Information Bulletin of the BRICS Trade Union Forum

Monitoring of the economic, social and labor situation in the BRICS countries
Issue 44.2022
2022.10.31 — 2022.11.06
International relations
Foreign policy in the context of BRICS
Lula presidential win a boost for Brazil-China ties, BRICS, experts say (Победа Лулы на посту президента даст толчок развитию отношений между Бразилией и Китаем, считают эксперты БРИКС) / China, October, 2022
Keywords: expert_opinion, lula_da_silva

  • The previous Lula government built strong ties with Beijing and helped to establish the BRICS forum
  • Beijing congratulates Lula on election win, says it is willing to promote partnership 'to a new level'

Luiz Inacio Lula da Silva's victory in Brazil's run-off election on Sunday will help strengthen ties with China, Brazil's top trading partner, and the BRICS countries, according to analysts.

Lula, a 77-year-old former two-term president, narrowly defeated far-right incumbent Jair Bolsonaro, ending a divisive four-year administration that saw ties with China strained.

The leftist heavyweight had opened dialogue with Beijing during his first administration and in 2009 helped Brazil form BRICS – a group of leading emerging economies that comprises Brazil, Russia, India, China and South Africa.

Chinese President Xi Jinping congratulated Lula on his win in the presidential election, adding that China and Brazil's "long-standing friendship is conducive to maintaining regional and world peace and stability and promoting common development and prosperity".

China's foreign ministry also congratulated Lula on his election win, with spokesman Zhao Lijian saying China was willing to work with Lula's new administration to "promote the comprehensive strategic partnership between China and Brazil to a new level".

During Lula's administration from 2003 to 2010, Brazil saw China as a key partner in helping to restructure the international order. In 2004, Lula drew closer to Beijing, leading a delegation of more than 450 business leaders to China to lay the foundations for a partnership that intertwined the economies of both countries. During Lula's presidency, he met former Chinese president Hu Jintao eight times.

Trade between China and Brazil hit a record US$135 billion last year, marking four consecutive years of growth despite the Covid-19 pandemic.

China's relationship with Brazil cooled when Bolsonaro took office in 2019 as tensions grew over China's economic dominance and the origins of Covid-19.

Jorge Heine, a research professor at the Pardee School of Global Studies at Boston University, and a former Chilean ambassador to China, told the Post earlier that Lula put Brazil's relationship with China front and centre, and did much to cement it, including establishing BRICS.

Lula would continue to do so once he won in the second round, he said.

Heine also said that US-China tensions and their public hiccups benefited Brazil.

"In fact, the US-China trade spat, and the mutual tariffs it has led to on bilateral trade have been highly beneficial to Brazil, which has considerably increased its agricultural exports to China, especially in soybeans and beef," Heine said.

Ralph Newmark, director of the Institute of Latin American Studies at La Trobe University in Melbourne, told the Post earlier that Lula's win could have a different effect on BRICS.

"A Lula win, in conjunction with South Africa and India, should help the BRICS move back to its original role of being a counterweight to excessive US domination and therefore promoting South-South development," Newmark said.

Lula has shown support for the leadership of China's Communist Party and for China's handling of Covid-19, having expressed gratitude for Chinese-made vaccines supplied to Brazil.

In an interview with Chinese state media last year, Lula praised Beijing's controversial and strict Covid-19 prevention and quarantine policies. He criticised US hegemony and its interference in Brazil's economy, adding that China's growing military might and space aspirations were threatening US global dominance.

Lula credited the Communist Party and China's single-party leadership system for helping the country to avoid major financial and medical crises.

"The reason that China was able to fight the coronavirus so fast is that it has a strong political party and a strong government, and the government has the right to control and command," he said. "Brazil doesn't have that, and other countries don't have that."

Lula's win also sparked online discussion among Chinese, where some people said the new president would actively engage in partnership with China.

"Lula is a politician who has thought about politics. Brazil developed rapidly during his administration and it had a better relationship with China. I hope there will be more politicians like this in Latin America," one user commented on Weibo, the Chinese equivalent of Twitter.
Progressive winds blowing in BRICS again (В БРИКС снова дуют прогрессивные ветры) / South Africa, November, 2022
Keywords: expert_opinion
South Africa

"A wind has been blowing from the West; now it will begin to blow from the East."

While travelling in China, this quote by Chairperson Mao Zedong came to mind after hearing the election results from Brazil.

The presidential triumph of Luiz Inácio Lula da Silva is a victory for both Brazil and for BRICS.

Coming hot on the heels of the re-election of the Chinese president, Xi Jinping, the Lula Moment 2.0 accelerates the evolution in the change of the domestic politics of the BRICS member countries back to the progressive politics of a decade ago when the group was formed.

In his 2018 presidential election campaign, outgoing and right-wing Brazilian president, Jair Bolsonaro, promised to "liberate Brazil from the ideology of its international relations that it subjected Brazil to in recent years."

Clearly referring to the BRICS group, Bolsonaro was going to break with the international role that Brazil had begun to craft for itself under Lula and his immediate predecessor but protégé of Lula, Dilma Rouseff.

When the BRICS group was formed in 2009, then excluding South Africa, Lula represented Brazil while Dmitry Medvedev, then president, represented Russia, Manmohan Singh, then prime minister, represented India and Hu Jintoa, then president, represented China.

Therefore, while the politics of China and Russia remained consistent over the past thirteen years, since that first BRICS Summit in Yekaterinburg, Brazil went right with Bolsonaro, India went right as well as the election of the BJP's Narendra Modi and even in South Africa, the ANC elected capitalist and mining tycoon, Cyril Ramaphosa.

The Neo-liberal domestic politics of the IBSA (India, Brazil and South Africa) bloc within BRICS affected the direction of the group to the extent that Ramaphosa wasted no time upon his election as president of South Africa in 2018 in instructing his then-minister of international relations and cooperation, Lindiwe Sisulu, to reconvene the IBSA meeting of foreign affairs ministers in June 2018.

On a side-line of the meeting of BRICS foreign affairs ministers, Minister Sisulu found it necessary to resurrect IBSA when the forum had folded into BRICS when South Africa joined the group in 2010.

Yet, Bolsonaro, Modi and Ramaphosa, though initially moving their countries' foreign policy back to the West, soon realised that they were not going to be taken seriously by the West.

While Bolsonaro found it easier to scoff his northern neighbour, Venezuela, and thereby attempt to curry favour with Washington, it was a bit more difficult for him to adopt the same attitude towards China.

Hell breaks loose, Julius Malema takes matters into his own hands during Siyabonga rally after-party
If you have a mouse, you have to play this game. No Install. Play for free.DITOGAMES CombatSiege Play game

Brazil remains China's most strategic and important trade partner in Latin America.

In the aftermath of his election both as ANC president and president of South Africa, Ramaphosa soon jetted off to the Commonwealth Heads of Government Meeting (CHOGM). A meeting that had been mostly missed by his predecessor.

It would not be far-fetched to suggest that one of Ramaphosa's biggest regrets was that he neither hosted Donald Trump nor the American president ever hosting him. However, it is safe to assume that his brother-in-law spoke on his behalf when Patrice Motsepe declared to the former US president that "Africans love you, Mr President."

Both Bolsonaro and Modi were enamoured by Trump. Elections in India happens, as in South Africa, in 2024 again.

The election of Lula again to the Brazilian presidency should provide impetus to the ANC in relooking at the global politics and the choice that it makes in December. Hopefully, ANC delegates will feel the progressive wind, starting in the east, blowing again through Brazil and ensure that the progressive wind of change blows through South Africa and then moves on to India.

Mayalo is the Youth Business Chain Executive Chairperson. He writes in his capacity.
Investment and Finance
Investment and finance in BRICS
South Africa is the bridge in BRICS (ЮАР – мост в БРИКС) / India, November, 2022
Keywords: expert_opinion, economic_challenges

As it assumes the chair of BRICS in 2023 to host the 15th summit, South Africa prepares for a critical role.

The world has suffered repeated waves of chaos and uncertainty since the year 2020 when Covid-19 was declared a pandemic. The war in Ukraine has sparked an energy crisis in Europe and triggered inflationary trends globally. The continuing turmoil in the world's rich democracies like the UK and the US has further added to the uncertainties of our present. The future doesn't look steady or safe under the current world order.

For the vast majority of humanity, who live in developing countries, a slowdown means further misery and a delayed improvement in the quality of life. Globalisation, as it was created, can no longer be relied upon to bring growth and development to the poorest. The new phase of globalisation means that flow of capital and technology can no longer be from the global north to the global south. It is time for the global south to realise that it must come together to increase trade, investment and collaboration within itself.

It is here that South Africa must play a critical role. As a dynamic economy of the vast African continent and vibrant member of BRICS, it has the responsibility of leading the way for collaborative growth.

South Africa became a member of BRICS—the prominent grouping of emerging economies—in December 2010 and hosted the fifth BRICS summit, the first one on the African continent, in 2013. The main agenda for South Africa to join the bloc was to strengthen South-South relations and boost trade by facilitating better access to markets of the member countries, promoting mutual trade practices, attracting investments and creating a business-friendly environment. Particularly for South Africa, the critical drivers for its BRICS participation had been the triple challenges resulting from its apartheid legacy of poverty, inequality, and unemployment.

The already slow economic growth of South Africa was further affected by the onset of the Covid-19 pandemic in 2020. At present, the country's economy is recovering but at a sluggish pace with growth estimated at 1.9% in 2022. In these challenging times, South Africa's membership in BRICS has proven to be particularly beneficial. The New Development Bank (NDB), established by BRICS countries, approved a USD 2 billion Covid-19 Emergency Program Loan to the Government of the Republic of South Africa to support the country's economic recovery from the pandemic. The bank was initially formed to mobilize resources for infrastructure and sustainable development projects in BRICS, emerging economies and other developing countries. It was formed to complement the existing efforts of multilateral and regional financial institutions for global growth and development.

During the BRICS summit this year, Leslie Maasdorp, vice president and chief financial officer of the New Development Bank said in an interview, "Lack of economic growth is at the centre of our problems in South Africa. For the last decade, we haven't grown. We are hovering around 1% and will continue to hover there unless we solve the energy problem. What is required now, though, is execution."

In a statement before the 14th BRICS summit this year, South African President Cyril Ramaphosa mentioned, "The collaboration among BRICS members in the area of health and in response to the Covid-19 pandemic, in particular, has placed South Africa in a better position to respond effectively to the current and future health emergencies."." BRICS also extended great support to the India-South Africa proposal to waive certain provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement with regard to prevention, containment, and treatment of Covid-19. The proposal was submitted on October 2020.

In terms of trade relations, the 2010 United Nations (UN) Conference on Trade and Development World Investment Report had put South Africa in the top 20 priority economies for foreign direct investment in the world. According to recent reports, in 2021, over 17% of South Africa's exports were destined for other BRICS countries, while over 29% of its total imports came from these countries. Hence, BRICS countries today have not only become significant trading partners, but the association is strengthening apace. The total South African trade with these countries has reached R702 billion in 2021,up from R487 billion in 2017.

South Africa also continues to attract substantial diversified investment from the BRICS countries. While the government is working towards mobilising finances from different sources to fund its ambitious infrastructure building and sustainable development projects, the New Development Bank (BRICS Bank) has also been playing an important role by extending financial as well as project preparation support. South Africa has already received $5.4 billion, currently worth around R86 billion, from the Bank to improve service delivery in critical areas.

Tourism is one of the key contributors to the country's growth. However, as a result of travel restrictions during the pandemic, South Africa had to bear critical losses in its tourism industry. Tourists from other BRICS countries accounted for 65% of all arrivals in South Africa in 2018, indicating that these markets are set to make important contributions to the recovery of this sector. With its eVisa programme, South Africa aims to make travel and tourism easier and less expensive, especially for visitors from India and China. In a recent report, South African Tourism said that it is eyeing 64% year-on-year growth in arrivals from India in 2022.

As BRICS aims at extending solutions to global problems and designing a new paradigm for international relations, it is a crucial platform for SA to enhance the African agenda and emphasise the continent's overall development by leveraging its BRICS membership. As part of G20 and the Group of 5 (G5—the five emerging nations), South Africa uses its BRICS membership to push for a developmental position on multilateral forums, including on pressing issues such as climate change and agricultural trade. South Africa is the only African nation in G20 and is responsible for representing the entire continent. South Africa's membership has enhanced the political component of BRICS deliberations and has also received support from BRICS partners for African peace, security, and development issues, a notable feature on the agenda of the UN Security Council (UNSC).
According to Ziaad Suleman—Chair of the South Africa BRICS Business Council Digital Economy Work Group on how the BRICS agenda has changed over the years with the advancement in digitization—60% of the population of Africa is under the age of 25. Hence, digitization is another key focus for the country. He believes that cloud technology and other digital education are remarkable opportunities for them.

The remarkable Smart Africa initiative is an important example of how countries within the continent have come together for common good. The collection of 30 countries and several global corporations are working for a single digital market in the African continent. South Africa is leading an effort on deepening the use of Artificial Intelligence and its deployment for development efforts.
As South Africa prepares to chair the incoming BRICS 2023, the ministers of these countries recently held a meeting as a run-up to the summit. They discussed the preparations for South Africa's Chairship, the agenda for BRICS in 2023 and pledged to extend their full support to the country for the holding of the XVBRICS summit.

South Africa is well placed geographically within the BRICS. At the confluence of the Indian Ocean and South Atlantic Ocean, South Africa is an ideal bridge between the Americas and Eurasia. With its increasing responsibilities within BRICS, it also is the bridge for boosting economic growth between the African continent and the world.

Pranjal Sharma is a geo-economic analyst and author based in New Delhi.
Media release: SARS furthers International Tax Cooperation in Africa and among BRICS countries (Пресс-релиз: SARS способствует международному налоговому сотрудничеству в Африке и странах БРИКС) / South Africa, November, 2022
Keywords: economic_challenges
South Africa

4 November 2022 – The South African Revenue Service (SARS) participated in two multilateral meetings in the current week to cement international tax co-operation in Africa and among the BRICS Countries (Brazil, Russia, India, China and South Africa).

In line with our Strategic Objective 8-working with stakeholders and Strategic Objective 9-building public confidence and trust, SARS has been progressively working to rebuild our international partnerships with key organizations such as OECD, Global Forum on Tax Transparency, ATAF, WCO, SADC, SACU, United Nations and the IMF as well as bilaterally with other Tax and Customs administrations. SARS actively participates and contributes constructively at these forums as was evident again during the past week.

The first meeting was the hybrid 7th Annual General Assembly of the African Tax Administration Forum (ATAF) in Lagos, Nigeria, from 31 October to 3 November 2022. This was followed by the virtual meetings of BRICS, hosted by the State Taxation Administration (STA) of China as the current BRICS Chair. This comprised of the BRICS Tax Experts and Heads of Tax Authorities on 2 and 3 November 2022.

The economic dominance of the US and Europe gets more challengers (Экономическое господство США и Европы становится все более опасным) / United States, November, 2022
Keywords: economic_challenges, expert_opinion
United States

There's a new sheriff in town — or at least a new applicant. The five countries that have banded together to form a partnership called BRICS want to overthrow the global economic and political order that has long been shaped by Europe and the United States. That's potentially earth-shattering. So far, though, not much earth has been shattered.

The acronym BRIC was coined in 2001 by a banker at the investment firm Goldman Sachs who saw Brazil, Russia, India, and China as emerging titans on the world stage. The four countries held their first summit in 2009. South Africa joined in 2010, turning BRIC into BRICS. At the summit the group will hold next year in Cape Town, leaders of the five countries may accept Saudi Arabia's application to join. That would increase the power of a bloc that already represents 43 percent of the world's population and one-fourth of the global economy. Egypt, Iran, Turkey, and Argentina also want to join.

Part of the reason these five countries banded together is that they control less than 15 percent of the weighted votes in the World Bank and the International Monetary Fund, which were established after World War II and are dominated by Western powers. They aim to create a new global reserve currency to replace the dollar and the IMF's "special drawing rights" in international trade. A study released this year by Harvard and Columbia universities concludes that BRICS has "established a critical infrastructure for a prospective alternative non-dollar global financial system." Since the five member states produce half the world's iron, more than 40 percent of the world's wheat and corn, and one-fourth of the world's oil, their adoption of a new currency to replace the dollar could dramatically change the economic order that has been in place for the last 75 years.

Frustration over the global financial order is not the only reason these countries have banded together. All believe the West has been too quick to sanction countries for what it considers bad behavior. They want to be free to act as they wish, whether that means military action or domestic repression, without fearing punishment from abroad. Since 2012 they have also been planning an undersea "BRICS cable" that would give member countries Internet and other communications outside the watchful eye of the US National Security Agency.

The BRICS bloc is hardly the first effort to create a grouping of countries seeking distance from the West. Its ancestry may be traced back to the 1955 Asian-African Conference held in Bandung, Indonesia. Leaders of 29 countries gathered to demand a world guided by what the host, President Ahmed Sukarno, called the "live and let live" principle. It was a star-studded list, including Prime Ministers Jawaharlal Nehru of India and Zhou Enlai of China, President Gamal Abdul Nasser of Egypt, and the future leaders of Vietnam and Ghana, Ho Chi Minh and Kwame Nkrumah. The United States declined to send observers, leading Harlem Congressman Adam Clayton Powell to announce that he would attend anyway; he later called it "one of the most significant conferences of our times." The novelist Richard Wright also attended, and wrote afterward that the conference "smacked of tidal waves, of natural forces."

The Bandung conference led to the formation in 1956 of the Non-Aligned Movement. Many of the countries that joined were climbing out of various forms of colonialism and wanted to remain neutral in the Cold War. That outraged Secretary of State John Foster Dulles, who told President Sukarno, "You must be on one side or the other. Neutralism is immoral." The Non-Aligned Movement formed a potent bloc, but during the 1970s it lost its identity as neutral when Fidel Castro of Cuba, clearly aligned with the Soviet Union, became its dominant figure. In 1979 it split over whether to condemn the Soviet invasion of Afghanistan. It still exists but is no longer a force in world politics. BRICS is in part an attempt to pick up its fallen banner.

This bloc has the potential to upset the world order that Western nations constructed three-quarters of a century ago. It is still, however, far from reaching that potential. Though it is already more than a simple talk shop, it's hardly a true alliance and punches far below its weight. Its key projects remain unrealized, and it plays no substantial role in world politics. The five members and the countries that may soon join have vastly different political and economic systems, and little in the way of shared values. They are split on major global issues like the Russia-Ukraine war. Some quietly resent China's inevitable dominance. All they really have in common is that they're large, non-Western, and eager to change longstanding global rules. That's a long way from producing the true alternative system that is their dream goal.

More than a few countries are seeking to escape from the Western-dominated world order. BRICS is only the most visible of their emerging coalitions. Another is the Shanghai Cooperation Organization, which was founded in 2001 and groups China, Russia, and four Central Asian nations. In part to counter these challenges, the United States has strengthened its commitment to NATO and created new blocs of its own, most recently the not so subtly anti-China "Quad" partnership that includes Australia, Japan, and India — which is also a BRICS member. As the world changes in our volatile era, quiet confrontation among these blocs will shape geopolitics for future generations.
COP27 Multilateral Development Banks Joint Statement (COP27 Совместное заявление многосторонних банков развития) / China, November, 2022
Keywords: ndb, concluded_agreements

Across continents, climate change is having increasingly severe environmental, social and economic impacts posing a significant and urgent challenge to development and the achievement of the SDGs. The current global context of multiple shocks, elevated risks, and stretched public resources are exacerbating the challenge, particularly for developing countries. Achieving true momentum on climate action requires the identification of impactful programs and projects, adequate public policies, and significantly increased funding from multiple sources. Transformational results and systemic impacts at sector level depend on comprehensive efforts by countries, MDBs and all public, private and civil society partners, local communities and indigenous people.

In 2021, MDBs sustained their efforts on climate finance and delivered $51 billion in Low and Middle Income Countries, of which $33 billion (65%) was for mitigation and $18 billion (35%) for adaptation; and $31 billion in High Income Countries, of which 95% was for mitigation and 5% for adaptation. In addition $41 billion of private finance was mobilised in parallel. In doing so MDBs reached in 2021 the climate finance levels they anticipated reaching by 2025, announced at the UN Climate Action Summit in2019. The MDBs have also worked collaboratively on a range of topics, such as Paris Alignment approaches and recent updates of mitigation and adaptation finance tracking methodologies.

Recognising the interconnected challenges of sustainable development, climate change and nature loss, MDBs have committed to address these challenges in an integrated manner, maximising co-benefits while minimising trade-offs, notably by continuing to address the direct and indirect drivers of nature and biodiversity loss. In this urgent and complex context, the MDBs affirm their commitment to expanding their support to countries in their low-carbon, climate-resilient transition to:

  • Undertake sound analysis integrating climate and development to identify priority mitigation and adaptation actions, including support to countries in: the formulation of their Long Term Strategies, Nationally Determined Contributions and National Adaptation Plans; sectoral and subnational transition pathways; drawing on sound evidence-based diagnostics.
  • Formulate policies to spur systemic change and provide the legal and regulatory certainty to attract investment, going from green projects to greening economies.
  • Define specific investment plans and prepare impactful projects and programs.
  • Mobilise financing sources including public (local and concessional), private and blended finance.
Accordingly, MDBs are working with an increasing number of countries, regions and cities to develop mitigation, adaptation and "nature-positive" programs. Applied at scale, this programming approach can mobilise significant financing to implement the actions, plans and policies needed to drive the global transition. These efforts will also require additional resources in terms of MDB lending capacity, project preparation, advisory outreach and staffing.

While efforts will be tailored to individual country and client needs and priorities within individual MDB mandates, the following are critical priorities to deliver high impact outcomes:

Accordingly, MDBs are working with an increasing number of countries, regions and cities to develop mitigation, adaptation and "nature-positive" programs. Applied at scale, this programming approach can mobilise significant financing to implement the actions, plans and policies needed to drive the global transition. These efforts will also require additional resources in terms of MDB lending capacity, project preparation, advisory outreach and staffing. While efforts will be tailored to individual country and client needs and priorities within individual MDB mandates, the following are critical priorities to deliver high impact outcomes:

  • Implementing Paris Alignment approaches: All the MDBs are currently on track to meet their individual Paris Alignment commitments, with institutions at different stages of piloting or implementation.
  • Mainstreaming Just Transition efforts: Reflecting the sharp social issues arising from the current context, the MDBs are including just transition and social inclusion considerations in relevant policies, plans and projects. MDBs are also working to advance inclusion and equality of opportunity for women and vulnerable groups, and to improve their resilience to the impacts of climate change.
  • Boosting Adaptation Finance: The MDBs are boosting support to build climate-resilience and will provide particular attention and support to Low Income Countries, Small Island Developing States, and disadvantaged populations where the gap between adaptation finance requirements and capacity is the widest, noting that concessional finance is critical to catalyse both public and private sector investment in adaptation.
  • Supporting Efforts on Nature: Following upon their Joint Statement on Nature, People and Planet at COP26, MDBs are developing definitions of nature-positive actions to support developing projects and programs, business models and financing instruments addressing the drivers of nature and biodiversity loss. In parallel, MDBs are developing methodologies to identify, monitor and track nature positive investments in support of biodiversity and ecosystems services.
  • Increasing Concessional Finance: Concessional finance will remain a decisive element to achieve a broad range of high impact outcomes, including for the private sector and in Middle Income Countries. Significantly higher funding is needed from the global community to respond to the high demand for upstream policy support and to support approaches such as results-based climate finance.
  • Scaling up Private Sector Mobilisation: To reach the scale of action required, MDBs will enhance support to countries to strengthen the enabling environment for private climate investment, including:
    • market creation, for instance generating market confidence through new green business opportunities;
    • project pipeline development including support to corporates and early-stage finance to step-up the generation of projects;
    • direct or indirect finance mobilisation including innovative MDB private finance mobilisation, risk-sharing and de-risking instruments supporting adoption of new technologies; and
    • catalysing markets through asset class and market infrastructure development, greening and strengthening local banking sectors and capital markets, blending and refinancing.
  • Voluntary Cooperative Approaches: As recognised under Article 6 of the Paris Agreement, the MDBs are supporting the development of market and non-market instruments, such as monetisation of adaptation benefits and verified emissions reductions.
Taken together this suite of actions, encompassing investment, mobilisation, policy support, market reform and innovation, delivered by MDBs in a coordinated but diverse manner, reflects our collective efforts to support our countries of operations in addressing their most urgent development and climate challenges.

1 African Development Bank, Asian Development Bank, Asian Infrastructure Investment Bank, Council of Europe Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, Islamic Development Bank, New Development Bank, World Bank Group.
BRICS and the Belt and Road Initiative (БРИКС и инициатива «Один пояс, один путь») / Russia, November, 2022
Keywords: expert_opinion, economic_challenges

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

In September 2013, Chinese President Xi Jinping announced the Belt and Road Initiative. Initially, it focused on connectivity and land integration of the western part of China with Central Asia and Europe. Over the years, it has added maritime routes that include Southeast Asia and the Indian Ocean, Africa, and as of 2018, they already included it in Latin America with its projection towards the Arctic Ocean. More than 20 countries have already signed a Memorandum of Understanding to take part in this initiative and foreign direct investment from China in several regions has already surpassed $90 billion.

As the initiator of the Belt and Road Initiative, China also acts as a member of the BRICS, which will help achieve the goals of seeking, shaping and promoting a new model of international cooperation and development by strengthening existing regional bilateral and multilateral mechanisms with Chinese participation by building infrastructure, expanding trade and cultural exchanges. The peculiarity of the initiative is the openness to participation of all interested countries from all regions of the world, and the broad geographical focus. However, the highest priority regions for cooperation at present are Asia, Europe and Africa.

Although the initiative and BRICS are not directly linked and not all participating countries have signed the Memorandum of Understanding, this article will discuss the interaction of the member nations under the Belt and Road Initiative, common strivings, tendencies, and areas for cooperation.

BRICS and the Belt and Road Initiative are platforms for joint development through consultation, construction and sharing, which complement each other, achieve mutual benefits and win-win results, coordinate development and common progress. BRICS is an important mechanism for cooperation and global governance, in which China actively takes part and plays an important role. It focused on promoting the reform of the international order in a direction that benefits developing countries.

The Belt and Road Initiative launched by China aims to join efforts with other economies of the world to realize the "five links" (political communication, site linkage, seamless trade, financial integration and person-to-person connections) and create a community with a common future for humanity through extensive consultation, co-building and exchange. As the BRICS mechanism and the Belt and Road Initiative converge in ideas, principles and goals, both see developing countries, especially emerging economies, as major objects of cooperation. There are some similarities between them that can be used for comparison and mutual promotion.

The BRICS countries and those involved in the initiative seek convergence of national strategic policies and priority areas and continue to move towards the goal of creating large trade, investment markets and major infrastructure connectivity. In addition, the BRICS mechanism's spirit of openness, inclusiveness and cooperation is quite in line with the Belt and Road principle of joint consultation, building and sharing. On the other hand, the Belt and Road has also provided a broader platform for BRICS cooperation, as the participating countries can build stronger ties with their surrounding states and other neighbors in the region, and significantly increase the level of regional integration in the five areas mentioned earlier. Effective cooperation among the BRICS members can join forces and contribute to implementing the Belt and Road Initiative.

Infrastructure is undoubtedly an important area of cooperation. For example, some BRICS countries lack manufacturing technology and infrastructure. China, Russia and India have land borders, but the infrastructure in the border areas is poorly developed, which affects the connectivity and cooperation between the states. Consequently, both BRICS and the Belt and Road can jointly focus on building infrastructure in underdeveloped regions in order to facilitate convenient and smooth economic and trade cooperation.

Second, group of five and initiative strive for constant and shared development. Poverty has always been a long-standing problem for developing countries. In the process of BRICS cooperation and the Belt and Road Initiative, poverty reduction and eradication are very important goals. Since the reform and opening-up policy, China has contributed to the reduction of global poverty. In the process of poverty alleviation, China has always cultivated and strengthened local competitive and distinctive industries, strengthened the industrial base and relied on industrial development.

Thus, BRICS countries and countries along the Belt and Road can learn from China's experience in implementing innovation strategies and promoting "mass entrepreneurship and innovation" and actively build an entrepreneurial innovation ecosystem with dynamic innovation actors. It is relevant because, first, innovation stimulates industrial transformation and modernization, increases innovative investment and innovative cooperation in emerging areas, and contributes to improving the quality and efficiency of enterprises. Second, entrepreneurship can promote employment, alleviate unemployment in different countries and enable people to generate income and wealth. Governments in all countries should attach importance to the important role of small and medium-sized enterprises in boosting employment and economic growth.

Exploring further the coordinated development of the Belt and Road Initiative and the BRICS cooperation mechanism, we see that this is also important for building a fairer and smarter new order of international cooperation. For example, the Asian Infrastructure Investment Bank and the New BRICS Development Bank are global monetary and credit institutions, while the Belt and Road is a global economic and trade mechanism. It can be assumed that the mutual support of these banks and the Silk Road Fund can allow developing countries to integrate and cooperate in order to independently and effectively promote global governance reform, including increasing employment opportunities, accelerating industrialization and achieving sustainable economic development.

Having broadly defined the ideas, goals, concepts and spirit pursued by BRICS and the Belt and Road Initiative, we can move on to a discussion of the BRICS countries' relationship to the project. The BRICS mechanism can effectively promote the construction and development of the Belt and Road. Thus, the attitude of the BRICS countries is crucial. Not only the further development of the BRICS mechanism, but also the effectiveness of cooperation among the BRICS members will depend on whether the participating economies support this strategy. Initially, not all states accepted the idea of the Belt and Road, but now they express a positive attitude to the initiative and are ready to contribute to its development and promotion. For example, besides China, Russia, Brazil and South Africa, also play such a role as hubs and offshoots in Eurasia, South America and Africa that are difficult for other countries to replace. India, with its great economic development potential, is also a leading force in promoting the Belt and Road.

Russia is an important partner in the Belt and Road, with which the "Joint Statement of the Russian Federation and the People's Republic of China on Cooperation in Linking the Construction of the Eurasian Economic Union and the Silk Road Economic Belt" was signed in 2015. However, in the first half of 2022, China's funding and investments in Russia, under China's global development and cooperation project "One Belt, One Road" decreased. This is primarily because of the February events in Ukraine and the threat of sanctions from Western countries. Although there has been a drop in investment, Chinese experts argue that this is only temporary and that the trade and economic sector is still growing.

As for Brazil, the joint promotion of Sino-Brazilian cooperation since the establishment of diplomatic relations between China and Brazil has always maintained a good dynamic, including economic and infrastructure relations. However, although Brazil has not signed the Memorandum of Understanding on the Belt and Road initiative or related documents, its position regarding participation in it is positive and opportunities for Sino-Brazilian infrastructure cooperation are only expanding.

Despite this, many domestic and foreign experts do not see any connection between BRICS and the Belt and Road Initiative, as it is China's national initiative, while BRICS mostly focuses on the initiatives of the association itself. Moreover, there is a point here that the positions of BRICS members have not always been and remain the same, so when discussing the ways and means of BRICS participation in this initiative, it cannot be seen as a single entity.

The BRICS mechanism and the Belt and Road Initiative can be seen as a new model of international cooperation created by developing countries based on their own needs for further progress. In the turbulent international environment and lack of own capacities, China needs Russia and other BRICS countries, and Russia and all other BRICS members also need China. Whether through BRICS or the Belt and Road, China, Brazil, Russia, India and South Africa will continue to improve their global competitiveness and enhance mutual strategic trust and cooperation. In the long term, this will inevitably bring more opportunities for development and cooperation to the entire international community.

Political Events
Political events in the public life of BRICS
What Does Lula's Return Mean for BRICS? (Что означает возвращение Лулы для БРИКС?) / Russia, October, 2022
Keywords: expert_opinion, political_issues

Lucas Leiroz, researcher in Social Sciences at the Rural Federal University of Rio de Janeiro; geopolitical consultant.

Luiz Inácio Lula da Silva won the second round of the presidential elections in Brazil. The leftist candidate will inaugurate in January 2023 and promises to put an end to the legacy of Jair Bolsonaro, marked by terrible economic policies and an unstable diplomacy. There are many expectations of improvements with Lula. Analysts hope he will bring social improvements to the country and cooperate with BRICS' partners. However, there are also those who see the situation from a more critical point of view and find many differences between the current Lula and that one of previous terms.

Throughout the electoral process, polls indicated Lula's victory as the most likely scenario. Some of the country's main institutes even indicated that Lula would win in the first round. However, the institutes were wrong in their mathematical data. Lula's victory took place, but it was not so easily as the polls were predicting. There was a second round and Lula received 50.9% of the votes, while Bolsonaro reached 49.1%. It was a small advantage, revealing high levels of polarization in Brazilian society. In practice, the result, although sufficient to elect Lula, proved wrong the narrative that was being spread by the local left parties, that there was a national "democratic mobilization" to overthrow Bolsonaro.

Despite having worsened the living conditions of the people through a disastrous economic policy, guided by the neoliberal agenda, Bolsonaro remains really popular. Brazil is once again part of the hunger map and has reached high food, fuel and energy prices, but even so, the preference for Bolsonaro is great among the most conservative sectors of Brazilian society, which includes not only the middle classes, but a considerable part of the low-income populations.

The reason for this is quite simple: most of the Brazilian people is conservative. The institutions historically most trusted by the population are the Catholic Church and the Brazilian Army, which are groups linked to more reactionary political positions. It is a people "accustomed" to a long history of material scarcity and social problems, but who for cultural and religious reasons prioritize politicians with a conservative discourse over politicians aligned with the ideas of the Western "new-left". Not by chance, despite being supported by the most radical leftist groups, Lula changed his speech a lot during the campaign, even making statements against agendas such as abortion and "gender ideology", which undoubtedly helped him to achieve victory.

In fact, the defeat in the presidential dispute did not mean a "political death" for Bolsonaro. Analyzing the result of the elections, it is possible to see that Bolsonaro obtained a wide advantage in the Congress. In most states, right-wing senators and deputies were elected on a large scale, which makes Lula's parliamentary situation very delicate for the next four years. His victory did not mean reaching massive support in the Congress, with predictions that the left-wing government will have great difficulty in passing bills that contradict the interests of groups linked to Bolsonaro.

However, this is just one of the challenges that Lula will face. The president-elect will have to deal not only with the difficulties created by the opposition, but also with those created by his own allies. To defeat Bolsonaro and return to power, Lula accepted delicate agreements with Brazilian and foreign political and economic groups. The "anti-Bolsonaro coalition" included liberal parties, the mainstream media, the artistic class, and other sectors historically unconcerned with the interests of the poorest population (who votes for Lula). Also, at the international level, Lula was not only supported by the traditional Latin American left, but also by European and American liberal politicians.

For example, Lula on several occasions promised to promote an "international administration" of the Amazon Forest, having even personally promised this to Olaf Scholz in 2021. It explains why, after his victory, the Soros-funded NGO Amazon Watch published on twitter: "We' re heartened that Bolsonaro, who oversaw colossal destruction of the Amazon and policies imperiling Earth Defenders, did not prevail today. We stand with Brazil's Indigenous movement, now and in the years ahead. The struggle for the rainforest & its peoples continues".

Indeed, Lula will be demanded to have a more submissive international posture with regard to the Western elites. And this will be his biggest problem. The great dilemma for the president-elect will be to balance the interests of his historic allies (BRICS and emerging countries) with the ones of his new "friends" (US and EU politicians, global NGOs). So, for these reasons, it is premature to think that Lula's return is a kind of "victory for the multipolar world". It is unlikely that there will be substantial changes in the current situation of Brazil – both domestically and in international relations.

Made on