Information Bulletin of the BRICS Trade Union Forum
Issue 32.2018
2018.08.06 — 2018.08.12
International relations
Foreign policy in the context of BRICS
BRICS summit in South Africa shows high level of mutual understanding between leaders (Саммит БРИКС в Южной Африке показывает высокий уровень взаимопонимания между лидерами) / Russia, August, 2018
Keywords: expert_opinion, summit

9 August 2018. PenzaNews. The leaders of Brazil, Russia, India, China and South Africa took part in the 10th BRICS summit, which was held in Johannesburg on July 25–27. The main theme of the international forum was BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution.

During the three-day summit, the leaders discussed their cooperation in trade and the economy, coordination of their activities in politics, and resistance to unilateral approaches in global affairs. Furthermore, the participants spoke out against protectionism and changing the rules of world trade.

During the summit, the BRICS leaders signed inter-governmental memorandums on cooperation in regional aviation and environmental protection, memorandum of understanding on joint research in distributed ledger and blockchain technology in the context of developing the digital economy, and an agreement on establishing a new Development Bank office in Brazil. Moreover, the leaders held bilateral meetings and a separate outreach meeting with invited representatives of several African countries and the current chairs of a number of international associations.

After an expanded BRICS summit meeting, the leaders signed the Johannesburg Declaration, summarizing the joint activities of the international group not only over the past year, but also over the past decade.

Commenting on the summit in South Africa, Lak Chansok, Researcher at Cambodia Maritime Silk Road Research Center (CMSRRC), the Royal University of Phnom Penh in Cambodia and at Democracy Promotion Center, Research Center for Asia Pacific Studies (RCAPS), Ritsumeikan Asia Pacific University in Japan, stressed that the BRICS leaders reaffirmed their commitment to the principles of mutual respect and sovereign equality.

"The declaration states the iterated political commitments of five leaders to the principles of democracy and inclusiveness, international peace and stability, as well as multilateralism and ruse-based world order. […] The leaders also discussed the conflicts in Africa and the Middle East, supported the Iran's JCPOA deal and North Korea's peaceful denuclearization and stability in Northeast Asia," the expert told PenzaNews.

He also reminded that since 2009, BRICS has enhanced economic cooperation of its members as the largest emerging markets.

"BRICS' 41% of global population and 23.6% of contribution to global economy have been significant as one of the best alternatives to the existing West-dominated global institutions: World Bank and IMF," Lak Chansok said.

In his opinion, BRICS members, especially China, aimed to have a strong statement against the US due to Trump's unilateral trade approach.

"Thus, for China, this summit particularly responded to the US-China trade conflict, which can undermine 'Made in China 2025' strategy in this new wave of industrial revolution. […] The growing level of tariffs on especially China's technological products also negatively affects China's efforts to achieve its military modernization by 2035. For Russia, India and Brazil, Trump's unilateralism and ultra-nationalism are very unpredictable for their further economic and security interests," the analyst said and added that BRICS serves as another platform for comprehensive multilateral collaboration among five countries.

In turn, Nobuhide Hatasa, Professor, Nagoya University of Economics, expressed confidence that this year's BRICS summit attracted the attention of the whole world.

"It was the first big even that China participated since the trade war between the US and China has just began to escalate into the most critical risk for global economy. How the leaders of five member countries react to this economic conflict and what kinds of messages are delivered as to international trade issues during this summit were major concerns among economists as well as the media," the expert explained.

However, in his opinion, the outcome of the meeting was "somewhat modest."

"While the 10th BRICS summit Johannesburg Declaration clearly and repeatedly emphasized the importance of multilateralism and the open trade system within the WTO, it avoided using the word of 'protectionism' and denouncing a specific country. The main messages were rather focused on the upholding of the existing international rules and regimes in particular under the United Nations, in which China and Russia, two major BRICS members, have institutionally dominant power," Nobuhide Hatasa said.

According to him, this moderate outcome implies the complicated political and economic relations between the US and other four BRICS countries besides China.

"In terms of security issues, India is very much worried about the China' maritime expansion, and is trying to strengthen the military cooperation with the US. Russian President Vladimir Putin is more in favor of Donald Trump, […] and is seeking a chance to build friendly ties with him. Brazil and South Africa never want to be involved in the struggle for supremacy between the US and China since the both Chin and the US are equally the most significant economic partners for them," the Japanese analyst said.

Meanwhile, Harun Ozturkler, economy researcher, associate professor of Economic and Administrative Sciences at the Kirikkale University, pointed out that during the summit there were taken no concrete countermeasures against Trump led international trade wars.

"While US is producing about one fourth of the world GDP, from a worldwide economic power dominance perspective, it is understandable why BRICS failed to produce expected economic results. An important shortcoming of BRICS is that as a group it is not energy self-sufficient. Russian energy surplus is by itself not enough to meet energy demand by China and India," the economist explained.

Furthermore, BRICS countries need US and EU markets, he said.

"The purchasing power of consumers in BRICS countries is not enough for a sustainable economic growth in those countries. If Iran included in this block, then it can become a real energy power. However, for it to become a real economic power, it should expand its market base by inviting other countries with a growth potential, such as Turkey," Harun Ozturkler said.

Moreover, according to him, BRICS should construct its own institutional bases to come up with a way to coordinate the countries' economic policies.

"A common market or a free trade zone between those countries can turn this block into an important economic power," the analyst stressed.

In his opinion, the trade between Turkey and BRICS countries, especially Turkey and Russia, in local currencies is important for Turkey in the long run.

"Turkey's participation as NATO member is important for BRICS as group form an economy-political perspective. However, BRICS is not the answer for the economic problems Turkey faces today. Turkey does one half of its international trade with EU and more importantly Turkey's economy is structurally dependent on EU," Harun Ozturkler said.

In turn, Varaprasad Dolla, Centre for East Asian Studies, School of International Studies, Jawaharlal Nehru University, called the 10th BRICS summit a major milestone in its brief history.

"The summit focused on collaboration for inclusive and shared prosperity. This is quite relevant particularly at a time when science, technology and innovation are emerging as the driving forces of development. The challenge is to harness them for sustainable development," the expert said.

In his opinion, a key takeaway from the summit is the establishment of BRICS Partnership in New Industrial Revolution.

"While the initiative is laudable, the challenge is to make it eco-friendly Partnership on New Industrial Revolution (PartNIR) given the role of industrialization in precipitating global pollution," Varaprasad Dolla added.

He also reminded that the main political trend of the summit was associated with the birth centenary of Nelson Mandela, who stood for some of the most cherished values of equality, dignity and justice for the oppressed and marginalized.

"This underscores the imperative of BRICS countries to factor these central ideas into their own national and international political and development trajectories. BRICS Networks of Science Parks, Technology Business Incubators and SMEs is another initiative that needs considerable support […] for inclusive and shared prosperity," the analyst said.

Meanwhile, Brig Vinod Anand, senior fellow of Vivekananda International Foundation and author of a series of articles on geopolitics in Asia, drew attention to the fact that the atmosphere in the world economy is becoming increasingly unpredictable.

"This state of affairs was driven by Donald Trump's unilateralism, […] which negatively impacted only the BRICS nations but also the European Union," the expert said.

However, from his point of view, the BRICS countries are distinguished by their cohesion and ability to cooperate.

"The images and bytes coming out of G7 group summit reflected the disunity in the group while images coming out of the SCO summit held around the same time period showed a cohesive group of leaders notwithstanding many differences in their policies and outlooks. India, China and Russia are the major powers not only in the SCO but also in BRICS. Looking back, […]
BRICS has come a long way. It needs to be remembered that the Western nations had been somewhat dismissive of BRICS as an international grouping that aimed to challenge the western domination of institutions of global governance including those of finance and economy. But the new Development Bank or the BRICS Bank has been functioning well and has advanced funds for development projects," Brig Vinod Anand said.

He also added that countries still have work to do.

"On the current state of BRICS' economies, both India and China are growing at a good pace, there has been some growth in Russia's GDP, but the economies of both Brazil and South Africa have contracted. Mutual cooperation in the areas trade, commerce and technology needs to be enhanced as it is much below the potential," the expert of Vivekananda International Foundation explained.

"Additionally, at the next G20 meeting BRICS nations need to come together along with others to rally against the unilateral and protectionist policies. G20 is much more representative of the world economies and therefore, an appropriate platform for aligning their policies and rejecting protectionism," the analyst concluded.
'BRICS offers innovations for global sustainable development': South African envoy («БРИКС предлагает инновации для глобального устойчивого развития»: посланник ЮАР) / South Korea, August, 2018
Keywords: global_governance, sustainable_development, expert_opinion
South Korea
Author: Joel Lee

Against an onslaught of protectionism, the five major world emerging economies that comprise BRICS are strengthening cooperation in defense of multilateralism and free trade, and further preparing for the "fourth industrial revolution," according to South Africa's top envoy to Korea.

South Africa assumed the rotating annual presidency of BRICS -- Brazil, Russia, India, China and South Africa -- on Jan. 1 this year, which lasts through Dec. 31. It hosted the 10th BRICS Summit in Johannesburg from July 25-27, where the five countries' national leaders gathered.

"This year holds special significance in the BRICS' historical trajectory, as it concludes the first decade of its summits and coincides with the Nelson Mandela centenary," Ambassador Nozuko Gloria Bam told The Korea Herald.

The first BRICS summit took place in Yekaterinburg, Russia, on June 16, 2009, between Brazil, Russia, India and China. South Africa joined the institution on Dec. 24, 2010.

South African Ambassador to Korea Nozuko Gloria Bam (Joel Lee/The Korea Herald)
"South Africa, as part of its BRICS chairship, seeks to strategically align its approach with past chairships, whilst simultaneously retaining its focus on domestic and regional priorities," she added, noting the event prioritized collaboration for inclusive growth and coping with industrial paradigm changes brought by automation and digitalization.

To combat worldwide isolationist trends started by Washington, and reciprocated by others, the envoy said, "The BRICS countries agreed on the need to safeguard and strengthen multilateralism, and affirmed their commitments to the World Trade Organization to ensure a rules-based, transparent, nondiscriminatory, open and inclusive multilateral trading system."

Bam said that both BRICS and MIKTA -- an informal alliance of middle powers Mexico, Indonesia, South Korea, Turkey and Australia -- "basically share a similar vision." She said both institutions were dedicated to fostering innovative and constructive partnerships for "multilateralism, transparency, inclusiveness and compatibility," as well as creating pragmatic solutions to global challenges.

Both BRICS and MIKTA can buttress their engagement with the African continent, the ambassador highlighted, by partnering with the African Union and working in areas of connectivity, transport, finance and banking, trade and investments and security.

Turning to South Africa's G-20 membership as the sole African permanent member, the ambassador urged both South Africa and South Korea -- via the Group of 20 -- to enhance collaborations. The two countries, Bam suggested, can help spur economic growth of developing countries in the Global South, narrow opinion gaps on G-20 issues and tangibly implement commitments to global sustainable development, particularly through the G-20 Action Plan on the 2030 Agenda.

(From left to right) India's Prime Minister Narendra Modi, China's President Xi Jinping, South Africa's President Cyril Ramaphosa, Russia's President Vladimir Putin and Brazil's President Michel Temer pose for a group picture during the 10th BRICS (acronym for the grouping of the world's leading emerging economies, namely Brazil, Russia, India, China and South Africa) summit on July 26, 2018 at the Sandton Convention Centre in Johannesburg, South Africa. (AFP/Yonhap)
The African Union recently signed Continental Free Trade Agreement, which will turn the whole continent into an integrated free trade area after it goes into effect in a few years.

"The African Continental Free Trade Agreement, which provides access to a market of over 1 billion people and a combined gross domestic product of over $3 trillion, aims to spur intra-African trade," said Bam. "In order to achieve this, massive investments in infrastructure and skills development will be essential, which present great opportunities for countries like the Republic of Korea. Korea can lend its extensive experiences and expertise in infrastructure development, education and skills development."

The administration of South African President Cyril Ramaphosa welcomed foreign investments in diverse fields, she noted, mentioning renewable energy, recycling, biofuels, water infrastructure, energy, mining and minerals beneficiation, agriculture and agro-processing, aquaculture, tourism, shipbuilding and repairs, business process outsourcing, advanced manufacturing, fuel cell production, aerospace and defense.

"South Africa is determined to derive greater values from its abundant natural resources, and steadily advance up the value chains into knowledge-based industries," the diplomat said. "We are embracing new technologies and approaches that merge physical, digital and biological worlds. With its world-leading technological know-how, we hope that Korea will play a major role in this process."

Seoul, through the Korea-Africa Economic Cooperation and the Korea-Africa Industry Cooperation Forum, has participated in Africa's infrastructural and skills development projects -- two key areas for the continent's inclusive growth, structural transformation and sustainable development. The country's development assistance to Africa nearly quadrupled from $107 million in 2008 to $421 million in 2016.
BRICS Leaders Are Reinforcing, Not Replacing, the Global System of Power (Лидеры БРИКС укрепляют, а не заменяют, глобальную систему власти) / India, August, 2018
Keywords: global_governance, global_governance
Author: Patrick Bond

Can the Brazil-Russia-India-China-South Africa (BRICS) bloc rise to the occasion, as Donald Trump jerks Western imperialism out of traditional alignments? With war-talk against Iran blowing through Trump's tweets, and with Washington's trade wars raging against both China and traditional allies, there was talk here in Johannesburg about counter-hegemonic prospects during the last week of July. Chatter about reforming multilateral economic power structures, launching a new BRICS credit ratings agency and prospects for leapfrog technology within the '4th Industrial Revolution' (4IR) also filled the air.

The most vainglorious elements of South Africa's ruling elite were thrilled that BRICS leaders descended for several days of pageantry. Visiting heads of state Michael Temer, Vladimir Putin, Narendra Modi and Xi Jinping – joined for a day by 'BRICS-Outreach' and 'BRICS-Plus' tyrants Recep Tayyip Erdoğan, Faure Gnassingbe, Joseph Kabila, Paul Kagame, Emmerson Mnangagwa, Yoweri Museveni and Ali Bongo Ondimba among others – were welcomed at the Sandton Convention Centre, in the heart of the world's most corrupt corporate district (according to regular PricewaterhouseCoopers 'Economic Crime' surveys).

Revealingly, the business establishment is often split in such instances. The main Western-oriented corporate rags – Business Day and Financial Mail – regularly ridicule (for very good reasons) BRICS Business Council chairperson Iqbal Survé, whose allies include Siyabonga Gama, the oft-accused chief executive of Transnet.

Gama is also a member of Survé's five-person BRICS Business Council, and he and his Transnet predecessor Brian Molefe (who was also Survé's predecessor as council chair) allowed the huge state transport parastatal to became the main milk cow of the notorious Gupta brothers' 'state capture' corruption network. Billions of dollars' worth of Transnet kickbacks were arranged for the Guptas over the last few years, especially from two Chinese parastatal firms – which may see Gama losing his job in the coming days.

In contrast, South Africa's pro-BRICS corporates are few and far between but nevertheless vocal, with Survé sometimes (for very good – albeit contested – reasons) calling 'racism!' on the white-owned periodicals. Thanks to Chinese co-ownership and South Africa's main public pension fund support, Survé runs the largest chain of national daily English-language newspapers, the Independent group. Hence the BRICS summit received pure sunshine-journalism coverage from his Business Report.

Reinforcing, not replacing, world power

But the BRICS failed to stand up to Trump, mainly due to their ideological diversity, given that several pro-Washington leaders offset Xi. An excellent opportunity to establish a firmly oppositional stance against Washington was utterly wasted.

The only apparent unity came from the elites' love of mercantilist-neoliberalism. As South African president (and mining tycoon) Cyril Ramaphosa put it, "We confirmed our commitment to the World Trade Organisation, as the most effective mechanism available to ensure a rules-based transparent, non-discriminatory, open and inclusive multilateral trading system." In late 2015, the BRICS signed on to the last major revision of world trade rules in Nairobi – which effectively terminated the prospect for food sovereignty remaining a public policy option.

In contrast, progressive international reform is practically impossible at present, as witnessed in the teetering global financial markets. To illustrate, the BRICS further distorted the International Monetary Fund (IMF) during its 2015 vote restructuring. Four of the five took much greater shares for themselves (aside from South Africa, which lost 21% of its vote) at the expense mainly of poorer countries.

The BRICS were at the same time in the process of establishing the Contingent Reserve Arrangement (CRA) as a supposed alternative to the IMF but upon closer examination, once a country borrows 30% of its quota from that fund, it must go to the IMF and get a structural adjustment programme to access the remaining 70% (so little did the BRICS elites trust each other). Yet reflecting how far reform hucksterism has permeated the BRICS scene, even Financial Mail journalist Steven Cranston remarked that the CRA will provide "protection against global liquidity pressures without having to bow and scrape to the IMF."

Even more bowing and scraping is done when New York credit ratings agencies prepare their reports, as South Africans know well. But in Sandton, not only did a hoped-for alternative credit ratings agency (RA) not materialise – in spite of Brazil, Russia and South Africa suffering junk ratings from the hated Standard&Poors, Fitch and Moody's. Worse, the BRICS Expert Group report on a new RA suggested features that recreate in such a body many of the three agencies' same foibles.

That Expert Group recommended, "The BRICS RA shall adopt the issuer-pay business model since it is well-tested and globally accepted. The BRICS RA should be set up as a private sector entity to ensure private-sector efficiencies, independence from government influence, credibility and acceptance by global investors… On the governance and operational aspects, too, private-sector efficiencies can be derived to ensure commercialisation on market-based principles."

RA technical advisers will be important: "The expert group suggests a voluntary network of well-established credit rating agencies registered in each of the BRICS nations be formed." In short, as in so many aspects of its work, the BRICS bloc starts with rhetoric about an 'alternative' to Western hegemony and ends up amplifying neoliberal capitalism instead.

Anti-neoliberalism also appeared in Sandton

The main site to consider antidote analysis and news is 'BRICS from below,' a tradition of counter-summit critique begun in Durban five years ago, and also witnessed in Fortaleza in 2014, Goa in 2016 and Hong Kong in 2017. (In 2015, Russia's Ufa proved an impossible site in which to generate civil society critiques, and instead Vladimir Putin established a 'Civil BRICS' hand-in-hand with Oxfam to draw activists inside the tent to piss politely, rather than stay outside pissing on the tent.)

The annual counter-summit activity included a Teach In at the University of the Witwatersrand and two protests: one at the Sandton summit led by the United Front-Johannesburg and the other at the BRICS New Development Bank (NDB) regional branch nearby. The former, on July 26, raised the variety of critiques now increasingly common against BRICS states and companies: exploitation and unemployment, climate change and pollution, violence against women, repression and surveillance, non-delivery of services, austerity, budget cuts, human rights abuses, rampant corruption, racism, xenophobia, extreme inequality, looting of natural resources, subimperialism, neoliberalism, dictatorships and homophobia.

There were especially angry delegations representing Kashmiris, Rwandans and Congolese. Indeed, the Muslim Lawyers Association managed to get a docket initially investigated by Pretoria's National Prosecuting Authority for the Indian regime's gross human rights abuses in Kashmir, but one of Ramaphosa's most trusted ministers ensured it was quashed a few days before the visit.

Anti-BRICS banking, in support of genuine development

The other protest, against the NDB on July 25, was led by four Goldman Environmental Prize winners and their organisations and allies: Makoma Lekalakala of Earthlife Africa, Bobby Peek of groundWork, Thuli Makama of OilChange International and Des D'Sa of the South Durban Community Environmental Alliance. They mainly raised the vexing questions of socio-ecological damage and corruption associated with the mega-projects typically announced with fanfare at the BRICS summits, and now increasingly financed by the NDB.

Indeed, a huge increase in coal-fired power plant financing resulted from the biggest single loan announced during the BRICS summit: the China Development Bank's $2.5 billion credit to complete the state-owned power company Eskom's generators at Kusile, still mired in corruption and missed deadlines. With its 4,800 megawatts of supply, Kusile will emit 31 million tonnes of CO2 annually, one of the world's most carbon-intensive power plants.

Following a major 2009-11 campaign against the World Bank and US Ex-Im Bank financing of Eskom's coal generator expansion (focused on Kusile's predecessor Medupi power plant), the leading pollution watchdog groundWork has called for further Kusile work to be halted.

Again, corruption is a factor. In 2015, the US Securities and Exchange Commission fined Hitachi $19 million for violating the Foreign Corrupt Practices Act, specifically for making "improper payments" to South Africa's ruling party when bidding to install coal boilers worth $5.6 billion. But Hitachi's work continues at Kusile, with no South African prosecution.

On top of that, the NDB reactivated a $180 million deal for restructuring Soweto's electricity grid plus privatised renewable grid lines. The first is opposed by Soweto community activists led by decommodified-electricity activist Trevor Ngwane, on grounds it will end up squeezing local consumers.

The NDB energy grid loan to Eskom is also being fought by the country's largest trade union – the National Union of Metalworkers of South Africa – because it will prevent progress towards a socially-owned, worker-managed renewables sector. Metalworker leader Irvin Jim argues instead for a non-profit strategy of energy based on "decentralised ownership and operation integrated into a coherent, national centre. We made it clear that the national grid must be publicly owned and must remain the backbone of energy provision."

Instead, the NDB promotes the Independent Power Producer model, which, says Jim, is "the privatisation of Eskom by other means and we reject it in its totality. We cannot allow the grid and the supply of electricity to be placed in private hands. We have learnt many hard lessons in the past about privatisation. It ultimately worsens conditions for workers and their families, through increased tariffs and retrenchments."

Transnet also received a recent $200 million loan from the NDB, to finance the expansion of the Durban port-petrochemical complex. It is firmly opposed by D'Sa and his neighbours for reasons ranging from the borrower's prolific corruption to its insensitivity to climate change to the anticipated rise in local pollution and housing displacement.

No nukes, at least for now

At least South African society breathed a sigh of relief at one announcement, regarding the largest proposed mega-project made at prior BRICS summits in 2014 and 2015: $100 billion worth of nuclear energy reactors. That deal, between former South African president Jacob Zuma and Putin, is now on indefinite hold.

As Ramaphosa explained, "On nuclear, we said because our economy is not participating at a level we would like it to and have huge financial constraints, we are not able to proceed with a nuclear build programme. President Putin was relaxed about this and says that we (must) deal with our issues, and when the situation changes we can talk and that's where we left it."

This was one of several diplomatic stresses. Another occurred during the main symbolic event for the five leaders: visiting the 'Cradle of Humankind' where some of the world's oldest hominids (four million years) have been preserved. At the last moment, the visit was replaced with what should have been a live video feed from the site (an hour west of Johannesburg). Ramaphosa admitted, "The logistical arrangements were a little difficult for us" (to get to the Cradle site). Then, to everyone's embarrassment, the video feed also failed.

As a journalist observed, "There were so many logistical failures that it was ironic for the leaders to discuss the 4th Industrial Revolution as part of their future plans." Most enthusiastic was Survé: "I have a vision, as a South African, African and internationalist, that our continent will thrive, that millions of unemployed youth will be educated with the skills required for the 4IR."

The 4IR concept fuses Artificial Intelligence, robots, nano-technology and all manner of other dangerous, disparate high-tech corporate and state innovations, resulting in massive job losses, enhanced surveillance (e.g. China's "Social Credit") and potential chaos if not regulated and socially controlled.

The ironies of the BRICS are here encapsulated, for they begin with the critique everyone shares of a world out of control, one facing myriad geopolitical, economic and environmental meltdowns – and end with even more contradictions. Now, with Trump setting the agenda on the building and destruction of political alliances between states while wrecking prospects of multilateral action, the world requires a new generation of international leaders to develop a genuine alternative.

That can only occur based not on the desire to merely gain a seat at the global corporate capitalist table, as do the BRICS elites, but on overturning it.

Patrick Bond teaches political economy at the University of the Witwatersrand School of Governance in Johannesburg.

A BRICST in the making (БРИКСТ в разработке) / China, August, 2018
Keywords: summit, brics+, expert_opinion
Author: Sabena Siddiqui

At the recent BRICS summit, Turkish President Erdogan urged the member countries to facilitate his country's admission to the group, saying: "If you take us in, the name of the platform would become BRICST."

With substantial economic potential, the five countries forming BRICS (Brazil, Russia, India, China and South Africa) presently account for 23 percent of the world's GDP, and the IMF expects this to rise to 26.8 percent by the year 2022. Thus, it's no surprise that more countries wish to join the bloc.

Inviting leaders of various emerging economies for top-level talks preceding any extension, the summit host, South Africa, had arranged a specific meeting to create an effective mechanism for cooperation.

Aiming to diversify Turkey's options, Erdogan wishes to extend links and increase leverage beyond the West, even though being perceived as part of the Western bloc has long provided it with relevance as well as an economic cachet.

Currently facing the threat of American sanctions and seemingly stuck in a never- ending EU membership process, Turkey seeks to strike a balance by becoming part of the more forward-thinking BRICS instead. A member of NATO since 1952, it has the second largest army within the group, yet is not integrated completely into the Western defence system due to a somewhat different perspective of military priorities.

Nevertheless, the EU countries would never wish Turkey to leave NATO as the U.S. – via President Trump – already complains about the alliance's costly maintenance and would like other members to foot the bill.

Ostensibly, Turkey will not have to leave the NATO after joining the BRICS, because the latter places no such stipulation on new members to leave other organizations. At the end of the day, Turkey seeks to emerge as a multi-dimensional global power that remains a "much wanted" country in both the West and the East.

As Dr. A. Kadir Yildrim, from the Baker Institute of Public Policy, has observed: "Maintaining relations with the West while seeking alternative arrangements suits Erdogan's long-standing motivation of being a bridge between the East and the West."

Thus, it can be expected that ambiguous neutrality will continue to be the linchpin of Turkey's foreign policy.

On the economic front, instability in Turkey's neighborhood has adversely affected its exports and created a chronic current account deficit; hence, gaining access to new markets will help it regain sustainable economic growth.

BRICS countries happen to be particularly important as Turkey's imports from these five countries are currently valued at $53.4 billion a year, while its exports to the same countries only reach $7.3 billion. It has been calculated that 60 percent of Turkey's overall trade deficit is, in fact, caused by BRICS countries.

These days, the Turkish government and business community is exploring export options to increase market presence in these countries. Significantly, Turkey would also gain access to BRICS financial resources and vast pool of raw materials even as the lira continues to dip amid U.S. sanctions.

In addition, Turkey also wishes to become a member of the Shanghai Cooperation Organization, where, again, it would be lined up alongside Russia, China and India, as well as being part of the Belt and Road Initiative. Already a part of the G-20, along with the five existing BRICS members, Turkey wants to join them as an official member instead of being affiliated under the existing BRICS+ arrangement so as to be able to play an active role and contribute in policy making and determining the group's direction.

Turkey's request to join has been well received by the member nations; especially China has been in favor of the BRICS+ initiative and broadening international partnerships for some time.

Spanning Europe as well as Asia, Turkey would be the first Muslim country to join BRICS, raising its importance in the international Islamic community of nations. Nowadays, Erdogan is also the current chairman of the Organization of Islamic Cooperation.

Focusing on the threat to global trade at this year's event, the BRICS members underscored the importance of an open economy enabling more countries to avail themselves of the opportunities provided by globalization; hence, it can be safely said that the group membership is going to keep on growing.

Setting a broad-based agenda, discussing climate change, counter terrorism and regional security along with innovative multi-pronged strategies for BRICS constituencies at home and abroad, this group can eventually bring about a change in global economic governance, perhaps ultimately replacing the G7 grouping of industrialized countries in terms of importance.

BRICS Summit: A Blessing in Disguise (Саммит БРИКС: Замаскированное благословение) / Russia, August, 2018
Keywords: expert_opinion, summit
Author: Victoria Panova

The second cycle of BRICS summits has come to an end: the first full cycle for all five states and the tenth anniversary summit for the organization. It is time for some stock-taking.

A Hero on the Stage of another Theatre

It would seem that the true hero of the BRICS Summit was someone who is not even a member of the group. We are talking, of course, about President of the United States Donald Trump. Neither did he represent an invited member state either within BRICS Outreach or BRICS-plus. Indeed, he was not even physically present there. Yet it was Trump who helped transform a fairly regular and run-of-the-mill summit into a significant event even before it actually took place. The success of the BRICS Summit was helped by the G7 meeting and NATO summit that preceded it.

First, major scandals and the effective public failure of the meetings of western leaders have already shined a favourable light on the peaceful tone and aligned discourse of the leaders of the alternative "club," even if they did not have a profound meaning. Second, the consistency with which Trump is keeping his campaign promises has shown the BRICS leaders that no one will be able to "sit it out." Yes, the meeting between the leaders of the United States and China was a success, but this did not prevent Washington from then starting a trade war with its principal rival. No matter how much Washington may be courting India seen as a main counterbalance to China in the new political and geographical setup in the Indo-Pacific, the stance of the President of the United States on protecting U.S. manufacturers while essentially ignoring WTO rules, coupled with the fact that the two countries previously held very different positions, does not afford the Indian Prime Minister of India the luxury of becoming complacent and assume that the United States need for India will make it possible for New Delhi to continue to receive an endless supply of "carrots" from Washington unless India has additional insurance and an alternative counterbalance.

For Russia, the current situation is interesting in that now the other "club" members, and not Russia alone, need to protect themselves, and this gives BRICS a new impetus. Now all the BRICS countries are aware of their vulnerability, which is not only theoretical, but quite real. And this awareness, in turn, determines a far greater desire to come to an agreement, not just to politely support Russia by speaking about the inadmissibility of unilateral actions and sanctions that bypass the United Nations.

A Play Without a Hero

There is not much to say much about the summit itself. It probably turned out to be too run-of-the-mill for an anniversary event. Unsurprisingly, many commenters noted that the bilateral meetings held between leaders were richer in content than the group discourse. To be sure, it was hard to expect anything else from the organization's weakest member, which is still experiencing problems stemming from the political processes taking place in the country. The general outline of the summit was quite standard. The key issues were inclusive and sustainable development, "the fourth industrial revolution," and Africa's special role in the context of South Africa's claim to leadership on the continent. On the other hand, each party received some working mechanisms and initiatives that they surely found interesting. We are talking here about peacekeeping in Africa and around the world; a research platform for the energy sector or agriculture; joint research into distributed ledgers and blockchain; agreements on civil aviation or environmental issues; and opening a new regional office of the BRICS Development Bank in the Western Hemisphere.

Methodologically, BRICS is analogous to the tried and tested G7 mechanism that was created 40 years ago. In this respect, it is hard to speak about innovations.

Quite predictably, a great amount of space in the final document was given not only to issues of Africa, but also to the issues of the WTO, ranging from general promises to promote a "transparent, non-discriminatory, open and inclusive multilateral trading system" to barbs intended for the President of the United States on specific issues, such as the refusal to approve new members of the Appellate Body of the World Trade Organization. The already "mature" BRICS format entails not only active discussions of economic issues, but also gives significant attention to politics and security. However, there is nothing new in this, since despite the economic subtext that dominated the initial summits, political issues remain one of the pillars of cooperation for the members. It was interesting to note that the agenda featured a large number of items related precisely to security issues in the countries of the Middle East, as well as a very detailed paragraph on Syria (including support for the Sochi meeting and the Astana process in general, which looks like another jab directed at the United States due to its decreased level of representation and subsequent absence from the last meeting). The stance on the Korean settlement was sketched out very briefly, apparently because none of the BRICS countries feel like a leader in the process. The paragraph on preventing militarization of outer space did not contain references to the Russia-China initiative.

The initiatives discussed not only in the Business Club, but also at the BRICS Expert Council are gradually moving to the fore. Those are, in particular, issues pertaining to people-to-people contacts and humanitarian ties: holding joint events in cinema, education, culture, tourism and sport. The last section of the final declaration on "people-to-people" cooperation raised some eyebrows and the question of what the five leaders mean by such cooperation. This section lists various measures and steps to boost such contacts, but it also contains information that seems to be unrelated to this segment, such as the World Health Organization's Global Ministerial Conference on Ending Tuberculosis held in Moscow, the World Water Forum in Brazil, the Vaccine Research and Development Center and matters related to outer space – that is, everything that was not listed in the previous sections. Does this speak to the lower priority the five leaders give to this aspect of cooperation? Or is it another example of the somewhat loose organization of this year's summit?

Still, BRICS attracted far greater positive attention than its rivals. This much was evident from the level of guests in attendance. In recent times, only the representatives of poor countries angling for aid from "the club of the rich" have attended the G7 summits with any kind of regularity. Conversely, the BRICS summit, in accordance with its combined nature, was attended by African states and major regional players, states that lead several international organizations.

Unlike the G7 members, BRICS attendees are more and more interested in systematic and full-fledged collaboration. Recep Erdogan's speech was particularly memorable this year, as he called for the letter T to be added to the BRICS acronym. Although it is clear that, thus far, expansion could bring more problems than advantages, and, as the President of the Russian Federation said, such questions are not decided "on the spur of the moment," the summit also demonstrated that BRICS members need to make difficult decisions today. Talks about potential new candidates (Turkey, Argentina and Indonesia) can be held until these candidates begin to give very serious consideration to the prospects of such changes. The excessive delay in the process entails the risk that the former "circle of friends" of BRICS could turn their backs on it and start to consider alternative options of participating in global governance. So maybe it is finally time to think about real changes and innovations in the format and contents of the work of BRICS, be it various forms of institutionalization, admitting new members, or changing the format or types of cooperation.

When a Blast from the Past is not Really that Outdated

It is not a project of "friendship against" anybody, it is a partnership for a common future of independent, integral, full-fledged subjects of a stable and prosperous system of international relations.

The world today is characterized not only by chronic turbulence, but also, despite its significantly more complex worldview, by the return of the key actors to geopolitics and the prioritizing of national interests. At the same time, given the new conditions, old tools and methods are no longer effective enough. Such a situation already arose in the early 1970s: a host of new challenges emerged; old institutions stopped being efficient; and capitalist powers needed to invest intellectual capital in determining further steps and inventing new approaches. It is during times like this that new formats of international collaboration appear in the form of international regimes and international "clubs." Work within the G7 brought the stances of the leaders of the capitalist world closer together, helped overcome an identity crisis and ultimately resulted in a more profitable position by the end of the Cold War.

Methodologically, BRICS is analogous to the tried and tested G7 mechanism that was created 40 years ago. In this respect, it is hard to speak about innovations. This is why, when people speak about ineffectiveness of the models for regulating international relations, it also applies to the young BRICS mechanism borrowed from the past.

However, what makes the old model from the "G7 designer" somewhat more viable is the fact that members of the organization have far fewer things in common. This might sound illogical and go against the currently fashionable statements of some Russian and foreign experts that it is rather a major drawback for the club.

So, what is the source of such conclusions? Why would countries that have nothing in common do anything together? And how might they preserve long-term relations once the fleeting problems that brought them together are gone? What could five economies have to talk about if one of them is already the global leader in terms of GDP at Purchasing Power Parity, yet their mutual trade turnover, having increased by "as much as 30 per cent," totals just $102 billion? What do authoritarian and democratic regimes have in common, especially when participants love to differentiate themselves along these lines? And this list of questions is by no means exhaustive.

Moreover, the principle of "becoming friends solely to stand against" somebody that has been repeatedly stressed this year is always unstable and easily shattered by concessions from the party against which it is intended. The problem, however, is that if Trump's policies (in particular, launching the current trade war) have created a starker background for collaboration (and the BRICS president's rating has recently dropped to junk, thus prompting the idea of the organization establishing a rating agency of its own), it is still only a background. Probably, given the considerable contradictions in India–China relations, India is indeed the relatively "weak" link in BRICS. This applies not only to unresolved territorial disputes, but also to its strategic resistance to Beijing's Belt and Road initiative, as well as other issues. Of course, the United States plays the Indian card in its rivalry with China with varying degrees of success. It is not for nothing that, intentionally or not, the ending of the BRICS summit coincided with the announcement that India now is one of the United States' privileged allies; moreover, hi-tech weapons can now be sold to India. What was it – a general demonstration of support for India, or compensation for the CAATSA, rather than an anti-Chinese step? Another attempt to force Russia out of this market segment? Whatever it was, any such attempts to pitch one BRICS country against the others through the concessions of the United Stated do not provide sufficient grounds to disband the BRICS mechanism.

They have something far more fundamental in common: as a result of a particular historical situation, western countries have attempted to consider each BRICS country not as an independent actor in the global politics, but as an object that can be influenced and which must be either incorporated into the liberal democratic system on the system's terms or (if the country resists) to be pushed outside the "global community" as far as possible and be isolated. The G7 itself transformed into a project of "friendship against" the USSR, the socialist camp and the newly independent developing countries. Each BRICS member began to demonstrate too much independence and a vision different from the one commonly accepted in the West. Or their capabilities grew. Or they were not considered equals as a matter of principle. Hence the common principles of protecting sovereignty, the unacceptability of interference in the internal affairs of another state, the unacceptability of unilateral pressure and the reliance on multipolarity, as well as the strong emphasis on the role of the United Nations.

We should not forget that BRICS membership is a status – the status of a global power even for regional actors that do not quite qualify for that status under other criteria. Given the maximum vulnerability of the states against the background of current global turbulence, BRICS means common insurance.

Other commonalities emerge in the course of business and create that untearable network of collaboration on various levels that allows the organization and its members to live their lives regardless of the weaknesses or strengths of a particular president, or the successes or failures of a particular meeting. The starker and longer the strategic disrespect and resistance to alternative visions of BRICS countries and other non-western states, the desire to "divide and rule" – the stronger the BRICS network is and the higher the chances that when the time comes for the network to spread wider, it will not "wash out" and its thread will not weaken. Because it is not a project of "friendship against" anybody, it is a partnership for a common future of independent, integral, full-fledged subjects of a stable and prosperous system of international relations.
The BRICS Summit and Russia's Renewed Focus on Africa (Саммит БРИКС и новая заинтересованность России в Африке) / Russia, August, 2018
Keywords: expert_opinion, summit
Author: Vladimir Shubin

The meeting between the Russian and South African presidents at the recent BRICS summit in Johannesburg was particularly valuable marking the birth of a new stage in bilateral relations. The course for all-out cooperation was sealed by the signing of a Joint Statement.

From July 26 to 27, Johannesburg, South Africa's "business capital," hosted the 10th anniversary BRICS summit that was attended by Russian President Vladimir Putin. Along with taking part in the proceedings, he held numerous meetings with leaders of other countries, including with PRC President Xi Jinping and South African President Cyril Ramaphosa.

In the former case, this is explained by the fact that it is actually with China of all the BRICS members that Russia maintains the closest and most versatile ties. This includes for example regular top-level talks. This particular encounter with Xi Jinping was also the longest meeting of all, with the two presidents having their discussion when they informally dined together. What was brought up during the talks was not revealed by the Russian side as the media were not invited to attend. However, presidential aide Yuri Ushakov said before the meeting that it would be dedicated to a discussion on the preparations for Xi Jinping's participation in the Vladivostok economic forum as well as matters related to bilateral cooperation in all fields.

Neither was the Chinese side more "talkative," with a Xinhua report tersely referring to an "in-depth exchange of views on the current international situation" and "important issues of mutual concern."

Whatever the reason, the summit has shown that even after the completion of the Chinese BRICS chairmanship in 2017, Beijing remains active as a member. However, it would not be right to note, as is so often the case, China's "dominant" influence in BRICS. Addressing a news conference in Johannesburg, Vladimir Putin stressed that "All decisions are taken by consensus with full respect for the interests of all the participants in this organisation."

Moreover, Beijing's involvement in BRICS seems just one of the tools to implement its course for a "community of common destiny for all mankind" and not as the most important tool at that. Let me give you an example: Addressing BRICS Academic Forum's Peace and Security session in Johannesburg, a Chinese representative talked at length about this course but failed even to mention BRICS. Asked by the present writer about the reason for his "forgetfulness," he simply avoided answering the question.

President Putin also had his first meeting with South African President Cyril Ramaphosa, who was elected in February of this year. There are long-standing historical bonds between Russia and South Africa. South Africans remember the USSR's comprehensive support in their fight against the apartheid movement, a fight led by the African National Congress, now the ruling party. Regrettably, these relations sustained a lot of damage during the Yeltsin-Kozyrev period in Russia, when the Kremlin chose to receive Frederik Willem de Klerk, the last head of the racist regime, rather than Nelson Mandela, the future president of democratic South Africa.

However, bit by bit the relations fell once again into place, particularly when it came to political ties, and the recent presidential visit to South Africa was already the number three. Jacob Zuma, who was elected president in 2009, displayed friendly feelings towards Russia as well. But this active liberation fighter, underground worker and political prisoner, who was largely behind the decision to bring South Africa to BRICS, faced not entirely unfounded charges of corruption in recent years and had to resign after the ANC decided to recall him against the background of parliamentary threats of a vote of non-confidence.

Regrettably, the negative attitude towards Zuma was extended to Russia. During the last Zuma period as president, the West-controlled South African media launched a nasty anti-Russia campaign over the signing in 2014 of a framework agreement on strategic cooperation in the nuclear power industry.

This is why the meeting between the Russian and South African presidents was particularly valuable marking the birth of a new stage in bilateral relations. The course for all-out cooperation was sealed by the signing of a Joint Statement. The parties also signed an intergovernmental agreement on agricultural cooperation as well as a memorandum of understanding on cooperation in the sphere of water resources.

The matter regarding the likely South African-Russian collaboration in building a nuclear power plant ended up clarified as well. Addressing a news conference, Mr. Ramaphosa said that his country had huge financial constraints and was unable to proceed with its nuclear program. "President Putin was quite relaxed about this," he added. "He said you deal with your issues and when the situation changes we can keep talking about this. And that's where we left it. There's no other hidden agenda."

There is no doubt that President Vladimir Putin's visit to South Africa to attend the BRICS summit, his meeting with President Ramaphosa together with numerous other meetings with Russian representatives' participation during the year of the South African chairmanship should help South Africans get rid of the misinformation imposed upon them and to better understand Russia's policy.
Briefing by Foreign Ministry Spokesperson Maria Zakharova, Moscow, August 9, 2018 (Брифинг официального представителя МИД России М.В.Захаровой, Москва, 9 августа 2018 года) / Russia, August, 2018
Keywords: mofa, political_issues

Publications on new Russian "interferences" with elections in foreign countries

On August 3, a central Indian newspaper published an article by the Washington bureau of the Press Trust of India news agency titled "Russia now targeting elections in India, Brazil: Oxford expert tells US lawmakers.» It focuses on recent hearings at the US Senate Intelligence Committee on the impact of foreign states through social media platforms. Professor Philip N. Howard dealing with online studies at the Oxford University was invited to the hearings and argued that, following successful interference with elections in the United States and other countries, Russia is going to use its tried and tested technology to tamper with the outcomes of upcoming election campaigns in India and Brazil.

I think that endless Russophobic mudslinging by various American figures and British researchers no longer deserves to be even mentioned.

The meaning of the accusations is clear, and the goal of another get-together at the Senate is to drive a wedge between partners, in particular, BRICS. As you may be aware, a BRICS summit was successfully and constructively held just recently.

Clearly, the Americans were seriously upset by the weighty results of the most recently held BRICS summit in Johannesburg, the growing authority of the five powers and the ever strong interaction between its participants on matters of global order. Returning to consideration of a positive and constructive agenda, there's nothing they can offer in terms of "smart power" or "soft power." So, they go ahead and publish such planted articles. Fake news again. We call attention, also of the Indian media, to the fact that this is a case of unadulterated fake news. Why? It's simple and is all about anti-BRICS lobbying.

I'm confident that publishing such fake news will accomplish nothing. It is unpleasant by itself and poisons the information environment. However, this will not affect Russia-India relations which are improving as well as interaction within the BRICS group.
Russian, Brazilian security chiefs discuss bilateral cooperation (Главы силовых ведомств России и Бразилии обсудили двустороннее сотрудничество) / Russia, August, 2018
Keywords: national_security, top_level_meeting

MOSCOW, August 6. /TASS/. Secretary of the Russian Security Council Nikolai Patrushev and head of Brazil's Institutional Security Cabinet Sergio Etchegoyen have held Russian-Brazilian consultations on security, Patrushev's spokesman Yevgeni Anoshin said.

"The prospects of bilateral cooperation in the sphere of security, as well as the issues of coordinating activities at international level, including in BRICS and UN, were discussed," the Security Council spokesman noted. Representatives for some ministries and agencies took part in the consultations.

Stacking With BRICS (Расставляя БРИКС по местам) / Jamaica, August, 2018
Keywords: expert_opinion, ecology, political_issues

Better late, they say, than never. It has been four years since this newspaper first urged Jamaica and its Caribbean Community (CARICOM) partners to pursue "a deeper political and economic engagement" with the BRICS - Brazil, Russia, India, China, and South Africa - as part of this region's strategic widening of alliances against the dangers of a unipolar dependence.

At the time, the economies of the quintet, some of the world's largest and fastest-growing, had begun to slow. More important, two major destabilising events hadn't yet happened. Few could have conceived Brexit and neither had Donald Trump broken the horizon of America's politics. As it is, Britain is messily attempting to decouple from the European Union (EU). In America, Mr Trump is president, busy wielding a wrecking ball against global certainties.

So, last month in Johannesburg, in this new environment of instability, Prime Minister Andrew Holness, on behalf of CARICOM, addressed the BRICS summit, offering unassailable logic of a partnership between that group of emerging economies and CARICOM, including in combating climate change and maintaining a rules-based, multilateral trading system.

Global Warming

America is, by far, on a per capita basis, the world's largest emitter of greenhouse gases, which all credible science concludes is the major factor in global warming. Mr Trump denies that the problem is primarily man-made. He pulled the United States out of the Paris Climate Agreement, which is aimed at mitigating rising world temperatures. This is an existential matter for Caribbean countries. For, as Mr Holness told the BRICS leaders, global warming makes the mostly small-island states of CARICOM "extremely vulnerable to the impact of natural disasters and severe weather events". The upshot: It makes sense for both groups to work together to promote compliance with the Paris Agreement, including the measures of mitigation support for the most vulnerable countries.

Climate concerns are critical, but it is not the only worry for this region. For instance, Britain's planned exit from the EU has created uncertainties for CARICOM over the future of its trade arrangement, the Economic Partnership Agreement, with the EU as well as the shape of a future trading pact with the United Kingdom.

Such concerns are exacerbated by Mr Trump's unilateralist approach to global trade. Concerned about America's half a trillion dollar deficit, he imposed tariffs on goods from China, the EU, Canada, and others, who he claims trade unfairly. Mr Trump's trade war is potentially damaging to the international economy, with small economies like CARICOM's, still struggling to emerge from the great recession of a decade ago, likely to suffer most.

Political Bridges

That is why, despite its concern that the Doha Round of global trade negotiations hadn't lived up to its promise of pursing the interests of developing countries, CARICOM embraced the BRICS' support for the World Trade Organization, based, as Mr Holness explained, on their need, "as small economies", for "a rules-based multilateral trading system to ensure transparency and predictability" - rather than Mr Trump's unilateralism. Indeed, the economic issues addressed by Mr Holness in South Africa also have political bridges, such as Mr Trump's withdrawal from the Iran nuclear deal, which helps to make new thinking about the global order, and America's place in it, urgent.

Ironically, this engagement of the BRICS has echoes of Michael Manley's attempt nearly 40 years ago to promote new, more equitable global arrangements, albeit on a different, socialist-oriented economic foundation.

Indeed, there were Manleyesque tones to Mr Holness' Johannesburg remarks, with his references to the shared problems of the "global South", that will require partnerships to overcome. In this regard, we agree with Mr Holness that this was the start of an important engagement. But for real value, it has to be sustained.
Investment and Finance
Investment and finance in BRICS
Blockchain: Exim Bank signs MoU with BRICS development banks (Блокчейн: Exim Bank подписывает Меморандум о взаимопонимании с банками развития БРИКС) / India, August, 2018
Keywords: ndb, concluded_agreements, digital

To undertake 'collaborative research' in distributed ledger/blockchain technology

Exim Bank of India has signed a multilateral cooperation agreement with member development banks of BRICS to undertake "collaborative research" in distributed ledger/blockchain technology.

The MoU — signed by Exim Bank Managing Director David Rasquinha — was an outcome of the discussions the member development banks had during their annual meeting, with the objective of strengthening the cooperation under the BRICS Interbank Cooperation Mechanism.

The BRICS grouping comprises Brazil, Russia, India, China and South Africa. Under this umbrella agreement, the signatories have agreed to constitute a joint research working group which will formulate the research agenda and targeted outcome.

The working group will also carry out research towards identifying potential applications of the distributed ledger/blockchain technology, in the financial sector, particularly in the area of infrastructure financing. The distributed ledger/blockchain technology replaces the old processes and paperwork with a new-found innovative process that is faster, and can offer tangible outcome.

The agreement, thus, is expected to contribute to enhanced cooperation among BRICS development banks, and would also speed up and simplify the processes, and thereby reduce the cost of cross-border payments using the blockchain technology.

Exim Bank of India is the nominated member development bank under the BRICS Interbank Cooperation Mechanism.

Other nominated member development banks from BRICS nations are: Banco Nacional de Desenvolvimento Economico e Social – BNDES, Brazil; State Corporation Bank for Development and Foreign Economic Affairs – Vnesheconombank, Russia; China Development Bank Corporation, and Development Bank of Southern Africa.
The BRICS Summit – An Evaluation (Саммит БРИКС - Оценка) / India, August, 2018
Keywords: summit, expert_opinion

The economic row between the US and China also opens up new possibilities for India in Africa, which New Delhi must not hesitate to exploit. In this context, India must use BRICS in its desire to maintain a balance between New Delhi's status as a leading regional power and its erstwhile identity as the leader of the developing world. This balance can be strengthened as seen by India's deepening engagement with Africa - especially over the last four years. The sense of ties can be gauged from the International Solar Alliance Founding Conference in March 2018 that took place in New Delhi – during which more than forty heads of State and Government from Africa attended.

August 2018

For those who believe in the 'multilateralism' of global politics and even for its sceptics, the BRICS (Brazil, Russia, India, China and South Africa) Summit 2019, that took place in Johannesburg in South Africa would be a matter for interest. Given the global scenario with the United States pushing for a unilateralism by opting out of multilateral agreements, BRICS – by having the other major rising global powers – could provide an argument in support for a pluralistic or multi-polar world.

Significance of BRICS Today

When the BRIC (Brazil, Russia, India, and China) was created in 2009, these countries maintained high growth rates and enjoyed greater social stability. Today, almost 10 years after its first meeting and with the addition of South Africa in 2011, there has been a rise of sceptics who doubt the continuity of the initiative. They are dispersed geographically, their economies are in different stages of development and there is a fair degree of ideological dissonance between them. And unlike other economic associations, BRICS does not seek to set up any common political or security plan.i

However, the recent Johannesburg Declaration points to a few interesting facts that could indicate the way BRICS is moving forward. In the 2019 Summit, the BRICS leaders seem to have committed with unprecedented emphasis to the principles of "democracy" and "multilateralism". As compared to the previous Xiamen declaration, "democracy" was mentioned half a dozen times in the present declaration (the word was mentioned thrice in 2017 declaration); and "multilateralism" was mentioned 23 times in the Johannesburg declaration, as against seven times in the Xiamen declaration last year.

The idea of 'multilateral' and multi-polar world assumes significance as United States keeps pulling itself out of various international agreements (such as the TPP, UNESCO, and UN Human Rights Council) thereby creating rifts between the global giants (as evidenced in the 2018 G-7 Summit); and the trade war between US and China. In fact, as the Trump administration continues to favour a 'unilateral' policy, the BRICS nations' commitment to a multilateral world provides hope for cooperation and mutual growth. It also affords India and China a space to make their stand - especially with regards to the 'global South'.

The trade war between China and the US has its repercussions in Africa as well. After all, the US and China are two of the largest investors in the continent, and the latter is the biggest trading partner for some of the continent's most significant economies, including South Africa, Nigeria, and Ethiopia.

The economic row between the US and China also opens up new possibilities for India in Africa, which New Delhi must not hesitate to exploit. In this context, India must use BRICS in its desire to maintain a balance between New Delhi's status as a leading regional power and its erstwhile identity as the leader of the developing world. This balance can be strengthened as seen by India's deepening engagement with Africa - especially over the last four years. The sense of ties can be gauged from the International Solar Alliance Founding Conference in March 2018 that took place in New Delhi – during which more than forty heads of State and Government from Africa attended. Under the Africa Outreach initiative, there have had visits to all African countries at Ministerial level.ii

New Delhi is, in fact, strengthening its outreach in Africa based on its traditional historical ties with the continent. But this is in contrast with the way China has approached Africa - Beijing has tried to impress Africa with the scale of its resources and the ambition of its projects like the Belt and Road Initiative (BRI). However, India-African ties will only be reinforced going forward, chiefly due to both their commitments to a multipolar world that allows for sovereign equality and democratic decision-making.

BRICS and India – China Relations

There were concerns that geopolitical tensions between India and China could test the foundational principles of BRICS – respect for sovereign equality and pluralism in global governance. These were not unfounded. The Doklam standoff between the two; China's thinly veiled attempts to co-opt nation-states, which are integral to its Belt and Road Initiative (BRI) by pushing for a 'BRICS plus' model – are the perfect examples.

However, a positive tone has emerged post the famous informal summit in Wuhan between Indian Prime Minister Narendra Modi and Chinese President Xi Jinping. Indeed, India has stood up to the Chinese border disturbance at Doklam and has continued to take a principled and consistent position on China-Pakistan Economic Corridor (CPEC). The result was that the Chinese President accorded the Indian Prime Minister the honour of an informal Summit, which is rare and usually reserved for American presidents.

At a time when China is facing negativity with the Trump administration's clampdown on tariffs and when voices are growing around the world against the predatory practices of the BRI, it is important for Beijing to work together with New Delhi - given the shared global economic climate. Since both Asian powers are trying to attract the resource-rich African continent, the 2018 BRICS summit in Johannesburg, will, therefore, allow them to take a step back and look at their bilateral engagement more holistically.

This Sino-Indian partnership is not new. Throughout the early 1990s, both spoke in one voice against western interventionist policies in the 1990s and stood up against the West in global trade and climate change negotiations. The recent weakening of this engagement has been partly because Beijing seemed keener on reaching a bilateral understanding with major western powers without taking New Delhi into account. However, since India remains to be an emerging economic power, it could help bolster China's partnership with the West and at the same time contribute towards shaping the global economic architecture.

In this context, the Johannesburg Declaration seems to provide some optimism. In effect Prime Minister Narendra Modi, while addressing the Plenary Session of the 10th BRICS summit in South Africa, said that India would work with other member states of the economic bloc to prepare for the Fourth Industrial Revolution.iii This Industrial Revolution is building on the Third - the digital revolution - that has been occurring since the middle of the last century. It is characterized by "a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres".iv India's role, going forward in the Fourth Industrial Revolution phase, will be significant - particularly in the field on national and international security.


Moving forward, BRICS will have to utilize the leverage it has gained as a multi-regional grouping in the areas of as trade, infrastructure finance, urbanisation and climate change. The modest progress in people-to-people connections will be a bonus. Platforms such as the BRICS Academic Forum and Business Council have proved to be useful in improving their understanding of each other's industry, academia and government. Furthermore, the institutionalization of the New Development Bank (NDB) and the Contingency Reserve Arrangement support the idea that BRICS can deliver concrete results.

BRICS will continue to remain relevant over the next decade if each of its members make a realistic assessment of the initiative's opportunities and inherent limitations. While BRICS itself is unlikely to form the fulcrum of foreign policy for any of its members, it will continue to be an important instrument in their global strategy.
How green is Africa's future in reality? (Насколько на самом деле зеленое будущее у Африки?) / South Africa, August, 2018
Keywords: ecology, economic_challenges, ndb
South Africa

The recent BRICS Summit in South Africa highlights not only a shift in global geopolitics but also the importance of BRICS' New Development Bank's growing footprint in the infrastructure space, write SALIEM FAKIR and YEMI KATERERE.

THE New Development Bank's portfolio contains extensive commitments and policy direction towards green technologies, but it is unclear how green or sustainable the rest of its infrastructure investments look like or will be.

The Bank has an opportunity to make a difference and do things differently on the African continent. This includes adopting lending practices that are different from other traditional lending practices.

The most troubling aspect is the way the lending patterns are done not only in South Africa, but in Africa more broadly. They are often uneven and don't take into account the need for the types of growth models that meet a broader set of development objectives. These include protecting the natural assets and ecological infrastructure of Africa.

Current plans for infrastructure development that are in the African Union's (AU) Programme for Infrastructure Development in Africa (PIDA) show a strong bias towards extractives (in other words the mining industry) especially in linear infrastructure such as roads, and power generation.

Africa remains a continent subject to resource demands and even more so for a suite of new technologies such as electric vehicles, solar power and other clean technologies where valuable and strategic resources continue to be critical components and the mainstay of many countries on the African continent.

The clamour for technology-led economic dominance by various advanced economies places Africa in the throes of a new geopolitical scramble and types of investment flow for infrastructure that prioritise lender interests rather than holistic development objectives. These investments seem increasingly one-sided and, in some respects, anti-developmental.

This can be clearly seen with Africa's urban futures. Urban infrastructure investment, compared to Asia, lags significantly in terms of capital intensity and the city centre enjoys the largest share of capital investment relative to non-core and peripheral parts of the city.

Cities are Africa's future and their engines of growth will need significant investments influenced by futures thinking.

Foreign Direct Investment (FDI) is much needed, but one of the fundamental requirements of FDI is transparency to ensure that the investment is development appropriate. But, such transparency should not only extend to the size of the investment envelope, but also to short and long-term risks. Africa's wealth is not just its mineral endowment, but it is also its people and nature.

Growth statistics tend to tell a good story of Africa rising but often Africa rising does not tell us whether the long-term growth of countries and the African continent as a whole builds both sustainable economies and enhances its existing ecological systems.

There is a saying that there are no sustainable mines but rather sustainable economies – such a switch still seems to be a distant dream for Africans.

Infrastructure development trajectories can often be done for short-term considerations as politicians want visible progress to boost their image while paying little attention to the long-term consequences.

BRICS countries want to facilitate green growth but this is also contradicted by the continued support for coal-fired power generation plants in South Africa. This

trend is evident in the development of a pipeline of coal and power plant infrastructure elsewhere in Africa such as in Zimbabwe. Such investment effectively results in outsourcing pollution to Africa, while other countries benefit economically without bearing the cost of externalities of such activities.

Concern should also extend to debt obligations that can make countries more vulnerable to inappropriate infrastructure models and pressure from countries with vested interests which are often at the expense of the national interests of indebted countries. They could be akin to the IMF and

World Bank structural adjustment and austerity policies but with just another face.

Ironically, BRICS countries present themselves as a counter to the Washington Consensus, however, such investment action can perpetuate the poverty trap if such investment practices reinforce the existing inequality.

In the face of these pressures which non-African BRICS countries could exert, one important challenge for Africa is how to deal with power relations between influential foreign direct investment institutions from non-Western countries and investee countries.

African countries need to act in concert and not individually in defining a development trajectory that embeds African interests rather than the interests of other non-African parties. The fact that Africa doesn't act in concert, or that BRIC members often act bilaterally outside of BRICS co-operation makes individual nations vulnerable to external pressure.

The future of sustainable economies in Africa will largely depend on how these asymmetries are resolved.

Ultimately, the underlying premise for BRICS countries is not just geopolitical but it is to drive new business for each of them by forging regional and bilateral alliances across continents.

For example, Russia is trying to sign deals with South Africa on nuclear, despite the fact that the country's President Cyril Ramaphosa has issued a directive that South Africa cannot afford nuclear. The Russian push for nuclear in South Africa is to present South Africa as a lighthouse for future nuclear deals in Africa. Egypt is already being wooed to sign up with Russia's Rosatum.

China is also trying to push its own companies. At the 2018 summit, despite their poor financial and corruption track records, New Development Bank loaned Transnet $200m and activated the $180m it had granted to Eskom in 2016.

In 2015, China South Rail's and China North Rail signed a deal to supply Transnet with locomotives. A deal which was later revealed as a massive corruption scandal with kickback agreements totalling R5.3 billion along with other transgressions.

Africa is the next frontier of infrastructure development if done wisely. With broader development goals and the protection of its natural assets, the continent can build sustainable economies and a prosperous future.

We need to constantly ask ourselves – what is the future we as Africans want? We need to ask ourselves, and have a conversation about, what role should development finance institutions like the New Development Bank play in realising development goals such as the African Union's Agenda 2063?
Malawi economists against Brics loan proposal (Экономисты Малави против кредитного предложения БРИКС) / Malawi, August, 2018
Keywords: ndb, economic_challenges

LILONGWE-(MaraviPost)-Some economic commentators have reservations over President Peter Mutharika's idea to borrow from Brics' New Development Bank established in South Africa, stressing that public debt levels are already high in relation to the country's Gross Domestic Product (GDP).

On arrival from the Brics summit on last Sunday, Mutharika told journalists that he has instructed Minister of Foreign Affairs and International Cooperation Emmanuel Fabiano to file a loan application for Malawi to benefit from the US$34 billion set aside by the bank for infrastructure and energy sector development.

Mutharika backed the establishment of the bank, saying institutions such as the World Bank and International Monetary Fund are dominated by western countries.

"They have set up this new bank worth US$50 billion and I am hoping that we can take advantage of that bank [to promote] infrastructure and power sectors in Malawi. So, we will do our best to access that," Mutharika said.

But Economics Association of Malawi President, Chikumbutso Kalilombe told The Daily Times that it is not viable for Malawi to be exploring borrowing opportunities as it may cause macroeconomic imbalances.

"Currently, public debt levels are above the limit of debt to GDP ratio of 50 percent. This means that we, as a country, have reached unsustainable levels. This outturn also implies that we, as a country, may have problems in serving our debt since debt is, on average, growing faster than the country's GDP. This has potential to cause macroeconomic imbalances," Kalilombe said.

Economics Research and Evaluation Consultant, Colen Kaluwa, concurred with Kalilombe, saying most infrastructure development projects have been used in the past to swindle money from public coffers.

"When he says infrastructure development, that becomes tricky because its where people start siphoning money through bogus contractors. Borrowing is not bad per se but, right now, Malawi is heavily indebted both outside and locally. As such, adding more debt to a more fragile economy will be detrimental," Kalua said

BRIC PMIs Trace Global Economy's Slowdown At The Start Of Q3 (Индекс PMI БРИКС отслеживает замедление глобальной экономики в начале третьего квартала) / United States, August, 2018
Keywords: research, expert_opinion, economic_challenges
United States
Author: Constantin Gurdgiev

Recent PMIs for BRIC show a weaker start to 3Q 2018, in line with moderating growth outlook for the global economy:

In summary, Composite PMIs for July show Russia, China and Brazil underperforming the global composite index, with India being the only BRIC economy trending in line with the global economy. Much of this dynamic was down to the Manufacturing sector, with Services supporting global economy to the upside:

The biggest downside momentum came from Russia's sub-50 reading in Manufacturing, followed by significant decline in growth activity in the sector in Brazil, and a more moderate slowdown in China:

For Russia, weaknesses in the Manufacturing sector, for now offset by strengths in Services, are unpleasant reminders that the economy is still fundamentally on near-zero growth path, despite early 2018 hopes for 1.9-2 percent growth projections. For China, there are growing signs of the adverse impact of trade war with the U.S. taking their toll on growth and cost dynamics.
Experts categorized the regions of the BRICS countries (Эксперты классифицировали регионы стран БРИКС) / Russia, August, 2018
Keywords: research, economic_challenges

The Analytical Center issued a new bulletin on the current trends in the global economy, which presents the classification of the regions of the BRICS countries. Middle-income countries, to which these states belong, as a rule, are characterized by high regional and socio-economic inequalities. This issue of the bulletin analyzes the main parameters of the regional economies of the countries and identifies four groups of regions based on the development level for Brazil, India, China and South Africa.

The synthetic classification of territories by the economic development level, which is used in the work of the Analytical Center, allows determining the vector of regional development taking into account the specifics of groups of regions. The regions are grouped into 4 categories for each country: capitals and financial and economic centers, developed regions (usually with a noticeable concentration of manufacturing industries), medium-developed regions (usually with a noticeable concentration of the extractive industry) and less developed ones.

Experts note that the results are quite predictable. Capitals and financial and economic centers of all countries are distinguished by higher indicators of per capita income, with a primary reliance on the sphere of services and financial and banking activities. Developed regions rely primarily on the industry, especially processing. The middle-developed and less developed regions are noticeably inferior to the first two in terms of per capita income and are focused on extractive industry and agriculture.

The grouping of the BRICS countries unites economies with significant differences in the development level and economic growth models. The GDP (PPP) of China, which is comparable in population to India, is almost 2.5 times higher than that of India. The spread in GDP (PPP) per capita in 2017 prices within the BRICS is 3.9 times. The per capita indicators for China, Brazil and South Africa are similar, Russia is almost two times ahead of these countries (27.8 thousand Intl. dollars per a person), and India falls twice behind them (7.2 thousand Intl. dollars per a person). At the same time, the maximum social inequality is observed in South Africa, which is in the middle of the classification.

The authors of the bulletin offer readers an overview of the key economic statistics of the world's leading countries.

For details, see the bulletin "The BRICS Countries: Classification of Regions"

The other bulletins on current global economic trends can be found in Publications.
Opportunity Africa: Will the Brics countries manage mutual cooperation? (Возможности Африки: Будут ли страны БРИКС заниматься взаимным сотрудничеством?) / South Africa, August, 2018
Keywords: expert_opinion, economic_challenges, summit
South Africa
Author: Sizwe Mbele

Widely touted as a major milestone in the developing relationship between South Africa and its Brics partners, the message at the 10th annual Brics summit in Johannesburg last month was resoundingly clear: Both Brics and South Africa, in particular have a strong desire to deepen mutually beneficial, pragmatic cooperation in the African continent.

South Africa, under the leadership of President Cyril Ramaphosa, hosted the 10th Brics Summit under the overall arching theme "Brics in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution".

The leaders of the five nations met at a time the US was threatening to impose trade tariffs against other countries that were likely to derail global growth.

This gave the Brics leaders an opportunity to showcase the importance of multilateralism.

At the conclusion of summit, the Brics leaders adopted the Johannesburg declaration, which reaffirms principles of mutual respect, sovereign equality, democracy, inclusiveness and strengthened collaboration.

In addition, the following areas of cooperation were agreed upon:

• Establishment of the Brics Energy Research Cooperation Platform;

• Establishment of the Brics Networks of Science Parks, Technology Business Incubators and Small and Medium-sized Enterprises;

• Commissioning of the review of the Brics Joint Trade Study on promoting intra-Brics Value Added Trade; and

• Establishment of a Brics Working Group on Tourism.

With trade protectionism growing in popularity, the Brics nations can harness on each other to increase mutually beneficial intra-trade flows.

The inclusion of Africa through the Brics-Africa Outreach programme as well as the inclusion of other emerging economies through the Brics Plus Initiative provides a platform to partner with a wider community to grow trade.

The biggest challenge the bloc is likely to face is up-skilling the current workforce to benefit from the opportunity provided by the 4th industrial revolution.

Without active steps to get this right, leapfrogging to development may be a distant dream.

The summit also enabled South Africa to showcase to the rest of the world that it is open for business.

In pre-meeting engagements, President Cyril Ramaphosa was able to secure $14.7 billion investment in investment commitment from China.

Ramaphosa has made significant progress in his $100 billion investment drive, receiving commitments from the UK ($64 million), Saudi Arabia ($10 billion) and the UAE ($10 billion). Mercedes-Benz earlier in the year also announced that it will be investing R10 billion.

These commitments, once realised, will provide the much-needed boost to the local economy.

Five years since the 2013 eThekwini Summit when South Africa initiated the Brics-Africa Leaders Dialogue Forum Retreat, attended by 12 African leaders representing the African Union, the New African Partnership for Africa's Development and the eight AU regional economic communities, the Brics-Africa nexus had a curious ring of reassurance in the discussions on implementing the outreach programme.

Beneath this welcome news, however, lie some deep uncertainties about the future of Africa's trade relations with Brics.

Emboldened by an escalating trade war, evidenced by rising tariff barriers in the United States, the protracted and seemingly complex withdrawal of Britain from the European Union under Brexit, Brics Outreach' seems a natural reflex by African countries.

Yet, fermenting, too, has been a pervasive climate of scepticism in some quarters of the African continent towards Brics generally, and China in particular.

While it is true that friendship and cooperation, which underpin the Brics partnership framework, comes from equality, can the Brics Outreach programme be a genuine vehicle for mutual cooperation?

Short end of the stick

Since South Africa's inclusion in Brics in 2011, there have been mounting concerns that African economies are getting the short end of the stick.

While Brics has presented itself as an alternative to the economic prescriptions of the Bretton Woods institutions, the flip side of this policy avowal are allegations that South Africa has merely courted Chinese "neo-colonialism" on the continent, representing an asymmetrical relationship that resembles the classic north-south model of exporting raw materials while importing manufactured goods – a model critics say Brics ostensibly embeds in its trade relations.

At first, this may appear to be the case – certainly at the level of trade data.

As Africa's largest Brics trading partner, some 1500 Chinese companies have invested in African countries in the last two decades, mostly on the back of Chinese-sponsored development projects and infrastructural support for its extractive interests.

On the African export side, one could argue that much of the revenue generated has been a result of rising oil and commodity prices rather than growth in actual trade volumes.

An observation is that deficits on the African side abound, including in South Africa, Chinese foreign direct investment into South Africa, for instance, has been scant.

The chink in the chain – and a cardinal lesson for South Africa and the rest of the continent – lies in the overriding question: will the anticipated growth in trade volumes between Brics countries and Africa increase or decrease Africa's trade deficit?

Let's start with statistics.

Combined and uneven development

Collectively, Brics countries have a GDP of $18.5 trillion, or 22.8% of the share of global GDP, according to the Brics 2018 annual report.

Despite the geographic distance between some Brics countries, the combined value of intra-Brics trade is estimated at $242 billion.

However, this broadly bristling picture masks a more complex story. As the current-year performance, along with the longer-term forecasts in the Brics 2018 annual report, suggests, the five member-countries are expanding at very different rates.

In 2016-2017, the share of industrial output in GDP of China, Brazil, Russia, India and South Africa accounted for 39.8%, 21.2%, 32.4%, 28.8% and 28.9%, respectively.

The distribution of manufacturing's share across the Brics countries is skewed towards China (73%), with Brazil, Russia and South Africa net commodity exporters and India a primarily service-based economy.

In broad terms, the growth trajectories are a result of two drivers within the Brics grouping — those economies that took advantage of globalisation's march to integrate themselves into global supply chains (primarily China and India) and those that took advantage of globalisation to sell their abundant natural resources (primarily Brazil, Russia and South Africa).

As Brics' exports are likely to be blocked by rising US tariffs, all this points to industrial powers such as China and India in the direction of Africa, according to the Brics annual report. Overlooked, however, are the potential long-term benefits for Africa's manufacturing sector.

Although the return to growth for Brazil, Russia and South Africa last year has had much to do with a recovery in world commodity prices during 2016-2017 – whereas China and India have been buoyed by strengthening demand for manufacturing and services exports – the challenge facing South Africa and the African continent relative to Brics can in part be attributed to development patterns that unfortunately do not accurately reflect the true potential for mutually beneficial cooperation.

Diversification – the challenge

The outreach policy is, in one sense, emblematic of a broader re-examination within the Brics bloc of the growth story.

At the same time, the initiative underscores the need for policymakers in both Brics and African economies to shift their focus towards sustainable and inclusive growth paths in the longer term.

While only a narrow base of countries is benefiting from China's commodity hunger, it nevertheless poses questions as to whether African economies can optimise the opportunities presented by the initiative to diversify their economies towards manufacturing activities with strong multiplier effects for small business development and employment creation.

Against a recent backdrop of firming recoveries in advanced economies to pre-2008 crisis levels, the 10th Brics summit correctly noted that monetary and fiscal policy levers have become less of a priority, and productivity-enhancing structural reforms have become increasingly urgent as the pressures of technological disruptions and the 4th Industrial Revolution on business and labour intensify.

"African economies therefore face the challenge of diversifying their exports away from unprocessed commodities and raw agricultural products; improving education and health systems; boosting value-added exports; and implementing business climate reforms," the summit declared.

In recognition of this, the Brics Africa Outreach policy has identified development finance through the New Development Bank, infrastructure development, agro-business, human resources, skills training, disease prevention and treatment, and disaster relief, among other things, as areas of cooperation.

All these efforts will be critical to a sustainable growth path, alleviating poverty and, if accompanied by a rising number of skilled workers, to reducing inequality.

This may sound like the standard prescriptions of development economics. There's a reason for that: structural reform and diversification are fundamental to sustainable and inclusive economic growth.

BRICS, B&R help Africa embrace a promising vision (БРИКС и Пояс и Путь помогают Африке принять перспективное видение) / China, August, 2018
Keywords: expert_opinion, economic_challenges, trade_relations, obor

While the protectionist trend in the US has shocked many world economies, Africa finds itself embracing a more promising economic vision based on respect, win-win cooperation and total integration.

When South Africa was accepted as a member of the BRIC bloc in 2010, there was skepticism about the move initiated by China. Africa's footprint on global trade and investment was minimal, and its infrastructure was in a dire state.

Almost a decade after South Africa joined the BRICS, Africa has gained at all levels by engaging with China, India, Russia and Brazil. They have become vital trade and investment partners of the African continent.

Africa is taking advantage of BRICS cooperation, with South Africa as the conduit to expand its reach and support on the continent. And the BRICS New Development Bank (NDB) has provided an alternative for African nations to fuel their development and spur economic growth.

Among BRICS members, China has been a responsible actor in supporting emerging economies and has provided financing to build Africa's logistics and transport networks, from highways and rail to sea ports, while engaging in trade with an average of $170 billion in bilateral trade volume in 2017. Chinese investment was $1.6 billion in the first half of 2017, recording 22-percent growth year-on-year.

Brazil's trade with Africa has increased from $4.3 billion in 2000 to more than $20 billion in 2012. Brazil's agriculture and bio-ethanol expertise have found eager partners in parts of Africa as well. As for Russia, Africa found new opportunities to secure new imports and market sources through BRICS. Russia-Africa trade, with aggregate turnover reaching $14.5 billion in 2016, was up by $3.4 billion year-on-year. Russia has also provided Africa more than 1,000 grants a year to fight AIDS, tuberculosis and malaria. Meanwhile, India and Africa had already shared close relations, and 21 percent of Indian investment outflow from 2008 to 2016 went into this region.

Aside from giving Africa an opportunity to tap the BRICS alliance, Chinese policy has also integrated the African continent with the global trade and investment network of the Belt and Road (B&R) initiative.

Senegal has emphasized the importance of the B&R platform, and China has become Senegal's second-largest trading partner, after the EU, and its largest financing channel, with $110 million direct investment.

Senegal understands that only the B&R can bring and attract investment for President Macky Sall's Plan for an Emerging Senegal, the country's plan to attain emerging-country status by 2035.

Internationally, South Africa is seeking to channel Chinese investment in the B&R to other parts of Africa by integrating its infrastructure with that of neighboring countries and beyond to the 80-plus signatory nations and regions of the B&R initiative.

By the end of 2016, more than 300 Chinese companies were operating in the country in different sectors. China-South Africa cooperation has helped the local economy, created jobs, promoted the development of science and technology and helped improve people's livelihood.

In summary, African nations appreciate China's effort to build institutions and platforms that serve emerging economies so they can close the industrialization and income gap and project themselves into the 21st century economic vision put forth by the BRICS and the B&R initiative.

The author is director of education with the International Bachelor Program at the International School under China Foreign Affairs University.
Tenth BRICS Summit — Urging for an Open World Economy (Десятый саммит БРИКС - Призыв к открытой мировой экономике) / India, August, 2018
Keywords: economic_challenges, summit, global_governance, expert_opinion
Author: R.G. Gidadhubli

The BRICS Summit, held on July 25, 2018 in the South African city of Johannesburg, was an important event as it marked the tenth anniversary of the formation of the grouping. In fact it was 20 years back that the leaders of Russia, India and China (RIC) conceived the formation of this regional trade organisation, somewhat comparable to the European Economic Union. Subsequently, the RIC became BRIC when Brazil joined this organisation and BRICS with the addition of South Africa. This regional organisation has emerged as one of the major trading blocks in the world constituting about 40 per cent of the world population. There is close and consistent relations among the members and summit meetings are held regularly attended by the heads of all the member-states; these have strengthened this organisation. Turkey is not a BRICS member, but Turkish President Erdogan attended the Summit in his role as the Chairman of the Organisation of Islamic Cooperation (OIC). With its close relations with Russia there could be speculation whether it could be another member joining BRICS in the future.

The salient outcome of the Tenth Summit was that a formal communique was signed in which all the five countries unanimously supported for an "open world economy" based on the principles of the World Trade Organisation (WTO) and insisted that all WTO members need to abide by WTO rules. This proposal is particularly significant because there was great concern which was expressed by the BRICS members in stating "we recognise that the multilateral trading system is facing unprece-dented challenges".

It is a matter of global importance and signifi-cance that even as the focus of BRICS was on trade and economic cooperation, the Summit Declaration stated: "We deplore the continued terrorist attacks, including in some BRICS countries. We condemn terrorism in all its forms and manifestations wherever committed and by whomsoever." The concern of the leaders was relevant since terrorism has an impact on economy and trade. Prime Minister Narendra Modi was fully supportive of the BRICS objective of 'open world economy' and also assertive in condemning all forms of terrorism.

There are legitimate problems facing the BRICS members. This is evident from the fact that Russia has been facing economic sanctions by the USA and European countries since 2014 for its alleged annexation of Crimea, and this has affected its economy and also foreign trade. From the last year or so there are ongoing conflicts between the USA and China on bilateral trade. China has been facing sanctions by the USA and the American President, Donald Trump, has accused China of being "vicious" and for adopting unfair trading practices. Conflicts seem to have increased since Trump has imposed tariffs on $ 34 billion of Chinese imports a few months back and threatened to increase the amount to $ 500 billion. In response China has retaliated with tariffs on US products, including soyabeans and pork.

For promoting his own national economic interest, during the last one year Trump has put restrictions for importing steel and metal products from India, China and Russia. Hence, as speculated by some commentators, a trade war was looming even as the BRICS meeting was to be held. Thus there is genuine concern that the USA has been pursuing economic policies contrary to the objectives of promoting economic globalisation. Therefore it is important to note that as per press reports China, India and Russia have applied to the WTO to challenge the duties imposed by the United States on their countries' products.

In the backdrop of these developments as reported by the media, Chinese President Xi Jinping was candid in his concluding statements urging for united efforts by global institutions such as the United Nations, G-7, and WTO to fight unilateralism and protectionism. Hence he urged all BRICS members: "We must work safeguard the rule-based multilateral trading regime; promote trade and investment, globalisation and facilitation; and reject protectionism outright."

As the summit concluded, the China factor has assumed importance not only among BRICS but also in global trade. This is mainly because with consistent high economic growth during the last over two decades, China has emerged not only as a major global trading country but also one that enjoys trade surplus with a majority of trading partners including members of BRICS. China has huge trade surplus with Russia and India. This is partly because China has not been fair in promoting bilateral trade, contrary to what it is sermonising to the rest of the world. This is evident from the fact that as it has been reported by the Indian media, many small and medium enterprises (MSEs) in India are losing their market and suffering due to the dumping of imported goods from China.

It seems China has its own national interest in maintaining its status in world trade which is also evident from the assertive statements of Xi at the Summit. He is highly critical of the USA and hence expressed his opposition to protectionism and "unilateralism" in the wake of threats by US President Donald Trump to impose global trade tariffs. In a highly diplomatic tone Xi asserted on July 25 that the world must decide "between cooperation and confrontation" as there "will be no winner" should a global trade war erupt.

China is a communist country retaining state control and economic benefits of that system. At the same time China has also adopted major elements of the market economy. Thus China has had the best of both the systems for promoting its own benefits. High economic growth has been achieved by partially opening up its economy for attracting foreign capital and technology. There are even allegations by some critics in the USA that China has not legally acquired some of the latest technological patents and processes. But at the same time China has not been fully opening up its own economy and restricting imports due to selective state policies and controls as has been practised under the communist system. This could be one of the reasons and apprehensions for America's differences with China. But at the same time, as reported by media channels including AP and Reuters, China has warned against unilateralism that is gaining some acceptability in the West as it affects its economy the most.

Russia being a key figure in BRICS, Russian President Vladimir Putin has been pragmatic and optimistic at the Summit and has welcomed closer cooperation between businesses in the BRICS nations while calling for more trade within the bloc. Putin has justification that he is implementing this concept. So far as Russia-India trade is concerned, Putin has mentioned that bilateral trade between Russia and India increased by 24 per cent in 2017 and 26 per cent in five months in 2018.

The 2019 BRICS Summit is scheduled for Brazil, and the 12th gathering is tentatively scheduled for Chelyabinsk in Russia in 2020. There are legitimate expectations that leaders of BRICS will succeed in achieving the objectives of the Open World Economy.

Dr R.G. Gidadhubli is a Professor and former Director, Centre for Central Eurasian Studies, University of Mumbai.

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