Information Bulletin of the BRICS Trade Union Forum

Monitoring of the economic, social and labor situation in the BRICS countries
Issue 08.2023
2023.02.20 — 2023.02.26
International relations
Foreign policy in the context of BRICS
African Union: future role in BRICS+ and G20 (Африканский союз: будущая роль в БРИКС+ и G20) / Greece, February, 2023
Keywords: brics+, expert_opinion

The summit of the African Union (AU) in February 2023 marked the rising stature of Africa on the world stage and the increasing support for African economic integration both regionally and globally. In fact, one of the few positive trends in the global economy in recent years has been the greater prominence of regional integration in the Global South of which perhaps the most important has been the AU-led creation of the African Continental Free Trade Area (AfCFTA). The African Union is in the process of accession to the core of the G20 grouping as a full-fledged member and is also a participant of the BRICS+ meetings that in turn are increasingly targeting regional groupings from the Global South. What will be the future course taken by the African Union along the North-South (G20/BRICS) axis and are there prospects for the AU to become a permanent part of the BRICS/BRICS+ decision-making process?

Calls for other regional blocks to join the EU as members of G20 have been voiced years ago[1] and with respect to the African Union they have become much more vocal in the past several years as the AU has exhibited rising prominence and success on the international stage. Last year support for AU's membership in the G20 has come from prominent academic figures (Jeffrey Sachs) as well as a number of country leaders. It appears that the likelihood of full membership of the AU in the G20 is quite high and likely to materialize in the coming years when developing nations from BRICS hold G20 presidency (India in 2023, Brazil in 2024 and South Africa in 2025).

As regards the BRICS, South Africa is presiding in the grouping this year and has already declared that it is planning to host the 15th Summit scheduled for August 2023 with the theme: "BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development and Inclusive Multilateralism". According to South Africa's President Cyril Ramaphosa, "we want to use this opportunity to advance the interests of our continent, and we will therefore through the BRICS summit be having an outreach process or moment, where we will invite other African countries to come and be part of the BRICS because we do want BRICS in whatever BRICS does to focus on helping to develop our continent"[2].

At the very least the above statements coming from South Africa suggest that the African Union may be increasingly active in building ties with BRICS, including possibly via the expanded BRICS+ framework that South Africa itself has successfully implemented in 2018 during its previous presidency. Some of the possible venues of cooperation in this respect have already been explored in the academic circles and largely centered on connectivity projects (see A BRICS+ framework for Africa: targeting regional connectivity, Valdai club, 2018[3]). The exact mechanics of how the BRICS-AU partnership is going to be forged is still very much an open question, and there may be several possible scenarios for this to unfold.

One possibility is for the African Union to occasionally become a participant in the annual summits of BRICS – much like the AU is taking part in the annual happenings of the G20 without being a full-fledged member. Another possibility is for the African Union together with a number of country candidates to become a permanent member of a circle that participates in the BRICS summits alongside the BRICS core. Finally, another modality is for the African Union to become part of a platform of regional blocks and associations under the banner of BRICS+.

The problem with the first scenario is that it does not really address Africa's greater involvement in BRICS decision-making and does not go farther than the current unsatisfactory state of play between the AU and the G20. The question with respect to the second scenario is: if the AU is part of the "inner circle" than why would other key regional groupings formed by BRICS countries not have the same capability? The latter issue is essentially resolved in the third scenario, whereby the AU could lead the formation of a platform for regional integration arrangements of the respective BRICS economies.

A possible format for such a common platform for the regional organizations of BRICS countries could be the BEAMS formation that brings together BIMSTEC (India), Eurasian Economic Union (Russia), African Union (South Africa), MERCOSUR (Brazil), SCO (China)[4]. Such an undertaking is facilitated by the fact that the African Union already has a number of partnerships built with these regional groupings, including a Memorandum of Understanding with the Eurasian Economic Union and the initiation of trade and cooperation talks between MERCOSUR and the AU in 2021[5]. In this respect, it is important to note that the African Union and Africa as a continent have been among the leaders in the Global South in coordinating cooperation among the numerous regional organizations and regional integration blocks.

Creating a regional platform within the BRICS+ circle would strengthen the AU's position in leading a similar effort within the G20 when its chairmanship in the grouping starts in 2025. In particular, the AU could lead the creation of a separate engagement group (Regional 20 (R20)) that could bring together the regional organizations, regional integration blocks and regional development institutions led by the respective G20 members[6]. A regional platform within the G20 would significantly expand the outreach of the G20 to virtually all economies of the world community. In this way through the introduction of R20 the roles played by the African Union in the BRICS and in the G20 would not be contradictory, but would rather be mutually reinforcing.

Some of the studies, however, are attempting to position the choices that are to be made by the AU on the international arena as a mutually exclusive scenario, with some advocating the prioritization of the G20 route vs. BRICS[7]. Rather than a tug-of-war between the BRICS and the G7/G20 over the African Union, a far better outcome is the African Union leading the formation of platforms of regional cooperation in the Global South (within the BEAMS/BRICS+ format) as well as globally (within the G20 framework). This would be a palpable contribution of Africa and the Global South more broadly to a material transformation of global governance in the direction of inclusivity and openness to the developing world. It would also position the AU at the center of the re-assembly of global governance via expanding the possibilities for international diplomacy through communication lines being established between regional organizations, integration blocks and their development institutions – thus far globally there is no such platform for dialogue among regional organizations.

Within such a scenario of the AU serving as a unifying point for regionalism in the world economy, it may be possible to entertain the integration of the African Union into a reformed UN system of governance, where seats in the Security Council can be allocated not just to country heavy-weights, but also to regional associations and blocks. The resulting global governance construct would be rendered less polarized and antagonistic with a layer of pragmatism and non-alignment/neutrality represented by regional blocks/organizations such as the AU. No doubt, against the grim backdrop of today's international relations such an Africa-led breakthrough may appear utopian to most pundits and observers. But as Nelson Mandela used to say, "it always seems impossible, until it is done" and "a good head and good heart are always a formidable combination".








                Russia, China and South Africa engage in joint naval exercises (Россия, Китай и ЮАР проводят совместные военно-морские учения) / Russia, February, 2023
                Keywords: expert_opinion, national_security

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

                The BRICS countries seem interested in advancing cooperation beyond mere economic partnership. Now, Russia, China and South Africa engage in joint naval exercises, taking a significant step towards the creation of an axis of military collaboration between the countries of the group. However, India and Brazil seem hesitant about the bloc's direction, as they have interests and alliances that are still very much linked to the West.

                South African, Russian and Chinese naval exercises, codenamed Mosi II, began in the Indian Ocean on February 17. According to official information from the Russian Defense Ministry, the drills are to take place along the coast of the African nation for ten days. It was also reported that the drills are a platform for the three nations to share military knowledge, skills and operational experience, and prove that Moscow is not globally "isolated", contradicting what the western media irresponsibly claims. During the exercises, navies will combine their operational naval systems and improve joint command and control systems.

                It is important to remember that this is the second trilateral exercise between South Africa, Russia and China. The previous one was held in November 2019 near Cape Town, in the southwest of South Africa, in the waters of the Atlantic Ocean. The case demonstrates a constant interest on the part of these three countries in raising the intra-BRICS partnership to a military level, surpassing mere the economic alliance. This is extremely significant for the group to play a prominent role in the current process of geopolitical transition towards a multipolar world.

                In January, the White House stressed that the US would always express "concerns" about any country training with Russia in the current context - where there is a strong effort on the part of NATO to "isolate" Moscow in the international arena. South Africa assures that it maintains neutrality in the Russian-Ukrainian conflict, using the argument that it intermittently carries out similar maneuvers with other countries, including Russia's rivals, such as the US and France. However, despite South African diplomatic discourse, there is an undeniable move towards the political and military cooperation among the BRICS being represented by the current drills.

                The possibility of the BRICS becoming a military alliance has been discussed for a long time. Some pro-multipolarity experts suggest that this would be an important step to combat NATO interventionism and encourage the process of geopolitical decentralization. However, many challenges arise in the face of these attempts, such as Western sanctions and constant pressure from NATO countries for Moscow to be isolated and kept without international alliances.

                Although the mere execution of military exercises does not mean a major geopolitical change, the mere fact that they are being operated at the moment of height of Western sanctions shows that these BRICS countries are solidly united in order to strengthen diplomacy with Russia. In practice, this shows the failure of attempts to make Moscow an international pariah, evidencing the victory of diplomacy over hostility.

                Regrettably, however, Brazil and India remain the two most ambiguous countries in the group. Trying to maintain a strong dialogue with the West, Brasilia and New Delhi seem undecided about occupying their role within the BRICS. In fact, their absence from the current exercises shows how many opportunities are being lost due to this ambiguity.

                Although India is cooperating strongly with Russia on economic issues and has even withdrawn troops from the border with China, there is still a kind of distrust in the country regarding the possibility of engaging in military cooperation projects that also involve Beijing. The country has largely evolved towards overcoming its alliance with Washington, but there are still some steps to be taken for New Delhi to definitively prioritize the BRICS in its foreign policy.

                In the same sense, the absence of Brazil arouses suspicion. When the military cooperation project between Russia, China and South Africa emerged, in 2019, Brasilia was under the most pro-US phase of the Bolsonaro government, when there was a policy of automatic alignment with Trump, which is why Brazil's distance from BRICS initiatives was expected. Now, however, Lula is expected to take a more sovereign and pro-BRICS stance.

                For Brazil, as well as for India, it would be extremely interesting to participate in the current military exercises, since a lot of combat experience would be passed on to soldiers, preparing them for an eventual conflict scenario in the future. However, more than a merely military issue, this is an essentially geopolitical maneuver. It is necessary that Brazil and India contribute more actively with the other partners, so that the BRICS take a step beyond mere economic collaboration.

                If the BRICS start to engage in mutual military support projects, the greater will be the reciprocal trust between the members, as knowledge and data will be shared, making them equally strong to deal with common challenges. If the consolidation of a multipolar world is really an objective of all BRICS members, it is essential that internal rivalries and disagreements are overcome and that all cooperate for a common objective.

                              Investment and Finance
                              Investment and finance in BRICS
                              The Global South Embarks on Sectoral Alliances (Глобальный Юг приступает к секторальным альянсам) / Russia, February, 2023
                              Keywords: expert_opinion, cooperation

                              Amid fears of de-globalization and the fragmentation of value-added and production chains, a new trend may be in the making as developing nations are starting to foster their own partnerships—not merely regional alliances but comprehensive platforms that aim for a greater coordination in the resource sectors of the world economy. Such sectoral alliances may portend the coming of a more fragmented economic space globally, but these trends could also lead to a greater consolidation of economic/market power in the hands of the developing nations. The key focus for the international community will need to be the greater incorporation of such sectoral accords into the framework of broader multilateral cooperation, possibly including G20.

                              The formation of platforms across countries, regions, sectors and companies has been highlighted on a number of occasions by the Valdai club, including in a separate report published in June 2021. The most emphatic of these "platform trends" has been associated with the regional platforms of the Global South that included such projects as the African Continental FTA, the creation of the Regional Comprehensive Economic Partnership (RCEP), expansion in the Shanghai Cooperation Organization (SCO).

                              Apart from creating new regional blocks, greater activism on the part of the developing countries in building alliances was also reflected in the emergence of platforms/clubs bringing together the largest producers of mineral resources. This, in turn, reflects the increasing role of the "resource ownership" in the world economy and the preponderant role played by developing countries in supplying the world economy with natural resources.

                              One of such sectoral alliances recently promulgated by developing economies is a platform to protect the world's rainforests uniting Brazil, the Democratic Republic of the Congo as well as Indonesia—the countries that account for 52% of the world's tropical rain forests. Similar green alliances were formed by other developing nations: Suriname, Panama and Bhutan formed an alliance in 2021 envisaging trade liberalization, carbon pricing and other policies to support the progression of their economies along the "carbon negative path".

                              Another sectoral alliance discussed this year was the alliance of Lithium producers, which is to bring together members of the so-called "Lithium triangle", namely Argentina, Chile and Bolivia. These countries account for the bulk of the reserves in Latin America, which itself accounts for nearly 60% of global reserves.

                              For its part, Indonesia is looking into the establishment of an Opec-like cartel for nickel and other key battery metals. In particular, Bahlil Lahadalia, Indonesia's investment minister, declared: "I do see the merit of creating Opec to manage the governance of oil trade to ensure predictability for potential investors and consumers. Indonesia is studying the possibility to form a similar governance structure with regard to the minerals we have, including nickel, cobalt and manganese.".

                              These new sectoral platforms are to come on top of the existing arrangements that have already proven their efficiency in regulating supply and commodity price dynamics. This is the case with the OPEC+ arrangement that coordinated oil supply policies of key suppliers from the developing world and Russia. In essence, such platforms will involve greater market power and higher prices that are likely to be passed on to the consumers. This pro-inflationary factor will come on top of some of the potent drivers of higher prices, including the effects of monetary policy loosening in the U.S., electricity/food price surges, labor shortages, disruption in global supply chains, etc. This may be the price that the world economy pays for the "overshooting of globalization" in the preceding decades and the political expediency of developing nations translating their increasing economic clout into greater market and geopolitical capital.

                              In the financial space, greater market power of developing countries in the resource space is likely to lead to a further expansion in the reserves held by the sovereign funds of the Global South economies. The rise of these sovereign funds, to a significant degree, reflected the growing role of such developing economies as China and the resource-rich economies of the Middle East.

                              As a result, sovereign wealth funds—such as GIC, CIC, ADIA—have risen to leading positions in the institutional investor space across global markets. While the sovereign funds have become more sizeable players in the world's financial markets, there is no comprehensive platform uniting the main funds from the Global South. In this respect, one of the initiatives discussed in the past several years was the possibility of creating such a platform for the BRICS economies. An expanded BRICS+ framework could comprise some of the leading sovereign wealth funds from the Middle East as well.

                              Going forward, there may be a number of areas where sectoral platforms with dominant participation of developing economies may emerge in the coming years:

                              • Rare-earth elements (REE)
                              • Producers of key food staples and fertilizers
                              • Potable water and water preservation
                              • A "gas OPEC"
                              • Green platforms uniting countries around the goal of lowering net emissions
                              Some of these tracks have already been explored. In the case of the "Gas OPEC", there is already a grouping of countries that brings together some of the main gas producers, namely the Gas Exporting Countries Forum (GECF). There have been suggestions the GECF could perform a role on the gas market similar to the one that is played by OPEC in the oil sector. Russia's Deputy Prime Minister Alexander Novak declared, however, that the GEFC does not currently have the authority to regulate the gas market and primarily deals with information exchange and joint research. Novak further noted that there were also inherent difficulties with gas market regulation given that it is not as well-developed as the oil market in terms of production, supply and spot trade. Accordingly, with time conditions may improve for gas market coordination mechanisms to be created among the main gas producers from the developing world.

                              Importantly, developed economies have embarked on creating their own alliances in the sphere of natural resources. In particular, the EU put together a European Raw Material Alliance to involve all relevant stakeholders, including industrial actors along the value chain, Member States and regions, trade unions, civil society, research and technology organizations, investors and NGOs. One of the rationales for the creation of the alliance was to diversify sources of supply of rare earth materials away from China and with time that trend does appear to be slowly setting in: while China supplied the EU with 98 per cent of its rare earth needs in 2017, it accounted for 90 per cent of rare earths supplies in the following 5 years.

                              In effect, the formation of such platforms is in line with the friend-shoring strategy promulgated by advanced economies in 2022 – a strategy of redirecting the supply chain toward countries that share the same political values. These partnerships in the developed world are starting to take on a trans-regional scale as the EU is teaming up with such important economies in the mineral resource space as Canada—the partnership between the Canadian and EU governments concluded in 2021 aims to secure supply chains for natural resources critical to manufacturing.

                              Another alliance launched by the advanced economies deals with sustainable development in mining natural resources – in 2022 Canada, Australia, France, Germany, Japan, the United Kingdom and the United States launched the Sustainable Critical Minerals Alliance to improve the sustainability of mining minerals essential to decarbonisation. The announcement was made at the COP15 biodiversity summit in Montreal.

                              The rise of sectoral cartels may well pick up steam in the coming years as countries seek to compensate high inflation via greater proceeds from increased market power and prices in various commodity segments. This cartelization of the world economy could become a reaction of developing economies to the undermining of universal rules and norms in the economic sphere, most notably the principles of fair and open competition. Against the backdrop of rising protectionism from the advanced economies and the re-configuration of supply chains on the basis of friend-shoring, developing countries will be increasingly bent on creating their own platforms, regional groupings, development institutions, sectoral cartels and extracting their own fair share of market power.

                              The world economy that emerges on the back of the creation of such sectoral platforms is more regionalized, more geared towards the developing world and more vulnerable to excesses in market power. Accordingly, it will be important to find pathways to integrate these platforms and clubs into the broader framework of G20 and the main international organizations. With respect to the G20 this may call for the creation of a new engagement group that brings together such sectoral platforms (whether formed already or groups of main producers in key sectors of the global economy). This would facilitate the resolution of some of the key sectoral global problems such as energy security and food security.

                                            Budget 2023: SA to apply to BRICS New Development Bank for a loan (Бюджет на 2023 год: ЮАР подаст заявку на получение кредита в НБР БРИКС) / South Africa, February, 2023
                                            Keywords: economic_challenges, ndb
                                            South Africa

                                            Treasury officials said the government would apply to the BRICS New Development Bank (NDB) for further loans in the 2023/24 fiscal year, but were unable to say whether the paperwork would be ready by the time South Africa hosts the BRICS Summit in July.

                                            In December 2019, the NDB provided a loan of R6 billion to Eskom to set up a Battery Energy Storage System comprising 360 MW of distributed battery storage sites across four provinces of South Africa.

                                            The project was primarily aimed at meeting peak electricity demand, increasingly through renewable energy, and avoiding emissions associated with utilisation of fossil fuels. NDB's financial support to this project was provided along with that of the World Bank and African Development Bank.

                                            Currently Eskom uses expensive diesel-fired Open Cycle Gas Turbines (OCGT) and hydro-electric pumped storage schemes to meet peak period demand, but recently, unplanned breakdowns at coal-fired power plants have meant it has been unable to meet demand and so has had to institute load shedding to balance demand with supply.

                                            Eskom's Energy Availability Factor (EAF) eased to 52.22% in 2022 from 58.01% in 2021 and 61.79% in 2020. Planned maintenance outages eased to 10.61% in 2022 from 10.81% in 2021, 11.24% in 2020 and 9.94% in 2019, while unplanned outages rose to 29.82% in 2022 from 24.49% in 2021, 20.88% in 2020 and 21.57% in 2019.
                                            Finance Minister Enoch Godongwana said in his Budget speech that the lack of reliable electricity supply was South Africa's biggest economic constraint.

                                            This was because South Africa experienced record levels of load shedding in 2022 with 207 days of load shedding compared with 75 days in 2021.

                                            The new NDB loan is likely to focus on strengthening the transmission system as the wind-rich and solar-rich provinces of the Eastern Cape and Northern Cape have reached their transmission capacities.

                                            Only five solar photovoltaic (PV) projects had been appointed in the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) Bid Window 6.

                                            This Bid Window was launched in April 2022, and was then delayed specifically to allow for an expansion in the procurement allocation from 2,600 megawatts (MW) to 4,200 MW as part of interventions announced by President Cyril Ramaphosa on 25 July 2022 to tackle extreme load shedding.

                                            In the event, projects with a combined capacity of only 860 MW have advanced to preferred-bidder status, a figure that could rise to 1,000 MW, if discussions with a sixth eligible project are successful.

                                            Not one of the 23 wind projects bid, with a combined capacity of more than 4,000 MW, have been appointed, even though 3,200 MW was specifically allocated for wind procurement under this bid window.
                                                          World of Work
                                                          SOCIAL POLICY, TRADE UNIONS, ACTIONS
                                                          'Happy worker is a productive worker': BRICS nations compare notes in Joburg on workers' rights («Счастливый работник — продуктивный работник»: страны БРИКС сверяют мнения в Йобурге о правах рабочих) / South Africa, February, 2023
                                                          Keywords: quotation, social_issues
                                                          South Africa

                                                          Pretoria - Deputy Minister of Employment and Labour Boitumelo Moloi has emphasised the importance of workers' rights as the cornerstone of any fair, just and prosperous society which ensures that employees have access to safe working conditions.

                                                          Moloi made the remarks while addressing the inaugural BRICS meeting organised by the department of employment and labour under the theme: "Ensuring decent work, dignity and respect for all."

                                                          The meeting is taking place in Muldersdrift, west of Johannesburg until Friday and is being attended by the five BRICS member states, namely; Brazil, Russia, India, China and South Africa alongside the International Labour Organisation (ILO), the African Union as well as Zimbabwe, Botswana, Eswatini, Namibia and Malawi as invitees.

                                                          The meeting is exploring issues around human dignity as the world tries to recover from the Covid-19 pandemic, the energy crisis and stagflation.

                                                          Deputy Minister of Employment and Labour Boitumelo Moloi. File Picture: GCIS Moloi told the 140 delegates in attendance that worker rights were essential for individual workers as well as the health and stability of the broader economy.

                                                          "Therefore, worker rights, productivity and decent work are intrinsically linked. A happy worker is a productive worker," she said.

                                                          She urged BRICS nations to lead the way in promoting and protecting workers' rights by implementing ILO conventions. In so doing, Moloi said the BRICS member states should demonstrate their commitment to a fairer, more equitable society and create sustainable and inclusive growth conditions.

                                                          She further encouraged member states to optimise the relationship between productivity and decent work, promoting and protecting workers' rights to improve poor working conditions, fair wages and protection against health and safety hazards.

                                                          In a message of support, ILO representative Claire Harasty said labour rights at work were indispensable in seeking to achieve equality and justice.

                                                          "Sustainable enterprise promote good working conditions for employees, and my organisation is ready to accompany BRICS in achieving its goals," she said.

                                                          African Regional Labour and Administration Centre (ARLAC) representative Dr Locary Hlabanu said: "Decent work sums up the totality of the mandate of my organisation and by extension the ILO. There is need for governments and social partners to create an enabling environment for social protection."

                                                          The Muldersdrift session paves the way towards the upcoming technical meetings to be held in May, June and September this year, the director general of the department of employment and labour Thobile Lamati said.

                                                          The final outcome of these gatherings will give birth to a declaration to be adopted by ministers and heads of state.
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