Saudi Arabia
Source: thecradle.co

Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman (MbS) discussed possible Saudi cooperation with the BRICS bloc of nations and expressed support for the two nations' cooperation as part of OPEC+ during a phone conversation on 21 April.

A statement issued by the Kremlin said: "The Russian president congratulated the Kingdom's leadership and people on Eid al-Fitr, which marks the end of the blessed month of Ramadan."

The statement added that the two sides exchanged views on various aspects of current affairs in West Asia within the framework of Russian and Saudi efforts to resolve crises in this region.

Putin and MbS also discussed ongoing coordination within OPEC+ to stabilize the global oil market.

The Kremlin said: "A number of issues on the bilateral agenda were studied with a focus on further expanding mutually beneficial relations in the fields of trade, economic, investment, and energy, and satisfaction was expressed with the level of coordination within OPEC+ in order to ensure the stability of relations between the two countries and the global oil market."

OPEC+, a group of 23 oil-exporting countries which meets to decide how much crude oil to sell on the world market, cut oil production once again in early April in a surprise move to shore up oil prices in the wake of a banking crisis in the US.

The bank failures, in part, resulted due to aggressive interest rate raises over the past year by the US Federal Reserve.

The interest rate raises are meant to tame inflation in the US and the broader world economy, but risk causing an economic recession that could reduce oil demand and cause falling prices, a negative outcome for the world's large oil producing nations.

Despite the recent cust,s the global oil price has slid in recent days, as fears of an economic slowdown continue to weigh on investor sentiment.

The March OPEC+ production cut follows a previous cut in October 2022 of 2 million barrels per day (bpd), which surprised the White House.

Russia
Source: tass.com

According to Mauro Vieira, Brazil notes "the gradual and balanced process of the expansion of the NDB, which admitted three new members (Egypt, the United Arab Emirates, and Bangladesh) in 2021

BRASILIA, April 17. /TASS/. A measured approach is needed when considering the possible expansion of the BRICS (Brazil, Russia, India, China, South Africa) platform to include new members, Brazilian Foreign Minister Mauro Vieira said in an interview with TASS ahead of Russian Foreign Minister Sergey Lavrov's visit to Brazil.

"From Brazil's point of view, the issue of BRICS' expansion requires a balanced approach with due respect to the criteria of possible admission of new members that were adopted by consensus-based and transparent decisions," he said. "We see BRICS as a creative diplomatic structure that has demonstrated extraordinary usefulness, including thanks to such an instrument as the New Development Bank (NDB), which is now headed by Brazil's former President Dilma Rousseff."

According to the minister, Brazil notes "the gradual and balanced process of the expansion of the NDB, which admitted three new members (Egypt, the United Arab Emirates, and Bangladesh) in 2021.

Brazil, in his words, has a special role in BRICS "in terms of the consolidation of a new multipolar world order with a general understanding that all participants have a legitimate voice in discussions of serious global matters." He also noted the fact that the combined population of BRICS countries makes up nearly half the entire world. "And this means that the association bears special responsibility for the future of the planet," Vieira stressed.


Interest in the BRICS association, which has surpassed the Group of Seven in terms of a number of key economic indices this year, has grown considerably in the world. Thus, Algeria, Argentina, and Iran have already applied for membership. Saudi Arabia, Turkey, Egypt, and Tunisia have announced their interest in joining the group. Several African nations are in consultations on possible accession.

Russian Deputy Foreign Minister Sergey Ryabkov said earlier that one should not expect quick decisions on BRICS expansion. The BRICS members, in his words, must "reach an understanding on basic expansion parameters," and this process "is anything but simple."

Brazil, Russia, India, and China established the BRIC association in 2006. South Africa joined the group in 2011 to turn it into BRICS. The next BRICS summit will be held offline in Durban, South Africa in August.

Russia
Source: infobrics.org

Lucas Leiroz, journalist, researcher at the Center for Geostrategic Studies, geopolitical consultant.

The visit of Russian Foreign Minister Sergey Lavrov to Brazil was interpreted by some analysts around the planet as representing an important step towards bilateral cooperation and the establishment of a multipolar world. However, after a journalistic work done on the ground, it was possible to see that some things really did not happen as expected.

The Russian Minister arrived in Brazil early in the morning of April 17th, landing at an air base in Brasilia. In a normal situation, the visit of such an authority would be received by his local counterpart. However, Lavrov was received only by a military official from the local base and by the Russian Ambassador to Brazil, with foreign minister Mauro Vieira not attending the occasion.

As it is normal in situations where there is no formal reception, Lavrov left the plane wearing ordinary civilian clothes, not using an official suit. Quite mistakenly and provocatively, some mainstream media outlets in Portuguese and pro-Western TV channels in Brazil reported the Russian minister's attitude as a kind of "disrespect" or "disdain" for the Brazilian people, ignoring the circumstance of his welcome greeting without the presence of the expected authorities.

In his schedule throughout the day, Lavrov met with Mauro Vieira, when he reinforced topics of common understanding between Brazil and Russia and advanced conversations on matters of mutual interest. He also held a press conference answering questions from local journalists and gave a lecture at the Rio Branco Institute - the Brazilian diplomacy academy -, highlighting in his words the importance of Russia and Brazil in the current global geopolitical scenario.

The long-awaited meeting between Lavrov and Lula was marked by doubts and uncertainties. The Brazilian President arrived in Brasilia on the 16th, after his trip to Asia. The meeting was announced precisely on the 17th, and was rescheduled several times throughout the day, with plans being repeatedly changed, postponing the arranged meeting time. The most curious thing is that, contrary to what traditionally happens during the reception of foreign authorities, Lavrov did not enter the presidential house in Brasília through the front door. Also, the Russian flag was not hoisted there, which seemed really impolite on the part of Brazil.

Lavrov handed Lula a letter from Russian President Vladimir Putin inviting him to attend the Saint Petersburg Economic Forum, one of the most important international events of the Russian Federation, scheduled for June. The invitation comes after Lula declared that he would not visit Russia or Ukraine due to the conflict, as well as after Foreign Minister Mauro Vieira himself irresponsibly suggested that Putin could be arrested if he visited Brazil, due to the illegal decision taken by an international court during an invalid and unrecognized lawsuit.

During the early hours of the 18th, Lavrov left Brazil and continued his Latin tour, which also includes Venezuela, Nicaragua and Cuba. The visit was extremely rapid and to some extent "chaotic". Several other statements were expected from Lavrov, as well as a series of important meetings with Brazilian representatives, businessmen and local leaders. Many of these events seem to have been canceled due to changes in plans that occurred throughout the day.

Despite some obvious rudeness on the part of the Brazilian authorities, such as the lack of reception at the air base and the exclusion of the Russian flag from the presidential palace, the result of the meetings was positive for bilateral relations. Topics of mutual interest were emphasized and Lavrov made it clear that both states have very "similar" views about the world today. The visit showed that, despite Lula's recent rapprochement with the West, Brazil continues to be an important and indispensable partner for Moscow, being among the priorities of the Ministry of Foreign Affairs of Russia.

This consolidation of ties, as expected, was not well received by Lula's supporters linked to Western powers. Internal Brazilian anti-Russian sectors protested against Lula's meeting with Lavrov. As well known, the Brazilian president approached many anti-BRICS groups in order to garner electoral support, which is certainly creating some problems for him now. In the same sense, at the international level, spokesman for the National Security Council of the United States, John Kirby, strongly condemned Lula's dialogue with BRICS partners, stating that the Brazilian president shares "Russian and Chinese propaganda".

Curiously, on April 19, CNN Brazil published an article accusing Lula-led Brazilian intelligence agencies of colluding with the January 8 attacks, when pro-Bolsonaro groups invaded Brasília and carried out vandalism actions. At the time, some analysts believed in a kind of false flag operation by the Lula government to legitimize the use of force against oppositionists - which was seen by the media as a "conspiracy theory". Now, just two days after Lavrov's visit, the American-Brazilian mainstream media is starting to use that same narrative - which is leading analysts to believe that such journalists would be publishing the content as a response to Lula's dialogue with the BRICS, "punishing him" so that he no longer contradicts the Western interests.

The case clearly shows the current situation of ambiguity in the Lula government. The Brazilian president was widely praised by the mainstream media in the first months of his administration, when he bet on dialogue with the West. Now, when a small rapprochement with the BRICS has been made, the media's tough response emphasizes that Lula is under strong pressure not to hurt American interests. In fact, overcoming this scenario, aiming for the best for Brazil and the BRICS, is a fundamental step for the new government in Brasilia.

You can follow Lucas on Twitter and Telegram.

India
Source: www.india-briefing.com

By Chris Devonshire-Ellis

India and Russia are in 'advanced negotiations" for an updated Bilateral Investment Treaty (BIT) that is necessary to boost the conf confidence of investors, Indian foreign minister S Jaishankar said as he described India-Russia relations as amongst the 'steadiest' in the world. Jaishankar was speaking in New Delhi at a business event also attended by Russian Trade Minister Denis Manturov.

India-Russia Bilateral Investment Treaty

BIT are fairly basic documents and do not generally cover tariff reduction agreements, but instead provide investment protections for investors on each side. They deal with issues such as Double Tax protection and offer reduced taxes based on Withholding Tax provisions, in addition to addressing issues related to bilateral services rather than trade. The previous BIT was agreed back in 1994 and is outdated.

India-Russia Free Trade Agreement

At the same time, both parties are recommencing their Free Trade negotiations with the Eurasian Economic Union (EAEU) having been delayed by Covid. The EAEU includes Russia along with Armenia, Belarus, Kazakhstan, and Kyrgyzstan, and is a trade bloc with a GDP of USD3.5 trillion and a consumer market size of 167 million. Russia is the largest member. Any agreement has to be ratified by all parties and would be an India-EAEU deal, and not exclusively Russian.

Jaishankar said a new deal with Russia would make a huge difference to trade relations. Bilateral trade shot up to US$45 billion in 2022, although there is an imbalance in Russia's favour created by India's substantial purchases of Russian oil and gas. Both sides have agreed to establish an inter-governmental commission on trade, culture, science and technology, and discussed a wide range of issues to develop the India-Russia strategic partnership.

BRICS

Jaishankar also stressed India's commitment to a multipolar world in comments that will alarm Washington. Brazil's President Lula said the same thing when discussing trade with the Russian Foreign Minister, Sergey Lavrov, in Brazil on Monday. Both India and Brazil are members of BRICS, together with Russia and China. Lula met with Chinese President Xi Jinping last week, who the week before had met with Vladimir Putin in Moscow. Developments within BRICS are rapidly progressing amongst a flurry of intra-Bloc activity.

Other India-Russia issues discussed

In terms of specifics, energy was very much on the agenda, as was transportation and logistics. India and Russia are at opposite ends of the International North-South Transportation Corridor (INSTC), a multimodal route that includes maritime passage from Mumbai to Iran's Chabahar Port, overland by rail to Iran's Caspian sea ports, and connectivity from there through to Russia as well as Azerbaijan and onto Turkiye and Europe, and east via Kazakhstan and Turkmenistan to markets in Central Asia. Iran has also agreed to an FTA with the EAEU and has applied to join BRICS Plus.

The two countries also discussed improving and expanding their trade settlements in mutual currencies with both committed to dropping the USD and Euro in bilateral trade settlements. Other trade matters such as the improved import of Russian fertilizer were also discussed as Indian imports have been disrupted by the Ukraine conflict. Mutually acceptable trade documentation such as certificates of origin and related standards recognition were also part of the negotiations, as were discussions dealing with a Russian program of preferential loans and insurance for Russian importers towards procurement of priority products from foreign countries – with India being among them.

"Among the most demanded goods under this program are components and equipment for road construction, products of chemical and pharmaceutical industries. I am sure that this will create opportunities for Indian companies to increase their supplies to Russia." Manturov stated. Russia has also invited Indian companies who are keen on joint projects to consider 'cluster investment platform'. "This provides preferential credits for designing and manufacturing of priority products, subsidies for pilot batches of goods, insurance premium and income tax preferences" he said.

Summary

The speed of which changes to the global trade system are occurring are breathtaking, and especially with what can only be described as a massive and rapid strengthening of the existing BRICS bloc. As mentioned, all leaders are currently involved in enhancing bilateral trade discussions: Russia-China; Brazil-China, Brazil-Russia and now India-Russia within the space of a month.

It is apparent that all member countries see BRICS as a hedge against US-EU trade which is viewed as becoming unreliable in terms of sanctions threats spilling over. This is not an end to globalization, but an end to who controls it and decisions taken as to who wants in and who wants out. With the BRICS group already looking at significant expansion – Bangladesh, Egypt and the UAE have all de facto joined with numerous other nations lining up to do the same, the global trade onus is no longer on isolating Russia – as portrayed by the West – but reducing dependency upon the United States and Europe – as is being carried out by significant economies. That the BRICS has already overtaken the G7 in terms of percentage share of global GDP is now ushering in an era where their collective trade might is gaining an upper hand in the battle for multipolarity and a revised world order.

India Briefing

Russia
Source: www.interanalytics.org

What is BRICS+?

Despite the fact that the BRICS+ initiative was first proposed in 2017, there is still hardly any concrete framework or overarching concept advanced by any of the BRICS countries. The main theoretical forays into the BRICS+ concept have been undertaken by E. Arapova and Y. Lissovolik, with particular emphasis being placed on the possibilities of a format based on cooperation among the regional integration arrangements in which BRICS countries are members1. Some of Russia's prominent scholars have noted both the possibilities as well as the challenges of implementing such a format,2 as well as the leading role of China in the bloc in realizing its key initiatives.3 Another strand of research has focused on the relationship between BRICS and G20 in the context of the evolving transformation of global governance.4 Still, other theoretical studies have evaluated the prospects of expanded BRICS cooperation via the expansion of the operations of the New Development Bank.5 Overall, however, the theme of BRICS+ remains heavily under-researched and in need of more perspectives coming from all of the members of BRICS / BRICS+.

In practical terms, the implementation of the BRICS+ framework has taken the form of BRICS+ summits (in 2017 (China), 2018 (South Africa), and 2022 (China)) that involve the invitation of a number of developing economies outside of the BRICS core. Brazil, Russia, and India opted not to conduct BRICS+ summits altogether. Despite the lack of clarity and detail on the exact modalities of BRICS+, there are some clues that may be gleaned from the statements of officials from BRICS countries. In fact, it could be the case that the BRICS+ space is intentionally left blank to leave open the scope for multiple formats to be pursued in the coming years.

One insight into how BRICS countries are looking at the BRICS+ format came from Russia. In the beginning of 2018, Russia's Deputy Foreign Minister S. Ryabkov declared, "We suggest that our partners consider BRICS+ as a platform for developing what could be termed an 'integration of integrations'." In other words, Russia's Foreign Ministry called for the BRICS+ platform to follow the route of cooperation among the regional integration blocks in which BRICS countries are members. This path leaves substantial scope for innovative undertakings in bringing closer together not only the regional integration arrangements of the respective BRICS countries but also their regional development institutions (development banks and funds as well as regional financing arrangements).

China's approach, as judged by the summits conducted during its chairmanship in 2017 and 2022, appears to aim for greater breadth and weight in choosing countries that are invited to BRICS+ leaders' meetings. This involves inviting heavyweight developing countries that are members of the G20, as well as countries that are leaders or that hold chairmanship in their respective regional integration blocks. The latter aspect partly overlaps with the Russian approach described above and suggests that there may be possibilities for a harmonized regionalistic approach to emerge from the BRICS+ summits in the coming years.

Indeed, one more member of the BRICS circle, namely South Africa, after conducting a BRICS+ summit in 2018, may choose to hold it again in 2023 during its chairmanship. Judging by the countries and groups invited to the BRICS+ summit, South Africa may be leaning closer to a regionalistic approach towards BRICS+, given that in the past it has invited representatives of regional integration groups and associations. A regional approach to BRICS+ coming from South Africa may make sense also due to the country's efforts to promote Africa globally as well as within BRICS.

In practice, the BRICS+ initiative presents multiple dimensions and possible formats. One of these involves a regional approach, which entails bringing together regional organizations / regional integration blocks where BRICS countries are members. Another approach is to establish a pool of heavyweights among developing economies, which could potentially be part of BRICS+ and the BRICS core. Alternatively, the expansion of the ranks of members of the New Development Bank, which can also be considered as part of a financial track of BRICS+, presents yet another possible avenue.

These various formats of the BRICS+ initiative have the potential to impact global governance, particularly considering that in the coming years, BRICS countries are set to lead some of the key global fora. From 2023 to 2025, three BRICS countries are to chair the G20, which opens up the possibility of advancing common BRICS initiatives on the global stage. South Africa is set to chair both the G20 and the BRICS grouping in 2025, while Brazil will chair the G20 in 2024 and the BRICS in 2025, and India chairs the G20 in 2023. These opportunities on the global stage provide the BRICS grouping with tremendous potential for advancing common initiatives and for advancing BRICS+ cooperation on a broader, more inclusive scale. This, in turn, is likely to be undertaken via the creation of platforms for economic cooperation in spheres ranging from the real sector of the economy to the financial sector.

BRICS+ in the Future Platform World

There is an argument that the world is moving towards an increasingly platform- based modus operandi where micro-level companies offer platforms to customers, making goods and services more accessible. At the macro-level, these platforms are formed based on regional integration arrangements that bring together not only national economies but also regional economic blocks. The African Continental Free Trade Area is an example of a macro-regional platform in the Global South that subsumes the effects of regional integration arrangements operating in Africa.

The BRICS+ regional format presents an opportunity to introduce a platform that encompasses the majority of the Global South, thus creating integration platforms in the global economy. One proposal in this regard has been the BEAMS platform, which brings together the primary regional integration blocks of the BRICS countries, namely BIMSTEC (India), Eurasian Economic Union (Russia), African Union (South Africa), MERCOSUR (Brazil), and SCO (China). The benefits of creating such a BRICS+ platform are manifold, including the multiplier effect that this format achieves with regard to the outreach of BRICS to the remainder of the developing world. Moreover, this format enables BRICS to progress with trade liberalization across the Global South and establish inclusive cooperation platforms in both the financial and real sectors.

The financial sector can potentially benefit from the establishment of a BRICS+ platform of cooperation among regional development banks where BRICS countries are members. This platform could facilitate cooperation between development banks and other development institutions formed by BRICS+ economies, such as the Eurasian Development Bank (EDB), the Development Bank of South Africa (DBSA), the SAARC Development Fund (SDF), Mercosur Structural Convergence Fund (FOCEM), China Development Bank (CDB), China-ASEAN Investment Cooperation Fund (CAF), and the New Development Bank (NDB). Within this network of regional development institutions, the NDB could potentially serve as a coordinating body with respect to BRICS+ initiatives. Such cooperation could be targeted at co-financing investment projects, as well as initiatives and programs aimed at promoting the attainment of key development goals, such as human capital development, ecology, and financial sector integration and cooperation.8

One of the important financial tracks of BRICS+ involves cooperation among the regional financing arrangements (RFAs) where both BRICS and BRICS+ countries are members. These RFAs with BRICS participation include the Eurasian Fund for Stabilisation and Development (EFSD), BRICS Contingency Reserve Arrangement (BRICS CRA), and CMIM – Chiang Mai Initiative Multilateralisation. This platform may have the option of financing stabilization programs and investment projects in national currencies. The BRICS Contingent Reserve Arrangement, which became operational in 2015, is a critical element in the BRICS cooperation in the sphere of financial and macroeconomic stability. In accordance with Article 2 of the BRICS CRA Treaty, the initial committed resources of the CRA stand at USD 100 billion, with individual commitments ranging from USD 41 billion for China to USD 5 billion for South Africa9.

Other possible platforms that could be created based on BRICS+ include:

– a strategic alliance between high-tech companies in BRICS;

– a digital platform for BRICS economies;

– a coordination mechanism among the central banks of the BRICS economies.

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

One of the sectoral alliances recently promoted by developing economies is a platform to protect the world's rainforests, uniting Brazil, the Democratic Republic of the Congo, and Indonesia – the countries that account for 52% of the world's tropical rainforests. Similar green alliances have been formed by other developing nations. In 2021, Suriname, Panama, and Bhutan formed an alliance envisioning trade liberalization, carbon pricing, and other policies to support the progression of their economies along the "carbon-negative path."

This year, discussions of sectoral alliances included the alliance of lithium producers, which seeks to unite the members of the "Lithium Triangle" – Argentina, Chile, and Bolivia. These countries hold the majority of reserves in Latin America, which accounts for almost 60% of global reserves. Additionally, Indonesia is exploring the creation of an OPEC-like cartel for nickel and other battery metals. In particular, B. 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."6

These new sectoral platforms are in addition to the existing arrangements that have already proven to be effective in regulating supply and commodity price dynamics. This is the case with the OPEC+ arrangement that coordinated the oil supply policies of some of the key suppliers from the developing world and Russia. Essentially, the formation of such platforms will involve greater market power and higher prices that are likely to be passed on to consumers. This pro-inflationary factor will add to some of the potent drivers of higher prices, including the effects of monetary policy loosening in the US, surges in electricity / food prices, labor shortages, disruptions 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.

Looking ahead, it is plausible that several sectoral platforms with dominant participation of developing economies will emerge in the near future. These may include rare-earth metals, producers of key food staples and fertilizers, potable water and water preservation, a "gas OPEC," and green platforms uniting countries around the goal of lowering net emissions.

Some of these tracks have already been explored – in the case of "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 that the GECF could perform a role on the gas market similar to the one played by OPEC in the oil sector. Russia's Deputy Prime Minister, A. Novak, declared, however, that the GECF 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 trade7. Accordingly, with time, conditions may improve for gas market coordination mechanisms to be created among the main gas producers from the developing world.

The proliferation of sectoral cartels is poised to intensify in the years to come as countries endeavor to offset inflationary pressures with the greater proceeds from increased market power and prices across various commodity segments. This cartelization of the global economy may represent a response from developing economies to the undermining of universal rules and norms in the economic sphere, particularly the principles of fair and open competition. Against the backdrop of the escalating protectionism of advanced economies and the reconfiguration of supply chains predicated on friend-shoring, developing countries will be increasingly motivated to establish their own platforms, regional groupings, development institutions, sectoral cartels, and secure their equitable share of market power.

The BRICS+ platform can serve as an important instrument of mobilizing efforts and resources of the developing countries in reshaping global governance in such a way that the growing economic role of the Global South is duly reflected in the greater voice of developing nations on the international arena. In this respect perhaps one of the BRICS+ platforms with the most significant potential could be a platform for sovereign wealth funds (SWFs) – in fact such a platform is likely to be effective only in a BRICS+ format.

A BRICS+ platform for sovereign wealth funds

A potential avenue for cooperation in the financial sphere among the BRICS+ economies is the establishment of a common platform for their sovereign wealth funds. According to the Sovereign Wealth Fund Institute, a staggering nine out of the ten largest sovereign wealth funds (by assets under management (AUM)) are from developing economies of the Global South. Leaders from this region include the China Investment Corporation (CIC), which boasts USD 1.35 trillion in assets under management, and the Abu Dhabi Investment Authority (ADIA), which manages nearly 0.8 trillion in AUM. Notably, the total amount of assets managed by the top ten SWFs from the Global South exceeds USD 6 trillion, a figure greater than the combined GDP of the United Kingdom and France in 2022 (see Table 1).

In addition to Russia and China, which have a number of large sovereign wealth funds (SWFs), India also possesses a sovereign wealth fund called the National Investment and Infrastructure Fund (NIIF). Among the BRICS countries, apart from Russia and China which have a number of large SWFs, India also has a sovereign wealth fund called the National Investment and Infrastructure Fund (NIIF). Brazil discontinued the operations of its SWF in 2019 but is considering its relaunch. Importantly, there are already linkages built between the BRICS financial institutions and some of the sovereign wealth funds of the BRICS economies – in particular NIIF's Fund of Funds is a USD 600 million fund with investors including the BRICS' New Development Bank as well as the Asian Development Bank and the Asian Infrastructure Investment Bank. However, South Africa is the only BRICS country that has yet to establish its own sovereign wealth fund, despite arguments in favor of such a mechanism.

Table 1.

A Ranking Of Sovereign Wealth Funds By Aum

Rank Profile - Total Assets - Region
1 - China Investment Corporation USD - 1,35 trn - Asia
2 - Norway Government Pension Fund Global USD - 1,3 trn - Europe
3 - Abu Dhabi Investment Authority USD - 0,79 trn - Middle East
4 - Kuwait Investment Authority USD - 0,75 trn - Middle East
5 - GIC Private Limited USD - 0,69 trn - Asia
6 - Public Investment Fund USD - 0,61 trn - Middle East
7 - Hong Kong Monetary Authority Investment Portfolio USD - 0,51 trn - Asia
8 - Temasek Holdings USD - 0,5 trn - Asia
9 - Qatar Investment Authority USD - 0,48 trn - Middle East
10 - National Council for Social Security Fund USD - 0,47 trn - Asia

Source: "Rankings by Total Assets," SWFI, accessed March 16, 2023, https://www.swfinstitute.org/fund-rankings/sovereign-wealth-fund.

The platform for sovereign wealth funds could potentially facilitate greater coordination in the development and deepening of local and regional financial markets, while also promoting the increased use of national currencies in long-term investments and investment projects. Similar to the co-investment efforts between development banks such as NDB or the regional development banks where BRICS countries are members and the BRICS sovereign wealth funds, the inverse is also possible – sovereign wealth funds may co-invest in long-term real sector projects undertaken by national or regional development banks and NDB. Consequently, the platform of sovereign wealth funds could serve as a crucial instrument in advancing another pivotal BRICS+ project, namely the launch of a new reserve currency based on the currencies of the BRICS+ members.

A BRICS+ reserve currency: what are the possibilities?

The creation of a new reserve currency could be a potentially significant catalyst for the development of BRICS+ and the transformation of global governance more broadly. The proposal to create a new reserve currency based on a basket of currencies from BRICS countries was initially formulated by the Valdai Club in 2018. The concept was to create a currency basket, similar to the Special Drawing Rights (SDR), composed of national currencies from BRICS countries, as well as potentially some of the other currencies of BRICS+ circle economies. The selection of BRICS national currencies was due to their status as some of the most liquid currencies across emerging markets. The new reserve currency was proposed to be called R5 or R5+ based on the first letter of the BRICS currencies, each of which begins with the letter R (Real, Rouble, Rupee, Renminbi, Rand).

What is clear at this stage is that the BRICS reserve currency will not be created to replace the national reserve currencies of the BRICS economies – rather it will complement these national currencies and will serve to improve the possibilities for more EM currencies to attain reserve status. Accordingly, the attainment of high trading shares among the BRICS economies is a desirable but not altogether an indispensable condition for launching the new reserve currency. In fact, the new BRICS currency does not have to service all trade transactions among BRICS economies in the very near term. Initially, the new BRICS currency could perform the role of an accounting unit to facilitate transactions in national currencies. In the longer run, the R5 BRICS currency could start to perform the role of settlements / payments as well as the store of value / reserves for the central banks of emerging market economies.

Within the composition of the R5 currency basket, the share of the Chinese renminbi may initially be set at a relatively high level in order to take advantage of the already advanced reserve status of the Chinese currency. This share may be progressively reduced in stages later on, along with the inclusion of new EM national currencies. Outside of the BRICS economies, some of the potential candidates that could be included in the R5+ currency basket over time may feature the Singaporean dollar or the UAE's dirham.

One of the potential risks associated with the use of EM currencies in reserves is their high volatility. The basket mechanism of the BRICS reserve currency will allow for reducing some of this volatility by averaging out the exchange rate dynamics of currencies that follow different market trends. If the currencies of Russia, South Africa, and Brazil follow the commodity cycle, the opposite is true with respect to commodity importers such as India and China.

The potential for utilizing the new reserve currency in the global economy is considerable, particularly given the enormous potential for de-dollarization. The newly established BRICS reserve currency can collaborate with the increased role played by BRICS national currencies to acquire a greater share of the total currency transactions in the global economy. This greater role can be gradually extended from servicing foreign trade transactions to investment flows across the developing world. In line with the original R5 concept developed by Valdai club in 2018 one of the possible venues for boosting the use of national currencies and the BRICS reserve currency could be the creation of a platform for regional development banks in which BRICS economies are members. Such a platform could develop a portfolio of common / integration projects that may be financed in national currencies.

The creation of the R5 reserve currency will be facilitated through its implementation on the basis of a broad BRICS+ regional format, whereby the regional partners of core BRICS countries start to use national currencies and R5 instead of the dollar for the purpose of boosting mutual trade. Furthermore, the R5 basket of currencies could include some of the currencies from outside of the BRICS core – in particular, the most liquid currencies from the BRICS+ circle.

In the end, the launching of a new reserve currency, if successful, will have a transformational effect on the international financial system. The central banks in the global economy are experiencing a notable shortage of reserve currencies in managing their reserve holdings. In this respect, the emergence of additional reserve currencies from among the emerging market economies will serve to expand the possibilities for diversifying reserve holdings and reducing the vulnerabilities associated with the dependence on a narrow range of currencies. The R5+ project can thus become one of the most important contributions of emerging markets to building a more secure international financial system.

Conclusion: taking BRICS+ to the next level – what are the new horizons for the Global South?

For the BRICS+ initiative to achieve significant progress, it is imperative to reinforce the pragmatic aspect of the platform. This can be accomplished by concluding breakthrough economic agreements based on the Global South platforms. To that end, the following key measures could be implemented:

– The signing of key trade and investment agreements between developing economies or their regional blocks at the BRICS / BRICS+ summits.

– Using the BRICS / BRICS+ platforms for dispute settlement and resolution. This can include trade and investment disputes (which should involve the creation of relevant arbitration bodies and procedures) as well as international conflicts. The BRICS platform could play a particularly important role in resolving conflicts in the Global South, i.e. between developing countries. Importantly, analytical work on the creation of a BRICS+ arbitrage is already underway and is actively being advanced.

– A platform for regional integration arrangements where BRICS countries are members. Such a platform needs to involve the principle of rotation in conducting the main events and initiatives, with the BRICS+ summits used as a platform to present the main achievements and results of such initiatives.

– The formation of a platform of investment cooperation among the regional development institutions in which BRICS countries are members. The BRICS New Development Bank can play a coordinating role in working with the relevant banks and funds. The New Development Bank could participate in the BRICS / BRICS+ summits with the announcement of some of the key agreements, including on financing of green and sustainable development in the developing world.

– Creation of a platform for cooperation among the sovereign wealth funds of BRICS+ countries. One of the key areas of cooperation could be the coordinated initiatives directed at developing and deepening local financial markets.

– The possibility for the New Development Bank to participate in the G20 summits alongside the main MDBs such as the Asian Development Bank or the African Development Bank.

– More active involvement of the BRICS CRA in the BRICS / BRICS+ summits: the presentation of an annual report on the macroeconomic trends in BRICS / BRICS+; presentation on the state of the world economy; quantitative assessments on the potential effects of de-dollarization.

– Regular discussions in the BRICS+ summits on the transformation of the global monetary system, including a review of the progress of moving towards the creation of new regional and global reserve currencies.

– Presentation of the 3-5 main technological breakthroughs of the Global South at the annual BRICS+ summits.

It is through the building of a sizable pragmatic agenda at the BRICS+ summits that there could be a critical impetus delivered to the South-South economic cooperation. In this respect, it is important that the aforementioned initiatives contain algorithms for scaling these achievements and agreements across the rest of the Global South / BRICS+ platform.


1 - Arapova 2019; Arapova, Lissovolik 2021.

2 - Лагутина 2022.

3 - Лексютина 2017.

4 - Larionova, Shelepov 2022.

5 - Hooijmaaijers 2022.

6 - Harry Dempsey, "Indonesia considers Opec-style cartel for battery metals," Financial Times, October 20, 2022, accessed March 16, 2023, https://www.ft.com/content/0990f663-19ae-4744-828f-1bd659697468.

7 - Vitaly Sokolov, "Mission Impossible: 'Gas Opec' Not Happening, Says Russian Deputy PM," Energy Intelligence, December 29, 2021, accessed March 16, 2023, https://www.energyintel.com/0000017e-05a9-d2ba-adfe-0da966110000.

8 - Lissovolik, Vinokurov 2019.

9 - Ibid.

References

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Lagutina, Maria L. "Regional Dimensions of BRICS Cooperation." Journal of International Analytics 13, no. 1 (2022): 66–82 [In Russian].

Лексютина, Я.В. Лидерство в БРИКС: прогнозы и реалии // Мировая экономика и международные

отношения. – 2017. – Том 61. – № 5. – С. 25–33. https:// doi.org/10.20542/0131-2227-2017-61-5-25-33.

Leksyutina, Yana. V. "Leadership in BRICS: Forecasts and Reality." World Economy and International Relations 61, no. 5 (2017): 25–33 [In Russian].

Arapova, Ekaterina Y. "The 'BRICS Plus' as the

first international platform connecting regional trade agreements." Asia-Pacific Social Science Review 19, no. 2 (June 2019): 30–46.

Arapova, Ekaterina Y, and Yaroslav D. Lissovolik. "BRICS: The Global South Responds to New Challenges (In the Context of China's BRICS Chairmanship)." SSRN Electronic Journal (2022). https://doi.org/10.2139/ ssrn.4301141.

Arapova, Ekaterina Y., and Yaroslav D. Lissovolik. "The BRICS Plus Cooperation in International Organizations: Prospects for Reshaping the Global Agenda." Asia-Pacific Social Science Review 21, no. 4 (December 2021): 192–206.

Duggan, Niall, Bas Hooijmaaijers, Marek Rewizorski, and Ekaterina Arapova. "Introduction: 'The BRICS, Global Governance, and Challenges for South–South Cooperation in a Post-Western World.'" International Political Science Review 43, no. 4 (2022): 469–80. https:// doi.org/10.1177/01925121211052211.

Hooijmaaijers, Bas. "China, the BRICS, and the Limitations of Reshaping Global Economic Governance." The Pacific Review 34, no. 1 (2021): 29–55. https://doi.org/ 10.1080/09512748.2019.1649298.

Hooijmaaijers, Bas. "The Internal and External Institutionalization of the BRICS Countries: The Case of the New Development Bank." International Political Science Review 43, no. 4 (2022): 481–494. https://doi. org/10.1177/01925121211024159.

Larionova, Marina, and John J. Kirton (eds.). BRICS and Global Governance. New York: Routledge, 2018. https://doi.org/10.4324/9781315569925.

Lagutina, Maria L. "BRICS in a World of Regions."

Third World Thematics: A TWQ Journal 4, no. 6 (2019): 442–458. https://doi.org/10.1080/23802014.2019.1643781.

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Rewizorski, 39–55. Cham: Springer International Publishing, 2015. https://doi.org/10.1007/978-3-319- 19099-0_4.

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512–530. https://doi.org/10.1177/01925121211035122.

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Lissovolik, Yaroslav, and Evgeny Vinokurov. "Extending BRICS to BRICS+: The Potential for Development Finance, Connectivity and Financial Stability." Area Development and Policy 4, no. 2 (2019): 117–133. https://doi.org/10.1080/237

92949.2018.1535246.

O'Neill, Jim. "Building Better Global Economic BRICS." Global Economics Paper, no. 6 (November 30, 2001).

Vazquez, Karin C. 2022. South-South Ideas: Catalyzing the Contribution of the New Development Bank and the Asian Infrastructure Investment Bank to the Sustainable Development Goals. United Nations Office for South- South Cooperation, 2022.

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Greece
Source: moderndiplomacy.eu

Meanwhile the downfall for us dollar remains work in progress. The US dollar is continuously facing backlash. Now Russia thinks that BRICS should do more. It has floated the idea of common currency. The first indication came in January when Russian foreign minister has issued the statement in which he says "Serious, self-respecting countries are well aware of what is at stake, and want to create their own mechanisms to ensure sustainable development. It is in this direction that have been voiced recently about the need to think about creating our own currencies within the framework of BRICS." This idea is now gathering steam. Reports say that they are working on a proposal which is likely to be presented at August that's when BRICS summit will be held in South Africa.

Background

BRICS is an acronym that stands for an association of five major emerging national economies: Brazil, Russia, India, China, and South Africa. The term BRIC was initially coined in 2001 by Jim O'Neill, an economist at Goldman Sachs, to refer to the four countries of Brazil, Russia, India, and China, which were expected to become dominant suppliers of manufactured goods, services, and raw materials by the mid-21st century. In 2010, South Africa was included in the group, and the acronym was changed to BRICS. The five countries are all members of the G-20, and together, they represent about 42% of the world's population, 23% of global GDP, and 17% of world trade. The BRICS countries cooperate in various areas, such as trade, investment, finance, and technology, and they hold summits annually to discuss issues of mutual interest. The BRICS countries have been exploring ways to challenge the dominance of the US dollar in international trade and finance. One of the ways they are doing this is by increasing the use of their own currencies in trade with each other. In 2014, the BRICS countries established the New Development Bank (NDB), which is aimed at providing an alternative source of funding for infrastructure projects in developing countries. The bank is capitalized with $100 billion, with each of the five member countries contributing an equal share of $20 billion. In addition, the BRICS countries have been pushing for reforms to the International Monetary Fund (IMF) and the World Bank to give emerging economies greater representation and voting power. They have also been calling for the creation of a new international reserve currency that would be less dependent on the US dollar.

Why the need to create a new currency?

Russia has been pushing the idea to create common currency among BRICS members since last year. Russian president backs the idea. Last year he said" The matter of creating the international reserve currency based on the basket of currencies of our countries is under review. Russia has its own reasons to push for this. It is under western sanctions, its access to global banking system has been limited, it also cannot use the Us dollars freely so it is pushing for a new global reserve currency and the other members of the BRICS also seem opened to the idea as they too wanted to challenge the dollars hegemony. A Russian lawmaker Alexander Babakov, the deputy chairman of Russia's state Duma which is the lower house of Russian parliament shared the way forward. Babakov in his statement highlighted the fact that India and Russia currently one of largest emerging economies in the world would both benefit from the creation of a common currency that could be used for payments, calling it the "most viable" route to take at this time. "New Delhi, Moscow should establish a new economic alliance with a new shared currency, which could be a digital ruble or Indian rupee," Babakov said. He further noted that China will also play a key role in the development of the common currency as it adds 1.4 billion more participants to the system.

The Russian lawmaker further stated that the transition to settlements in national currencies is the first step. The next one is to provide circulation of digital or any other form of fundamentally new currency in the nearest future. Some of this is already happening. For example, the settlement of trade in National currency. India has an agreement with Russia. It's called the Rupee-Rubble mechanism where India pays for Russian goods in rupees and Russia earns in Rubbles. They do this with the help of special Vostro accounts and this has led to a boost in bilateral trade. According to statistics, in 2022 India's trade with Russia touched the record which was valued at $30 billion dollars. This is belief to be an all-time high. Ofcourse the surge was fueled by oil purchases but the Russia has more expectations from India. It is banking on India for more support. Why the support? Infact Russian president Vladmir Putin has unveiled his view in foreign policy. The published new guidelines in Moscow a handbook for Russian diplomats says, Russia will continue to build up a particularly privileged strategic partnership with the Republic of India with a view to enhance and expand cooperation in all areas of mutually beneficial basis.

Russia has still a hope from China. The plan that the BRICS currency cannot materialize without help from India and China. Russia needs support from both of them and it's not going to be an easy. Even former Goldman Sachs chief economist Jim O'Neill, who coined the acronym BRIC, has called for the BRICS bloc to expand and challenge the dominance of the US dollar as a way to combat the destabilizing effects that dollar dominance has on their monetary policy. He wrote in an article published in the journal Global Policy. "The US dollar plays too dominant a role in global finance. Whenever the Federal Reserve Board has embarked on a period of tightening or, conversely, easing, the consequences for the value of the dollar and the knock-on effects have been dramatic. O'Neill sees dollar dominance as a burden for countries with dollar-denominated debt, as their monetary policy is destabilized by exchange rate fluctuations.

Conclusion:

The strength of the Russian ruble following harsh sanctions by the US and other European countries shows that there is a high level of opposition to the hegemony of the USD, and the BRICS countries see this as an opportunity to capitalize on the growing level of discontent toward the U.S.

Russia
Source: tass.com

The agreement on establishing the BRICS New Development Bank was reached on July 15, 2014 in Brazil's Fortaleza

SHANGHAI, April 20. /TASS/. The New Development Bank (NDB), created by the BRICS countries, placed three-year "green" bonds on international capital markets in the amount of $1.25 billion. This is according to a statement the bank's press service released on Thursday.

The bank indicated that these are the first "green" bonds issued by the NBR in US dollars. The issue was made as part of the $50 billion medium-term Eurobond program, which was registered by the bank in December 2019. Proceeds from the issuance of bonds will be used to finance or refinance relevant "green" projects, as provided for by the sustainable financing policy of the NDB.

"We are pleased with the strong investor reception and high quality orderbook achieved for our new $1.25 bln 3-year Green Bond. With this transaction, NDB has successfully re-tapped into the USD bond market. Our investors have demonstrated their solid confidence in NDB's credit, and our green and sustainable mandate. The Bank has a robust pipeline of green and sustainable projects in all our member countries to finance," NDB Vice President and CFO, Mr. Leslie Maasdorp said as quoted by the bank's press service.

The agreement on establishing the BRICS New Development Bank was reached on July 15, 2014 in Brazil's Fortaleza. The bank's starting capital was set at $100 bln. The Shanghai-headquartered bank has been set up to finance infrastructure projects and projects for sustainable development of BRICS and other developing countries. The bank previously received international credit ratings of "AA +" from Fitch Ratings and S&P Global Ratings, which allow it to effectively attract long-term funding in international and local capital markets. Over the years, the bank has approved almost 100 projects totaling $32.8 billion in support of such areas as transport, water supply, clean energy, digital and social infrastructure, and urban construction.

India
Source: thecradle.co

The member states of the BRICS group, which include Brazil, Russia, India, China, and South Africa, are expected to surpass the US-led G7 states in economic growth expectations, according to a Bloomberg report.

Bloomberg estimates that the BRICS nations will contribute 32.1 percent of global growth, compared to the G7's 29.9 percent, based on the most recent IMF figures.

According to the Bloomberg analysis, the G7 and BRICS nations each contributed equally to global economic growth in 2020. The western-led bloc's performance, however, has since declined. The G7 is expected to make up just 27.8 percent of the global economy by 2028, while BRICS will make up 35 percent.

"In total, 75 percent of global growth is expected to be concentrated in 20 countries and over half in the top four: China, India, the US, and Indonesia. While Group of Seven countries will comprise a smaller share, Germany, Japan, the United Kingdom, and France are seen among the top 10 contributors," Bloomberg reports.

The report comes as BRICS has been receiving more and more interest from other states wanting to join.

Russian Foreign Minister Sergei Lavrov has said that "more than a dozen" countries have shown interest in joining BRICS this year, including Algeria, Argentina, Bahrain, Bangladesh, Indonesia, Iran, Egypt, Mexico, Nigeria, Pakistan, Sudan, Syria, Türkiye, the United Arab Emirates, and Venezuela.

Other countries such as Saudi Arabia, Egypt, and Bangladesh have acquired equity in the BRICS' New Development Bank.

The US Dollar has become more unreliable for dollarized economies due to rising interest rates regulated by the US Federal Reserve (FED) and the bank's weaponization of the dollar through financial sanctions.

In addition, the west, especially Europe, is facing a growing energy crisis resulting from sanctions targeting Russian energy markets due to its invasion of Ukraine and the US sabotage of the Nordstream pipeline. Germany has also begun to shut down its remaining nuclear power plants.

In January, Lavrov said that the BRICS countries will discuss creating a common currency at the group's upcoming summit this August.

Referring to the current US dollar-dominated international financial system, which exposes participant countries to the threat of economic sanctions imposed by Washington, Lavrov claimed that "serious, self-respecting countries are well aware of what is at stake, see the incompetence of the 'masters' of the current international monetary and financial system, and want to create their own mechanisms to ensure sustainable development, which will be protected from outside dictates."

On 13 April, Brazil's President Ignacio Lula da Silva called on the member states of BRICS and countries that seek to become part of it to replace the dollar in foreign trade.

"Every night, I ask myself why all countries have to base their trade on the dollar," he said, adding the question, "Why can't we do trade based on our own currencies."