Information Bulletin of the BRICS Trade Union Forum
Issue 24.2018
2018.06.11 — 2018.06.17
International relations
Foreign policy in the context of BRICS
July summit: Is it a case of another BRICS in the wall, without a plan? (Июльский саммит: это еще один случай кирпичика БРИКС в стене, без плана?) / South Africa, June, 2018
Keywords: expert_opinion, summit, global_governance
South Africa
Author: Donovan E Williams

"All in all, you're just another brick in the wall," is the immortal line in Pink Floyd's song, The Wall. I am sure that whenever you think of the BRICS group of countries, you think of that Pink Floyd line - not because BRICS conjures up an image of fighting for the underdeveloped of the world, but rather that it seems like just another brick in the wall. No different to the other global bodies.
The average South African thinks of BRICS as just another talk shop. At the end of July, the country hosts the 10th BRICS summit. No one will be holding their breath, hoping BRICS will be adopting policies that are any different to the International Monetary Fund.

As a country - not just government, but also the media, academia and policy centres - have we developed policies we think South Africa should be proposing at forums such as BRICS? Expect the experts to throw bricks at BRICS. On the left side of the political spectrum, they will point to President Cyril Ramaphosa speaking at the Afrikanerbond and attending the G7 meeting as proof that the unfair status quo remains. The right wing will warn against being close to Russia and China, and antagonising the West.

The perennial complaint is that our government "talks left, while acting right".

Do the BRICS countries owe us anything? None of them played any role in colonising Africa and weren't in cahoots with the apartheid state. They are not a part of the global military industrial axis, as controlled by the Western powers. The G7 meeting in Canada was a G7 meeting, not a G8 one. Russia was not welcomed.

It's wrong to create the expectation that an alternative economic system can be achieved by decree. Two hundred years after Karl Marx's birth, we are no closer to creating a new economic system. To illustrate, the world trades in the US dollar. Why is the dollar more valuable or the currency of "choice"? Countries had moved away from what is referred to as the "gold standard".

This standard was the basis of the monetary system. The amount of gold bullion that a country possessed determined the value of their currency and how much could be printed. This ensured no reckless printing of money by a government. When the gold standard was discarded, a currency's value was determined by the output of a country's economy.

Goods traded within and exported out of a country created a greater demand for the currency, therefore increasing the currency's value.

This was the theory, but the gold standard was in reality replaced by the dollar. You can only really buy goods on international markets with the American dollar, ensuring that the dollar is always in demand and the American economy is essential to all countries.

Thus, the laws of economics do not apply to the US. They can print as much money as they want.

There have been attempts made for the Euro or the Chinese yen to be a significant alternative to the dollar, but the reality is that the dollar remains the primary international currency.

The centrality of the American dollar ensures the material control by the West of the global economy. There's no real science behind confidence in a currency and country.

We must recognise that, essentially, sentimental feelings determine if a country is a good investment destination or not.

The Beijing Consensus has been touted as a viable alternative to the Washington Consensus. This little-known consensus cannot only be known in expert and elite circles to gain any traction.

The neo-liberal paradigm is presented as a fait accompli, pervasively entrenched by popular culture through Hollywood, reinforced by the values in our education and religious teachings.

It is more influential than economic policy institutions and governmental bodies. BRICS is criticised not because it is not doing enough to oppose neo-liberalism, but some believe it reinforces neo-liberalism.

For me, the operative question is: How do we ensure BRICS does what we want it to do? We cannot expect BRICS and its institutions to go toe-to-toe with the neo-liberal hegemony, however, it would not be untoward to expect BRICS institutions to operate differently to neo-liberal ones.

Thus far, BRICS partners seem to be on a first date and have not yet developed the trust to slow dance, cheek to cheek, and risk a little.

It would be foolish to believe that any institution can replace the need for strong rational argument and activism. All institutions are contested terrains, be it constitutionally-established ones like parliament or international ones such as BRICS.

Even if an institution had progressive objectives, that would be no guarantee that the decisions and programmes will be progressive.

In BRICS, we must note that the texture of ideology has changed, with a few political parties that were there at the inception being removed from power.

But here is the realpolitik. If the ruling parties were the same, the terrain would still be contested. Appeals to justice and fairness are never enough, requiring more gravitas than that.

Our government, in conjunction with the experts and talent within the country, should deploy thinkers and technocrats to BRICS. Technocrats and thinkers who are different and do not subscribe to the current neo-liberal paradigm.

It requires the experts, academics and the cleverest among us to come up with detailed alternative policies and procedures. We must present thought-out and detailed alternative policies to BRICS, not just good ideas.

We expect institutions such as BRICS to solve our problems, while we don't sit down and try to better understand them, so as to discover what a possible collective solution could be.

Instead of shouting at BRICS, we should use the opportunity of the lead-up to the BRICS summit to discuss an alternative analysis of what is wrong and highlight people-centred and people-driven policies.

Then maybe we can make it a different set of BRICS in the wall.

* Williams is the Director for Africa Affairs at the National School of Government. These are his personal views.

At Annual Brics Summit, India will Push Members to Define Terrorism (На Ежегодном саммите БРИКС Индия будет продвигать участников к определению терроризма) / India, June, 2018
Keywords: summit, terrorism

India will push fellow Brics members to define terrorism and reflect its concerns over cross-border terror when their leaders, including Prime Minister Narendra Modi, gather for their annual summit in Johannesburg in July, officials familiar with the matter said.

If India manages to achieve the twin objectives at the Brazil, Russia, India, China and South Africa grouping, it will be a major victory for the country after the United Nations and United States designated the Pakistan-based Lashkar-e-Taiba and Jaish-e-Mohammad as terrorist outfits.

Indian officials had already taken up the matter with their counterparts in the other Brics nations. India's demand had led to "intense discussion which remains inconclusive", diplomats of two member nations said.

The talks will continue as terrorism, Brics vision for UN reforms and de-radicalisation are on the agenda when National Security Advisers (NSAs) of the five nations meet in South Africa from June 21, an official said. NSA Ajit Doval will represent India at the meeting.

Delhi wants the grouping to come out with a definition of terrorism, an Indian official said on condition of anonymity. A mention of cross-border terrorism, which refers to terrorist activities launched against India from Pakistani soil, would be a diplomatic achievement for India.

But getting India's demand reflected in its entirety in a joint statement would not be easy. "The definition of terrorism is not an easy issue. The UN itself is yet to define it. We need to wait and see which way the discussion will progress what we come up with at the end," one of the Brics diplomats mentioned above said, requesting anonymity.

The Brics leaders have asked for discussions on the UN convention on counter-terrorism, which includes defining terrorism, to complete soon, a second Indian official said.

"We call for expeditious finalisation and adoption of the Comprehensive Convention on International Terrorism (CCIT) by the United Nations General Assembly," Brics leaders said in a joint communiqué last year, without getting into defining terrorism, as sought in the convention.

The group deplored all terrorist attacks worldwide, including those on Brics members, and condemned terrorism in all its forms, the statement said. Those responsible for committing, organising, or supporting terrorist acts must be held accountable, said the statement, reflecting the Brics line on terrorism.

Proposed by India, CCIT intends to define terrorism, criminalise all forms of terrorism and deny funds to terror groups.

The closest Brics came to mentioning cross-border terrorism was again in the 2017 communiqué, saying it was the responsibility of states to counter terrorism. "...we stress the necessity to develop international cooperation, in accordance with the principles of international law, including that of sovereign equality of states and non-interference in their internal affairs."

The UN's failure to define terrorism worries India. Addressing the Indian diaspora in Brussels in 2016, Modi said, "The United Nations has all means and mechanism to deal with war. But unfortunately the UN does not know what the definition of terrorism is and how to address it."

Foreign Minister Sergey Lavrov's remarks at a meeting with representatives of Russian non-profit organisations, Moscow, June 15, 2018 (Выступление Министра иностранных дел России С.В.Лаврова в ходе встречи с представителями российских некоммерческих организаций, Москва, 15 июня 2018 года) / Russia, June, 2018
Keywords: sergey_lavrov, speech


I am happy to meet with you again. Our meetings have become traditional. They give us an opportunity to talk in detail and exchange views on the issues that are of mutual interest to the Foreign Ministry and our non-profit organisations dealing with problems that are on the agenda of international agencies.

This goes far beyond the traditional interpretation of foreign policy and actually embraces all areas of human endeavor, which require universal regulation and development of the rules of conduct in the era of globalisation. Naturally, our talk with you helps us better understand the feelings of people who are directly dealing with these issues, for whom this is not a pastime but a mission in life. It is very important for me to know that NGO representatives are interested people that are following the dictates of their heart and their convictions rather than just doing a job.

Regarding the situation in the world and the atmosphere in which we have to work, I probably do not need too many words. This was reviewed by President Vladimir Putin in his latest statements. The Foreign Ministry regularly comments on various events and analyses world developments. In brief, a new, more democratic and fair polycentric world order is taking shape. Needless to say, those that ruled the world for centuries, established rules for themselves and others, demanding that the latter abide by them without necessarily following them themselves (these are our US-led Western colleagues) are resisting these processes and looking for excuses and reasons to impede them. They are trying to uphold their dominant position, which, by and large, is receding into the past.

Searching for such excuses and rationales, they have been accusing Russia of many mortal sins (I will not give specific examples at this point) and continue to demand that we change our foreign policy and our conduct. They are saying straight that they favour cooperation with Russia but to launch it Russia needs to repent and acknowledge everything, in which case they will start talking with us.

Obviously, it is pointless to discuss these issues without discussing the grounds for their concerns. We asked them to present specific facts (we have never dodged an honest conversation) so that we could sit down and exchange our assessments and approaches in a bid to find mutually acceptable solutions. However, we are being told that they are not going to give us any facts, that we know everything ourselves. I am not exaggerating – this is how it has been.

Naturally, such attempts to influence our foreign and domestic policy have no prospects for progress. Our country is capable of upholding its sovereignty, ensuring its national security and protecting its citizens in any situation and any developments.

That said, unlike our Western counterparts, we will never seek confrontation with anyone, threaten anyone or impose our views on various issues on others. We never interfere with the affairs of others, unlike our Western colleagues for whom this conduct has become all but standard practice. Just think about the events of the Arab Spring that still have repercussions in the entire international arena, and, of course, the anti-constitutional coup in neighbouring Ukraine.

Defending our sovereignty, security and the interests of our citizens, we will simultaneously protect (and are currently doing this) the foundations of international law and the agreements on strategic security, arms control, and non-proliferation of weapons of mass destruction, and will not agree with unilateral attempts to revise them (such attempts are being made today).

We remain open to a candid dialogue and cooperation. Of course, we prioritise our internal tasks and the goals of promoting integration processes within the Eurasian Economic Union with the involvement of the SCO, ASEAN and all countries located in Eurasia. President Putin spoke of the need to develop, based on available opportunities, the capabilities of our common space, which we refer to as the Greater Eurasian Partnership or Project. It is objectively taking shape in reality, which was confirmed during recent meetings held as part of the EAEU and the SCO.

I think that in the end (better sooner than later), our Western colleagues will realise that state-to-state relations should be based on the principles of mutual respect and consideration of each other's interests. In this regard, one cannot but rejoice that green shoots of common sense have begun to show. We have seen this and continue to see it in our contacts with some EU member states. Such countries are growing in number. Importantly, of course, their understanding of how abnormal things are now should be transformed into concrete practical actions. We look forward to our partners becoming ready to resume full-fledged relations with us.

Clearly, interaction with our partners abroad through non-governmental organisations makes it possible for everyone to take a broader look at a variety of issues than within the framework of classical diplomacy. We are interested in our civil society actively participating in discussions held on multilateral platforms. So far, this participation is not as developed as we want it. Only 70 Russian NGOs enjoy consultative status with ECOSOC, at a time where it has over 4,000 organisations represented with it. Speaking about the Conference of International Non-Governmental Organisations of the Council of Europe, only four Russian NGOs are its permanent participants. At UNESCO, only three our non-governmental organisations have attained partner status. Clearly, there are a number of factors which prevent a quick solution to the issue of expanding representation of our NGOs, including, of course, economic and financial aspects. However, with your active position and initiatives, the Foreign Ministry will do its best to make sure that these issues are resolved promptly. In any case, your work at the UN, the OSCE, the Council of Europe and other organisations is very much needed.

We understand your priority focus on strengthening interaction with civil society in CIS countries, including, of course, the CSTO and the EAEU. I believe it is important to support contacts between young people.

This is reflected in our agenda in the SCO and BRICS, where there are entities which encourage relations between the youth organisations of the participating countries. Of course, we see many positive examples, including, with President Putin's recent visit to the People's Republic of China in mind, fruitful contacts between the NGOs of Russia and China, which in fact help strengthen the humanitarian component of our comprehensive strategic partnership.

We will actively support your contacts with the authoritative political science centres in the countries of the East, participation in events organised at their venues, and your initiatives to invite experts to Russia. Of course, we are interested in ensuring that NGOs and informal structures communicate with each other and promote straightforward principles of mutual respect, mutual understanding and neighborliness in Europe.

We still very much appreciate your work on combating the falsification of history, including, primarily, the history of the Great Patriotic War and World War II in general, and opposing the unscrupulous war on monuments to Soviet liberator soldiers. It is appalling to observe such activities in a number of European countries, and we are taking measures to curb them, including through collective actions of the member countries of the CIS and the CSTO in international organisations and submitting specific proposals for consideration at various venues, including the OSCE and the Council of Europe.

We highly value our relationship. We see you as our partners in promoting our aspirations on the international arena, where we want to see a positive, non-confrontational agenda that allows us to seek compromises and overcome the temptation to rely on diktat and ultimatums, which, unfortunately, some of our partners still succumb to.

Today, we have here representatives of non-governmental organisations from many Russian regions. We support NGO activities in the Russian regions which will help us to develop our international ties, all the more so as each Russian region has international partners. This is also an important area of focus. As the Foreign Ministry, we will be willing to provide informational and organisational support and, whenever possible, resource support to the regional NGOs' activities through our representative offices in the Russian regions, to help make better use of the possibilities available through state grants and provide other support, including through the Alexander Gorchakov Public Diplomacy Fund created specifically for this purpose.

We will continue the practice of including NGO representatives, also from the Russian regions, in the Russian federal and regional delegations, when such delegations travel abroad for talks and contacts with their foreign partners.
Investment and Finance
Investment and finance in BRICS
BRICS realises its political and economic power (БРИКС осознает свою политическую и экономическую мощь) / South Africa, June, 2018
Keywords: expert_opinion, brics+, ndb, global_governance
South Africa
Author: Shannon Ebrahim

South Africa is just five weeks away from hosting the BRICS Summit in Johannesburg with the leaders of the most important emerging economies. If the BRICS foreign ministers' meeting held in Pretoria is anything to go by, there will be a lot more to discuss than mere trade, investment and development financing.

It seems the ministers may actually want to align their foreign policies on certain issues of international concern, which will serve as a counterbalance to the unilateralism of the US administration.

The very fact that the BRICS envoys (deputy ministers) on the Middle East and North Africa will be meeting in Durban this week in order to grapple with burgeoning international crises in this complex region is indicative of attempts to develop a common political approach to crises.

The days of sidelining the emerging economies in global politics is surely over. Together Brazil, Russia, India, China and South Africa are finding their collective political power, and are even expanding the grouping to the "BRICS Plus" in order to broaden the power base BRICS yields.

BRICS could potentially expand its formal membership in the foreseeable future, bringing in African and other powerhouses. This means that we need to capitalise on our position as the only current African partner in BRICS to drive a progressive agenda in keeping with the AU's priorities.

BRICS has a great deal to show for its decade of partnership and perhaps one of the most important accomplishments of BRICS to date has been the creation of the New Development Bank (NDB) in Shanghai in 2015. The NDB epitomises the desire of major developing countries to play a bigger role in global governance. It is well known that developing countries and emerging markets grew impatient with the slow pace of reform at international financial institutions to obtain a bigger voice.

The core purpose of the NDB is to mobilise resources for infrastructure and sustainable development in the BRICS countries. The NDB's vice-president is a South African, Leslie Maasdorp, who has proved to be a visionary driver of the process to mobilise development financing. It is a huge accomplishment that the NDB, which is three years old, has approved loans to date of $5.1billion (R68.7bn).

The NDB is prepared to reach $15bn worth of loans by 2021.

According to Maasdorp, the NDB has completed its first loans to entities in keeping with its policy that 30% of its loans should go to non-sovereign operations or the private sector, while 70% of the loans should have a sovereign guarantee. Usually loans are made to state-owned enterprises or a government where the government underwrites the loan. Many multilateral banks are now giving loans to the private sector for infrastructure financing.

The recent meeting of the board of directors and governors of the NDB has reached an important milestone, having approved a budget for six new projects. One loan is of particular importance to South Africa, as the bank has approved a loan of $200million to Transnet in order to enhance the capacity of its port in Durban.

The project will see the rehabilitating of the port's container terminal berths that are currently operating beyond their original design, and the upgrading of port infrastructure to provide additional slots for larger vessels.

Sixty-five percent of South Africa's through-put goes through the Durban port, but its lack of capacity is a key inhibitor of GDP growth.

While Transnet is 100% owned by the South African government, the government is not underwriting the loan as it is being made directly to Transnet in an effort to reduce the number of sovereign guarantees. Similar loans are being approved for other BRICS countries, such as a $200m loan to the state oil company in Brazil, Petrobras, to improve its environmental footprint.

The loan is not being underwritten by the Brazilian government. The loan is to assist Petrobras in complying with new environmental regulatory requirements, through the upgrading of the infrastructure of two existing refineries with the objectives of reducing harmful emissions and preventing water and soil contamination.

The NDB has proved it is helping to fill an important gap in the global development finance architecture, as financing for infrastructure development is limited, despite growing demand. Infrastructure is Africa's priority, and the infrastructure build across the continent will help to reverse the low levels of intra-regional economic exchange, thereby increasing Africa's share of global trade.

Such developments are indicative of the real relevance of BRICS for emerging economies today.

At the end of the day, BRICS has become the main engine driving world economic growth. Together BRICS countries contribute to 50% of world economic growth, which exceeds the contribution of all developed countries combined.

* Shannon Ebrahim is Group Foreign Editor
Beams of the sunrise: a look at BRICS 5-year cycles (Лучи восхода солнца: взгляд на 5-летние циклы БРИКС) / Russia, June, 2018
Keywords: expert_opinion, economic_challenges, research
Author: Yaroslav Lissovolik

Of clear morning the beams of the sunrise flow in,
Unimpeded, keen, golden and crystalline,
Banded armies of light and air at one gate
They encounter, but interpenetrate.

- Percy Bysshe Shelley, "A vision of the sea"

With South Africa's chairmanship in the BRICS this year and the 10th BRICS summit expected to take place next month, the BRICS have come full-circle in their outreach efforts vis-à-vis other developing economies. Back in 2013 it was precisely South Africa that launched the first outreach exercise with respect to its regional partners in Africa. The onset of the new 5-year cycle marked by South Africa's BRICS chairmanship will build on China's earlier innovations with BRICS+ and will also feature new approaches pointing to the qualitative transformations in the BRICS dialogue with the developing world.

The BRICS outreach exercises at the very outset were framed in a regional context, with all core BRICS members inviting their regional partners to take part in the BRICS summits throughout the 2013-2018 period:

- 2013 South Africa: Durban BRICS summit – the outreach exercise is launched. Attending the outreach were the Chairperson of the African Union, the Chairperson of the AU Commission, African Leaders representing the eight Regional Economic Communities.

- 2014 Brazil: during the Fortaleza summit in Brazil the outreach meeting brought together the BRICS and leaders of UNASUR, the Union of South American Nations which includes members of the MERCOSUR as well as a number of other countries in South America.

- 2015 Russia: at the 7th BRICS Summit in Ufa, Russia the outreach incorporated the Shanghai Cooperation Organization (SCO) as well as the Eurasian Economic Union (EAEU).

- 2016 India: Goa BRICS summit – the outreach was attended by the heads of member states of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic
Cooperation (BIMSTEC), an international organization of seven nations of
South Asia.

- 2017 China: Xiamen BRICS summit – a major innovation takes place, whereby China launched the BRICS-Plus arrangement, which involved the invitation of the leaders of Egypt, Guinea, Mexico, Tajikistan, and Thailand. The novelty of China's approach was to transcend the regional approach rendering the cooperation with other developing countries transcontinental/trans-regional in scope.

- 2018 South Africa: building on the innovations of China, South Africa opted for a synthesis of regional outreach approach and the diversified BRICS+ approach that became focused on various regional integration groups of developing countries – in particular the countries invited to take part in the BRICS+ exercise included:

  • Argentina (as Chair of the G20 and influential MERCOSUR member),
  • Indonesia (as Co-Chair of the New Africa-Asia Strategic Partnership with South Africa and influential ASEAN member),
  • Egypt (as Chair of the G77+China),
  • Jamaica (as incoming Chair of CARICOM), and
  • Turkey (as Chair of the OIC).

Further innovations along the BRICS+ road may involve progression to forming a unified platform of regional integration arrangements that featured in the outreach activities of the past 5-year cycle of BRICS summits. Such an aggregation of regional arrangements from the past summits for each of the BRICS members would then feature the African Union (AU), MERCOSUR (given the difficulties experienced by UNASUR), the Eurasian Economic Union, the Shanghai Cooperation Organization as well as BIMSTEC.

Altogether the resulting acronym – BEAMS – among its several meanings is suggestive of the role of the aggregating platform of regional integration blocks as supporting structures to the edifice built on BRICS. In terms of terminology, the BEAMS platform is to denote the aggregation of regional integration groups, with BRICS+ being a broader concept that incorporates other forms of BRICS' interaction with developing economies such as platforms of regional developing institutions or regional financing arrangements (RFAs).

The above BEAMS grouping is a direct, almost one-for-one reconstruction of the sequence of BRICS outreach exercises with their regional partners throughout the 2013-2017 period. In effect it is the "revealed preference" of the BRICS economies with respect to the composition of the BRICS+ aggregating platform of regional integration groups. The contribution from China was that of launching a diversified, global approach within the BRICS+ format that taken together with earlier outreach exercises lays the foundations for what China's foreign minister Wang Yi termed as the "most extensive platform for South-South cooperation with a global impact". In other words, BRICS+ and BEAMS as its sub-component, is a summing up/synthesis of earlier BRICS experiments and innovations in the field of building ties with the Global South.

In light of the trends and possibilities outlined above with respect to the formation of the BEAMS platform as well as the BRICS+ mode of cooperation more broadly, the past two 5-year BRICS cycles as well as the coming "golden decade" comprising the next two 5-year cycles may be presented as follows:

- first 5-year cycle: conceiving diversity and including South Africa into the BRICS fore

- second cycle: engaging regional partners (outreach cycle)

- third cycle (next 5 years): the BRICS+ period and the crystallization of the "integration of integrations" BEAMS platform

- the fourth cycle: the BRICS++ period and the extension of the integration impulses from the regional BRICS+ platform to other parts of the developing world via a combination of regional and bilateral economic alliances.

While in the case of the BRICS grouping the key criterion was the selection of the largest heavy-weights in terms of GDP and market size across EM, in the case of the BEAMS/BRICS+ platform of "integration of integrations" the criterion is more geared towards selecting those groups of countries that are the closest allies to the respective BRICS core members. Nonetheless, looking at the league table of regional arrangements formed by developing countries, it does appear that the regional groupings in the BEAMS platform such as the Shanghai Cooperation Organization (SCO) in Eurasia, or Mercosur in South America are among the largest in terms of GDP in their respective regions. Accordingly, one may also consider the BEAMS/BRICS+ platform as the aggregation of some of the largest regional integration groups across the developing world.

The IMF's and World bank's figures for 2016 suggest that the BEAMS platform comprising BIMSTEC, EAEU, the African Union, Mercosur and the SCO would account for 27.4% of global GDP, well above 15% of the IMF quota and nearly two-thirds (66%) of the global population. This is a notable improvement compared to the BRICS core, which accounts for 22.3% of global GDP, less than the 15% benchmark for the IMF quota and 42% of the population. Of broadly the same orders of magnitude would be other possible modifications of the BRICS+ platform, such as the proposed TRIA (comprising pan-continental unions such as CELAC and the African Union as well as the SCO) and a more RTA-focused variation of the BEAMS platform comprising BIMSTEC, EAEU, the ASEAN-China FTA, Mercosur and the Southern African Development Community (SADC). While TRIA would account for 29.7% of global GDP and 66% of global population, the corresponding figures for the modified version of the BEAMS platform would be 27.7% and 58.2% respectively.

Interestingly, both modifications of the BEAMS platform are roughly on par in GDP terms with the largest regional integration arrangements in the world, namely NAFTA, which in 2016 accounted for 28.1% of global GDP and only 6.5% of the world's population. At the same time in terms of GDP size BEAMS is notably behind such potential platforms as TPP (together with the US) and TTIP – these account for 38.3% and 46.5% of global GDP respectively. The way for an alliance of developing economies to edge closer to these levels of aggregated GDP weight would be to bring together all of the main regional trading arrangements of the Global South on top of BEAMS/TRIA such as ASEAN and the Gulf Cooperation Council (GCC). This in turn would also serve to bridge the gap with what currently appears to be the largest potential alliance in the world, namely a combined TPP and TTIP platform which would account for more than 60% of global GDP.

Aside from the quantitative considerations of the size of GDP and populations, compared to the BRICS core, the BEAMS/BRICS+ framework presents a qualitatively more diversified structure, which dilutes the prominence one single country and presents greater diversity and variety of economic models and types of regional integration. An "extended format" for BRICS via expanding economic cooperation with regional partners also renders such a platform more promising for increasing the use of national currencies across the developing world (see Y. Lissovolik. Monetizing BRICS+: introducing the R5 initiative, August 30, 2017). The formation of the BEAMS/BRICS+ platform also allows participating economies to exploit the sizeable potential of reducing the South-South protectionism – the signing of the African Continental Free Trade Area (AfCFTA) is one of the most important recent advances in this area. In this respect the regionalism (including mega-regionalism) of the Global South offers more scope for trade liberalization and variability in integration patterns and formations compared to the largely structured and in some respects ossified regionalism of the developed world.

Perhaps the most important reason why the BRICS+ platform based on aggregating regional groups is expedient and urgent is due to the trends observed in the world economy, namely the formation of mega-regional blocks such as the Trans-Pacific and the Trans-Atlantic Partnerships. While the formation of the latter has been postponed by tensions between the US and the EU, there are signs that the Trans-Pacific partnership is brought back to life. The main race in the world economy today is the creation of aggregated platforms of regional integration arrangements (TPP may be contemplated as bringing together several integration arrangements, including NAFTA, ANZCERTA, Peru-Chile FTA as well as a number of ASEAN economies) that have enough mass and leverage to attract trade and investment flows from across the world economy. In this respect the BEAMS formation may be the best that the Global South can come up with in terms of building a large enough platform (in effect its own mega-regional platform) to limit the adverse impact of trade diversion and losses in investment flows emanating from the emergence of other mega-regional blocks.

BRICS, SA to talk tax enforcement (БРИКС и ЮАР обсудят контроль за соблюдением налоговой дисциплины) / South Africa, June, 2018
Keywords: economic_challenges, SARS, tax_issues
South Africa

The improvement of tax enforcement technology in the Fourth Industrial Revolution will take centre stage as South Africa prepares to host tax experts and heads of tax administrations from BRICS member countries next week.

Hosted by the South African Revenue Service (SARS) the meeting will take place at the Hilton Hotel in Sandton on Monday.

"The tax meetings will discuss contemporary tax issues such as the improvement of tax enforcement technology with a focus on the Fourth Industrial Revolution. Digitalisation is regarded to be the most significant development of the world economy since the industrial revolution," said the SARS on Wednesday.

Ahead of the four-day meeting, the revenue service said the development of digitalisation creates opportunities for innovation, investment, new business and jobs. This also it said, is one of the main drivers of sustainable development.

"However, the taxation of the digital economy has not fully reflected the advantages created by the spread of technology. This meeting will also explore new approaches to taxation governance and economic and technological cooperation which is expected to contribute significantly to the improvement of a global economic governance system."

The Brazil, Russia, India, China and South Africa (BRICS) tax meetings follow on BRICS Customs meetings held in April this year, which contributed to creating an enabling framework for BRICS Customs cooperation.

The outcomes of the meeting as well as any agreements reached will be announced by acting SARS Commissioner Mark Kingon at the end of the meeting on Thursday.
BRICS setting up its own credit rating agency (БРИКС создает собственное рейтинговое агентство) / Greece, June, 2018
Keywords: expert_opinion, rating, economic_challenges
Author: Kester Kenn Klomegah

Experts on regional strategic policy have urged BRICS member countries to step up efforts towards setting up its own credit rating agency as an effective mechanism to consolidate the bloc's new multifaceted spheres of cooperation. BRICS (Brazil, Russia, India, China and South Africa) is currently working on a set of new proposals including the establishment of women business club and a rating agency, among others, for the 10th edition of BRICS Summit scheduled to take place from 25-27 July, 2018, in Johannesburg, South Africa.

As far back in 2015, Prime Minister Narendra Modi of India called upon members of BRICS to take begin the BRICS credit rating agency. India has long held the view that a new rating agency would provide an immense contribution to the existing knowledge of rating systems. Since then, there have been discussions at several conferences and forums, the latest was during the special panel session on the future prospects of BRICS at the St. Petersburg International Economic Forum late May.

"As a first step towards creating such an agency, we propose the countries offer their national agencies to form a network. Our partnership with one of the Chinese rating agencies, Golden Credit, could be used as a prototype of this network," Ekaterina Trofimova, Chief Executive Officer of the Analytical Credit Rating Agency, said.

There are also similar views. "Many foreign countries most often consider or rate BRICS countries, enterprises and financial institutions get a biased evaluation. We would like to see more neutral ones that we can further relate to," according to Sergey Katyrin, President of the Chamber of Commerce and Industry of the Russian Federation. It's necessary to have unbiased ratings of institutions of BRICS countries as there are is open to the world and consistently expanding ties with concerned countries and seek integration into business associations, he explained.

Jayshree Sengupta, a Research Fellow from the Observer Research Foundation in New Delhi, India, thinks that BRICS want to have their own rating agency and are set to have it soon because the three international rating agencies Moody's, Fitch and Standard & Poor that dominate the world sovereign rating market have been rather unfair to BRICS members and other developing countries. They frequently downgrade them on unjust grounds and criteria that serve western political interests. They downgraded Brazil and Russia in 2017 and keep changing their grading about India, creating much uncertainty.

Sengupta indicated in an email interview that "their 'issuer paid' model of rating is biased and BRICS members are perhaps contemplating having their own rating agency on 'investor pays' model which may be more appropriate for their Emerging Market economies."

While expressing the fact that the idea is highly laudable, Francis Kornegay, a Senior Research Fellow at the Institute of Global Dialogue, University of South Africa, explained recently to me that "it has something to do with the global economic balance of power as to whether there is sufficient leverage among BRICS countries and other emerging powers to provide such an alternative."

Kornegay specializes on global geopolitical and strategic trends and he is also a long-term analyst of global South and emerging power dynamics and US foreign policy. As such, he recently produced, as lead co-editor, Laying the BRICS of a New Global Order: From Yekaterinburg 2009 to eThekwini 2013 (Africa Institute of South Africa).

The BRICS economic growth rate is increasing. "Starting last year, all BRICS countries have demonstrated positive trend in economic growth. Moreover, we expect that the growth rate will be increasing through 2018 and 2019, especially in India," according to Yaroslav Lisovolik, Chief Economist and Managing Director for Research at the Eurasian Development Bank.

Thus, a BRICS own rating agency has the benefit of reducing the dependency of sovereign and corporate ratings of the developing world on the verdicts of the "big three" referring to Moody's, Standard & Poor and Fitch. "The fact that all five BRICS economies are to participate in launching the ratings agency serves as a wide enough base to create sufficient demand and use of its ratings compared to the relatively narrow potential of national rating agencies," he explained.

In other words, an alliance among the largest developing countries is crucial in launching such an enterprise – on top of the possibilities of operating in the BRICS countries themselves and there may also be the possibility to expand the operations of such an agency to the regional partners of BRICS countries, Lisovolik suggested.

On his part, Brazilian Ambassador to Russia, Jose Vallim Antonio Guerreiro questioned how the procedures of existing rating agencies could be applicable to all economies. "The question is whether this procedure includes all the relevant factors. You may need to look for alternative indicators and broad approaches to assess the health of economies," he argued. "I do not believe that the new agency will be something to resist the existing institutions. They do their job, and certainly, there is a demand for their services. But it is possible that the BRICS countries will elaborate a different approach."

Some experts still cast doubts about the feasibility of the project. "As far as I know, this endeavour was considered too expensive and not feasible at the moment," Professor Georgy Toloraya, Executive Director at the National Committee on BRICS Research in Russia, wrote me simply without detailed discussion on the topic.

But, an Associate Researcher at the South African Institute of International Affairs (SAIIA), who requested for anonymity, strongly suggested that the BRICS credit rating agency as a business project could be well-managed if given to India, or at best, to China that previously offered a larger part of seed capital for the establishment of the New Development Bank.

The Financial Times reported that BRICS countries have long deliberated on plans to establish their own rating agency along with the formation of the New Development Bank. The BRICS member countries (namely Brazil, Russia, India, China and South Africa) collectively represent about 26% of the world's geographic area and are home to 2.88 billion people, about 42% of the world's population.
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Social policy, trade unions, actions
Chelyabinsk to Take Advantage of Foreign Experience in Preparation for SCO, BRICS Summits (Челябинск будет использовать зарубежный опыт для подготовки к саммитам ШОС и БРИКС) / Russia, June, 2018
Keywords: summit

Moscow, 2018, June 15. Boris Dubrovsky, Governor of Chelyabinsk Region, held a number of meetings on June 9–10, during his visit as part of the official delegation of the Russian Federation to China. The meetings were devoted to organization of the largest international summits. As the head of the region noted, the foreign experience will be useful in the preparation for the SCO and BRICS summits, which will be held in Chelyabinsk in 2020.

"Our goal was to study their experience in preparing and hosting the SCO summits. We learned a lot of useful and interesting things through cooperation with our colleagues. Many of those things made us revisit what we are doing now. We'll keep working with this information," said Boris Dubrovsky.

The meeting with Zhang Zongyan, President of China Railway Group Limited, had a special practical bearing and was held to discuss the prospects for company's participation in the Ural High-speed Railway construction project. It will use the infrastructure legacy of SCO and BRICS summits that will be held in Chelyabinsk in 2020 to support Russia's bid for the World Expo 2025 in Yekaterinburg.

"We think of Chelyabinsk – Yekaterinburg HSR as a key link along the Moscow – Beijing route. Thus, in this context partnershi with Chinese companies is an absolutely logical step. Throughout the life of the HSR project we have repeatedly cooperated with the Chinese side. I can say that once Chelyabinsk qualified to host SCO and BRICS summits 2020, the interest of Chinese side in our project grew substantially. We are already discussing the subject matter in details. For instance, Qingdao hosted the meeting with the President of China Railway Group to discuss our further cooperation. As a result of this meeting, we agreed to draft a protocol on joint implementation of the Chelyabinsk – Yekaterinburg HSR," Boris Dubrovsky emphasized.

Chelyabinsk is the designated location for the Council of Heads of SCO Member States session and BRICS leaders meeting in 2020, in accordance with the Presidential Decree No. 110 'On the Organizational Committee for Preparation and Provision of the Russian Federation's Presidency of the Shanghai Cooperation Organization in 2019–2020 and in the BRICS association in 2020.

The Roscongress Foundation is a socially oriented non-financial development institution and a major organizer of international conventions, exhibition and public events.

The Roscongress Foundation was founded in 2007 with the aim of facilitating the development of Russia's economic potential and strengthening the country's image by organizing international conventions, exhibitions, and public events.The Foundation develops substantive content for such events, providing companies and organizations with advice, information, and expert guidance, and offering comprehensive evaluation, analysis, and coverage of the Russian and global economic agendas.It offers administrative services and promotional support for business projects and helps to attract investment, including in the form of public-private partnerships.

Today, its annual programme includes events held from Montevideo to Vladivostok, offering an opportunity to bring together global business leaders, experts, the media, and government officials in one place, creating favourable conditions for dialogue and the promotion of new ideas and projects, and assisting in the creation of social enterprise and charity projects
BRICS delegation to learn lessons on agriculture (Делегация БРИКС получит уроки по сельскому хозяйству) / South Africa, June, 2018
Keywords: agriculture
South Africa

A BRICS delegation will next week visit agricultural programmes in South Africa and engage students at the Elsenburg agricultural college in Stellenbosch.

Agriculture, Forestry and Fisheries Minister Senzeni Zokwana and the Western Cape MEC for Economic Opportunities, Alan Winde, will host the delegation who will also visit a farm.

South Africa assumed the rotational chairpersonship of BRICS (Brazil, Russia, India, China and South Africa) from 1 January to 31 December 2018.

This year, South Africa will host the 10th BRICS Summit to take place in Johannesburg in July.

The 2018 Summit will be a milestone for BRICS cooperation, as it represents a decade of BRICS cooperation at the highest diplomatic level.

The summit will be held under the theme: "BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution".

The theme is reflective of the core priorities of each one of the BRICS members, notably to strive towards the creation of an inclusive society and global partnerships that will bring prosperity to all humankind.

The theme is intended to align and ensure strategic continuity with the approved themes for South Africa's Chairship of both the South African Development Community (SADC) and the Indian Ocean Rim Association (IORA). –

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