South Africa
Author: Sourajit Aiyer
Source: www.huffingtonpost.co.za

Since the commodity-cycle slumped at the start of the 2010s, some started debating the inclusion of South Africa in BRICS.

Can #SEXIT follow #ZEXIT in South Africa, or can the reverse of #SEXIT occur

In 2017, I attended a conference where a former South African finance minister was a guest. It was interesting to hear his views on the South African economy. This was just after headwinds hit the BRICS, and to many, the BRICS story seemed circumspect.


But by then, India, Brazil and China were executing hard policy decisions; and markets were responding to the probability of improvement. India's Nifty rose 17 percent from July 2016 to June 2017, China's SSE Comp rose ~10 percent and Brazil's BVSP rose 15 percent. But South Africa's All Share was flat as controversies made its future unclear.


Since the commodity cycle slumped at the start of the 2010s, some started debating the inclusion of South Africa, Brazil and Russia in BRICS, and whether they were draggingthe BRICS story. Many quoted Goldman Sach's Jim O'Neill, who had excluded it when he coined BRIC in 2001. As per Okun's Misery Index using IMF WEO data, South Africa and Brazil from the BRICS had the worst scores in 2016, but Brazil was taking policies to recover.


High-income inequality made South Africa's addressable consumer base proportionately smaller. It had not scripted gains by being in BRICS, as EXIM Bank data showed its share within BRICS trade remained flat at 6 percent from 2011-2015. Its share within BRICS-ex-China trade was also flat. While Brazil and Russia shared similar fates, Russia's location meant shared geo-economic interests with China, while Brazil was effecting changes.


But South Africa did not evince confidence. So, while the governments included it, the financial economy kept wary. Hence, only 50 portfolio funds had over 90 percent allocation of their corpus to South Africa in early-2017, as per Bloomberg. India had 1,000 while Brazil had 3,000. Even Russia had 170.

One can now coin those debates as #SEXIT, i.e. should South Africa exit the BRICS? Quips aside, the question now after #ZEXIT (exit of Jacob Zuma) is what would happen to calls for #SEXIT? Hope is built on President Ramaphosa to reset South Africa, which would impact the BRICS story too. In this objective, it might be relevant to look at what Brazil and India did and how they match with Ramaphosa's plans. That can give a clue about the expectations of #SEXIT?

Ramaphosa's immediate bias for investment to drive growth seems correct. He is also focusing to revive small-businesses, with plans to review regulations and create a fund. Fiscal stability

Both Brazil and India stressed on reducing fiscal deficit, a key metric for rating agencies and investors. Brazil's Temer is taking a tough decision to trim social-security, though it is debated if this bill would be finally passed. Even India controlled subsidies through the Direct Benefit Transfer. Both hiked gas prices, another tough political call.

Ramaphosa faces a tricky choice. He plans to invest in infrastructure, internships to unemployed and may forego revenue due to incentives planned in the economic zones. But his public finances are already stretched, ergo a controversial wealthy tax hike in early-2017. With its credit rating turning south, Ramaphosa will have to expand his fiscal resources to meet his investment plans while holdingthe deficit at 4 percent to impress rating-agencies.

Growth

As export growth hit in a sluggish economy (global GDP grew 1 percent CAGR from 2012-2016, as per IMF) and fiscal cuts hit investments, consumption drove growth in both Brazil and India. Even China is moving to consumption. An accommodative monetary policy in Brazil helped. Even India effected rate-cuts till a year ago. As cuts hit economic activity with a lag, their effect should sustain.

As South Africa has high-income inequality, expanding consumption across the broad-base is a structural challenge. Ramaphosa's immediate bias for investment to drive growth seems correct. He is also focusing to revive small-businesses, with plans to review regulations and create a fund. A revival augurs well for wage growth of their current employees, in turn, driving consumption. But if their idle capacity limits the scope for wage-growth, the pressure will be entirely on new job creation to push incomes and growth.

People

Job creation will depend on skills, not just business. India ramped up skill-development centres along with its rural-employment programme so that it built long-term capabilities and job-creation. Brazil's Exchange Bureau is attracting quality faculty from abroad, to enhance its human capital. South Africa is younger (median age 26 vs. India's 27, Brazil's 31 and China's 35, as per Statista), hence a higher demographic bonus. But its skills should match demand.

Ramaphosa aims to strengthen black empowerment. But this has to be productive, and not just participative, for long-term results. Ramaphosa should drive South Africans' savings culture given the skewed wealth concentration. India and China rank much higher in savings. So they continue consumption even during unemployment.

If Ramaphosa can balance policy-priorities amid his constraints, it would give confidence for the probability of improvement, reaffirm South Africa as a key emerging market and drown calls for SA to exit the Brics. Corruption

India's Modi took a tough call to curb the corruption of black-money and tax-evasion through policies on demonetisation, GST and real estate. Brazil is combating corruption with the probes on money-laundering. Ramaphosa plans to remove corruption in large projects through a presidential panel. But if he can also remove the corrupt elements from governance and cronies, that would itself give a huge boost of confidence to rating agencies.

External situation

This is set to improve (global GDP is expected to grow by 5 percent CAGR from 2016-2021, as per IMF). But Ramaphosa's ability to ride that tailwind to push South African exports can be slowed by the protectionist USA and a calibrating China, its main partners constituting ~16 percent of exports, as per WITS data. This will mean trying to crack new markets, preferably in the continent, to drive export growth?

Ramaphosa's plans face fiscal and structural constraints. But while recovery takes time, policy clarity is awaited now. Finance is as much about confidence as about fundamentals. #ZEXIT has created a positive bias in some sectors.

If Ramaphosa can balance policy priorities amid his constraints, it would give confidence for the probability of improvement, reaffirm South Africa as a key emerging market and drown calls for #SEXIT. With #ZEXIT renewing investor interest, it might just be an opportune time for a complete reversal of #SEXIT to occur!

United Kingdom
Source: www.securingindustry.com

Today, the Transnational Alliance to Combat Illicit Trade (TRACIT) participated in a meeting on illicit trade and counterfeiting, co-hosted by the European Commission's DG Trade and the OECD. During the event, the OECD presented its latest findings on Intellectual Property Rights (IPR) enforcement practices in the "BRICS" economies of Brazil, Russia, India, China and South Africa.

The EU Joint Research Center also presented a study that provides empirical estimates for the impact of counterfeiting practices on the economic and innovative performance of companies. The study crucially relies on firm-level databases as a source of information. Among its conclusions is the fact that counterfeits affect predominantly the best-performing digital companies, i.e., those with greater profitability, higher revenue, more intangible assets and more patents. At the same time that BRICS countries are playing a growing role in global economic development, studies have shown that these countries consistently underperform in their protection of IPR, especially with regard to counterfeiting and copyright piracy.

"The OECD study is timely considering BRICS Leaders' commitment to safeguard intellectual property rights at the 2017 Xiamen Summit," said Mr. Stefano Betti, TRACIT Deputy Director-General. "However, it is clear that much more needs to be done to prevent IP theft and we encourage BRICS countries to double down on this important issue at their upcoming July Summit in Johannesburg."

BRICS countries are, however, increasingly recognizing the value of IP and the need to protect it. In August 2017, BRICS Trade Ministers agreed to promote exchanges and cooperation on IPR legislation and enforcement in order to create favorable conditions for trade and innovation-driven economic development. This was followed up with the adoption of the BRICS IPR Cooperation Guidelines at the 9th annual Leaders' Summits in Xiamen, China.

"Given the important role that emerging economies, including BRICS, are playing in the global markets for fake goods, their involvement and active leadership in countering illicit trade is essential," said Mr. Betti. "The OECD, the European Commission and members of the OECD Task Force on Countering Illicit Trade have a critical role to play in both driving and supporting progress by BRICS countries to combat illicit trade. Today's discussion is an important step in that direction."

TRACIT is an independent, private sector initiative to drive change to mitigate the economic and social damages of illicit trade by strengthening government enforcement mechanisms and mobilizing businesses across industry sectors most impacted by illicit trade.

United States
Source: www.youtube.com

How does NATO compare to BRICS? Which one has a better economy? Which one spends more on military?

Russia
Source: www.mid.ru

Question: Your planned African tour in March 2018 includes five countries. It will be the most important visit by a Russian Foreign Minister to Africa in several decades. What is the goal of your visit?

Sergey Lavrov: Russia's foreign policy is multi-directional. The African direction is one of our priorities, as the updated Foreign Policy Concept, which President of Russia Vladimir Putin approved in November 2016, says. We appreciate Africa's contribution to the development of a fairer and more democratic polycentric world order and to the settlement of current problems.

Russia actively contributed to the independence of African countries and the development and strengthening of their states. Today, we maintain friendly relations that are spearheaded into the future. We are promoting our political dialogue, including the exchange of visits at the high and top levels, as well as trade and economic cooperation and relations between our parliaments.

The goal of my upcoming visit to Sub-Saharan countries – Angola, Zimbabwe, Mozambique, Namibia and Ethiopia – is to promote multifaceted ties and find new areas of cooperation in trade, the economy, research, technology, culture and other areas. We hope to have in-depth exchanges of opinion on a wide range of global and regional issues, such as counterterrorism and conflict settlement, including in the Sahara-Sahel region, the Horn of Africa and in the Great Lakes region.

Russia attaches much importance to strengthening its ties with regional and subregional African organisations, primarily the African Union. I plan to have a meeting with Chairperson of the African Union Commission Moussa Faki Mahamat as part of the implementation of the 2014 Memorandum of Understanding between the Russian Foreign Ministry and the African Union Commission on the Establishment of a Mechanism for Bilateral Consultations. We will discuss Russia-AU relations and the African Union's role in finding the best possible solutions to the numerous challenges and threats that are facing the world.

Question: What is the present state of Russian-African relations across the political, diplomatic, economic and cultural spheres? Are you satisfied with the situation?

Sergey Lavrov: As I said, Russia's relations with African countries are traditionally friendly and based on the principles of equality and mutual respect. They also have considerable potential for development in the political, trade, economic, and humanitarian spheres, as well as other areas.

Our political ties in particular are developing dynamically. We maintain close relations with South Africa, which is our strategic partner and a member of the BRICS group. Our presidents regularly meet on the sidelines of BRICS summits and at other multilateral platforms.

Chair of the African Union and President of the Republic of Guinea Alpha Conde made an official visit to Russia last year. Mr Conde previously visited Russia as a guest of the St Petersburg International Economic Forum. Last year, Deputy Prime Minister and Presidential Plenipotentiary Envoy to the Far Eastern Federal District Yury Trutnev made working visits to Angola, Namibia and South Africa.

Ties are actively developing between our parliaments. Large delegations from many African countries attended the 137th Assembly of the Inter-Parliamentary Union, which was held in St Petersburg in October 2017. The speakers of the two houses of the Russian parliament met on the sidelines of that event for talks with their colleagues from Botswana, Burundi, Namibia, Rwanda, the Seychelles, Uganda, Equatorial Guinea and South Africa.

Interaction between our foreign ministries is expanding. Last year, 12 foreign ministers visited Russia. Deputy Foreign Minister and Special Presidential Representative for the Middle East and Africa Mikhail Bogdanov is doing much to promote links with African countries. Regular consultations are held between our foreign ministries. We also maintain close ties at the UN. I am pleased to say that the majority of African countries are interested in strengthening political dialogue with Russia and in coordinating our views on the main issues of the present time.

We are deepening humanitarian ties. The Russian Centres for Science and Culture are working fruitfully in Zambia, Congo, Tanzania and Ethiopia. They hold seminars, conferences and advanced training sessions for African specialists in Russian philology, Russian language festivals, roundtables and open lessons. Our embassies in Africa regularly organise themed exhibitions and show Russian films. A cross-cultural year was held between Russia and South Africa in 2016−2017.

Another traditional area of cooperation is the training of national personnel. The Russian Government annually allocates federal scholarships for the training of African students at Russian universities. In 2017 alone, more than 1,800 African young people studied in Russia on federal scholarships. Overall, 15,000 young people from Africa are studying in Russia, including some 4,000 at state-financed departments and the rest under contracts.

Our economic cooperation is not as far advanced as our political ties. However, it has improved over the past few years. Our trade with Sub-Saharan countries amounted to $3.6 billion in 2017, compared to $3.3 billion in 2016 and $2.2 billion in 2015. Russian companies are working in the exploration, mining, energy and petrochemical sectors in Africa. They conduct exploration, develop oil and gas deposits, take part in national programmes to build gas pipelines and gas storage facilities, provide technical maintenance for hydroelectric power stations, as well as carry out feasibility studies for the construction of nuclear power plants and nuclear research and technology centres. Cooperation in high technology is also developing. There are good prospects for partnership in transport, industry and agriculture.

We believe that we should promote joint activity in order to make broader use of the huge potential of Russian-African trade and investment cooperation.

Question: Africa is a huge continent that still requires economic development. Its active demographic growth and abundance of natural resources are creating conditions for the emergence of probably the world's biggest market in the next few decades. Russia is an advanced industrial country with a relatively small population and considerable natural resources. How should Russia and Africa develop mutually beneficial economic ties? What economic branches, or to be more precise, what goods and services can make up a foundation for such relations?

Sergey Lavrov: I have already partially answered this question. Africa is rich in raw material resources, including those that are required for high technology and for moving to a new technological pattern.

We have a number of examples of productive cooperation in this area. Alrosa is involved in diamond mining in Angola's largest Katoka deposit. In Guinea, RUSAL is mining bauxite at the Friguia deposit and works under the Dian-Dian concession agreement. RUSAL owns 85 percent of Alscon, a Nigerian aluminium company. A consortium of a number of our companies, including the Vi Holding investment and industrial group is developing Darwendale, a project on one of the largest deposits of platinum-group metals in Zimbabwe. Rosneft has won a tender for gas prospecting on the continental shelf in Mozambique. Nordgold is mining gold in Burkina Faso and Guinea, while Global Resources is involved in geological prospecting for gold in Mali and uranium in Niger. GeoProMining is involved in extracting and processing of titaniferous sands in Guinea-Bissau, RENOVA is mining manganese ore in South Africa, while Severstal is taking part in developing a phosphate deposit in Guinea-Bissau. These and other examples allow us to look to the future with optimism.

Apart from mining, Russia and African countries are cooperating on high technology. Rosatom is considering a number of projects that are of interest to Africans, for instance the creation of a nuclear research and technology centre in Zambia. Nigeria has a similar project. There are good prospects for cooperation with Ghana, Tanzania and Ethiopia. Talks are underway on the construction of a nuclear power plant in South Africa.

Again, we will do our best to raise trade and economic ties to a high level of political cooperation.

Question: Many African states favour general UN reform. They are particularly enthusiastic about the expansion of the UN Security Council and want to have two permanent seats there. Do you know about this? What is Russia's attitude to this issue?

Sergey Lavrov: Naturally, we are well aware of Africa's consolidated position on reforming the UN Security Council, which was formulated in the Ezulwini Consensus in 2005.

For our part we agree that Africa should be duly represented in the UN Security Council, in particular because African issues dominate the UN agenda. We are prepared to help Africans expand the Council based on a model that will enjoy the most support of the UN member states.

We hope the African Union will continue adhering to the common approach formulated in the Ezulwini Consensus. This is a reliable guarantee that African interests will not be neglected as has happened in the past. It is impossible to ignore the common opinion of 50 countries. We are convinced that Africa's strength lies in following this common line.

We conduct trustworthy bilateral dialogue with African countries at the UN and bilaterally. Thus, Sierra Leone Foreign Minister Samura Kamara visited Moscow in July 2017 as the Chairman of the African Union Committee of Ten, which was established to promote African interests in expanding the UN Security Council. The sides conducted an engaging exchange of views and stated their common understanding that the Security Council can only be reformed through intergovernmental talks in New York. It should be continued on all available proposals without commotion, artificial narrowing of the agenda or a fixation on temporary schedules and deadlines.

We believe the Security Council should become more representative but without damaging its efficiency. The lineup must reflect the formation and consolidation of a polycentric world arrangement.

At the same time we are skeptical about restricting the right to veto. We regard this right as an important element in drafting the Security Council's decisions and in upholding the interests of the minority.

Question: The letter R in BRICS stands for Russia, and the letter S for South Africa. The establishment of BRICS and the BRICS Development Bank became for many Africans a source of hope for a more favourable alternative to the imperialist, oppressive and predatory policies of western countries and such institutions under their control as the IMF and the World Bank. The hope was not borne out. And many Africans feel disappointed. As a foreign minister of one of the leading BRICS nations, what could you say to Africans to sustain their belief in the opportunities afforded by BRICS?

Sergey Lavrov: I cannot agree with such a view of BRICS activities. On the contrary, international interest in the association is growing. We see it at the summit meetings which attract increased attention of the media and experts, and at dozens of meetings of the foreign ministers and agency heads, at forums of representatives of civil society, the scientific community, and figures from the worlds of culture and sport. The decisions worked out by the Five go well beyond intra-BRICS cooperation, projecting into the most diverse political and economic international platforms.

Interaction within the Five is an important element in shaping a fairer and more democratic polycentric world system, a clear example of improving the multilateral, collective foundations of world affairs. Our strategic partnership is unfolding on the principles of equality and solidarity, mutual respect and strict consideration of each other's interests, openness and mutually beneficial cooperation, the primacy of international law and the UN Charter. These principles are shared by the majority of the world's nations, including on the African continent. With that in mind we do not set ourselves in opposition to other associations or forums. BRICS is always 'for,' not 'against.'

The Republic of South Africa took over the helm of BRICS this year. Figuratively speaking, the association is coming back to Africa. Our countries have never shied away from the continent's problems – they receive due attention at the summits and other high-level meetings of the Five. It is symbolic that the RSA's chairmanship coincides with the centenary of Nelson Mandela's birthday, the wise Madiba who stood up for the same principle as our association does.

I note with satisfaction that our South African friends are going to fill the BRICS agenda with African issues, to discuss the continent's key challenges and problems. We, for our part, welcome these intentions. We support deepening the BRICS-Africa dialogue which was started in Durban in 2013 during a meeting with the African Union leadership and the heads of eight leading regional integration associations. This year's chairman also plans to invite Africans to the tenth BRICS summit in Johannesburg.

The BRICS – African Union dialogue is not limited to the RSA's chairmanship. Guinea as chair of the African Union took part in the meeting of the BRICS leaders with heads of invited states at the 2017 Summit in Xiamen. I think that the BRICS Plus Concept adopted last year lays a foundation for inviting African Union chairing nations, and maybe the leaders of other African regional organisations, to BRICS summits on a regular basis.

The BRICS countries are major investors in the African economy. We note with satisfaction the growth of African countries' interest in deepening practical cooperation with the Five. The New Development Bank mentioned here offers additional opportunities for that. This financial institution – along with BRICS Contingent Reserve Arrangement – is set to create a more just global economic architecture.

The Bank is in its fledging phase now. We expect that it will be able to operate not only in the RSA but also in other countries of the continent, including with the help of the NDB's African Regional Centre set up last August.

The five countries' relations with the continent are not confined to economics and finance. Tens of thousands of African students study in the BRICS countries. The BRICS countries play an important role in peacekeeping efforts in Africa.

Question: The Fifth African Union – European Union Summit was held in Abidjan, Cote d'Ivoir, in November 2017. African countries have regular summits with China, India, Turkey and other countries, and there are also regular meetings of the Tokyo International Conference on African Development which is in fact a Japan-Africa summit. Why do they not have Russia-Africa format summits? Wouldn't they benefit both Russia and Africa?

Sergey Lavrov: We carefully study the practice of summits between African countries and their major partners abroad.

At present, Russia's relations with African countries are progressing both on a bilateral basis and along the line of African regional organisations, primarily the African Union and the Southern African Development Community. As I have already noted, an intensive political dialogue is being maintained with the continent's countries, interparliamentary contacts are gaining strength, trade and economic and investment relations are improving, and scientific, technological and humanitarian interaction is expanding. African countries' representatives are active participants in international forums hosted by Russia.

A dialogue launched between the African Union Commission and the Eurasian Economic Union Commission has become a new area of cooperation. We hope it will deepen.

Our African friends note the need for Russia's active presence in the region, and more frequently express their interest in holding a Russia-Africa summit. Such a meeting would undoubtedly help deepen our cooperation on the full range of issues. However, it is necessary to bear in mind that arranging an event of such a scale with the participation of over fifty heads of state and government requires most careful preparation, including in terms of its substantive content.

The economic component of the summit has a special significance in this relation as it would be of practical interest for all the parties. As such, specific Russian participants in bilateral or multilateral cooperation should be identified, which are not only committed to long-term cooperation but are also ready for large-scale investments in the African markets with account of possible risks and high competition. Equally important are African businesspeople who are looking to work on the Russian market.

Definitely, time is needed to solve all those issues. We could start with experts' meetings, say, within the framework of the St Petersburg Economic Forum or the Valdai forum, and other events where business leaders of our countries participate.

United Kingdom
Source: www.moneyobserver.com

In 2001 the acronym 'BRIC' was coined to refer to Brazil, Russia, India and China, which were all deemed to be at a similar stage of rapid economic development. South Africa joined what then became the BRICS in 2010. From 1990 to 2014, the BRICS' share of world GDP grew from 11 to almost 30 per cent.

However, there was a huge slowdown in growth and increasing divergence in more recent years. Now, as investors once again pile into emerging markets, we consider how much these countries really have in common and whether there is still a valid argument for grouping them together. The term BRIC was first popularised in 2001 by former Goldman Sachs economist Jim O'Neill, who used it to refer to the fastest-growing and largest emerging market economies. BRICS countries have all welcomed some form of capitalism and they all have growing middle classes, but they also have very different political and economic systems. So how much do these countries really have in common?


Two-horse race

Ed Smith, head of asset allocation research at Rathbones, says: 'The BRICS group has only ever really been about China and India. Russia and Brazil had neither the economic nor the demographic clout that India and China possessed.' They have accounted for less than 5 per cent of the growth in the global workforce since 2005 and less than 5 per cent of the growth in global GDP, compared with China's and India's combined and respective 35 per cent and 40 per cent.' He adds that India looks very similar today to China around the start of the millennium.

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'The five BRICS are more united by their differences than by their similarities,' argues John Redwood, chief global strategist at Charles Stanley. First, China and India are in a league of their own in terms of size, with populations of around 1.4 billion. Brazil has 200 million people, Russia 140 million and South Africa just 56 million.

Redwood further argues that China has been successful at growing its economic output and boosting incomes. As a result, it is now producing more than the other four economies combined. China, Brazil and Russia are middle-income countries, with GDP per head well above the level in India and also above the level in South Africa.

'India has scope to become one of the world's largest economies, but it still has a lot further to go to increase incomes per head,' he says. Moreover, South Africa, Russia and to some extent Brazil rely on mining and the production of oil and commodities, whereas China and India are more dependent on imports of raw materials.

Political differences

Politically, too, the countries are wildly different. China has a unified single-party system, as has Russia in all but name. Meanwhile, 'the democracies in India and Brazil are the complete opposite: where a head of state surviving more than one term can be seen as quite an achievement,' says Will Ballard, head of emerging market and Asia Pacific equities at Aviva Investors.

What they share, politically, is 'a resentment about being under-represented in the traditional global governance structures', says Raheel Altaf, co-manager of Artemis Global Emerging Markets. He adds: '[Moreover] they are all modernising their military capabilities to preserve their strategic interests .'

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So is there still a valid argument for grouping these countries? Smith says: 'No, there never was one in the first place, at least beyond the marketing power of a good acronym.' In contrast, Richard Stammers, investment strategist at European Wealth, believes there is a case. However, he warns: 'Having long-term opportunities in common does not make BRICS a single asset class with similar performance characteristics.'

Altaf argues that a number of other countries could conceivably also be included in the BRICS group, including Mexico, Turkey and even Indonesia. He says: 'The grouping may also help relations between the countries, particularly between India and China, given their past hostilities. The BRICS group, which faces common challenges, now holds meetings to cooperate in areas such as security, health and education.'

Great expectations

So what is the outlook for the BRICS? Stammers says that, ultimately, China and India are looking to become leading global providers of goods and services, so they make things. In contrast, Russia and Brazil are expected to become the global giants in commodities, so they provide the basic raw materials needed to make those things.

Paul McNamara, an investment director and lead manager on emerging market bond, currency and hedge fund strategies at GAM, says: 'China and India matter a lot; the other two are secondary.' All the BRICS countries face different obstacles. 'Russia is crippled by dysfunctional institutions and corruption, but Brazil is slightly better off,' comments McNamara. Redwood says Russia has 'suffered a setback from the lower oil price, which has hit its export earnings and tax revenues, and from Western actions, which have made some trade and transactions more difficult'.

Redwood observes that Brazil has been through a bad political and economic crisis, with recession, high inflation and difficult corruption problems forcing changes of government. He says: 'There is now some hope of recovery, but there remain deep-seated economic and political problems to resolve fully.' South Africa too has been suffering from political instability and failing economic policies. 'Future sustained progress in both Brazil and South Africa will need stable reform-oriented governments that can shake off the problems of the past,' he adds.

India has become the poster child for reform-led recovery in emerging markets, argues James Penny, senior investment manager at TAM Asset Management. 'With the appointment of prime minster Modi, the country has been put on a path of steep and deep economic and government reform to bring its economy and vast middle-class population to the forefront in the modern market.'

Dominant China

However, Penny says the biggest and, on the global stage, the loudest of the BRICS nations remains China. The country continues to make headlines speculating about whether its economy could suffer a 'hard landing' in the face of its highly leveraged corporate sector and a fall in GDP to 6 per cent. But he is keen to put these figures in context: 'Let's be clear here,' he says. 'The US is struggling to find 4 per cent GDP growth, the UK is looking at 1.5 per cent, and the world is worrying about a Chinese slowdown to 6 per cent GDP growth?'

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The growth rates of the BRICS economies, with the possible exception of India's, over the next 10 years is likely to be about half that of the previous decade, according to Smith. India's and China's shares of global GDP growth will probably be smaller, but the countries will remain dominant.

'China will remain the largest [BRICS] economy and should continue to command investors' attention,' he says. 'But if India opens up and reforms, investors should begin to devote more of their attention to the subcontinent.' That said, he points out that, given the relative size of the two economies today, it would still take more than 30 years for India's GDP to exceed China's, even if India achieves all its reform goals and China achieves few of its aims.

Ultimately, the strength of the BRICS as an investment proposition is their very diversity, argues Ballard. 'They are so different that they provide an element of diversification beneficial for any long term investor.'

Russia
Source: tass.com

MOSCOW, March 6. /TASS/. The BRICS format (informal intergovernmental entity made up of Brazil, Russia, India, China and South Africa) can and should propose a new concept for sustainable development in contrast to the US model, Director of the Strategy for Asia Center of the Institute of Economics at Russia's Academy of Sciences Georgy Toloraya said in an interview with TASS.

Amid a new geopolitical reality where Russia is reluctant to take a backseat role and play by Washington's rules, and holds a different view of the world, "an alternative concept is important," instead of "denying the American-centric order and the attempts made by a 'City upon a Hill' to rule the world," he said. "Particularly the concept of multipolarity, a fresh sustainable development, compliance with a certain code of international rules and concepts. This is what Russia should offer together with BRICS," the expert added.

Earlier this week Russia's Foreign Minister Sergey Lavrov embarked on a multi-nation junket though Africa. Prior to his visit, the top diplomat said that Moscow is seeking to expand dialogue between BRICS and African states.

"BRICS is an ideal platform for developing this model to develop this concept and further on offer a new view on development different from the American one to the whole world," Toloraya said. "A revision is necessary in those conditions, this is a normal historical evolution," he said, adding that "Europe has taken an interest in BRICS recently since many contracts are being reached in this area."

"Truth to be told, this year (South Africa took over chairmanship in the group as of January 1 - TASS) after China's successful and efficient chairmanship in BRICS the organization's work has plateaued. South Africa does not have the resources that China has, particularly there has been a change of power in the country, and Brazil has scheduled a national election for October. No one knows how the situation will unfold, which is why it is necessary to use this pause to focus and develop new ideas," the expert said.

"The main thing for Russia is to conduct a respective dialogue with South Africa and propose options that could be the highlight of the chairmanship. As of now there are certain ideas, particularly to implement the 'BRICS plus' (inviting the heads of the African Union and other regional organizations to BRICS summits - TASS) format, there are specific ideas concerning the expansion of the energy platform, and the production of medications. However, it is important to use the period of Russia's chairmanship in the BRICS in 2020 to develop a number of proposals able to help the integration play a significant geopolitical and geo-economic role," Toloraya said. "An ordinary integration group as part of the BRICS is no longer efficient and unnecessary, the global management system should be revised, the time is ripe to candidly state this," he added.

Russia
Source: www.rt.com

BRICS countries are major investors in Africa, according to Russian Foreign Minister Sergey Lavrov, who said Moscow expects the bloc's New Development Bank (NDB) to operate on the continent.
Talking to the pan-African monthly Hommes d'Afrique magazine, Lavrov said that "currently the bank is in its infancy."

"We expect it to operate not only in the Republic of South Africa (RSA), but in other countries of the continent in the future, particularly through the Africa Regional Center (ARC), which was set up last August in Johannesburg," he said.

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An initiative to create a joint digital currency for BRICS countries and the Eurasian Economic Union (EEU) has been proposed by the Central Bank of Russia, according to its First Deputy Governor Olga Skorobogatova.

The minister also expressed satisfaction about the African countries being "increasingly interested in deepening practical cooperation with the five (BRICS) states."

The BRICS countries (Brazil, Russia, India, China and South Africa) created the New Development Bank in July 2014. It funds infrastructure projects within the bloc. The bank's capital is up to $100 billion.

The first project was a $811 million loan for a rooftop solar power project in China. NDB is also considering two Russian projects worth over half a billion dollars.

South Africa
Author: Anine Kilian
Source: www.engineeringnews.co.za

Africa lacks adequate infrastructure, which stymies regional trade and the provision of basic services such as health and education, New Partnership for Africa's Development (Nepad) capacity development officer Bob Kalanzi said on Thursday.

Addressing delegates at a dialogue, hosted by Oxfam South Africa, about the launch of the New Development Bank (NDB), he said infrastructure was Africa's top priority and added that the continent suffered from low levels of intra-regional economic exchange and had the smallest share of global trade.

"Bridging this gap can only be achieved through [greater] regional and continental cooperation, which could be achieved through support from the NDB," he said.

The NDB, which is an initiative of Brazil, Russia, India, China and South Africa (Brics), was launched in Shanghaiin 2016 and aims to mobilise resources for development projects in the Brics countries, as well as in other emerging and developing economies.

Kalanzi pointed out that infrastructure development in Africa must be prioritised to achieve the accelerated industrial development of the continent.

Further, the African Union's (AU's) Agenda 2063 aims to propel intra-African trade to 50% by 2045 and Africa's share of global trade from 2% to 12%.

Kalanzi added that infrastructure also had the potential to raise gross domestic product by 2% and develop the backbone for rapid industrialisation across the continent, boosting capacity to generate more domestic resources.

"The NDB signifies developing countries' coming of age and reflects their aspirations to stand on their own feet. It also focuses on funding sustainable development and infrastructure in member nations, as well as other emerging and developing countries," he said.

He noted that Nepad, which is the coordinating and implementing agency of the AU, has recently seen innovative financing models like the NDB, which are able to support Nepad and AU priorities.

"We are currently guided by the AU Agenda 2063, which is a framework vision and document for the African Continent aimed at socioeconomic and sustainabletransformation for the continent's transformation," he said.

He added that the AU also had a document called, 'the First Ten-Year Implementation Plan', which is focused on various priority projects that need to be implemented to fast-track development across the region.

"We hope the NDB, and especially the African Regional Centre (ARC) which was launched last year, can mobilise resources and partnerships towards implementing various infrastructure projects stipulated in the 2063 Vision and the First Ten-Year Implementation Plan, across the continent," stated Kalanzi.

Meanwhile, Oxfam South Africa CEO Siphokazi Mthathi said the NDB ARC could offer a different way of working than other development finance institutions (DFIs), but only if it takes a pro-poor approach and engages in an open and transparent manner.

She noted that the ARC, which is the South African branch of the NDB, offered a real and concrete opportunity for South Africa and other Brics governments to ensure that development financing is sensitive to the needs of the poorest and most marginalised.

"It also needs to focus on tackling inequalities that exclude women from accessing economic, social and political opportunities in Africa," she said.

The ARC aims to mobilise resources and carry out projects for sustainable infrastructure and sustainabledevelopment on the continent. It is the first NDB regional centre to be opened, which will be followed by the launch of the Latin America Regional Centre, in Brazil, later this year.

"Brics has continued to challenge global governance structures through debates among emerging markets and the developing world. It was in response to the belief that global financial institutions lack democratic voting rights, that the NDB was created," Mthathi noted.

The bank's operational strategy emphasises sustainableinfrastructure that incorporates economic, environmental and social criteria in its design, building and operations.

It claims to promote a "new" way of working in the way it engages in relationships, projects and instruments, and approaches. In aiming to diverge from traditional institutions that have not always respected the needs of local communities, it emphasises equality, mutual respect, trust and national sovereignty.

"Oxfam South Africa believes the bank needs to establish a structural framework for engagement with civil society organisations that will promote the transparent and accountable manner in which projects are chosen, implemented and monitored," she noted.

Mthathi added that, as part of this, the bank should consider environmental and social safeguards that take into account communities' needs.

She highlighted that the funding model should focus on inclusivity, which she said was key, because DFIs on the continent had a reputation of undermining countries' priorities, taking them away from their key developmental mandates.

"We have critiqued the International Monetary Fund and the World Bank for the way they impose budgeting on countries, undermining the capacity of governments to deliver on basic needs for their people. We want to see the NDB support development from the ground up," she said.

South Africa
Source: thebricspost.com

Hard to measure services sector revisions make technical recession disappear

Is the South African economy on the rise again? [Xinhua]

The IMF in January 2018 estimated that South Africa grew by 0.9 per cent in 2017. South Africans were even more pessimistic and in the fourth quarter 2017 survey by the Bureau for Economic Research, the average forecast was that 2017 growth would be only 0.5 per cent rising to 1.0 per cent in 2018.

Statistics South Africa estimated that 2017 gross domestic product (GDP) growth was in fact 1.3 per cent. Revisions to the hard to measure services sector also resulted in the fourth quarter 2016 quarterly contraction first estimated at a 0.3 per cent annualised contraction has now been transformed into a 0.4 per cent expansion.

The first quarter 2017 still remains as a contraction, but as the usual definition of a technical recession is for two consecutive quarters of quarterly contractions, the 2016/17 recession is no more.

The service sectors that were responsible for this good news were the wholesale, retail and motor trade; catering and accommodation sector; the transport, storage and communication sector, the finance, real estate and business services and lastly general government services. The new quarterly growth rates in per cent for the fourth quarter 2016 (with old estimate in brackets) are: 2.5 (2.1); 3.1 (2.6); 2.6 (1.6) and 1.2 (0.9).

This meant that the annual growth for 2016 was doubled to 0.6 per cent from the previous estimate of 0.3 per cent .

Given the difficulty of estimating service sector value add, economists query why the annual growth rate in the transport, storage and communication sector is only 1.5 per cent in 2017 from 0.8 per cent in 2016, as land transport payload tonnage grew by 9.3 per cent in 2017 due to the record maize harvest after a small 2.2 per cent gain in 2016, while communication companies reported double-digit increases in data usage in both years.

The better than expected GDP growth rate is not unique to South Africa as most countries in the world have exceeded economists' forecasts as shown by the consensus forecasts from UK-based Consensus Economics (www.consensuseconomics.com). 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 in January 2018, 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, so the optimistic forecast that growth could exceed 2 per cent this year made by former Finance Minister Malusi Gigaba in East London in January now looks achievable.

China
Source: www.ndb.int

On 10 March 2018, the New Development Bank (NDB) and International Solar Alliance (ISA) signed in New Delhi, India a Joint Declaration for the Promotion of Solar Energy Globally.

The Declaration was signed by Mr. K.V.Kamath, the NDB President and Mr. Upendra Tripathy, Interim Director General of ISA, in the presence of India Finance Minister Mr. Arun Jaitley and Mr. Raj Kumar Singh, Minister of State (IC) for Power and New & Renewable Energy.

The NDB and ISA agreed to consider a roadmap for the mobilization of financing to promote solar energy in countries of common interest and to explore mechanisms for supporting solar energy development.

The parties will mutually support the implementation of the NDB's and ISA's plans for solar energy development and deployment through technical assistance and knowledge transfer.
Affordable, reliable and sustainable solar energy is crucial to achieving universal energy access and will contribute to economic growth, acknowledged the NDB and ISA.

Background Information

The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.

International Solar Alliance (ISA) is a treaty based international inter-governmental organization which was launched on 30 November 2015, in Paris, France, and Headquarters at Gurugram, Haryana, India. The Alliance aims to provide a platform for the promotion of solar energy across 121 prospective member countries of ISA to specifically address energy needs by harnessing solar energy. The ISA's major objectives include global deployment of over 1,000 gigawatt (GW) of solar generation capacity and mobilization of investment of over $1 trillion into solar energy by 2030.

South Africa
Author: Rob Davies
Source: infobrics.org

The diminutive nature of SA's participation in Brics — the organisation bringing together Brazil, Russia, India, China and SA — was highlighted by facts provided by Trade and Industry Minster Rob Davies in Parliament. SA is the current chair of Brics despite the relative smallness of its contribution to investment and trade.

Davies said in a briefing to Parliament's trade and industry committee that in 2016 total intra-Brics trade amounted to $235bn. China accounted for 56%, Brazil 18%, Russia 15%, India 7% and SA 5% of intra-Brics imports.

SA's exports to Brics countries stood at $13.5bn, while imports were $21.4bn in 2017.

"SA's biggest export destination within Brics remains China, followed by India, Brazil and Russia, with its exports in mainly primary products," Davies said.

In the period January 2015 to February 2016, intra-Brics investment amounted to R554bn, of which China accounted for 76.7%, India with 12.7%, Russia with 5.3%, SA 4.1% and Brazil 1.4%.

Russia
Source: sputniknews.com

The forum is aimed at exploring the immense possibility of collaboration and cooperation among the youth of BRICS countries for building a common, robust future on the basis of a tradition of trust.

New Delhi (Sputnik) — The Youth Parliament was part of the three-day program called "Vision for Future" and was attended by youths from India, Russia, Brazil and South Africa, apart from young Parliamentarians from India and Russia. The event was jointly organized by the BRICS International Forum and the International Federation of Indo-Russian Youth Clubs.

Addressing the youth forum, G. V. Srinivas, Joint Secretary (Eurasia Division), Ministry of External Affairs, Government of India called upon Indian youths to learn from the advancement in the genome, artificial intelligence and other technologies in Russia to create something new and worthwhile for humanity.

"Recently, when President Putin was giving his annual address, in his short paragraph about foreign policy, India figured along with Russia. This is the kind of importance which Russia gives to India and it is an opportunity for the young people to collaborate and generate newer ideas and solutions for humanity," G. V. Srinivas told the participating youths.

Youths are the ambassadors of our countries and they must ride on the existing trust and faith between the two countries to collaborate, he added.

"The coming together of youths in Delhi from BRICS nations and especially a large delegation of more than two dozen people from Russia is an integral part of the ongoing celebrations commemorating the 70th year of the establishment of diplomatic relations between India and Russia," Purnima Anand, president of the BRICS International Forum told Sputnik.

The meeting was attended by Indian Parliamentarians Udit Raj, Anurag Thakur and Russian Parliamentarian Tatyana Romanova Lebedeva among others.

China
Source: thebricspost.com

As the 10th BRICS Summit in South Africa approaches, member countries are turning their resources to boosting African development.

On Wednesday, Chinese Agriculture Minister Hang Changfu told members of the national legislature that Beijing is ready to share its skills and technologies to enhance food development in Africa.

He said that China could use the experties it applied to producing 600 million tons of grain in 2017 to help Africa boost its food supply.

"China plays an active role in addressing the problem of food security in African countries, and we will continue to strengthen cooperation with them," he said.

But he also encouraged African countries, particularly the least developed ones, to work toward finding solutions to food scarcity.

Food security in Africa has always been a primary concern for BRICS.

During the past summits, BRICS heads of state have formed common ground to alleviate the impact of climate change on global food security.

"BRICS countries are an important grouping to deal with the global food crisis, promote global economic recovery and play an important role in global initiatives on food security," their communiques have reiterated.

Africa remains the region with the highest prevalence of undernourishment, according to the Food and Agriculture Organization.

One in eight people around the world is chronically undernourished, said the UN.

United Kingdom
Author: Andrew Hurrell
Source: www.ethicsandinternationalaffairs.org

Abstract: In the early years of the twenty-first century the narrative of "emerging powers" and "rising powers" seemed to provide a clear and powerful picture of how international relations and global politics were changing. Yet dramatic changes in the global system have led many to conclude that the focus on the BRICS and the obsession with the idea of rising powers reflected a particular moment in time that has now passed. The story line is now about backlash at the core; and, with the exception of China, rising powers have returned to their role as secondary or supporting actors in the drama of global politics. Such a conclusion is profoundly mistaken for three sets of reasons: the continued reality of the post-Western global order; the need to understand nationalist backlash as a global phenomenon; and the imperative of locating and strengthening a new pluralist conception of global order.