Information Bulletin of the BRICS Trade Union Forum

Monitoring of the economic, social and labor situation in the BRICS countries
Issue 37.2022
2022.09.12 — 2022.09.18
International relations
Foreign policy in the context of BRICS
Russian, South African top diplomats discuss strengthening bilateral cooperation
(Главные дипломаты России и ЮАР обсудили укрепление двустороннего сотрудничества) / Russia, September, 2022
Keywords: top_level_meeting, cooperation

The sides reiterated their commitment to closer foreign policy coordination within the United Nations, BRICS, the Group of Twenty and other multilateral formats

MOSCOW, September 12. /TASS/. Issues of the further development of bilateral relations were the focus of Russian Foreign Minister Sergey Lavrov's telephone talks with his South African counterpart, Naledi Pandor, the Russian foreign ministry said on Monday.

"The two top diplomats exchanged views on key topics of bilateral relations with a focus on strengthening political dialogue, expanding mutually beneficial trade-and-economic and other cooperation," the ministry said.

The sides reiterated their commitment to closer foreign policy coordination within the United Nations, BRICS, the Group of Twenty and other multilateral formats "with an aim of resolving pressing international and regionals problems via dialogue on the basis of the respect to the principles of the United Nations Charter," it said. "Apart from that, the minister discussed a schedule of upcoming contacts.".

China urges Russia to strengthen coordination within BRICS, other multilateral formats (Китай призывает Россию усилить координацию в рамках БРИКС, других многосторонних форматов) / Russia, September, 2022
Keywords: top_level_meeting, cooperation

China urges Russia to strengthen coordination within BRICS, other multilateral formats

The two countries should team up to protect the interests of developing nations, says Xi Jinping

BEIJING, September 15./TASS/. President Xi Jinping has said China and Russia should strengthen coordination within the framework of the Shanghai Cooperation Organization (SCO), the Conference on Interaction and Confidence-Building Measures in Asia (CICA), BRICS and other multilateral formats, as well as team up to protect the interests of developing nations.

"The parties should strengthen coherence and coordination within the CSO, CICA, BRICS and other multilateral mechanisms, promote the strengthening of solidarity and mutual trust among all participants, expand business cooperation, protect the interests on the track of region's security and advocate the interests of developing nations and countries with emerging markets," the Chinese leader was quoted by China Central Television as saying as he met with Russian President Vladimir Putin.

The two leaders met on the sidelines of the SCO summit in Samarkand on Thursday.

Matter of time (Дело времени) / China, September, 2022
Keywords: expert_opinion, brics+

BRICS expansion is inevitable in light of developed countries' unwillingness to give developing countries greater say in global governance, but will take efforts

Although BRICS has engaged several other nations under the rubric of "BRICS Plus "and "BRICS Outreach" summits, the group has remained cautious about adding new members.

Lately, however, expanding its membership has become a subject of discussion at the BRICS summits, especially those of 2013, 2017 and 2022 when China was the chair, as it is noticeably in favor of additional members. Russia and South Africa have also become increasingly agreeable though they believe no single nation should be allowed to decide on the new entrants. Brazil and India, on the other hand, are still cautious.

Nevertheless the die has been cast and expansion is bound to happen sooner rather than later. The Beijing Declaration from their 2022 summit, for instance, agreed on "promoting discussions … on the expansion process … to clarify the guiding principles, standards, criteria and procedures" in order to expand cooperation with other emerging markets and developing countries.

This sentiment for expansion was also visible in their 2021"terms of reference" for their Sherpas.

Five new nations could be joining BRICS in 2023 during the presidency of South Africa, which joined the original group of four BRIC countries in 2010.Applications from Iran and Argentina are already under consideration while Saudi Arabia, Turkiye and Egypt have begun the process of applying for membership.

Turkiye, in particular, is keen on fast forwarding the application process. In addition, Algeria, Bangladesh, Indonesia, Kazakhstan, Mexico, Nigeria, Pakistan, Sudan, Syria, the United Arab Emirates and Venezuela have also expressed interest in joining. Several of them participated in the May 2022 "BRICS Plus" foreign ministers' meeting convened by China.

Among the arguments in favor of expansion, BRICS remains under-represented in global financial governance. Collectively the five members account for more than 50 percent of global growth, 40 percent of global currency reserves, 25 percent of global GDP and 16 percent of world trade, and yet, they hold no more than 15 percent of the voting rights in both the World Bank and the International Monetary Fund.

BRICS' advocating for free, fair and equitable global commerce has made it the flag bearer of the aspirations of the Global South that believes its interests are not adequately protected under the existing global financial governance system. The BRICS' GDP is set to surpass the G7 economies' GDP by 2032 if not earlier.

However, the criteria for expansion may not be GDP or market size. The inclusion of South Africa was based on it being the gateway of BRIC into Africa, the next center of growth, and the inclusion of a country from the African continent would make BRICS global.

Today the criteria for inclusion may include geographical, civilizational and religious representation or resources. Indonesia, Iran, Egypt and Saudi Arabia could represent the Muslim countries, each one with its unique strengths. Saudi Arabia may also stand out as the world's largest oil exporting nation.

Consensus on expansion will also be constrained by intra-BRICS relations. The equation between the largest and second largest BRICS economies-China and India-is an apt example. Applications from Argentina or Pakistan may face serious trust deficit from Brazil and India.

The original logic of BRICS as "emerging economies" might be a problem for its current formation. Brazil, Russia and South Africa are not just smaller but face economic disruptions. During the pandemic years, even China and India saw periods of negative growth and a general slowdown.

But the Russia-Ukraine conflict and resultant volatility in food and fuel prices and shortages have provided a boost to BRICS expansion. The resultant rise in Russia's trade with other BRICS nations-especially with China and India-has revived their efforts at reducing their dependence on the US dollar through ruble-rupee and rubble-renminbi transactions.

The abrasive policies of the Donald Trump administration had already accelerated demands for BRICS to raise its voice on the international stage. The pandemic has further amplified those calls, exposing the West's "vaccine apartheid".Now, the Ukraine crisis has revealed the West's failure to stand united even in imposing economic sanctions.

Indeed, new revelations about food and energy leverages of several aspirant emerging economies over G7 nations have strengthened the conviction of BRICS to expand. Also, faced with Western sanctions, Russia is far more agreeable to expanding its circle of friends. But instead of heralding another Cold War, the expansion of BRICS is aimed at obtaining a greater say for the developing countries in global decision-making.

As post-pandemic resilience brings BRICS an opportunity to redefine global financial governance, BRICS has begun expanding beyond the time-tested "BRICS Plus" and "BRICS Outreach" summits to include new members. But an expanded BRICS will have neither the desire nor potential to become a counterweight to the G7 or the G20, or to disrupt financial institutions led by Western nations. BRICS expansion is making Western nations rethink their reluctance to make space for emerging economies, only further strengthening their realization that making space for emerging economies remains a prerequisite for making global financial governance inclusive, representative and effective.
The Winner Takes It All (Победитель получает все) / Russia, September, 2022
Keywords: expert_opinion

In 1911, Jack London wrote 'The Mexican,' a story of a Mexican pugilist who dared a famous American boxer for a match on the condition that the winner would take the entire monetary prize instead of sharing the reward as usual. The emotional appeal of the story comes from the fact that, while the outraged American wanted 'to lick the dirty little greaser' for offending his self-esteem, the determined Mexican needed the money to buy arms for the revolution in his motherland.

Emotions aside, the concept of "Winner-Takes-All Society" is well known to the researchers, in fact, a book with this title was published in 1995 by economists Robert Frank and Philip Cook. They considered its implications and concluded that such a society "misallocates economic resources, causing grave inequalities in the distribution of income" and leads to the creeping monopolization of power in national politics.

In the context of international affairs, the Winner-Takes-All rule results in the development of a monopoly-like, unipolar world order with a single state dominating the economic, social, cultural, and military influence over the globe. In such a world, there is no room for negotiation — even when an accommodation of contestant's claims would benefit the dominant power as well — because the latter cannot reveal its actual strength but must employ every surreptitious tool to nip any challenge in the bud. Thus, a fight ensues and the aggregate outcome will be negative no matter who — incumbent or challenger — prevails in the end, as is always the case in negative-sum games.

In my previous article, 'The Empire Strikes Back,' I stated that the Russian security demands, as expressed in December 2021, would eventually be accommodated. The reason for that claim was based on the observation that the relative worldwide strength of "globalists" (political, economic or financial actors whose power goes beyond national borders and who were against granting concessions to Moscow) was in decline, whereas the strength of "nationalists" (whose power lies within national borders and who did not mind accommodating demands of "foreigners" that suited them) was rising. In fact, that inference was erroneous, as a grave confrontation ensued, with a resulting "hot" war and breakdown of long-established commodity chains within Europe in 2022. Thus, it became imperative to revisit the argument and to consider what the previous analysis missed, along with a supplementary question of who specifically among the globalists happened to be keen to keep the world in the situation where the winner takes it all.

Globalists and Nationalists Revisited

The appearance of globalists as a social stratum can be traced back to the merchants who engaged in cross-border trades in medieval Europe and to the Spanish conquistadors who conquered new lands in Latin America. These two approaches led to the organization of commercial chains, through which the "civilized countries" that controlled the trade routes exchanged their home products for "colonial goods." On the political front, the same development led to the formation of colonial empires that used military force to introduce their own "law and order" in dependent territories.

Colonialism, with its overt exploitation of colonies by the metropoles, became virtually extinct in the 20th century, (mainly due to the military deterioration of the "old" European empires) but the world has stubbornly remained unequal, even after the former colonies obtained formal independence. This observation contradicted the mainstream economic theory that predicts the eventual convergence in wellbeing between former colonies and metropoles, and suggests that global trade is still controlled by new powers, albeit in a disguise. Since the discussion of the source of the modern globalists' power lies outside the scope of this article, it suffices to place globalists and nationalists within the framework of world-systems analysis developed by Immanuel Wallerstein in the 1970s to expose the main conflict between the two groups.

The world-system is defined by Wallerstein as "a social system, one that has boundaries, structures, member groups, rules of legitimization, and coherence" that is composed of nation-states but is larger than the sum of its constituent parts. He states that "its life is made up of the conflicting forces which hold it together by tension and tear it apart as each group seeks eternally to remold it to its advantage" ('The Modern World-System', 1974.) In this interpretation, global inequality becomes indispensable as it creates a force that sustains the eternal flow of goods between "rich" and "poor" countries. This inequality is cemented by the existence of "core countries" that specialize in higher-skill, capital-intensive production and "periphery countries" that are forced to focus on low-skill, labor-intensive production and extraction of raw materials.

The boundary between the core and the periphery is unstable and the lowest stratum of core countries may swap places with the highest layer of periphery countries and vice versa.

However, for such a transition to proceed peacefully, it is also necessary to receive an approving nod from the highest level of core countries that are ready to accommodate a newcomer into their club.

The world-systems analysis appropriately models the modern world and explains why some countries succeed, (and are invited, for example, to the OECD) but is silent on what happens when a borderline, semi-periphery country, like Russia, decides to challenge the status quo instead of waiting patiently in line to be admitted to the club of core countries. To answer this question, another thought concept is required. Since this article deals with a specific challenge (Russia against the Western global order,) a concept developed in Russia is appropriate. It can be found in the article written by former Putin's adviser and political theorist Vladislav Surkov "Where Has the Chaos Gone? Unpacking Stability" (in Russian).

Referring to the second law of thermodynamics, which states that entropy cannot decrease in isolated systems left to spontaneous evolution, Surkov claims that no sovereign nation can maintain its internal order without exporting some form of chaos (entropy) to the outside world (system environment). Thus, when a country aspiring to join the core fails to get invited by the core, it must challenge the existing global order and treat it as its "environment" to which it "exports chaos." This argument (export of chaos) has been basically interpreted in the West as a theoretical justification for Russian expansionism; however, its intellectual appeal is finer and can complement the world-system framework by adding a driving force behind global revolutions, a slogan known for ages — Divide et Impera: nations that can be divided become weak and subject to exploitation.

Yet, while the Russian audacity can be explained by the internal demand of this nation for "greatness", — that is, aiming to reach the status of a core nation by negating the status quo — the question of why the collective West reacted seemingly irrationally remains. Game theory tells us that "hot" wars happen because of information asymmetry: one or both of the opponents err and overestimate their net rewards. Apparently, Russia does not seem to expect to gain from the war: Russian President Vladimir Putin repeatedly said that "there will be no winners" in this conflict and that he "would avoid it if it were possible." On the contrary, the US-led alliance may believe in a net gain from the war between Russia and the Ukraine, expecting Russia to fail. US President Joe Biden is on record saying that "Putin cannot remain in power" and seconded by US Secretary of Defense Lloyd Austin who hoped "to see Russia weakened to the degree it can't do the kinds of things that it has done in invading Ukraine." Thus, the political actors of the current core countries are sufficiently confident that the Russian contender will be given "a good licking." We will further explore who among the economic and financial actors of the core countries agree with this assessment and for what reason they support it.

It's the Economy, Stupid: Who Calls the Shots

The politicians like to believe that they rule nations and, subsequently, the world; however, looking at the process of how policies are conceived and implemented, two observations caution against such hasty generalizations. First, the demand for new policies brews unnoticed among the masses until it is picked up by a few activists or the public media, who sense its political appeal. Since monetization is a common theme in market economies, a whole industry of public affairs has developed in response to this demand, with experts sifting through potential ideas and clarifying ambiguous points through public surveys. When the discovered topics are found to be relevant to a particular cause, they are subsequently hyped out of proportion by the media, including the social media, to steer the public sentiment for or, on the contrary, against that cause. As public sentiment rises enough to pass the scrutiny of political advisers, the causes are picked up by the politicians to appear on their political agenda with subsequent debates in parliaments. After the debates are completed and new policies are designed, they move onto the second stage — implementation. This stage is also filled with multiple pitfalls since the accepted policies can either be embraced wholeheartedly or covertly sabotaged by those who oversee their implementation or are obliged to comply with them.

The industry of public affairs comprises private establishments who are not bound by rules (apart from foreign lobbyists, who are to comply with the Foreign Agents Registration Act in the US) and may work for every wealthy client. Thus, the political decision undertaken by the West to rebuff the Russian security demands of December 2021 was obviously debated and endorsed by at least some among the Western non-political elite. Who among them would benefit from the resulting strain of global chains that involved Russia and how?

The states that belong to the global core and the periphery differ in their international standing and it is logical to conclude that their economic and financial actors also have different relative power within the relevant global chains and support globalist or nationalist agendas accordingly. It is also possible that agents of a core country may support nationalist policies if their position within the chain happens to be subordinate, whereas agents of a periphery country may support globalist policies if their position within the chain becomes dominant.

Assuming that the data from international trade statistics positively correlates with the position of national actors within the international value chains, it is possible to rank their preferences using the ratio of export to import as a proxy: the higher its value, the likelier the actors prefer globalist policies and vice versa. As an example, consider the international trade in motor cars, see Table 1.

Table 1 shows that the producers of motor cars in Japan, Korea, Canada, Mexico and the group of European countries tentatively centered around Germany assume the dominant position in the global trade. Therefore, they favor globalist policies and incur losses when the motor vehicle chains are broken. On the contrary, car producers in the USA, China and the part of Europe that includes the UK, France and Italy would see opportunities when these chains are interrupted and, hence, support nationalist policies. However, since Russia does not appear on the list, these chains are to remain mostly unaffected and the reaction of car producers to the war is mute (there are some reports of inconveniences experienced by the German producers of motor cars.) However, incidentally, the data shows a potential split of interests within the EU and NAFTA that may grow into a real issue if the popular appeal of nationalist sentiment grows stronger.

Next, consider the global financial actors who would be willing to endorse the confrontation between the West and Russia, see Table 2.

The situation with global finance is less clear-cut. Yet it is reasonable to conclude that the American and Chinese financial groups do not get along well on the basis of additional observations. First, there have been no significant mergers and acquisitions between the two groups, indicating a lack of mutual trust. Second, it appears that the UK, who probed to form a financial alliance with China, (it became a founding member of Beijing's Asian Infrastructure Investment Bank in 2015) reversed its decision and began to oppose China falling in line with American demanded. If the American financial circles pressed hard to stop their closest ally from partnering with Chinese bankers, they likely felt threatened. Otherwise, why were they concerned?

Whatever the case, the financial actors of the US supported the sanctions against Russia, including the exclusion of Russian banks from the SWIFT system, even though such a move had resulted in the losses that were recorded within the books of major US and European banks. On the other hand, freezing the assets of the Russian central bank and other sanctioned agents gave the Western banking system access to "free" funds in the amount of circa $300 billion, which more than compensated for their losses. Still, in the long run, the financial actors would lose through the reduce trust in their ability to preserve value and, hence, their support for the sanctions is conditioned on something else.

Le Charme Discret de la Démocratie Libérale

In 1972, Spanish filmmaker Luis Buñuel directed the surrealist film "Le Charme discret de la bourgeoisie." The film consists of five gatherings of a group of bourgeois friends who expect to have fine dinners, but they go awry every time. However, the friends never stop trying, as though it were their natural right for others to serve and pamper them.

People living in liberal democracies feel the same way: they want, as the Latin saying holds, "panem et circenses" ("bread and circuses") and, needless to say, this style of life is very expensive. The authorities of liberal democracies, — which happen to comprise the core countries, such as the G7 group, to a tee — must ensure the uninterrupted inflow of resources from the periphery countries to maintain a high standard of living required to keep their citizens content. Commonly, when authorities feel that the situation has slipped out of control and there is no more free lunch, they resort to public borrowing, with the resulting debts required — at least since the 1980s when this practice became widespread — only being serviced but not repaid. As a result, the public debt in the core countries has ballooned over time, unlike in the periphery countries. Let consider the amount of public debt of the leaders of two blocs that comprise the G7 and BRICS countries, see Table 3.

Obviously, the G7 — with the exception of Germany — have accumulated largely unsustainable amount of debt, unlike the BRICS country, especially Russia. Next, let observe how the amount of US public debt grew over time, see Figure 1.

Figure 1 reveal two curious incidences of rapid increase in debt. The first involves the period of the Great Recession 2007-9 when the debt grew from 63% of GDP (April 2008) to 100% (April 2013). That was the time when the US Federal Reserve System (the Fed) at first allowed a large banking institution, Lehman Brothers, to go bust, but then backed off from its hawkish stance and reversed its policy to quantitative easing, which involved pumping a large amount of funds into the troubled financial sector. The second case took place in March 2020 and, once again, the Fed played a major role in the drama, which saw the debt rise from 108% (January 2020) to 135% (April 2020).

The US Federal Reserve System is an interesting structure in and of itself and deserves to be elaborated upon. It is not a normal central bank, as it comprises 12 Federal Reserve Banks that are private establishments reporting to their shareholders, who happen to be local banks; however, the Fed itself is governed by the Board of Governors that is appointed by the US president and confirmed by the Senate. Essentially, it is a public-private partnership formally tasked with maintaining the balance between maximum employment and stable prices through open market operations and setting basic interest rates. But once in a while, the Fed engages in activities that go beyond its stated purpose.

For example, the quantitative easing of 2008-2014 witnessed the Fed entering the market to buy securities, typically mortgage-backed securities and US public debt (Treasuries), that is, to inject both capital and liquidity directly into the market. Thus, for the first time in its history, the Fed combined the roles of a regulator, supervisor, and participant in the economy. That created a conflict of interest as the Fed possessed the technical means to earn additional profits through operations that smacked of insider trading.

In 2020, the Fed was called to the rescue of financial markets again. This time it was an even more unorthodox type of intervention. Apart from purchasing mortgage-backed securities and Treasuries, as in 2008-13 — this time in unlimited quantity — the Fed pledged to funnel help far beyond the financial core. When I wrote "An Invisible Global Revolution" two years ago, I mentioned "recent jolts of stock indices … provoked by the interference of large institutional players," but the identity of those players was not yet known at the time. The fact that the Fed was buying corporate debt also implied that it lent money directly to the non-financial sector by playing the role of a regular bank. But how successful would the Fed be with its unconventional policies?

When America Sneezes, the World Catches a Cold

A potential answer to this question can be found in history of the British Empire. In 1945, within a memo circulated to the British War Cabinet discussing the staggering debt that the UK government accumulated during the Second World War, the prominent economist John Maynard Keynes wrote: "By cunning and kindness, we have persuaded the outside world to lend us upwards of the prodigious total of £3,000 million. The very size of these sterling debts is itself a protection. The old saying holds. Owe your banker £1,000 and you are at his mercy; owe him £1 million and the position is reversed." So, if £3 billion were sufficient for the UK government to keep its creditors at bay, how more efficient would be the $30 trillion borrowed by the US government to the same effect?

Yet the story did not end favourably for the British, who had to disband their empire in the aftermath of the war despite their fervent attempts to preserve it intact. Would it be a different case for the USA? The Russian challenge in the form of an open rebellion against the Ancien Régime is the first precursor, which could be followed by some kind of hostile action from China. The world enters into an unchartered territory and the unexpected can happen any time rendering futile current forecasts of the future. Yet, an interesting marker of the potential future can be found in the policies of one of the American allies.

A Canary in a Coal Mine

Until as recently as 1986, coal miners took canaries into the mines with them to detect the accumulation of carbon monoxide and other harmful gases in the atmosphere. That practice produced a saying: 'to be a canary in a coal mine', which describes one whose sensitivity to adverse conditions makes him or her useful early indicator of such conditions. Among the American allies, Italy seems to fit the bill. The Italians like to self-deprecatingly joke, saying 'Gli italiani corrono sempre in soccorso del vincitore' ('the Italians always run to help the winner') and for good reason. The unique historical experience of Italy being a rich medieval land incapable of protecting itself against external incursions has ingrained the local elites with acute sensitivity to oncoming changes in the power balances abroad. Thus, political processes that unwind in this country may be indicative of future political developments in the West as a whole.

Currently, Italy prepares for the general election due to be held on 25 September 2022 and it is worth explaining what is at stake. It all started in February 2021, when Mario Draghi, a former President of the European Central Bank, was tasked to form a technocratic government. Being closely associated with the financial sector, Mr. Draghi represented the Italian globalist faction and behaved accordingly. However, his position of a technocratic prime minister was always precarious. Mr. Draghi tried to increase his political weight by applying for the position of Italian President in December 2021, but his attempt was foiled by nationalists who dominated the Italian parliament.

After Russia started its military operation against the Ukraine in February 2022, Mr. Draghi sensed a chance to prove his worth. He was instrumental in the development of European sanctions against Russia, even though his country bore the brunt of the Russian countersanctions. The growing prices of energy, natural gas in particular, were especially hurting Europe and Mr. Draghi tried to show his economic acumen by calling for the introduction of a EU price cap on Russian gas (still debated within the EU) but, again, he did not succeed in impressing the parliamentarians. However, the main test of his political prowess came in May 2022, when he went on an official visit to the US, mostly to solicit American help in securing additional supplies of natural gas from sources other than Russia. By all indications, he returned empty-handed, and his failure was crucial in undermining the positions of Italian globalists.

Two months later, the part of Italian nationalists who formally supported Draghi's government (Lega and Forza Italia) withdrew their support, prompting a snap election in which another nationalist party (Fratelli d'Italia) that stayed in firm opposition to the government is likely to prevail. If that happens, the Italian political landscape will be altered beyond recognition.

It needs to be said that the post-war Italian political system is based on an informal agreement to exclude the old, pre-war force of the fascists and the new, post-war force of the communists from taking power with appropriate checks and balances being put in place. The system has worked flawlessly up to now, but its stability will be seriously tested after the oncoming election. The party Fratelli d'Italia has a fascist background and, hence, the system should prevent it from forming a government, but will the checks and balances function as expected?

At the moment, it looks like they will not: at least, there are already attempts to whitewash the party and present it as a traditional conservative group devoid of any fascist connotations. The media highlights the professed Atlanticism of its leader, Giorgia Meloni, but her election battle cry 'We are Ready to Revive Italy' sounds awfully reminiscent of the slogan 'Make America Great Again' that shook the US not long ago. So, the globalists must think twice if Ms. Meloni will be easier to rein in than former US president Donald Trump.

The dimensions of BRICS geography (Размеры географии БРИКС) / Russia, September, 2022
Keywords: expert_opinion

Harnessing continental distance for the developing economies may be the single most important mission for BRICS and the New Development Bank (NDB) in the coming decades. The BRICS+ framework offers a platform to scale up investment cooperation through bringing on board the regional development institutions in which BRICS countries are members.

There have been numerous attempts to bring all BRICS under one common denominator — a common feature that would explain the rationale for the emergence of such a grouping. Among the many common factors for BRICS countries the more popular was the growth potential, with predictions of a rising share for BRICS in the world economy being prevalent in the initial phases of BRICS evolution. Another vision was that the BRICS economies represent the leading emerging markets (EM) with some of the most liquid assets and sizeable markets in the EM universe. But over and above some of these unifying themes, there appears to be a less explored commonality among BRICS related to their geographical peculiarities. In fact, geography in terms of the size of BRICS economies, the distance that separates them and the regional roles of BRICS in their respective continental neighborhoods appears to be one of the most fundamental and long-term themes that determines the pathways of BRICS future cooperation.
Briefing by Foreign Ministry Spokeswoman Maria Zakharova, Moscow, September 15, 2022 (Брифинг официального представителя МИД России М.В. Захаровой, г. Москва, 15 сентября 2022 г.) / Russia, September, 2022
Keywords: top_level_meeting, mofa, quotation

BRICS events on the sidelines of the UN General Assembly

A traditional meeting of the foreign ministers of the BRICS countries is planned on the sidelines of the session's high-level week. According to the established practice, it will be organised by South Africa as the next chair of the five BRICS countries.

The ministers will discuss a broad range of urgent international issues, including the 77th UN General Assembly session's agenda. They are also planning to review cooperation in the framework of BRICS strategic partnership, including the institutional development of the association.

The Minister of International Relations and Cooperation of South Africa, Naledi Pandor, will describe to her colleagues the plans for the South African BRICS Chairmanship in 2023.

Alongside the BRICS Foreign Ministers Council, the five countries intend to hold a number of big high-level events – meetings of the ministers of tourism (September 19), energy (September 22), the heads of emergency response departments (September 23), and ministers of science, technology and innovations (September 27). The BRICS Chief Justices Forum will take place on September 21.

In pursuing strategic partnership, the BRICS countries are paying much attention to the humanitarian area. The forum of twin cities and municipalities of the BRICS countries will take place in the hybrid format on September 20. The 4th International Municipal BRICS+ Forum will be held in St Petersburg on November 24-26. Delegations from over 40 countries, representing regional authorities as well as business and research communities, are expected to attend it. The forum is aimed at establishing contacts between representatives of municipalities and business communities of the five BRICS states and attracting investment into the multi-industrial projects of their regions and cities.

This is a far from complete programme of the Russian delegation's participation in the events of the 77th General Assembly session. The schedule is still work in process. Logistics issues have to be resolved. Will the Russian delegation reach the UN Headquarters, considering the Washington-created illegal barriers? The United States has a commitment to the UN to facilitate its work. This implies interaction with the delegations and those who are going to the UN Headquarters to work.

BRICS urged to work collectively in global food, fuel crisis (БРИКС призвали работать сообща в условиях глобального продовольственного и топливного кризиса) / South Africa, September, 2022
Keywords: cooperation, social_issues
South Africa

The Speaker of the National Assembly, Nosiviwe Mapisa-Nqakula, has emphasised the need for a collective solution from the Brazil, Russia, India, China and South Africa (BRICS) bloc to mitigate the global food, fuel and financial crisis.

"Food security and nutrition of our vulnerable populations are under threat, and legislatures of all BRICS nations, in particular, occupy a unique place to foster cooperation and people-people relations through public diplomacy, where there could be strategic direction of multilateralism and mutual development," Mapisa-Nqakula said.

Mapisa-Nqakula was speaking at the 8th BRICS Parliamentary Forum (BRICS PF) virtual meeting held on Tuesday.

Mapisa-Nqakula led a multi-party Parliamentary delegation to the meeting hosted by the National People's Congress of China, under the theme, 'Leveraging the role of the legislature to foster high-quality BRICS partnership'.

The Speaker commended the 14th BRICS Summit Strategy on Food and Security Cooperation, which is aimed at stabilising global food production and contributing positively to global food security infrastructure.

Mapisa-Nqakula also applauded the establishment of the BRICS Vaccine Research and Development, saying that it was an important BRICS milestone, which will further enhance BRICS countries' capabilities to respond to future health emergencies.

"Through our oversight function as Parliaments, we have to ensure that the BRICS Vaccine Centre has the resources and the capacity to build a much-needed line of defence against infectious diseases," the Speaker said.

She said the BRICS PF has a key role to play in strengthening the broader BRICS partnership, and BRICS countries must reconnect with their objective of strengthening cooperation.

She said through sustained parliamentary cooperation, BRICS can create responsive governments to address the current crises.

The BRICS Parliamentary Forum is constituted by the National Congress of the Federative Republic of Brazil, the Federal Assembly of the Russian Federation, the Parliament of the Republic of India, the National People's Congress of the People's Republic of China, and the Parliament of the Republic of South Africa.

The forum was founded to strengthen and promote contacts at the leadership level of chambers, committees and groups of parliamentarians; perform inter-parliamentary exchanges and hold regular expert consultations, and create and develop new inter-parliamentary cooperation mechanisms.

China is currently chairing the forum and South Africa is next in line to chair and host the 9th BRICS PF in 2023. –

Investment and Finance
Investment and finance in BRICS
NDB Board of Directors approved New Development Bank Evaluation Policy (Совет директоров НБР утвердил новую Политику оценки Банка Развития) / China, September, 2022
Keywords: NDB, official_documents

On August 24, 2022, the Board of Directors of the New Development Bank (NDB) approved the NDB Evaluation Policy, setting out the overarching framework for conduct of evaluations in the New Development Bank.

The NDB Evaluation Policy highlights that the overarching goal of evaluation is to improve the New Development Bank's development effectiveness and to further the achievement of the NDB's mandate of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.

According to the Evaluation Policy, the Independent Evaluation Office (IEO) is responsible for the independent evaluation of the Bank's strategies, policies, initiatives, processes and operations, with the aim of identifying lessons and providing recommendations for improving the efficiency and effectiveness of the NDB. The IEO's aim is also to inform the Board of Directors and Management of the results achieved by the NDB in order to enhance the accountability of the organization and ultimately to strengthen and drive the quality of the Bank's interventions in delivering results in its member countries.

The NDB Evaluation Policy stipulates that independence of the Bank's evaluation function is essential to maximize the benefits of an evaluation system as it contributes to legitimacy and credibility, minimizes bias, and ensures that evaluations are free from external or internal influence or pressure as well as from conflict of interest. Taking this into account, IEO is independent of Bank's Management to ensure that the process for conducting evaluations is not influenced by the decision makers responsible for the products and processes being evaluated.

"NDB is strongly committed to enhancing its accountability and efficiency, in line with the Bank's 2022-2026 General Strategy. Reviews and reports from the Independent Evaluation Office will further add to transparency and accountability, delivering benefits in the form of new lessons for potential enhancements in the Bank's activities," said Mr. Marcos Troyjo, NDB President. "As we look towards the future, we want to make sure that the NDB is always enhancing the quality of its projects. We view it as our duty to optimize the development impact of what we do as an institution, continuing to build the NDB as a premier development bank for emerging economies."

On 18 April 2022, Mr. Ashwani K. Muthoo assumed his position as the first Director General of the Independent Evaluation Office (IEO) of the New Development Bank, reporting directly and exclusively to the Bank's Board of Directors.

The Evaluation Policy will be operationalised through dedicated guidelines to be produced before the end of 2022. The Policy will be fine-tuned as needed in the future based on lessons learned and emerging priorities. The Director General IEO commented that the "Policy is a fundamental instrument to allow for credibility in the assessment of results and generation of good practices for enhancing the quality and performance of Bank activities, based on robust and state-of-the art evaluation methodologies and processes".

BRICS New Development Bank: A Second Bretton Woods or a New Trend with its Own Future? (Новый банк развития БРИКС: второй Бреттон-Вудский договор или новый тренд со своим будущим?) / Russia, September, 2022
Keywords: NDB, expert_opinion

The idea of building an alternative reality was the result of attempts by the West to transfer dominance in the political sphere to the economy: the Bretton Woods International Monetary Fund and the World Bank began to put forward political demands when providing loans to the countries of the Global South. The BRICS countries, who do not agree with this practice, have proposed their own concept for building the future of financial stability - the New Development Bank (NDB).

The main catalyst for the creation of the New Development Bank was the shift to the emerging market countries within existing international financial institutions. Insignificant voting shares among the representatives of the developing world in international economic organisations brushed aside the hopes of the BRICS member states to build a world financial architecture within Bretton Woods institutions independently of the political landscape and economic potential of the country. In fact, the lack of chances for developing countries to have a real impact on the process of making key decisions reduces their participation in international organisations to a zero-sum game: in any case, the opposite side would be in a winning position.

The New Development Bank demonstrates an alternative approach to the distribution of voting shares of developing countries: the BRICS strategy assumes partnership on the basis of equality, regardless of the country's economic potential.

Unlike the development bank created by the BRICS countries, traditional international development banks do not have the necessary capabilities to meet the rapidly growing demand for investment in infrastructure projects, primarily from developing countries, where demand is estimated by experts at $1-2.3 trillion. The vast majority of international development banks were created in an era when the developed countries of Europe dominated alongside the United States and Japan. It differed significantly from the current political realities, which are based on a progressive movement towards multi-polarity. So, the ability of international development banks to respond to the growing needs of the economies of the developing world every year raises more and more doubts.

The New Development Bank, on the contrary, has confirmed its effectiveness in the face of global challenges: the Bank's operational activities to combat the coronavirus pandemic ensured a relatively soft landing for the economies of the five countries, even in the most acute phase of the Covid crisis. Thus, the Bank allocated more than $9 billion to finance government programmes to restore the economy, which significantly mitigated the effects of the crisis and facilitated adaptation to the new post-pandemic realities. The provision of anti-crisis loans by the Bank and the calculation of the risks associated with the pandemic piqued the interest of nations that are not members of the BRICS. In particular, Bangladesh, Egypt, Uruguay and the United Arab Emirates became members of the Bank. This expansion confirms the commitment of the NDB's strategy as a leading development vehicle for emerging economies.

As the lobbying of Western interests by the Bretton Woods institutions continues amid the current distribution of votes of the member countries of these organisations, the effective activity of the New Development Bank tips the scales in favour of supporting developing countries and shows great prospects for transforming into a full-fledged platform for expanding economic and financial cooperation. In May 2022, the Board of Governors of the Bank adopted a rather ambitious Development Strategy for the 2022-2026 period; the priorities outlined by the Strategy can be reduced to five main categories of the Bank's activity.

Development of settlements in national currencies

The local currency funding initiative is primarily aimed at reducing reliance on the US dollar and other international settlement currencies. The coordination of efforts in this area will contribute to raising the international status of the national currencies of the NDB member states, preclude currency risks and greatly facilitate mutual trade between the BRICS countries.

New Development Bank Membership Expansion

In 2021, the Bank opened its doors to four new member countries and will follow a similar strategy in the future in order to expand the geography of the infrastructure projects it finances. In order to make the development of the Bank more dynamic, it is desirable to involve countries with high credit ratings and large reserves in its activities. In this regard, the eyes of the Bank's member countries are especially focused on Southeast Asia, particularly Indonesia and Thailand; the expansion of cooperation with them will make the association more representative. The entry of other regional leaders is also beneficial for the New Development Bank: in Latin America one candidate is Argentina, in the Middle East, Saudi Arabia is a candidate.

The NDB beyond economic and financial cooperation

Every year the New Development Bank is gaining geopolitical weight, displacing the traditional concept of the superiority of developed economies on the world stage. As the Bank's capacity grows, the need to expand the scope of its activities is increasingly felt: from economics, the Bank's member countries are shifting their focus to discussing a broader agenda. A striking example of the revision of priorities in the direction of responding to global challenges is the Bank's desire to finance projects in the field of food and energy security, climate change, and healthcare. The latter has firmly entered the agenda: voices supporting the creation of a BRICS Medical Association are growing louder and louder. The high level of dynamism with which the association is developing clearly demonstrates its potential to consolidate the efforts of the member countries: expanding the scope of the Bank's activities will benefit everyone.

Raising the profile of sustainable development and green projects

Against the backdrop of the increasing importance of the environmental agenda in international realities, the green initiatives of the New Development Bank are becoming clearer: funding for green projects is rapidly gaining momentum. In 2016, the NDB placed its first issue of "green bonds" on the Chinese interbank market; the amount totalled 3 billion yuan, the income from the issue was allocated to support the environmental initiatives of the member countries of the association. Thanks to such initiatives, the movement towards the implementation of the sustainable development goals has been effectively continued: the NDB provided a loan to China to finance three projects related to green energy, and most recently it announced support for the Russian BRICS Clean Rivers initiative. In the foreseeable future, a consolidation of efforts to promote the green initiatives of new members of the Bank is expected. Thus, the United Arab Emirates, which confirmed its commitment to the sustainable development agenda, and Al Husseini, the representative of the country, declared the priority of ecology in the framework of multilateral cooperation. At the next meetings, the NDB may approve the allocation of funds for Uruguay's green hydrogen project, which confirms the NDB's priority within the environmental agenda for many years to come.

Building partnerships with the private sector

In order to implement the aforementioned initiatives, the New Development Bank is likely to resort to more active engagement with the private sector in the future. Attempts to coordinate the activity of the business structures of the association were made back in 2019, during the year of the presidency of Brazil, whose President proclaimed the deepening of business partnership for global development. Three years later, in 2022, such initiatives have received approval from the participating countries: at the 7th annual meeting of the Board of Governors of the New Development Bank, Brazil's delegation noted the potential for the convergence of the business structures of BRICS members to finance infrastructure projects. Already, the NDB has all the necessary conditions for intensifying such cooperation, so an increase in the role of the private sector may take place in the near future.

The New Development Bank is only at the beginning of its journey to create meaningful alternatives to the Bretton Woods institutions. According to analysts, by 2026 the New Development Bank will expand its total package of approved loans to $60 billion: such ambitious forecasts among experts indicate that the Bank is on the right track. The purpose of this path is the global mission of the NDB - to increase the confidence of the developed world in developing countries in the global economy and a clear demonstration that emerging markets are becoming a real force to be reckoned with.

Valdai Discussion Club

World of Work
BRICS Agricultural Cooperation (Сельскохозяйственное сотрудничество БРИКС) / Russia, September, 2022
Keywords: expert_opinion, cooperation
Source: InfoBrics

Tatiana Bokova, Intern of the Russian National Committee on BRICS Research – special for InfoBRICS

In recent years, the BRICS countries have been exploring long-term and sustainable mechanisms for cooperation in the agricultural sector. The issues of food security, poverty reduction and agricultural production, and technological innovation are on the agenda of the BRICS leaders. BRICS agricultural cooperation has contributed particularly to global food security and provided an impetus for economic recovery in the post-pandemic era. According to statistics, in 2021, total agricultural trade between the BRICS countries and other countries reached $588.3 billion. It is worth noting that compared to 2010, the volume of trade in agricultural products has increased by 128%.

Currently, member countries are deepening food and trade cooperation with emerging and developed nations, striving to remove trade barriers, and creating new and innovative mechanisms and tools for cooperation in agriculture. Moreover, the BRICS continues to strengthen environmental and ecological protection, monitor food quality and safety, and conduct joint training programs to modernize agriculture and rural areas in China, Brazil, Russia, South Africa and India.

The association are deepening cooperation in the agricultural sector through various mechanisms and instruments within the organization. For example, countries have announced the creation of a BRICS forum on agricultural and rural development.

Delving a little deeper into history, in September 2017, the Xiamen International Conference Center hosted the ninth meeting of BRICS leaders, where the "Xiamen BRICS Leaders Declaration" was adopted. Among them was the final document "BRICS Action Plan on Agricultural Cooperation (2017-2020)," which pushed the participating countries to unite in this area.

Already in 2021, the ministerial meeting adopted the next BRICS Agricultural Cooperation Action Plan 2021-2024, which intends to speed up agricultural development to improve food security and nutrition, strengthen BRICS food supply capacity, and share information and best practices in agriculture through the BRICS Agricultural Research Platform. Moreover, the document focuses on improving farmers' welfare, preserving agro-biodiversity, and promoting digital agricultural solutions among the population of the organization's members.

Another mechanism for cooperation is the BRICS Agricultural Research Platform, which was introduced at the ministerial meeting also in 2021. This platform is designed to develop agriculture and solve the problems of famine, poverty and inequality through agricultural cooperation among the BRICS nations. In addition, the five states have strengthened joint training programs for the modernization of agriculture and rural areas in different countries. For example, China's Ministry of Agriculture and Rural Development in 2021 trained 295 agricultural technicians and managers for South Africa in areas such as rice planting, production and application of agricultural machinery, plant protection, use of renewable energy and others.

We can see that the strength of the BRICS countries also lives in agricultural research. Russia, Brazil, China, India and South Africa have strong research systems focused on many of the problems facing developing countries, such as sustainable nutrition for a growing population. In this scenario, advanced research, biotechnology, agroecology, and climate-optimized agriculture that adapt to the uncertain changes faced by farmers become prioritized.

The BRICS members are rich in natural resources such as climate, environment, soil, and occupy half of the world's cultivated area and about 40% of the world's cereal production area. Consequently, the participating countries have a wide space for cooperation in agricultural trade.

Individual states such as the People's Republic of China have made significant efforts to promote agriculture and rural development and undoubtedly play an important role in the promotion of this area within the BRICS. The Chinese government is concentrating on rural works, accelerating agricultural modernization, and proposing to focus on food security and poverty reduction.

China continues to deepen agricultural cooperation with member states. For example, since 2019, the Brazilian state of Mato Grosso has been planting corn varieties provided by Longping High-Tech Brazil, a company with Chinese investment owned by Longping Agriculture Science Co., Ltd. During this time, the planted area has increased significantly and now amounts to about 3,330 hectares. This company has built an industrial park where seeds are stored for global integration of emerging markets with a focus on the BRICS countries. To date, China has managed to provide food to more than 1.4 billion people through its own efforts, contributing to global food security.

It is worth noting that agricultural trade between Brazil and China is highly important. Brazil's exports include soybeans, beef and chicken. At the end of 2021, Brazilian exports to China exceeded $45 billion, which has benefited Brazil's food and agriculture industry.

The People's Republic of China is a major producer and importer of soybeans, which contributes to the development of Russia's soybean industry. In 2019, China and Russia signed a plan to develop cooperation on soybeans and as a result achieved deepening cooperation in the whole production chain of planting, processing, logistics, sales and research, and the first batch of Russian soybeans arrived in China with over 4,400 tons. In addition, the total agricultural trade between China and Russia reached $5.556 billion in 2021. The two sides are also making efforts to train agricultural enterprises in China and Russia, by inviting experts to hold online and offline lectures to teach, for example, effective soybean sowing methods.

"In recent years, agriculture has become a new area of growth in Russian-Chinese cooperation, and our collaboration with China is mutually beneficial," the Russian side declared.

As for India-China cooperation in agriculture, the Freshwater Fisheries Research Center of the Chinese Academy of Fisheries Sciences has trained over 40 fisheries experts for India in various technical assistance training courses in the past few years. This campaign has effectively promoted the cooperation and development of fisheries production between China and India.

An important element in the development of agricultural production cooperation among the BRICS countries became e-commerce as part of the digital economy. Through various e-commerce platforms, people receive agricultural products from Brazil, Russia, China, India and South Africa. For example, China officially launched the "Buy in BRICS" campaign in 2021 and live streaming of represented BRICS products (wines from South Africa, coffee beans from Brazil, powdered condiments from India, and chocolate from Russia). Consequently, the combined sales of China's main e-commerce platforms exceeded 270 million of yuan last summer, contributing to the development of the agricultural industry within the organization's members.

Thus, the BRICS countries are important producers and consumers of agricultural products and play a significant role in the global food system. Representatives of the association highlight agricultural cooperation as one of the main areas of interaction between China, Russia, Brazil, India and South Africa.

As economic and trade exchanges between BRICS countries and other multilateral mechanisms expand, member countries may establish their own food trade mechanism. Total agricultural trade between the BRICS countries and other countries reached $588.3 billion. It means that the actions promoted by the BRICS members not only contribute to the prosperity and development of their agriculture but also provide the population with a wide range of high-quality goods.

In order to promote the rapid development of agriculture, the member countries intend to strengthen the construction of agricultural infrastructure, accelerate the process of agricultural scale management, expand agricultural cooperation with other BRICS nations through introducing various mechanisms within the association, innovative technologies and digital economy. It will certainly affect the global economy; help eliminate poverty and reduce social inequality. BRICS agricultural cooperation will continue to make an important contribution to overcoming the global food crisis in the post-pandemic era.

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