Information Bulletin of the BRICS Trade Union Forum
Issue 11.2018
2018.03.12— 2018.03.18
International relations
Foreign policy in the context of BRICS
South African Government Minister: Palestine must be placed on BRICS agenda (Министр правительства ЮАР: Палестина должна быть включена в повестку дня БРИКС) / Somalia, March, 2018
Keywords: expert_opinion, top_level_meeting, quotation

"We call on, and demand that president Ramaphosa places this matter [the Israeli occupation of Palestine] on the BRICS agenda," said Naledi Pandor, South Africa's Minister of Higher Education on Wednesday. BRICS is the acronym for the association of five major emerging national economies: Brazil, Russia, India, China and South Africa.

Referring to Donald Trump's reckless decision to recognise Jerusalem as the capital of Israel and move the US embassy there, Pandor explained that there was now "a need to identify powerful members of the global community who may give greater impetus to progress in finding a two-state solution, perhaps the BRICS countries should be called on to assume such global leadership,"

Pandor made the comments at an Israeli Apartheid Week event at the University of Cape Town (UCT) on Wednesday night, where she was the keynote speaker.

The comments are significant since South Africa is chairing BRICS in 2018. Collectively, the BRICS bloc represents over 3.6 billion people, or about 41% of the world population. Russia and China both hold permanent veto power at the UN Security Council.

Hosted by the UCT Palestine Solidarity Forum (PSF), Pandor reaffirmed both the South African government and the African National Congress's solidarity with the people of Palestine. She further urged South Africans – particularly young South Africans born in post-1994 democratic South Africa – to act in support of international struggles for freedom and self-determination just as the global community stood in solidarity with the anti-Apartheid movement in South Africa.

"One of the things we failed to appreciate as South Africans is the immense contribution to our struggle by the international anti-Apartheid movement. We enjoyed support from all corners of the world and now that we are free we are ignoring and enjoying our freedom and we have forgotten those who are oppressed in other parts of the world."

As former beneficiaries of selfless international support, South Africans have a collective duty to lend a supportive hand to others seeking justice and equality, explained Pandor to a crowd of over 250 students. "Now that we have achieved our freedom, we must not forget our friends and allies who helped us liberate ourselves," she cautioned.

According to Pandor, it was this duty that guided the ANC's deliberations on the issue of Palestine at its 54th National Conference in December, where South Africa's ruling partypassed a resolution to immediately and unconditionally downgrade South Africa's embassy in Tel Aviv to a liaison office. The pro-Israel lobby in South Africa were outraged by the resolution, calling the move "discriminatory".

The minister said that the decision to downgrade the South African Embassy in Tel Aviv is not an anti-Israel resolution, it is a pro-Palestine resolution.

"There has been consternation in Israel about the ANC's decision, but our decision does not detract from our commitment to a two-state solution. It does express our dismay and anger at the absence of any attempt by Israel, which is the powerful component of the struggle and its powerful friends in the north, their absence of any attempt to free the people of Palestine from the oppression they suffer today."

Pandor's comments were welcomed by the Palestinian solidarity movement in South Africa.

A new era for South Africa's foreign policy (Новая эра внешней политики Южной Африки) / South Africa, March, 2018
Keywords: expert_opinion, political_issues
South Africa
Author: Mzukisi Qobo

There are three inter-related ills that plague South Africa's foreign policy. Its credibility on the global stage needs to be restored.

The last decade can be characterised as a dark age in South African foreign policy. Under the previous international relations and co-operation minister, Maite Nkoana-Mashabane, South Africa's stature on the global stage diminished significantly. The country lost respect among its peers in the African continent. During this time, foreign policy was less about the substance of ideas and more about a flurry of international activities that yielded few benefits for the country.

For South Africa, the BRICS grouping that includes Brazil, Russia, and China was the alpha and omega of foreign policy, with little thought on how to use this platform to generate tangible economic value. It became another platform for President Jacob Zuma to deepen relations with the Russians and signal intentions to mortgage South Africa's energy future. South Africa was fixated on the old Cold War narrative that wrongly saw the BRICS as an alternative to Western dominance of the global system, so much so it paid little attention to other relations that could be of strategic value to the country. Complex issues were over-simplified and with little grasp of how much the world has changed since the collapse of the Soviet bloc.

Further, South Africa misunderstood the foreign policy posture of its partners in the BRICS, especially China and Russia, who have used this platform to bolster their national economic interests and geopolitical profile. Apart from strategic confusion over the role and identity of BRICS in a changing world, South Africa suffered many weaknesses in its foreign policy posture since Zuma took office in 2009.

Factors that have undermined South Africa's foreign policy

There are three inter-related ills that plague South Africa's foreign policy. The first is a defective political culture and institutional paralysis. Foreign policies are an expression of countries' domestic priorities, values, and institutional and leadership quality. South Africa's institutional and normative base was damaged under Zuma. The driving force of Zuma's presidency, and by extension his foreign policy thrust, was transactional leadership – a preoccupation with using public office to maximise personal gains. This transactional trait was manifest in South Africa's relations with Russia, something that became Zuma's personal drive, with the country almost mortgaging its energy future over a dodgy nuclear deal to the Russians. Even on the African continent, relations with countries such as Angola, the DRC, and the Central African Republic were always enmeshed with commercial deals that had nothing to do with South Africa's interests.

Second, Nkoana-Mashabane presided over poor governance at the Department of International Relations and Co-operation and got away with it. Under her watch, Dirco not only underperformed in achieving its strategic objectives, it also mismanaged hundreds of millions of rand.

According to the Auditor General's statement for the financial year end 2016/2017, unauthorised expenditure amounted to R34-million, with the department riddled with various breaches of the Public Finance Management Act; irregular expenditure went up to R366-million, and fruitless expenditure climbed to just over R2-million. No action was taken against the officials who committed these sins, which suggests that this was sanctioned from the top. For her leadership failures at Dirco, Nkoana-Mashabane has been rewarded with another ministerial post to handle the sensitive portfolio of rural development and land reform.

Third, South Africa's diplomatic missions abroad sprawled to 126 missions, without any strategic goal. Over 70% of these missions are headed by political appointees, meaning people who have a shallow training in diplomatic work and who are mostly unemployable anywhere in the economy. Many of them are cronies who are boarded on expensive welfare at taxpayers' cost. Before Zuma came to office, it was a practice that South Africa's foreign missions are mostly headed by career diplomats. Political appointees occupied a far smaller proportion of leadership roles in diplomatic missions abroad. Driving international relations across these missions cost a total of R3.7-billion, which is about half of the total approximation of the department at roughly R7-billion, yet there is no discernible value to the country.

In short, government suffers a serious lack of ideas and requisite institutional capabilities to articulate innovative foreign policy that responds to the new challenges of our time. Even on new threats such as cyber warfare, which other countries have identified as a critical aspect of foreign policy, it is doubtful that we possess strategic and tactical preparedness. Yet in the new age of foreign policy making, cyberspace has become an important domain of military operations alongside air, sea, and land. There is also a growing focus on leveraging the emergence of new technologies associated with the Fourth Industrial Age to explore new decision models in international relations, or to use data-driven approaches and predictive analytics to counter the threat of terrorism, or to structure new forms of virtual multilateralism among like-minded countries. These new challenges and opportunities require modernisation of institutions that drive foreign policy and upgrading of skills among decision-makers.

Preparing South Africa's foreign policy for the future

In restoring foreign policy credibility, the first thing that Sisulu will have to deal with at Dirco is to rein in the culture of poor financial management, and insist on good governance, especially so since no one has ever been held to account for systematic financial mismanagement in that department. Second, she will need to oversee the building of sound institutional capabilities, and retooling technical skills, to prepare for new challenges in the world. This will be particularly important if Dirco is serious about promoting economic diplomacy, which is essentially about using international relations to generate economic value for the country, especially to address challenges related to low growth, weak investment in the domestic economy, and high levels of unemployment.

The critical success factors for economic diplomacy lie in ensuring better co-ordination across government to develop a shared approach to external relations, building strong government-business relations on clarifying the terms for the country's Africa strategy, and drawing expertise from academia and policy think tanks.

For a long time now, South Africa's foreign policy has been directionless. As part of closing the curtain on Zuma's era, South Africa's credibility on the global stage needs to be restored. South Africa has an important contribution to make in a changing global system, in shaping the foundations of a progressive multilateralism, and playing a leadership role on the African continent. To achieve all of this, domestic institutions must be fixed. DM

Qobo is deputy director at the NRF Research Chair on African Diplomacy and Foreign Policy, University of Johannesburg
Political culture of BRICS is a concern (Политическая культура БРИКС вызывает озабоченность) / South Africa, March, 2018
Keywords: expert_opinion, political_issues, global_governance
South Africa
Author: Yonela Diko

BRICS seems to be politically toxic, with no overwhelming economic benefits for members.

One of the bizarre reasons said to have been given by former president Jacob Zuma for wanting to stay on as president was so that he could introduce President Ramaphosa at the BRICS summit scheduled for the end of 2018 in the country. Zuma's sentiments reflected a president who sees his person, and not the institution of the presidency and country, as the core component of his relationship with the BRICS countries, a strange phenomenon of personality and cult politics and the overblown megalominia of a monarch. One wonders where Zuma got that version of the presidency.

One, however, need only look at the BRICS countries, where fellow leaders see themselves as supreme or core leaders in their respective countries without whom there would never have been any development or civilisation or even air to breathe. Who would want such divine leaders to go or stand in their way.

Today's Russia and China, the leading members of BRICS, are almost undefined outside the persons of Vladimir Putin and Xi Jinping.

This weekend, Putin was running for president for the umpteenth time, in a hush-hush election that clearly was meant to dislodge any contenders from having enough time to campaign and put up a proper fight, least of all those opposition leaders who have met their untimely demise in inexplicable ways.

On the other side, in China, Xi's political thoughts have already been written into the party constitution, and the state constitution was amended to abolish term limits for the presidency. Xi has had a cult of personality constructed around himself, with books, cartoons, pop songs and even dance routines.

There was however a time when these BRICS countries had transformative moments which signalled new dawns, but the appetite for change soon waned.

One of the enduring pictures in my memory is that of OR Tambo, accompanied by the young Thabo Mbeki, sitting across Soviet Union's Mikhail Gorbachev, the eighth and last leader of the Soviet Union and General Secretary of the Communist Party of the Soviet Union from 1985 until 1991.

Not only does this picture show a Tambo who was at the pinnacle of world affairs but also at the heart of global change. Gorbachev's policies of glasnost (openness) and perestroika (restructuring) and his reorientation of Soviet strategic aims, contributed to the end of the Cold War. Under this programme, the role of the Communist Party in governing the state was removed from the constitution. He was awarded the Otto Hahn Peace Medal in 1989, the Nobel Peace Prize in 1990, and the Harvey Prize in 1992, as well as honorary doctorates from various universities.

Today's Russia, the one we have been in a relationship with for the last two decades, under Vladimir Putin, is a far cry from Gorbachev's perestroika and glasnost and is no longer considered a democracy by many experts. Putin has been president of the Russian Federation since 2000, with little stints of being prime minister in-between.

He is almost the polar opposite of Gorbachev. Under Putin's leadership, Russia has scored poorly in Transparency International's Corruption Perceptions Index and experienced democratic backsliding according to both the Economist Intelligence Unit's Democracy Index and Freedom House's Freedom in the World index (including a record low 20/100 rating in the 2017 Freedom House's Freedom in the World report, a number that has not been seen since the days of the Soviet Union). Unfortunately our relationship with today's Russia has been characterised by declining trade and a rising personal relationship between our heads of states.

Xi Jinping has been president of China since 2013. Lines between party and state have become more blurred and lines between Jinping and China itself even more convoluted. China has a history of dynasties which led for centuries until they lost popularity with the people and another dynasty would emerge and follow the same path. The rise and fall of the great dynasties forms a thread that runs through Chinese history, almost from the beginning till the birth of modern China in 1949. This is the history of empires and "everything under heaven" leaders who were seen almost as divine and God-sent and were accepted as such.

China, with its over 5,000-year history, is one of the world's four ancient civilisations. It can be divided into three phases including the ancient China era (from c. 1600-221 BC), the imperial era (221 BC-1912 AD), the republic of China era (1912-1949) and modern China (from 1949). Since 1972, when Chairman Mao welcomed American President Richard Nixon in Beijing, China almost embarked on its own glasnostprocess which was furthered under the rule of Deng Xiaoping (1978–1989).

The process of the opening of China has certainly been the hallmark of Xi Jinping's prosperity as the leader of modern China. One would have expected however that since the opening started with Mao, then Deng and now Jinping, Jinping would finally realise that the modernisation process itself will continue irrespective of which leader is at the helm and therefore Jinping does not need to implant himself in the country's constitution as the only true and supreme leader.

As for Brazil, the country has been crumbling over the period of its BRICS membership, bringing down its president and its former president and destroying the people's trust in their government. There has been no visible evidence of the shifting dependency from America to BRICS. Brazil remains vulnerable then to all kinds of external forces and it's not clear if BRICS has been a force for good or has exacerbated its problems.

India seems to have been the only country that has done well during the BRICS period; however, India's thought leaders have insisted that the country has made some significant strides over the past few years with countries like Japan, Vietnam and Bangladesh. Much to the chagrin of China, Vietnamese hydrocarbon firm PetroVietnam has given India's ONGC Videsh Limited a one-year extension to explore a disputed oil bloc located in the South China Sea.

Experts have further insisted that while it is true that there are numerous differences between India and the United States, the two countries strongly converge on issues contrary to Chinese interests — first and foremost being the South China Sea. This can also be seen in Latin America with Brazil, where India has begun to develop strong ties with countries in ways often unfavourable to Brazilian interests.

BRICS therefore seems to be politically toxic with no overwhelming economic benefits for each member.

Still, with a combined population of 2.5 billion and a GDP of $16-trillion, with better leadership and even economic benefits, this structure holds much potential. South Africa has an opportunity here to influence the political culture of this institution. DM

The Big C in the BRICS (Заглавная К в БРИКС) / China, March, 2018
Keywords: global_governance, expert_opinion, rating
Author: Albert Khaoutiev

The acronym BRIC was first mentioned in 2001 in a report by an economist of Goldman Sachs. South Africa joined the club only in 2010 with the help of China including the African continent as an additional player in the emerging markets.

The acronym BRICS, which aims to represent the rise of emerging markets around the world, is synonym with the rise of the non-west- ern world. Indeed, Brazil, Russia, India, China and South Africa are of- ten seen as a counterweight to the G7; the man behind the acronym even predicted that the BRICS would surpass the G7 by 2035.

The bloc has started to organize itself with its first formal BRIC summit in 2008 held in Russia and since then many international forums and official gatherings by the member countries willing to advance their agenda on the global scale have followed.

Western countries have been developing fast in the 20th century

and grew to become the leading economies. However, nowadays the BRICS countries should not be underestimated. They account for 43% of the global population, 26% of the world's land coverage and hold a GDP of USD 18.5 trillion. According to IMF, they contributed 23.6% to the world economy in 2017.

What is the current status of the BRIS and their relationship with China?


Brazil has had many internal scandals including corruption charges in the last years that led to the impeachment of the president Dilma Rousseff. However, despite the political turbulence Brazil's economy seems to be back with growth again after a recession in 2016. Ac- cording to the latest report from the IMF in January 2018, the country is forecasted to expand by 1.9% in 2018.

Within BRICS, China is Brazil's major trading partner and is seen as the big brother in the development of Brazil and Latin America in general where China wants to build itself as a trusted partner. With Russia, bilateral trade hit USD 4.3 billion in 2016 according to Brazilian government sources. With South Africa, trade has been going down from 2011 to 2016, but the launch of the free trade agreement between Mercosur and SACU (Southern African Customs Union) is aimed to boost trade between the countries. India, on the other hand has had little cooperation with Brazil as they are focusing their trade on the faster growing Mexico.

The economic outlook seems to be rather positive for Brazil. However, it may soon be caught back by its demons in the political arena. The country will hold general elections this October where the former president Luiz Inacio Lula da Silva is planning to run.


After disputes with the West, Russia turned its focus to the East, get- ting closer to China and finding new partners such as Turkey and Iran. The economy has been in a precarious situation, but the country is continuing to grow, and the IMF predicts the Russian economy to grow by 1.7% in 2018.

Being the largest country in the world with massive resources of oil, coal and natural gas, Russia has been pushing to promote economic cooperation within the BRICS and bolster the alliance. For example, it is now in discussions to establish its own gold trading system as BRICS members are all either major consumers or producers of physical gold. Moreover, the Central Bank of Russia (CBR) opened its first foreign representative office last year in Beijing for a greater cooperation between Russia and China. Finally, the CBR also started talks with BRICS nations to create a payment system that would be an alternative to the SWIFT system.


When it comes to India and China, geopolitics plays a crucial role and affects their economic and political decisions. Both countries are the main drivers of the BRICS, but also increasingly consider each other as regional competitors.

However, both countries are also closely connected. On the one side, China is India's largest trading partner, even though the trade is skewed in favor of China. In 2016, India's trade deficit with China reached about USD 46 billion. On the other side, China strongly relies on India's cooperation to push forward its Belt and Road Initiative.

South Africa

South Africa is seen as the Eldorado of natural resources. As a matter of fact, the country own vast quantities of gold, diamonds, platinum, iron ore, copper, manganese, uranium, chromium, silver, titanium and beryllium. The country is also the largest producer and consumer of energy on the African continent.

Since joining BRICS, South Africa has benefited from both trade and diplomatic ties with the other member countries. Without surprise, China is its largest trading partner and top investor particularly in infrastructure, energy, transport and banking. For example, ICBC owns a 20% stake in South Africa's Standard Bank.

However, South Africa's place in the BRICS could be debated. Its economy has been growing slowly at 0.9% in 2017 and the IMF expects the GDP to remain steady this year. Just recently, the president has been pushed by his own party to resign due to corruption scan- dals, weakening the position of South Africa within the BRICS.

What is next for the BRICS?

Has the BRICS lived up to the expectations from its conception?

There were big plans, but relatively little results. The bloc has however managed to transform itself from a mere political association into an increasingly relevant influencer on regional and global affairs. In 2014, it set up the New Development Bank, to be an alternative to the IMF and the World Bank, with headquarters in Shanghai. It started to issue loans last year, however its capital is still much lower than the one of the AIIB. They have also been planning to create a joint rating agency to counterweight the three globally accepted credit rating agencies S&P, Fitch and Moody's.

The main challenge for the BRICS is their geographical and cultural differences. They have little in common aside from the fact that in 2001 they were willing to embrace globalization and were forecasted to drive high future growth. Over the years, it is clear that China has come to play a pivotal role in the development of the association. Trade between China and the other four-member countries of the BRICS accounted for 85% of total intra-BRICS trade; at the same time these countries face strong competition from the cheaper manufactured Chinese goods – leading in the past Brazil and India to address the issue at the WTO. Meanwhile, China's economy has grown to be larger than the ones of all other members combined.

President Xi made himself a defender of globalization at Davos summit last year. And the EU and the US have been calling on China for the past years to open more its markets, however, the country's reforms and policies have not yet shown the results hoped for. There are still many concerns for foreign companies operating in China, such as forced technology transfers and tight internet control.

The German ambassador to China, Michael Clauss, said that it was in everybody's interest to support an open global trade system centered on a strong WTO. "Chinese investments are highly welcomed by Germany; however, it cannot continue to be a one-way street: openness on the one side and tightening market access on the other". Indeed, European companies have not seen the same welcome in China even though the EU is China's biggest trading partner. There is need for greater reciprocity – trade happens when both parties are willing to collaborate.

Hence, there are not many things that unite the BRICS making it difficult for them to have a common agenda and the BRICS' future remains uncertain. Perhaps it is time to forget the BRICS? Even the inventor of the acronym has turned his attention to the new economies called « MINT »: Mexico, Indonesia, Nigeria, and Turkey – the next key emerging countries. However, the BRICS' consumption markets have powerful potential. So, the question could be how the interplay of the key players in the alliance needs to shift. If better cooperation is institutionalized, the BRICS might come to be the relevant economic alliance in the future.

Albert Khaoutiev is a senior consultant at Morgan Philips Executive Search. He holds a Master degree in international business from HULT International Business School. Now he specializes in the recruitment of senior professionals in the finance functions. Prior to the recruitment industry, Albert worked in investment management. He has been living in China over three years and usually comments on China-related topics including economy and politics.
Always a rule-maker (Всегда создает правила) / India, March, 2018
Keywords: global_governance, expert_opinion, China_India
Author: Mukul Sanwal

In the new world order, India should give primacy to rules that will chart a path for its own sustainable prosperity

The inaugural International Solar Alliance (ISA) summit underlines India's place in the new world order. Global equitable sustainable development, which is the basis of the ISA, suggests a 'third' way to the inequality and environmental damage characterising the current U.S. and China-led models. This vision follows from India's call for 'climate justice', which reframes climate change as a social and not a physical problem. The shift fills the gap in the thrust of the 'Chinese dream' and 'America first', both of which ignore sustainable development. In January, the big takeaway from the ASEAN-India Summit was that countries in the region questioned the benefits of China's model of a new order and the U.S.'s commitment to the existing order and considered India as a balancing factor. This is also why China and the U.S. are seeking to work with India.

U.S. President Donald Trump said: "Any nation that trades away its prosperity for security will end up losing both." This statement recognises the defining feature of the 21st century. The challenge for India is to take advantage of global trends and push infrastructure, e-commerce, human capital and technology development to position itself in the emerging global economic triumvirate, which must operate within global ecological limits, and as a cyber global power. India should now give primacy to rules that will chart a path for its own sustainable prosperity rather than seek congruent interests.

Jointly shaping new rules

Questions around the existing political and economic order suggest that India should not reject collaboration in the Belt and Road Initiative (BRI), which is the framework for a new order. Rather, it should work with China to jointly set the new multilateral rules. Part of this dynamics is being played out in the Regional Comprehensive Economic Partnership (RCEP), where India must consider longer-term and not immediate interests.

India and China have together been questioning the injustice of current global rules. They, along with other BRICS members, set up the BRICS Development Bank and established the BRICS Contingent Reserve Arrangement. In 2015, China launched the Asian Infrastructure Investment Bank of which India is the second largest shareholder. The RCEP, dominated by China and India, avoids rules on labour, environment and intellectual property rights espoused by the U.S., the European Union, and Japan. There is an emerging clash in the United Nations, World Trade Organisation, and the climate treaty with the U.S. weakening multilateral rules by redefining what is 'fair'. It is also becoming clear that in a multipolar world China cannot shape rules for the 'Asian Century' by itself, just as India should not expect countries in Asia to choose between itself and China, as they see the BRI as the only source of much-needed investment.

The two sides have just recognised "sensitivity to each other's concerns, interests and aspirations" and China has suggested they "meet halfway". New opportunities are emerging with Beijing's willingness to discuss Delhi's concerns about Pakistan and the BRI. The aim should be to demarcate the border, a colonial legacy, and for the Shanghai Cooperation Organisation to develop Asia-specific rules for non-aggression to institutionalise China's stated support for non-hierarchical relations.

Maritime trade routes

Indian Ocean trade routes, which have always connected the east and west, are an expanding conduits for half the world's container traffic, one-third of bulk cargo transport, and nearly two-thirds of global maritime oil trade. The UN Convention on the Law of the Sea was designed to maintain public order at sea, but is inadequate for current needs. A U.S. withdrawing from economic multilateralism needs India to shore up its strategic influence in Asia. China is wary of India's security understanding with ASEAN as it negotiates a Code of Conduct to meet challenges to its 'Nine-Dash Line'. Statesmanship would require India to limit itself to its own naval conclaves of the littoral states of the Indian Ocean and organise platforms which include China and Japan and allow for the development of Indian Ocean-centric rules of engagement.

The just-concluded reciprocal logistics support between the Indian armed forces and France limits itself to the Indian Ocean Region, India's security perimeter. Partnership should be extended to the Francophone Indian Ocean Commission. New global vision also matters.

In 2018, India will have to make hard choices. It will need to strike a balance between being a part of the Quad and partnering with Russia and China, as they are now considered the biggest threat by the U.S.

Mukul Sanwal is a former UN diplomat and currently Visiting Professor at the Tsinghua University, Beijing
Investment and Finance
Investment and finance in BRICS
[Abstract ]Foreign Minister Sergey Lavrov speaks and takes questions during the forum, Russia – Land of Opportunity, Moscow, March 15, 2018 (Отрывок из выступления и ответов на вопросы Министра иностранных дел России С.В.Лаврова на форуме «Россия – страна возможностей», Москва, 15 марта 2018 года) / Russia, March, 2018
Keywords: ndb, sergey_lavrov, quotation

Question (via the interpreter): South Africa as a member of BRICS is interested in how the New Development Bank will work in such areas as technology and the economy, taking into account the interference by the imperialists? We have seen some countries change governments outside electoral periods. What are the plans within BRICS to stabilise the situation?

Sergey Lavrov: The New Development Bank, established by the BRICS countries, is just beginning its operations; the new bank will soon be working at full capacity. The projects that are being discussed at the initial stage concern only the five BRICS countries. Possible projects outside the BRICS are the next step. Clearly, the African continent will receive special attention, because a New BRICS Development Bank branch will be located in South Africa.

As for our imperialist friends (as you called them), who are trying in every way to impede the development of economic cooperation within BRICS, this is not the only focus of their work. They are in principle interested in breaking up any associations where they do not call the tune. I am confident that such countries as China, India, Brazil, South Africa, and Russia have too much dignity and will not allow anyone to dictate their foreign policy or to forbid us to communicate with very close friends we are bound to, including the brotherhood-in-arms between my country and South Africa during the latter's struggle for independence.
Only 5% of adult Indians establish their own businesses, finds report (Только 5% взрослых индусов создают свой собственный бизнес, как выяснило исследование) / India, March, 2018
Keywords: rating, research, social_issues, economic_challenges

Ahmedabad: Only 11% of adult population in India is engaged in 'early-stage entrepreneurial activities', and only 5% of the country's people go on to establish their own business, a survey has found.

This rate is among the lowest in the world, while the business discontinuation rate in India is among the highest at 26.4%, the report says. The survey was conducted among 3,400 respondents aged between 18 and 64 years to assess the level of entrepreneurial activity.

According to the Global Entrepreneurship Monitor (GEM) India Report 2016-17, prepared by Gandhinagar-based Entrepreneurship Development Institute of India (EDI) and its associates, 11% of India's adult population is engaged in 'total early-stage entrepreneurial activity (TEA)'. Around 4% of the population accounts for 'nascent entrepreneurs', who are actively engaged in setting up a business they will own or co-own, the report says.

Another 7% are the entrepreneurs who are owner-managers of businesses, which are running for less than 3.5 years. Only 5% of adult population in India manages to establish their businesses, which is to say, their businesses survive for longer than 42 months, the report says. This rate is among the lowest in the world, it adds.

Among the Brics (Brazil, Russia, India, China and South Africa) economies, Brazil has the highest rate of established business ownership (17%) and South Africa has the lowest (3%). China has a slightly higher rate of 8%, while it is 5% in both Russia and India, the report says. Of those engaged in 'TEA' in India, more than half have low-growth expectation, as they "did not intend to expand their employee base," the report says, adding that 44% expect to hire one to five employees over the next five years and only 5% plan to hire more than five employees. At the same time, business discontinuation rate in India is among the highest in the world at 26.4%, it says.

Bureaucratic hurdles lead to business discontinuation in 1.3% of cases, 7% of businesses fail due to financial issues, 6.5% due to personal reasons, 16.9% because of the business turning unprofitable and 58.4% due to other reasons. Of those engaged in TEA, an overwhelming 70.9% are in wholesale and retail trade, 12.1% in agriculture, mining, manufacturing and transportation, 9.3% in health, education, government and social service, 4.5% in information and communication technology, and finance, and 3.3% in other sectors.

The figures show a sharp decrease in early stage entrepreneurial activity in agriculture, which used to be predominant in the previous year at 42%.
Political Events
Political events in the public life of BRICS
Zuma and Lula – persecuted by the same enemy of the poor (Зума и Лула - преследуемые одним и тем же врагом бедных) / South Africa, March, 2018
Keywords: expert_opinion, political_issues
South Africa

The following article by Black First Land First (BLF) President, Andile Mngxitama, was previously published on the BLF website and is now reissued by Black Opinion:

The script of parliamentary coups against recalcitrant leaders is written in London and certified in Washington DC. The laboratory of this post cold war, 'cold war' is Brazil. The announcement today of the prosecution of Jacob Zuma brings this modus operandi into full circle. The war against the BRICS block is now almost complete. The removal of former President Zuma as President was the beginning of the end of the BRICS project.

Imperialism has now broke two legs of BRICS – Brazil and South Africa (SA). BRICS is not an ideology free block. The removal of the leftist President of Brazil and the black radical nationalist Zuma and the replacement of both of them by corrupt stooges of the West has broken the glue that kept BRICS together. China and Russian may as well speak directly with London, Brussels and Washington DC.

The move now firmly established is to use the media, corrupt opposition parties, politicians, the pro West/WMC faction of the ruling party, as well as the foreign funded and directed so-called civil society organizations – their uniting theme being the fight against corruption. These forces that claim to fight corruption are themselves corrupt to the core. This is true for Brazil as it for South Africa.

The last and significant tactic of these coups is the judiciary which is used for selective prosecutions. Again this method was tested in Brazil where the most popular Presidential candidate has been blocked from running via malicious prosecutions and convictions. Having perfected this method with Lula da Silva – the poor peoples choice – in Brazil, they are now doing the same with Zuma who is the father of Radical Economic Transformation (RET) in SA.

Lula and Zuma are being punished for choosing policies which serve the poor but threaten the interests of big capitalists. The prosecutions are calculated to intimidate all the forces that want economic redistribution to the poor. The judicial attacks are coordinated with the same forces in the opposition parties that are controlled by London and Washington DC.

We have seen how in SA the announcement to prosecute former President Zuma was preceded by attempts to deny him state funds to defend himself legally. Nothing is a coincidence. The program of suffocation is designed by imperialism.

Lula has been convicted in a Kangaroo Court. Zuma's rights have been undermined severely in several ways. Just like Lula, Zuma will not receive a fair trial since the very process to prosecute him has been nothing but political persecution.

Zuma is being punished for standing out and supporting RET. Zuma would have been left alone had he not given presidential impetus to the call for land expropriation without compensation. He angered WMC immensely when he removed Pravin Gordhan from the position of Minister of Finance. The mining sector owners were greatly alarmed by the Mining Charter that sought to bring blacks into mining within twelve months.

The prosecution of both Zuma and Lula must be understood as persecutions by imperialism to set an example about what happens to leaders when they stray from the ten commandments of imperialism.

The forces of radical change have to appreciate these dynamics and organise even harder for the pro-people programmes that these leaders are being persecuted for. It is for this reason that Black First Land First (BLF) is agitating under the slogan, Defend RET! Linked to this defence of RET is the commitment to our 'Hands off Zuma' stance. It is up to the revolutionary forces to explain to the people what's going on and to organise resistance from below through direct action.

Zuma must be defended and his persecutors exposed. The real criminals who steal billions like Markus Jooste, Christo Wiese and Johann Rupert are not prosecuted. Mass murderers like FW de Klerk and Adrian Vlok are peacefully enjoying their retirement. This hypocrisy must be exposed through the radical demands for RET.

Now is the time to organize, not to mourn. BLF stands with Zuma and Lula to the end! RET will be defended.

World of work
Social policy, trade unions, actions
Book talk. The BRICS and collective financial statecraft (Разговор о книгах. БРИКС и коллективное финансовое государственное управление) / USA, March, 2018
Keywords: research, expert_opinion, global_governance, economic_challenges

Thursday, March 29, 2018 12:00pm
Marshall D. Shulman Seminar Room (1219 International Affairs Building, 420 W 118th St)
Please join the Arnold A. Saltzman Institute of War and Peace Studies and the Harriman Institute for a talk with Cynthia Roberts, Co-Director of Columbia University's BRICLab, and co-author of the book The BRICS and Collective Financial Statecraft (Oxford University Press, 2017). Jack Snyder, Robert and Renée Belfer Professor of International Relations, Department of Political Science and Member SIWPS, will moderate.

What are the implications of the recent emergence of China and other non-Western economies? In the early 21st century, five rising or resurgent powers (Brazil, Russia, India, China, and South Africa) formed an exclusive international club: the BRICS. The BRICS perceive an ongoing global power shift and contest the West's pretensions to permanent stewardship of the world economic order. Despite their diversity, the BRICS cooperate to realize joint goals, including greater influence within the International Monetary Fund and World Bank, and the development of "outside options" to create new multilateral institutions and opportunities in international financial markets. The analysis reveals their common aversion to being targets of financial sanctions and subject to U.S. dominance of the global financial system and their attempts to gain greater financial autonomy and a larger role for China's currency in world markets. Although each member has unique motivations for collaboration, China controls resources that permit it the greatest influence in intra-club decision-making and with the United States and other incumbent rule-makers. The BRICS future depends not only on their bargaining power and adjustment to markets, but also on their ability to overcome domestic impediments to sustainable economic growth, the basis for their international influence.
Mbalo Brief - March 2018 (Резюме Мбало - Март 2018) / South Africa, March, 2018
Keywords: social_issues, SA_chairmanship
South Africa

South Africa will host 10th Brazil, Russia, India, China and South Africa (BRICS) Summit which is scheduled from 25 to 27 July 2018. The 2018 Summit will be an important milestone for BRICS cooperation, as it represents a decade of BRICS cooperation at the highest diplomatic level. The summit will see South Africa building on the programme of development and prosperity for partner countries. The official BRICS Summit website was launched as the first point of contact for the latest information on the Summit for both domestic and international users. This will include, amongst others, information about BRICS, the member countries, the host country and province, logistics and side events.

In this month's issue of Mbalo Brief, our educational article is based on the Early Childhood Development, derived from the Education Series Volume IV: Early Childhood Development in South Africa, 2016. Also have a look at our monthly crossword puzzle and solutions for February 2018 puzzle.

Articles published in this issue are based on results of industry surveys conducted for the months ranging from December 2017 to January 2018.
Comprehensive reports, BRICS research materials
Economic Growth, Financial Development and Income Inequality in BRICS Countries: Evidence from Panel Granger Causality Tests (Экономический рост, финансовое развитие и неравенство доходов в странах БРИКС: данные из анализа причинно-следственных связей Гренджера) / Germany, March, 2018
Keywords: research, expert_opinion, economic_challenges
Author: Moheddine YOUNSI and Marwa BECHTINI

The purpose of this paper is to examine the causal relationship between economic growth, financial development and income inequality for the BRICS countries, namely; Brazil, Russia, India, China, and South Africa, using annual panel data covering the period 1995-2015. We construct a composite financial sector development index for these countries by applying the principal component method on the main four proxies of financial development, that is, domestic credit to private sector to GDP ratio, domestic credit given by banks sector to GDP ratio, M2/GDP, and stock market capitalization to GDP ratio. Results of Pedroni panel cointegration and Kao residual panel cointegration tests confirm the valid long-run cointegration relationship between the considered variables. Fixed effects estimation results show that GDP per capita growth has a positive and significant effect on income inequality, while the coefficient of its squared term has negative and significant effect on income inequality. Similarly, financial development index appears to have a positive and statistically significant effect on income inequality, while its squared term has negative and statistically significant effect on income inequality. Our empirical findings support the financial Kuznets hypothesis of an inverted U-shaped relationship between economic growth, financial sector development and inequality in the BRICS countries over the study period. Our results are robust by employing POLS and GMM estimators. Results of Granger causality test shown that there is a unidirectional causality running from financial development index to income inequality, but a bidirectional causality between inflation and income inequality is found. However, there is no causal relationship between income inequality and economic growth. These findings are expected to help policymakers to reduce inequality in these countries through the improvement of taxation policies financial system.
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