Information Bulletin of the BRICS Trade Union Forum
Issue 33.2018
2018.08.13 — 2018.08.19
International relations
Foreign policy in the context of BRICS
Putin praises solid ties with Beijing (Путин приветствует прочные связи с Пекином) / China, August, 2018
Keywords: vladimir_putin, quotation, xi_jinping

The Sino-Russian relationship has been developing in a positive, mutually beneficial direction thanks to the efforts of both governments, said Russian President Vladimir Putin on Wednesday.

Putin met Yang Jiechi, a member of the Political Bureau of the Communist Party of China Central Committee, in the Black Sea coastal city of Sochi.

Putin stressed the importance of the bilateral relationship to both countries as well as to the world.

Yang said the year 2018 marks a milestone for the development of Sino-Russian ties. Putin and President Xi Jinping met twice this year and have helped guide the direction of future bilateral relations.

Yang, also director of the Office of the Foreign Affairs Commission of the CPC Central Committee, said the relationship between the two countries represents a new model for international relations based on mutual respect and equality.

The Chinese government will work together with Russia to convert the agreements made by the leaders into practical results, maintain high-level strategic coordination and push the development of the international order in a better direction.

Putin said the Russian government will continue to engage in strategic communication with China and closely cooperate on global and regional issues. Moscow will also help develop the Sino-Russian comprehensive strategic partnership of coordination.

"I met President Xi Jinping last month. We exchanged opinions on our bilateral relations and on international issues during the BRICS Summit, and reached important new agreements," Putin said.

The 10th BRICS Summit was held last month in Johannesburg, South Africa.
In June, the two leaders met in Beijing during Putin's state visit to China during which Xi described the Sino-Russian comprehensive strategic partnership of coordination as "mature, stable and solid".

"I look forward to meeting with President Xi again," said Putin.
Why Turkey's joining BRICS should be welcomed (Почему вступление Турции в БРИКС следует приветствовать) / India, August, 2018
Keywords: expert_opinion, brics+, global_governance
Author: Jayshree Sengupta

It came as no surprise when Turkish President Recep Tayyip Erdogan showed interest in joining the BRICS at the Johannesburg Summit recently on 27 July, where he was invited by the South African President Ramaphosa. BRICS would become BRICST if Turkey is allowed into the grouping.

Loosely interpreted as a grouping comprising Emerging Market Economies that are trying to seek an alternative to the current international economic order, the BRICS represent some of the most populous and economically important countries of the global South. It now comprises Brazil, Russia, India, China and South Africa. There are no rules of entry to the BRICS. Turkey is a large middle income country, a member of NATO, an Islamic nation and currently bearing a grouse against the EU and the US. It has challenged in the past the hegemony of the western countries in the world economic order and their dominance and control over the international financial institutions, the IMF and the World Bank. It has also challenged the supremacy of the dollar in the world financial system.

Turkey has challenged in the past the hegemony of the western countries in the world economic order and their dominance and control over the international financial institutions, the IMF and the World Bank.

The BRICS summit in Johannesburg marked a decade of its existence. Even though nothing dramatic seems to be happening in BRICS summit meetings except reiteration of their pledges made in the past, they are an important marker of the challenges that the five are throwing at the workings of the current global order year after year. Throughout the year, about 100 meetings related to the BRICS are held in the country hosting the summit. There are leaders' meetings and ministerial meetings along with their relevant working groups on diverse subjects from economy to climate change and culture. The meetings stress on democracy and pursue equality of voting rights in their working. Compared to the US dominated G7, BRICS functioning mechanism is more equal.

The rising protectionism in the western countries is hurting many of the BRICS members directly and indirectly. Thus it is not surprising that the BRICS members resolved to adapt the global order for a more Asia centric world at the Johannesburg meeting. Turkey obviously shares the BRICS declaration projecting stability and predictability of a rule based order threatened by US President Trump. China's predicament is the worst in Trump's recent moves towards his protectionist stance because its manufacturing capacity is the largest in the world in steel, machinery, chemicals, high-speed rail and aerospace. Its exports to the US ($505.6 billion last year) will be curtailed but so also its imports ($130.4 billion) comprising mainly of agricultural products. The BRICS members can benefit from the increase in imports from them instead of the US in the future. Brazil has benefited from China's increase in imports of soyabeans and frozen pork after US imposed high tariffs on Chinese goods.

The rising protectionism in the western countries is hurting many of the BRICS members directly and indirectly. Thus it is not surprising that the BRICS members resolved to adapt the global order for a more Asia centric world at the Johannesburg meeting.

The members of the BRICS in Johannesburg also recommitted support for multilateralism and called upon all member countries of WTO to abide by its rules. They emphasised the central role of the UN in international affairs. They called upon all countries to fully implement the Paris Agreement. The grouping has tried hard again to reduce mutual ignorance among the member countries and has tried to increase and strengthen intra BRICS ties because even though all have strong economic ties with China, there are fewer ties among each other. Overcoming intra-BRICS obstacles of various kinds, especially in tourism, was also discussed in Johannesburg.

An important area where the BRICS members have pledged to cooperate is the Fourth Industrial Revolution. Challenges will emerge in the future in all BRICS members in the area of robotics, AI, block chains, nanotechnology, quantum computing and biotechnology, 3D printing, the Internet of Things and driverless vehicles. China has taken the global lead in many of these areas and collaborative research will be beneficial for all the members. Russia too has abundant expertise in military industry, higher education in science and technology and has excellent research institutions.

Turkey hopes to gain from the technology cooperation with the BRICS in the future. It has been trying to get a missile defence system with potential Chinese and Russian suppliers and also a third nuclear plant with Chinese technology. The Turkish economy is going through a rough patch currently because its exports are not doing well due to the instabilities in its neighborhood and contraction in demand for its products globally, especially after the failed coup attempt in July 2016. Its imports, especially from the BRICS members, have been rising and its current account deficit with them is the highest — mainly with China. A big support for Turkey's membership to the BRICS has come from China. Turkey can hope to increase exports to BRICS members after joining the grouping. It can also access infrastructural development loans from the AIIB and the NDB, the two newly established BRICS banks.

Turkey hopes to gain from the technology cooperation with the BRICS in the future.

The group has been viewed as not being cohesive because India and China have had geopolitical confrontation along the borders in the recent past but it has now been overtaken by the declaration of mutual interests, strategic cooperation and collaboration in the last two BRICS summits.

On the whole, the dynamism displayed by BRICS members in the economic front cannot be denied. Russia was facing economic hardships in the past due to the steep fall in oil and gas prices, but it is on the path of recovery and growing at around 1.4 percent. The fundamentals of the BRICS are strong and stable, even though they are all facing domestic problems and challenges. They are all unique in being resource rich and have enormous potential for development.

The BRICS economic growth rate in 2016 was at 5 percent, higher than developing countries by 0.9 percent and higher than developed countries by 3.3 percentage points. They account for more than 30 percent of the global economy in overall size and their contribution to global growth reached 60 percent, far surpassing that of G7 economies. While the G7 is 40 years old, the BRICS is only a decade old. It will expand in the future and become stronger and have a voice in global governance and the international financial system. Turkey will add to its becoming more diverse, and due to its strategic location, an important addition.
    US faces isolation in global community by sanctioning Iran (После введения санкций против Ирана, США столкнулись с изоляцией в мировом сообществе) / Iran, August, 2018
    Keywords: political_issues, brics+

    The crux of 2018 BRICS Summit was to counter the US unilateralism by switching to an open world economy and a multilateral trade system that is currently facing unprecedented threats. According to Chinese president Xi Jinping, the US administration has abused international law and the norms governing international relations with its unilateral withdrawal from JCPOA, thus there is a need for developing new types of international relations so that the hegemony of the so-called 'superpower' can be contained. Further Xi Jinping stressed on the fact that it is intolerable to recognize energy blockades, sanctions, and economic warfare through USA's unilateral decisions.

    For balancing the world order, the BRICS should be upgraded to BRICS Plus, the term itself proposed by China in 2017 at the Xiamen Summit which is aimed at developing mutually beneficial relations with all developing countries and has a transcontinental scope. According to Wang Yi, who served as a China's deputy foreign minister, BRICS Plus is an integration roadmap with global significance and attack on Iran is not only a blow to BRICS Plus but to the whole global south. It indicates that there are very slim chances of China succumbing to the US pressure on Iran.

    The increasing consent among eastern nations is isolating the US in this part of the world. It is obvious from the response by Russia and China regarding US sanctions on Iran as they have refused to suspend their trade with Iran. Russia and China are supporting Iran's nuclear program and aerospace industries and they have also helped Syrian president Bashar-al Assad, a close ally of Iran in the region, to remain in power.

    China is Iran's largest crude oil importer and because of Iran's crucial role in Belt and Road Initiative (BRI), China cannot let Iran to lose its influence into the region. Iran's high chances of joining Shanghai Corporation Organization (SCO), deal with Eurasian Economic Union (EAEU), and as a member of International North–South Transport Corridor (INSTC) provides it with a much broader importance in the affairs governing eastern part of the world.

    In addition to the economic and strategic importance of Iran, its military cooperation is vital in maintaining the security and peace in the region. According to TASS news agency, intelligence officers from Russia, China, Pakistan, and Iran recently conducted a secret meeting in Islamabad to formulate a strategy for countering the rise of ISIS in Afghanistan. It has come as an embarrassment for Washington and Kabul because of their failure in finding a tangible solution to the Afghan problem.

    Thus a consensus on Afghan problem among eastern countries has created a wide gap between the interests of east and US, and once again Iran has shown its importance on a global stage.

    Eastern powers are not alone in criticizing Iranian sanctions but the US is also facing the European backlash, as the French Finance Minister Bruno Le Marie recently stated that they are not obliged to act as a vassal of the US and they have a right to defend their economic sovereignty. He proposed a strategy to nullify US sanctions on EU firms in accordance with EU regulations passed in 1996. This first link in the proposal is to set up a European finance house that will facilitate Euro denominated transactions with Iran. The French president also showed respect for Iran due to its commitment to JCPOA when he said: "As long as the Iranians respect their commitments, the EU will, of course, stick to the agreement of which it was an architect."

    Jean-Yves Drian, the French minister of foreign affairs, described the US sanctions as unacceptable, thus European businesses need not to comply with US foreign policy diktats.

    The recent meeting between Iranian foreign minister Mohammad Javad Zaffar and his European counterparts in which he advised them to take practical steps without any preconditions regarding business deals with Iran was significant. The German finance minister Peter Altnaier issued a statement to help affected firms of Germany through legal and other means in order to ensure the continuation of business with Iran. Nathalie Tocc, the Deputy Director of Istituto Affari Internazionali Italy, criticized the unilateral withdrawal of US from JCPOA and said it is an unjustified betrayal of Europe and thus needs proportionate reprisals. David Thorne, the former US ambassador to Italy, also expressed his concerns regarding the rifts that may result due to US sanctions on Iran.

    The 2013 mass popular unrest in Turkey, 2016 failed coup attempt of Erdogan in addition to an alliance between Syrian and Turkish Kurds has convinced Ankara to review its status as a NATO member. The recent decision of the US to sanction Turkish interior minister and justice minister has proved to be a poisoned cherry on rotten cake. Turkey is perceiving disturbance from the West and an opportunity for development in the East as China is trying to fasten Ankara into its Belt and Road Initiative in addition to improving relations with Russia and Iran.

    In a recent August 12, 2018 speech Erdogan said that the economic warfare of US may trigger a geopolitical shift in NATO alliance and according to CNN security analyst Samantha Vinograd, Turkey is constantly getting closer to Iran on every front which is good for Tehran and bad for the Western empire.

    The writer is a Kashmir-based student and researcher. He can be reached at
    Investment and Finance
    Investment and finance in BRICS
    Project and Loan Agreements for Luoyang Metro Project Signed in Zhengzhou, China (Проект и кредитные соглашения для проекта метро в Лоян подписано в Чжэнчжоу, Китай) / China, August, 2018
    Keywords: concluded_agreements, ndb, investments

    On 16 August 2018, Project and Loan Agreements for the New Development Bank's Luoyang Metro Project were signed in Zhengzhou, the capital city of Henan Province, China. According to the Agreements, the Bank will provide a USD 300 million sovereign project loan to the People's Republic of China to be on-lent to the People's Government of Henan Province to support the construction of the first metro line in the city of Luoyang.

    The Project Agreement was signed by Mr. K. V. Kamath, the NDB President and Mr. Chen Run'er, the Governor of Henan Province. The Loan Agreement was signed by Mr. Shaohua Wu, the NDB Director General for Project Financing and Mr. Zhang Zhengwei, Deputy Director General, Department of International Economic and Financial Cooperation, Ministry of Finance of China.

    "The NDB is happy to be able to support this important project in Henan province, the birthplace of Chinese civilization with over 3,000 years of recorded history," said Mr. K. V. Kamath. "The Luoyang Metro Project will contribute to further strengthen the city's important role as a cultural, tourist, and economic center in China. The project is in line with NDB's mandate of financing infrastructure and sustainable development. We hope that this project as well as other similar projects supported by the Bank will act as catalysts for further development in our member countries."

    The Luoyang Metro Project involves the construction of the city's first metro line (Line 1) with a total route length of 22.34 km. The line will run through the historical center of the Luoyang and will decongest heavy traffic in the dense urban areas. The operations of the line are scheduled to commence in December 2021. It is expected that the line could reach a capacity to carry more than 500,000 passengers on a daily basis by 2046.

    Background Information

    The New Development Bank is a multilateral development bank established by Brazil, Russia, India, China and South Africa in 2014. The Bank is mandated to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the efforts of multilateral and regional financial institutions for global growth and development. The NDB received a long-term issuer default rating of 'AA+' with a stable outlook from Fitch Ratings.
    Commentary: Amid a brewing trade war, BRICS gains influence (Комментарий: В условиях назревающей торговой войны БРИКС получает больше влияния) / Australia, August, 2018
    Keywords: expert_opinion, trade_relations, political_issues, economic_challenges
    Author: Aarti Betigeri

    The association of the five major emerging national economies Brazil, Russia, India, China, and South Africa, is becoming more influential since it started more than ten years ago, says one observer.

    CANBERRA: As far as international groupings go, BRICS (Brazil, Russia, India, China and South Africa) was always considered head-scratchingly strange.

    They have been a disparate group of nations with very little to link them, whether it be geographical size, language, or form of governance.

    What BRICS did have in common was a shared status as economies transitioning from developing to developed.

    But was that ever enough to keep this group afloat?

    Since the inception of BRICS in 2006, the bloc has been dogged by predictions of its imminent demise. But 12 years on, it is clear that BRICS is to be ignored or dismissed at peril, as it is shaping up to be a significant grouping – so much so that other developing countries wouldn't mind being admitted into the club.

    By 2016, BRICS contained 41 per cent of the world's population, just under 30 per cent of the globe's territory, 23 per cent of global GDP, and 18 per cent of its trade.

    Against a backdrop of instability in the global world order, it is fair to say that BRICS is gaining currency and, potentially, influence.

    Last month saw the 10th annual BRICS Summit, held this year in Johannesburg, South Africa. For three days, leaders and representatives of the five members met to discuss how to best cooperate strategically and pragmatically in the face of their differences.


    In particular, BRICS aims to boost multilateral trade, investment, and financial connectivity between developing nations – possibly, it might be said, to reduce their dependence on the West.

    The summit was watched keenly by the international community, eager to see China's moves and words on trade in the face of the potential threat of a US-induced trade war over tariffs.

    Observers also wanted to see whether China would work to assert itself as the dominant state in the bloc whose members have, perhaps until now, enjoyed equal billing.

    The Chinese media might believe this is the case, with magazine covers such this one presenting President Xi Jinping towering over his counterparts, even Russian President Vladimir Putin.

    Xi did not disappoint. Delivering the summit's keynote speech, he underscored the importance of developing countries, and the need for cooperation in the face of rapidly changing global systems. He said:

    A trade war should be rejected, because there will be no winner. Economic hegemony is even more objectionable, as it will undermine the collective interests of the international community, those who pursue this course will only end up hurting themselves.

    Later, Xi called for BRICS countries to support the multilateral trading regime and increase the voices of emerging markets and developing countries.


    His counterparts took heed. At the end of the summit, all leaders signed the Johannesburg Declaration, reaffirming their commitment to fight unilateralism and protectionism, and pointing out the importance of an open world economy which would enable all people to share the benefits of globalisation.

    The Declaration also calls upon World Trade Organisation members to abide by the rules and honour their commitments to the multilateral trading system.

    The Declaration also reaffirmed members' joint commitment to cooperate on sustainable development, energy, agriculture, as well as on climate change, to ensure international peace and security.

    Just how meaningful is this document?

    Despite the presence of Putin's signature on it, it is unlikely to have any real impact. (However, it is worth noting that the US and EU have since agreed to start talks that could stave off a potential trade conflict.)

    What will have more impact is China's strategic spending on the African continent.

    Two weeks ago, Xi pledged US$14.7 billion in investment in South Africa, among other investments across Africa. South Africa returned the favour, pledging US$300 million to China for a new metro line in the city of Luoyang, a gesture that Beijing no doubt appreciates.

    Indeed, lending between BRICS members is a key part of the bloc's raison d'etre. The New Development Bank, formerly known as the BRICS Development Bank, now has a lending portfolio covering 23 sustainable infrastructure projects totalling US$5.7 billion.

    These include roads and water supply provision in rural areas, energy projects, and more, emphasising the bloc's commitment to developing countries.


    With efforts and sums such as these, it is no surprise other countries want in on BRICS.

    Last year, China invited a few guests of its own under the "BRICS Plus" banner, sparking speculation that Beijing wants to expand the bloc further.

    This year, several African leaders were invited as guests, including those from Uganda, Angola, Namibia and Togo. At the same time, BRICS Plus was formalised, including representatives from Argentina, Indonesia, Egypt, Jamaica, Turkey and the United Nations.

    From its indeterminate beginnings, BRICS has emerged as a significant global bloc: More than ten years in, it is starting to realise some of its early ambitions.

    What will be interesting to see as it progresses is what the group wants to do next. Does it remain focused on financial connectivity, or does it want to take a greater role in global governance?

    Is it content to allow China to take on a leadership role? And, importantly, will this bloc become yet another channel through which China will exert its influence?

    For a group that could provide a solid counter to Western hegemony, that would be a sad outcome indeed.
    World of work
    Social policy, trade unions, actions
    The building BRICS of the future (Кирпичики БРИКС для строительства будущего) / South Africa, August, 2018
    Keywords: digital, innovations, expert_opinion, social_issues
    South Africa

    South Africa has the potential to leverage its large youth population, along with emerging technologies, to become a leader in both BRICS countries and even globally.

    The recent BRICS Business Council conference held in South Africa analysed the opportunities and challenges facing emerging economies and focused on collaborative efforts by the countries that make up BRICS. Among the key areas identified for future focus were the issue of youth and fostering entrepreneurship; the Digital Economy and skills development for the Fourth Industrial Revolution; as well as agriculture and food security.

    Looking at the first of these, Nicol Mullins, Principal Consultant at Mercer South Africa, says there is no doubt that we need to seriously look at how we build a thriving workforce for the future. It is important, he suggests, to encourage innovation, which comes with risk taking, and cultivate a lab mind-set for experimentation in order to capture growth opportunities.

    "South Africa, like the rest of the continent, has an enormous resource in its large youth population, which provides us a competitive advantage over other countries around the world. We need to leverage what the youth can offer, such as their greater knowledge and intuitive understanding of technology, but at the same time, this must be done in partnership with the older generations, that have greater experience and understanding of the industry. It is about working together to create win-win opportunities to benefit us all," he says.

    "As a collective, the BRICS nations can look into fostering exchange programmes that promote capacity building and know-how transfer across borders, not only in a BRICS context, but in Africa as well, in order to enable our collective youth to move forward rapidly. At the same time, it is important for the youth to play their part in delivering on the BRICS vision – to make the partnership a successful and vibrant one."

    Vino Govender, Acting CSO at Dark Fibre Africa, adds that from a digital economy perspective, something that is expected to unlock unprecedented potential to build seamless digital ecosystems is the arrival of Fifth-generation (5G) mobile networks. These, he explains, will connect everything around us to a network that is 100 times faster than traditional cellular connections and at least 10 times faster than the speediest home-broadband service. Inevitably, this will completely reshape the way people live, work and interact.

    "Such speeds are becoming increasingly necessary when one considers that data generated by smart phones and tablets is currently growing at a rate of between 20% and 40% per year across developed markets. Now think what the combination of speed, responsiveness and reach that 5G promises will offer to the BRICS nations – it will unlock the full capabilities of hot trends like self-driving cars and virtual reality. More crucially, however, it will have a significant impact on critical areas like healthcare, by enabling effective remote surgery, and environmental management via drones, to name just two," states Govender.

    "Remember that a fibre network does not have to deal with spectrum constraints, as wireless networks do. This means that, even though contention might be applied, the speeds achieved by end-users will be much higher than existing wireless networks. This is exactly what is required when handling the kind of rich media already described, and which will become the norm once 5G arrives."

    Coming off the back of the higher speeds generated by 5G, Morne Bekker, NetApp South African country manager explains that, we can not only expect a vast increase in the amount of data being transported and captured by enterprises, but also a greater desire to glean as much information and knowledge from this data as possible.

    "The fourth industrial revolution can be leveraged by the BRICS nations to take the lead in revolutionising technology. A key tool in the arsenal here is data and analytics, backed by artificial intelligence (AI). It is important to leverage these tools to support the digital growth, development and expansion of BRICS. Advances in AI, particularly machine learning, will be core to this type of digital transformation," he says.

    "Machines are excellent learners. By turning data into an asset, these systems promise to enable organisations to accelerate innovation and achieve superhuman performance – driving efficiencies, creating insights that personalise the customer experience, improving engagement and commerce, and aiding in new business development. From financial services to healthcare and manufacturing, AI is impacting digital transformations in virtually every industry. Therefore, by leveraging emerging technologies like this, BRICS can position itself to be a true leader in the digital economy."

    With a young, technologically-savvy population, a 5G network on the horizon and a strong focus on leveraging emerging technologies like AI and machine learning, South Africa has all the key elements required to become a leader, not only in the BRICS group, but globally. What is required then is simply the wherewithal to combine these factors in such a way as to work with our BRICS partners to foster our youth, tackle the challenges of the fourth industrial revolution head-on and in so doing, build a strong, self-sufficient digital economy.
    Made on