was Rs 1,78,000 in terms of the purchase parity price on a dollar basis. This was higher than that of Russia, Canada, Israel, Hungary, Spain and the UK.

    The extramural R&D support by central government agencies increased from Rs 13.58 billion (Rs 1,358 crore) in 2009-2010 to Rs 20.02 billion (Rs 2,002 crore) in 2014-2015. Its share in the national gross expenditure on R&D was 2.3% during 2014-2015. The DST and the DBT were the two major players, contributing nearly 66.4% of the extramural R&D support in the country. The academic sector received 58% during 2014-2015.

    India spent 0.69% of its GDP on R&D in 2014-2015, Brazil, Russia, China and South Africa (the other members of the BRICS group) spent 1.24%, 1.19%, 2.05% and 0.73% respectively. The fraction was less than 0.5% for Pakistan and Sri Lanka, at 0.29% and 0.1% respectively.

    The number of scientific publications has been on the rise. According to the SCOPUS database, India's research output increased from 62,955 papers in 2009 to 106,065 papers in 2013. According to the Science Citation Index (SCI) database, Indian researchers published 39,672 papers in 2009 and 52,165 papers in 2015.

    Per an NSTMIS analysis, the SCOPUS and SCI growth rates of publications stand at 13.9% and 7.1% for the period 2009-2013 against the global average of 4.4% and 4.1%, respectively. Further, according to the SCI, India's share in global research publications increased from 2.2% in 2000 to 3.7% in 2013; according to SCOPUS, it went from 3.1% in 2009 to 4.4% in 2013. SCOPUS also ranked India sixth in the world in the number of scientific publications, ahead of France, Spain, and Italy during 2013.
    BRICS lead the way in taking millions out of poverty (БРИКС лидирует в выводе миллионов из бедности) / Saudi Arabia, January, 2018
    Keywords: expert_opinion, economic_challenges, social_issues, rating
    Saudi Arabia

    China and Russia last week lambasted the validity of a 20-nation international summit on North Korea, held in Canada, to which neither Beijing nor Moscow was invited. The intervention highlights the growing geopolitical interventions of combinations of the BRICS nations (Brazil, Russia, India, China and South Africa) on select global issues, from Syria to Korea.

    But while the BRICS cooperation agenda has expanded significantly in the past decade, security spats between the bloc — not least between China and India — have prevented the emergence of more strongly aligned political interests. This was illustrated by the attendance of India at the Canadian summit alongside the US and other leading Western powers.

    While the emergence of the BRICS as a collective power in international security therefore has clear limitations, where they have already made a game-changing impact is in the economic realm. The bloc accounted for 23 percent of global GDP in 2016, up from 12 percent a decade ago, and at last year's annual BRICS summit in China they discussed how they could become even bigger players in trade and investment.

    Beijing, especially, wants the five powers to lead a campaign for economic globalisation in the face of signs, especially from the Trump administration, of greater protectionism. China's advocacy of this agenda reflects, in large part, that it has been a beneficiary of globalisation, and its commitment to inclusive growth.

    This agenda is especially pertinent given that the world is at a potentially pivotal moment in the battle against global economic inequality. World Bank research indicates that, for the first time in two centuries, overall global income inequality appears to be declining.

    The BRICS, which account for more than 40 percent of world population, have been the key drivers of this historic movement toward greater overall global income equality. The collective economic growth and large populations of India and China, in particular, have lifted a massive number of people out of poverty — an estimated 600 million between 1981 and 2004 in China alone.

    This has catalyzed what Branko Milanovic, who co-authored the World Bank research with Christoph Lakner, asserts is the "profoundest reshuffle of individual incomes on the global scale since the Industrial Revolution."

    At the same time, however, there is an opposing force — growing income inequality in many countries, an issue that has become increasingly politically salient. It is rising inequality in developed markets that draws most attention. In the US, for instance, concerns over inequality and stagnant living standards have led to surging support for populist politicians such as Donald Trump. Brazil, Russia, India, China and South Africa are not yet a collective power in international security, but they have had a game-changing effect on global income inequality.

    Andrew Hammond

    These two opposing forces, like tectonic plates, are pushing against each other. While the net global trend for the past 200 years has been toward greater overall income inequality, there is now significant, growing evidence since the turn of the Millennium that the "positive effect" of growing income equality between countries, spurred by the development of the global South, is superseding the "negative effect" from increasing inequality within nations.

    Monumental as this could be, however, the picture is not yet clear. In part, this is because data sources on income across the world are inevitably imperfect, which means conclusions are hedged with uncertainty.

    While more proof is therefore needed to judge whether this economic phenomenon is robust and sustainable, what is certain is that the overall lot of the South has improved dramatically, as exemplified by the BRICS over the last generation. The most prominent beneficiaries have been a much heralded "new" middle class — estimated to be as large as a third of the world's population -— disproportionately located in key Asian emerging economies such as China, India and Indonesia.
    The World Bank research also indicates that much of the bottom third of the global income hierarchy have also generally benefited too. As in China, hundreds of millions of people have escaped absolute poverty.

    However, not all the South has shared fully in this success story. Much of Africa, and some of Latin America, have generally not benefited as much as Asia.

    With the current economic challenges in China and some other key emerging markets, including Brazil and South Africa, it is unclear whether the development of the global South has enough momentum to keep driving a more equitable world order. This will depend, largely, on the same twin issues of whether emerging markets generally continue growing robustly, and whether the trend toward rising income inequality within countries is sustained.

    On the first issue, the trajectory of the global economy will probably continue to shift toward the South, and for the foreseeable future many key emerging markets will probably remain in robust shape. However, the recent remarkable wave of emerging market growth of the last generation appears now to be decelerating, and the global transformation it has produced in recent years may not be repeated.

    On the latter, it is not set in stone that ever-growing income inequality within countries will continue, especially if there is political and popular will to address it. However, the debate over what long-term reform agenda should be undertaken to tackle this problem is contested by the left and right across much of the world.

    Taken overall, the BRICs are driving what could be the first period for two centuries of sustained movement toward greater global income equality. But the fragile process, fuelled by globalisation, could yet go into reverse if emerging market growth decelerates faster than anticipated or income inequality within countries accelerates, undercutting efforts to foster inclusive growth.
    Taxation: Some lessons from BRICS for Nigeria (Налогообложение: несколько уроков для Нигерии от БРИКС) / Nigeria, January, 2018
    Keywords: expert_opinion, social_issues, economic_challenges, rating
    Author: Seun Olamilekan

    In 2010, South Africa was invited to join BRIC (Brazil, Russia, India, China) and many wondered why Nigeria was not picked ahead of South Africa, considering its population size, abundant oil and gas resources and strong growth prospect. Today, BRIC has become BRICS (Brazil, Russia, India, China, South Africa), a group of five newly industrialised or developing economies which sought to have closer economic, financial and political ties among themselves and to use their combined influence to shape the world's socio-economic and financial narratives. The countries of BRICS are drawn from four continents, namely, South America, Europe, Asia, and Africa, and they are the largest or among the largest economies in each of their regions.

    Indeed, Nigeria could have learnt and benefitted a great deal from membership of the association, particularly in the area of taxation. Only recently, BRICS's tax authorities signed a taxation cooperation memorandum. Among other things, the agreement is expected to foster greater cooperation among members on taxation efficiency, capacities, policies, collection, improving consultation procedures on taxation, and encouraging information exchange on taxation. These are areas Nigeria could have gained critical insight and knowledge.

    Nigeria continues to struggle with its tax system and administration. The country's tax authorities are still burdened with obsolete tax laws, dearth of technology in tax administration and consequently inefficiencies in tax collections and poor compliance levels. The Nigerian tax system, according to experts, is still largely "characterised by complex distortions and inequitable taxation laws" fostered by a "multiplicity of rates and unnecessary exemptions." Many of the country's tax laws are obsolete and out of tune with current reality. It is not surprising therefore that the country's tax-to-GDP ratio is a mere six per cent. BRICS' economies, on the other hand, earn an average tax-to-GDP ratio of 24 per cent (Russia's tax collection is 19.5 per cent of its GDP, China 20 per cent, India 17.7 per cent, South Africa 26.9 per cent, and Brazil 34.4 per cent). PricewaterhouseCoopers (PwC) tagged Nigeria's six per cent "abysmal".

    However, Lagos State seems to have taken a few pages out of BRICS' tax book and the state is reaping the benefits. Aside from the deployment of technology, the state is working with its House of Assembly to upgrade its tax laws for simplicity, equity, certainty, relevance, and efficiency. Recently, a public hearing was held by the state House of Assembly on a bill to repeal the 17-year-old Land Use Charge Law and enact a new one that will consolidate all property taxes in the state (tenement rate, neighbourhood improvement tax, land rates) into one tax, the Land Use Charge Law.

    The legislators promised at the hearing to undertake an impact assessment of Lagos State tax laws with a view to amending and or enacting new ones, where necessary, to meet the present and urgent tax needs of the state. The new Land Use Charge Law was comprehensive enough to satisfy the basic requirements of a good tax. By collapsing the multiple property tax law in the state into one law, the government has simplified the law. The new law will be equitable and standardised; assessment of tax due is to be calculated based on the property type and the market value, unlike the old law where valuation is arbitrary and the taxpayer is not certain of his tax obligations. All this, coupled with deployment of e-filing, is expected to help the efficiency of the law.

    Lagos already boasts of about 30 per cent tax compliance rate. This is far better than the country's six per cent and even higher than BRICS' average of 24 per cent. It is expected that the new tax administration, with up-to-date tax laws, will further boost this compliance figure and provide the Lagos State Government with additional resources to tackle its developmental agenda.

    But most importantly, there appears to be a clear trust by residents in the state government to deploy tax revenue judiciously. For long, Lagos residents, and indeed Nigerians, had complained that the impact of government was hardly felt. That is no longer the case in Lagos. The state government has demonstrated good faith and has shown that it can be trusted with taxpayers' money to deliver people-oriented and impactful projects. The government is investing in a modern and efficient transport system: rail (Okokomaiko-Marina; Iddo Terminal-Alagbado); Automated Guideway Transit (Ikoyi-VI-Ajah line); Bus Rapid Transit plying routes across the state; channelisation of the waterways (construction of jetties and provision of ferry services); road rehabilitation, upgrades and maintenance. It is equally investing heavily in social infrastructure; upgrading schools, health facilities and working hard to protect the environment.

    Compliance remains a major challenge to unravel for Nigeria. At the 2017 Stanbic IBTC/Standard Bank West to East Africa Investors' Conference, the Minister of Finance, Mrs. Kemi Adeosun, told the audience that the country's "tax burden is not being shared fairly… being carried by those who are least able to afford it." According to Adeosun, the country "only has 14 million taxpayers out of about 70 million people that are economically active." And even at that, a "majority of that 14 million are people who have their taxes deducted at the source, largely lower income workers." Very few voluntarily file tax returns.

    The hallmark of a strong tax system/administration includes its simplicity for citizens to understand their tax obligations; equitability: relevance to reflect current realities; efficiency; enforceability, with mechanisms for compliance; and transparency, free from ambiguities and uncertainties. The country's tax system, unfortunately, fails many of these basic criteria. The BRICS' economies have very dynamic tax systems that are constantly reviewed to ensure relevance. As well, they deploy functional electronic filing systems to ensure standardisation and efficiency.

    The World Bank/PwC report, Paying Taxes 2018, which analysed and compared tax systems in 190 countries, shows that Nigeria has a lot to gain by learning from the BRICS' economies in terms of consolidation of its taxes to remove multiplicity and extensive use of technology for efficiency, which will no doubt help boost compliance. Paying Taxes 2018 shows that businesses in China pay taxes on a total of nine items, including profit tax, labour tax, and other tax payments. In Russia, it is nine taxable items; South Africa seven items; Brazil 10 items; and India 13 items. In Nigeria, businesses contend with a whopping 59 taxable items. The Director of Research and Advocacy of the Lagos Chamber of Commerce and Industry, Dr Vincent Nwani, at a forum organised by the Initiative for Public Policy Analysis, revealed that his group counted "up to about 80 different types of taxes" in some sectors. The effect, Nwani said, is to force many businesses (and individuals) to evade tax payments by going "invisible".

    Expectedly, the average hour spent on filing tax returns on the many taxes in Nigeria is equally high; it takes 360 hours or 15 days. In Russia, 168hrs/seven days is all a taxpayer needs; 207hrs/8.6 days in China; 210hrs/8.7 days in South Africa; and 214hrs/8.9 days in India.

    At 59 taxable items, Nigeria has one of the highest tax charges in the world. This is a major contributor to its regular poor performance in the yearly Ease of Doing Business index. Thus, an urgent reform is needed to consolidate the multiple taxes and streamline them for convenience and simplicity.

    The method of computing many taxable items in the country's tax system is often opaque and needs to be standardised. Many state and local council levies have no standard rate or valuation method; the charges are often arbitrary. For instance, tenement rates, ground rents, and property taxes are often charged without recourse to the property in question. Thus, a commercial property and another residential one in a neighbourhood may be charged similar property rates or two properties of equal status in a neighbourhood may attract different rates.

    When a "tax burden is not shared fairly" and "only 14 million out of 70 million" pay taxes, then such a tax system lacks equity and clearly negates the basic 'ability to pay' principle of taxation. Such a tax system needs strengthening. Brazil, India and China operate a progressive tax system, where a taxpayer's tax burden rises with income. So, those who earn more pay more.

    Tax regulation must be cost effective to both the government and the taxpayers. The BRICS economies regularly streamline their tax systems, administration, and procedures to make them more efficient and ensure everyone is captured in the tax net.

    No doubt these initiatives will increase tax revenue in the short term. However, long term gains will only be possible if the tax system is reformed alongside technology adoption.

      Economists are playing catch-up with economic reality (Экономисты играют в догонялки с экономической реальностью) / South Africa, January, 2018
      Keywords: economic_challenges, rating
      South Africa

      The news that China's GDP growth in 2017 was 6.9 per cent as opposed to the government target of 6.5 per cent and the January 2017 international Monetary Fund (IMF) projection of 6.5 per cent is merely the latest in a sequence of economic data releases that has pushed economists to play catch-up with economic reality.

      China is also not the only BRICS member county to see economic data exceed expectations.

      Brazil has surprised by how robust its economy has performed despite the ongoing corruption allegations and the stalled political reform agenda.

      Russia has exceeded expectations both in terms of growth and low inflation, while India has started to recover from the high-denomination rupee withdrawal of November 2016. South Africa has recently seen accelerating growth after a slow first half.

      The IMF in January 2017 forecast that Brazil would only grow by 0.2 per cent in 2017. Full year figures have not yet been published, but the Brazilian economy expanded by 1.4 per cent y/y in the third quarter of 2017, following a 0.4 per cent y/y gain in the second quarter and better than the consensus forecast of 1.3 per cent.

      It is the fastest growth rate since the first quarter of 2014, boosted by a jump in household consumption spending and exports.

      The IMF in January 2017 forecast that Russia would only grow by 1.1 per cent in 2017. Full year figures have not yet been published, but the Russian economy expanded by 1.8 per cent y/y in the third quarter of 2017, following a 2.5 per cent y/y gain in the second quarter and better than the consensus forecast of 1.6 per cent.

      The economy was boosted by a jump in household consumption spending and exports on the expenditure side and by farming and manufacturing on the production side.

      Agriculture advanced by 3.8 per cent y/y in the third quarter after a small 0.1 per cent y/y rise in the second quarter.

      The export performance was particularly robust as the oil price recovered from the January 2016 lows. That meant Russia's trade surplus widened by 28.4 per cent y/y to US$ 11.52 billion in November, which was above market expectations of a US$ 11 billion surplus.

      In the first eleven months of 2017, the trade surplus widened sharply to US$101.63 billion from US$ 78.5 billion in the same period of 2016.

      The IMF in January 2017 forecast that India would grow by 7.2 per cent in 2017, but full year growth in 2017 is unlikely to exceed 6.5 per cent as the structural reforms have had a larger than expected impact.

      Full year figures have not yet been published, but the Indian economy expanded by 6.3 per cent y/y in the third quarter of 2017, following a 5.7 per cent y/y gain in the second quarter, which was the lowest growth rate in nearly three years. A rebound in investment and inventories offset a slowdown in both private and public spending.

      Fourth quarter growth should exceed expectations as the November 2016 disruption falls out of the comparison period. India's industrial production surged by 8.4 per cent y/y in November 2017 easily beating market expectations of 4.4 per cent.

      It was the steepest increase in industrial production since June 2016, boosted by strong growth in manufacturing, which soared by 10.2 per cent y/y.

      The IMF in January 2017 forecast that South Africa would grow by 0.8 per cent in 2017. Full year figures have not yet been published, but the South Africa economy expanded by 1.3 per cent y/y in the third quarter of 2017, following a 0.9 per cent y/y gain in the second quarter.

      The third quarter growth was the fastest since the first quarter 2015 and was boosted by exports and household consumption expenditure.

      Fourth quarter growth is likely to exceed 2 per cent y/y as South African bulk export volumes rose by 4.9 per cent in 2017 to a new record of 171.3 million tons, while real retail sales surged by 8.2 per cent y/y in November for the highest y/y growth rate since June 2012.

      The higher than expected growth in 2017 therefore sets up these BRICS economies for an even higher growth rate in 2018.

      This is especially so as economists are having to do the same catch-up in their forecasts for developed economies as shown by the consensus forecasts from UK-based Consensus Economics.

      The US for instance has had its 2018 GDP growth forecast increased from 2.4 per cent in January 2017 to 2.7 per cent, while Germany has moved from 1.8 per cent to 2.3 per cent over the same period.

      France has been upgraded to 1.9 per cent from 1.6 per cent, while Japan's GDP growth forecast has improved from 1.1 per cent to 1.4 per cent. Only the UK has remained stagnant at 1.4 per cent.

      The stronger developed countries' growth bodes well for BRICS growth as most economies need improved exports to boost their economies in 2018.

      Another BRICS country cracks down on virtual currencies (Еще одна страна БРИКС закручивает гайки по отношению к криптовалютам) / Russia, January, 2018
      Keywords: digital, economic_challenges

      Brazil has joined fellow BRICS members China and India in taking a tough line on cryptocurrencies by banning them from the country's financial markets.

      The South American country's securities regulator has prohibited local investment funds from buying digital cash, Reuters reports. Cryptocurrencies cannot be considered financial assets, the regulator ruled.

      Earlier in December, Brazilian authorities published a warning about the risks associated with digital currencies. Brazil has had seven public hearings on bitcoin before finally cracking down on it.

      "According to a study by Credit Suisse, Brazil's productivity has not risen since 1981, and it's not going to rise if the government keeps banning everything that can make us more productive," Brazilian media commentator and popular YouTube blogger Raphaël Lima said, criticizing the decision. "And with an official 12.4 percent unemployment rate, anything that can generate a job should be welcomed with wide-open arms."

      China has already banned initial coin offerings and some other operations involving digital currencies.

      Bitcoin users in India were facing difficulties with deposits and withdrawals after the country's banks blocked all crypto-trading last week. India's Finance Ministry has warned investors about the risks of trading in cryptocurrencies such as bitcoin, branding the 'virtual currencies' as something akin to a Ponzi scheme.

      Russia is preparing legislation to regulate cryptocurrencies to be introduced this year. The Finance Ministry suggested in December that mining bitcoin and other forms of online money would be illegal, but buying them or trading them would remain within the law.

      World of work
      Social policy, trade unions, actions
      BIM-Ready 3D Models From Point Clouds to Improve BRICS' Construction, Management (3D модели для BIM из облака точек для улучшения строительства и менеджмента в БРИКС) / Russia, January, 2018
      Keywords: innovations

      The construction industry is a major contributor towards India's GDP, both directly and indirectly. It employs millions of people, and any improvements in the construction sector affect a number of associated industries.

      Scientists from Russia, China and India are developing software to convert 3D laser scanner point clouds into BIM-ready 3D models. The project won the BRICS STI Framework Programme contest, a competition among the BRICS countries in the field of science, technology, and innovation.

      The BRICS STI Framework Programme aims to support excellent research on priority areas which can best be addressed by a multinational approach. The initiative should facilitate cooperation among the researchers and institutions in the consortia, which consists of partners from at least three of the BRICS countries.

      Specialists from Peter the Great St. Petersburg Polytechnic University, the Russian Academic Excellence initiative university, East China Normal University and the Indian Institute of Technology, Roorkee, are developing software to analyze 3D images of infrastructure facilities, prepare cross sections and etc. Data are gathered using laser scanning technology and photography. The software will be useful at all stages of the facilities' life cycle, including finding defects and identifying non-compliance of constructions with project design, as well as for computer engineering before making repairs.

      Laser scanner point cloud data allows engineers to visually analyze the building site in 3D without visiting it. Master the workflow for converting 3D laser scanner point clouds and photos into Building Information Modeling (BIM) —ready 3D models, it helps build an effective and reliable workflow, captures large urban areas, and supports planning and design needs of the housing sector which is at a tipping point and will be the economy's next big growth driver.

      This winner of the competition of the BRICS countries in the field of science, technology, and innovation (BRICS STI Framework Programme winner) will give a tailwind and additional support to expanding affordable housing in Asia's third-largest economy.

      With laser scanner point cloud data, engineers now have a way to visually assess a building site in 3D without going there in person. It's the perfect reference for viewing the state of the building site, and it's also a great tool for checking if the project has been completed according to the plan. But it really starts to shine when it gets converted into data-rich geometry and BIM tools, like the new software Russian, Chinese and Indian researchers from these counties' leading universities are set to develop.

      Such technological advancements, jointly developed by Peter the Great St.Petersburg Polytechnic University, Indian Institute of Technology Roorke and East China Normal University may increase the pace and potential of the sector, and act as a growth catalyst. Among its many positive influences, a new construction technology and the entry of educated international infrastructure players is enhancing and strengthening the skilled workforce, across a vast array of different skill sets.

      "By working with Indian and Chinese colleagues, we are developing software which will enable us to obtain information on the qualities of materials and texture of objects and their changes by analyzing laser scanner point clouds. Our developments may also be used to monitor and repair road infrastructure, as well as to preserve historic and cultural heritage sites," says Vladimir Badenko, professor of the Institute of Civil Engineering, Peter the Great St. Petersburg Polytechnic University (SPbPU).

      The international team of scientists is developing tools for processing "raw" laser scanning data. At the first stage, the information on an object is converted into point clouds of the required density. To visualize them, specialists prepare projections combined with photography, which significantly improves the segmentation of an image. Using these projections to model facilities, it makes it possible to successfully display all 3D-data on a plane (monitor). Therefore, the quality and speed of processing improve. Furthermore, it allows a more flexible setting of the scale, and as precise an image as possible can be obtained without "shadows".

      Supercomputer Center "Polytechnic" at Peter the Great St. Petersburg Polytechnic University.
      It should be noted that a considerable amount of data is processed using the facilities of the Supercomputer Center "Polytechnic" at Peter the Great St. Petersburg Polytechnic University.

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