Information Bulletin of the BRICS Trade Union Forum
Issue 38.2018
2018.09.17 — 2018.09.23
International relations
Foreign policy in the context of BRICS
Why India Should Now Focus More On Latin American Region – Analysis (Почему Индия должна больше сосредоточиться на латиноамериканском регионе - анализ) / India, September, 2018
Keywords: expert_opinion, political_issues
Author: Pallav Aggarwal

In nearly two months, Prime Minister Narendra Modi will be visiting Argentina to attend the Group of Twenty (G20) meeting at Buenos Aires from 30 November. This will be Modi's second visit to the Latin America region, after his flamboyant visit of Brazil in 2014 to attend the BRICS Summit. This visit will provide an excellent opportunity for India to reach out to the region, which is often seen as the last frontier in India's foreign policy. New Delhi should not miss the occasion as India and Latin America can together become a formidable economic force if it acts now.

Latin American nations have long been seeking more diplomatic representation from India. During the prime ministership of Dr. Manmohan Singh, India had promised three new Indian diplomatic missions — in Dominican Republic, Ecuador and Uruguay — when Dr. Shashi Tharoor visited Dominican Republic as Minister of State for External Affairs in 2010. However, nothing has happened so far. With PM Modi's announcement of opening of 18 new embassies in the African region, it is time New Delhi should also look into the demands from the countries of Latin America — a region India has neglected so far, but need to improve its relationship with them at a time when it is aspiring to be a global power.

India-LAC relations

Both the LAC (Latin American and Caribbean) countries and India had found themselves in very different situations post-independence. LAC countries came under the influence of US hegemony, while India started the Non Aligned Movement and later signed a friendship treaty with Soviet Union. This had created a wedge between the two. Moreover, LAC countries did not act as a unit and were grappling with political instabilities where some countries showing capitalist tendencies while others leaning towards socialism. India's closed economy didn't help matters either, though there were some engagements on international fora like many LAC countries joining NAM eventually, India supporting LAC countries against US intervention in UN, etc. But this didn't address the deficit in the relationship. The only significant development was the visit of Indira Gandhi to the region in 1968, which she herself described as "voyage of discovery."

The end of the Cold War and the removal of American influence led to an end to decades of external interventions and regimes of dictatorship. With the emergence of democracies in the region, their focus shifted to economic fundamentals, regional integration and equitable development. This led to the emergence of the 'Brasilia Consensus.' India's opening up of its economy also created opportunity for the growth of trade and commerce. Bilateral trade has increased from a few hundred million in 1990s to $42 billion in 2013. According to the Economic Commission for Latin America and Caribbean (ECLAC), India and Latin America, together with China, are the world's new growth poles. Language and trade barriers are overcome by two dozen Indian IT companies working in the region operating 2,500 local staff.

However, there are still lots of potential areas for improvements in the relations between India and Latin America.

Areas of improvement

The region has a population of 620 million with a per capita income of $8,000. The pro poor policies adopted by most countries of the region has resulted in 60 million people climb out of poverty in the last two decades. This has presented with a very good opportunity to India to expand its exports. India's export of $12 billion has the potential to double itself in the next five years.

Latin America is gaining strategic significance in the area of energy security. Currently India sources 15% of its crude oil from LAC countries and in order to sustain its growing energy needs, its demand will increase in the future. Latin America has huge reserves of crude oil (20% of global reserves) and majority of exports goes to the US. But the dependence of the US on the region, post shale gas discovery, is decreasing. Latin America is looking towards India which has emerged as the second largest importer of crude oil from the region. Latin America is also an important partner in the India led International Solar Alliance.

The region can also contribute immensely towards food security as Latin America region is five times that of India and only has half as much population. India is importing pulses and oil seeds from many of African and Southeast Asian countries at very high costs. It can negotiate with South American countries that can give it an edge over existing suppliers in terms of prices. Latin America is also very rich in minerals such as copper, lithium, iron ore, gold and silver. It gives India an opportunity to increase investments for their extraction as well as for their imports at cheaper rates.

The region is very important for India in order to achieve its global ambitions such as in order to pursue its membership of the UNSC, the NSG and at various other negotiations like climate change, terrorism, trade, etc. For instance, during Vice President Venkaiah Naidu's trip to Guatemala in March this year, he has sought their support for India's membership to the UNSC. India is cooperating with Brazil at platforms like BRICS, IBSA which has provided an alternative platform for developing countries and reduce their dependence on existing institutions controlled by west.

Though the relations have lots of potential areas of improvement, still many challenges need to be overcome.


India's lack of uniform approach towards the region is one of the major challenges. India has good relations with countries like Brazil, Mexico, Chile but other countries lag behind. Rivalries between countries like Brazil and Argentina for regional dominance is also affecting India's relations with the region. For instance while India and Brazil are part of the G4 seeking the UNSC membership, Argentina is part of the coffee club (Uniting for consensus movement in opposition to the possible expansion of Security Souncil).

Though trade in commodities continues to grow and has reached $46 billion in 2012-13, but it is nothing compared to the Chinese trade of $250 billion with the region which is set to double itself in the next 10 years. Bilateral investments are relatively low. It is only four percent of India's total outward investment.

PM Narendra Modi's visit to Brazil for the BRICS summit in 2014 and his approach towards the region had created a lot of buzz. But not much change has occurred on the ground. Afterwards, out of the 33 countries of the LAC region, Modi has visited only Mexico in 2016. President Ram Nath Kovind's trip to Suriname and Cuba and Vice President Venkaiah Naidu's trip to Guatemala, Panama and Peru this year have tried to fill the gap. But much more dialogue needs to be conducted.

New Delhi should increase its diplomatic presence in the region, promote Latin American studies, invest in shipping industries, conclude PTAs (Preferential Trade Agreements) and FTAs (Free Trade Agreements) at the earliest with different countries. But most importantly, it should remove the psychological barriers that have stopped it from achieving full potential in the relationship.

*The author is a research intern at ORF.

Key political document to be signed at Russia-India summit in October — ambassador (Ключевой политический документ будет подписан на саммите Россия-Индия в октябре - посол) / Russia, September, 2018
Keywords: concluded_agreements, off_docs

NEW DELHI, September 19. /TASS/. A major political document will be approved at the summit meeting between Russian Prime Minister Vladimir Putin and Indian Prime Minister Narendra Modi in October, Russia's Ambassador in New Delhi Nikolai Kudryashov told reporters on Wednesday.

According to the diplomat, the document will be in the form of a joint declaration or statement.

"We hope that a major political document will be adopted and published. There [we] will enshrine our common views on global development, international law, multipolarity, political solutions to crises and non-application of sanctions, except those passed by the United Nations Security Council," the ambassador said.

The document will reflect the two countries' interest in the Shanghai Cooperation Organization (SCO), BRICS (comprising Brazil, Russia, India, China and South Africa) and RIC (comprising Russia, India and China), he added.

Earlier, India's External Affairs Minister Sushma Swaraj said that Putin's visit was expected on October 4. When asked by TASS about the president's plans to visit India, Kremlin Spokesman Dmitry Peskov promised to notify of them in due time.
Investment and Finance
Investment and finance in BRICS
OPINION: Tourism eyes BRIC billions and future growth (МНЕНИЕ: Туризм предвещает БРИКС миллиарды и будущий рост) / South Africa, September, 2018
Keywords: economic_challenges, social_issues
South Africa

CAPE TOWN – Hospitality marketing is complex, there are key source markets for South Africa with proven interest in the country as a destination, and there are also additional, growing markets, such as the BRIC (Brazil, Russia, India and China) nations, and also in a major markets that remain largely untapped such as Muslim-friendly tourism.

A recent PwC report into the South African tourism economy showcased just how valuable the contribution from BRIC countries is, and that we can look to expand on the opportunities this presents.

Tourist arrivals from the BRIC nations increased by 6.1 percent in 2017 – higher than the average of all tourist arrivals – to 275, 521 visitors. BRIC tourists accounted for 2.7 percent of all arrivals in South Africa in 2017, up from 2.6 percent in the preceding year.
Although this figure seems relatively modest, BRIC visitors spend about R3 billion a year while in South Africa, and for every R1 million spent by international tourists in South Africa, the industry contributes around eight jobs to the economy. The same R1m in expenditure translates into R1.28m in gross domestic product (GDP).

The easing of visa requirements for several BRIC countries over the past several years has added to increased arrivals, and Minister of Tourism Derek Hanekom's commitment to working with the Department of Home Affairs in continuing to ease the visa process, is promising.

Sending out the word

It's not a time when we can afford to sit back and hope for the best, there must be a proactive marketing drive that reaches trade shows, government delegations, tourism trade operators and consumers – across all fronts, we need to tap into those audiences that may become future visitors.

The writer says the primary reason BRIC visitors have for visiting South Africa is associated with business-related travel. File Photo: IOL

The big business of business travel

Currently, the primary reason BRIC visitors have for visiting SA is for business; around a third of tourist expenditure in South Africa is associated with business-related travel, with the remainder being leisure-related. Studies have shown that a positive experience in an attractive destination influences the likelihood that visitors will return for leisure purposes or recommend that destination for additional conferences by as much as 85 percent.

The key is in encouraging leisure and combination business//leisure (bleisure) travel. Targeting those travelling for business can lead directly to the growth of leisure travel. It's only natural that business travel is a leading factor in tourism from BRIC nations given those countries' interest in SA as a developing nation, and their willingness to invest in development programmes is something that should be leveraged.

Transport (26.5 percent) and accommodation (15 percent) accounted for the largest proportion of international tourist expenditure in South Africa during 2016. Tourists visiting South Africa contribute to the economy through the activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services.

In addition to the direct tourism economy benefiting, closely-related sectors such as the restaurant and retail industries are buoyed up by the contribution of the tourism rand. Wider afield, with new hotel developments and other infrastructural enhancements to cope with an influx of visitors, the construction industry and other related businesses all the way across the supply chain see value added.

Visitors from the BRIC nations supported an estimated 26 000 South African jobs in 2016, and that's important to note, since job sustainability is what will see us gaining momentum going forward. While other sectors such as mining and agriculture address the challenges before them, tourism has the capacity to support growth, and therefore employment, in a country where the spectre of unemployment threatens to destabilise our development plans.

What's fascinating about BRIC visitors is that they don't conform to preconceptions that they're after budget travel. Research has shown that among visitors from these countries, luxury tourism experiences are sought after, including cruises, private tours and even in exploring our jewellery and high fashion retail outlets. Our wine tasting and the culinary scene is third on the list of most-enjoyed experiences, and South Africa has a world-class offering in that regard.

It's also been shown that prior to visiting, visitors understand very little about what's on offer. Their knowledge of SA may be limited to awareness of Nelson Mandela or our international sport teams, but beyond that, our reputation is limited to Cape Town being a pretty environment and that there are game parks with lions, elephants and rhinos. An integrated marketing campaign can drive more awareness about everything from our cultural tourism offering to our widely-varied natural environment. It's possible for all tastes to be satisfied.

These developing nations have much in common with SA, in the sense that we're all coming to terms with our global footprint and finding out more about what's on offer. As we develop a more structured middle class, we'll find that more of our people have the means to explore, and that's an opportunity that shouldn't be overlooked, but embraced – market to those consumers where they are right now, and give them an appetite for travel.

Enver Duminy is chief executive of Cape Town Tourism.

The views expressed here are not necessarily those of Independent Media.
Defence deals worth $ 8 bn will be on agenda of the India-Russia talks next month (Оборонные сделки на сумму 8 млрд долларов будут включены в повестку дня переговоров между Индией и Россией в следующем месяце) / India, September, 2018
Keywords: national_security, investments

Defence deals worth more than $ 8 bn are expected to be inked next month when the annual summit of India-Russia takes place in New Delhi.

Sources confirmed to FE that, "Besides the $ 2.2 bn deal for Frigates of Project 1135-6 frigates for the Indian Navy, the $ 5.5 bn S-400 Triumf advanced air defence missile system and the $1-bn Kamov-226 helicopters will be part of the agenda when Prime Minister Narendra Modi and the Russian President Vladmir Putin meet in New Delhi, next month."

Progress report will be shared on the 140 Kamov-226 helicopters, the joint venture for which was inked at the BRICS summit in Goa in 2016, and are to be built in India as part of 'Make in India' initiative. Russian government firm Rostec Corporation has a 49.5% stake and state-owned Hindustan Aeronautics (HAL) has a 50.5 % stake.

As reported earlier, due to US-related sanctions imposed on Russia, payments could run into problems and these are issues that will be discussed at both at delegation as well as bilateral talks between the two countries.

"Russia has expressed its keenness to invest in India in collaboration with the central government, especially in manufacturing spare parts of aircraft and making defence planes."

Under the Project 1135-6 frigates for the Indian Navy, Moscow and New Delhi are looking at the possibility of transporting the hulls of the frigates, currently located at the Yantar shipyards in Kaliningrad Oblast, to the Goa shipyard which has been nominated for this project by the government.

The S-400 Triumf advanced air defence missile system which was expected to be stalled due to Washington's Countering America's Adversaries Through Sanctions Act (CAATSA), is expected to be inked soon.

On July 1, 2018 the Indian Defense Acquisition Council (DAC) cleared the $5.5 billion agreement to purchase S-400 air defense missile systems from Russia with minor changes. The deal gained preliminary approval from the DAC in 2016.

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Towards An Open World Economy (На пути к открытой мировой экономике) / South Africa, September, 2018
Keywords: expert_opinion, economic_challenges, trade_relations
South Africa

Analysts predict BRICS could become as big as the Group 7 by 2027. Can the BRICS nations effectively come together promoting inclusiveness, trade and technological collaboration?

The recurring question at the three-day BRICS summit in July, which brought some of the planet's most powerful leaders to Africa's richest square mile Sandton, was the importance of the Fourth Industrial Revolution (4IR) when it comes to inter-trade. So what happens next?

The 4IR, like the three revolutions preceding it, has disrupted economies and societies around the globe. In many instances, developing countries have been left behind, perpetuating the exclusion of the past rooted in colonialism and exploitation.

The leaders of Brazil, Russia, India, China and South Africa (BRICS), who are aware of the enormous hurdles, used the gathering in Johannesburg to issue a clarion call for united and concerted action for the impending revolution.

Host president Cyril Ramaphosa of South Africa – which is the current chair of BRICS – said the 4IR presents the world with opportunities and should be embraced.

"As the BRICS forum, we can neither ignore, nor take for-granted, the reality that is the Fourth Industrial Revolution and the impact that it will have on the global economy. There is no area of economic activity that is immune from technological disruption.

"It [The Fourth Industrial Revolution] has the potential to solve many of the social problems we face, by better equipping us to combat disease, hunger and environmental degradation."

The 10th summit, hosted in South Africa for a second time, was held from July 25 to 27. It brought together a galaxy of delegates, government officials, business people and the media at the Sandton Convention Centre.

Roads were barricaded amid heavy police and military presence, with strict no-flying zones applied as Vladimir Putin and Xi Jinping, among some of the world's most reclusive leaders, spent a night or two under African skies.

Under the theme, 'BRICS in Africa: collaboration for inclusive growth and shared prosperity in the 4th Industrial Revolution', the focus of the summit was issues and solutions to achieve inclusive growth through collaboration.

Technology, big data and innovation were amongst the most operative words. Ramaphosa set the agenda by highlighting the role technology will play years from now.

"The technologies of the Fourth Industrial Revolution provide developing and emerging economies with the opportunity to leapfrog the technologies of the preceding revolutions.

"It aims to translate the vision of the second decade of BRICS cooperation into reality through deepened cooperation on industrialization, innovation, inclusiveness and investment," he said.

India's Prime minister, Narendra Modi, emphasized the need for shared policies and collaboration in order to unlock the opportunities of the future.

But, he added, the consequences of the revolution may be difficult to predict.

"Whatever happens will be far-reaching. We need to discuss how we will prepare for it. Traditionally, manufacturing will continue being a source of jobs for our youth. We need to make changes in our approach and make sure that schools prepare our youth for the changes," said Modi.

The BRICS Youth Forum started off as an idea during a meeting between the heads of the five states in South Africa in 2014.

Encouraging dialogue with regard to youth policies and employment, the forum has notched some progress.

South Africa's Minister of Higher Education and Training, Naledi Pandor, said the youth forum consolidated a set of messages that was to be sent to the BRICS leaders.

"The youth have begun to speak, they believe BRICS should be a solid formation and they have ideas on how the youth should collaborate to ensure that the BRICS idea is not just the idea of our generation but one that exists in perpetuity," she said.

As argued by the South African Minister of Science and Technology, Mmamoloko Kubayi-Ngubane, collaboration between the youth from the five states will take the form of what she called "young researchers' exchange".

For Kubayi-Ngubane,"the inclusion of young people especially with regard to new tech and innovations should be prioritized as much as the formal trade collaboration.

"Innovation [is] becoming the cornerstone for our economy going forward," she told FORBES AFRICA.

The BRICS countries, which account for 40% of the world's population, have not been laggards with regard to technological advancements, with the World Economic Forum noting in 2016 that four of them – South Africa, Brazil, China and Russia – are in the top 100 list of countries with the latest technologies.

The President of BRICS' New Development Bank, K V Kamath, says that some of their big investments "include power, port and renewable power".

Analysts predict that BRICS could become as influential as the Group 7 (the USA, Japan, Germany, France, Britain, Canada and Italy) by 2027.

Therefore, the collaboration of BRICS nations is a key strategy to strengthen not just political powers but technological capabilities as well.

However, this collaboration calls for the redefinition of borders and going against the norms of sovereignty.

During the summit, emphasis was placed on establishing open economies. This would help foster easier trade between BRICS countries.

Within the hallways of the convention center, presidents Jinping and Ramaphosa shared a joke as they walked side by side towards the stage. They had caught up earlier.

China has dominated the trade relationship with South Africa, with some analysts going so far as to suggest that the world's second largest economy is dumping goods in South Africa.

Dressed in black and a blue tie, the Chinese president said he was delighted to visit the Rainbow Nation once again and used his opening address to drive home a message clearly directed at US President Donald Trump.

"We BRICS countries should firmly promote an open world economy, be resolute in rejecting unilateralism and protectionism, promote trade and investment liberalization and facilitation, and jointly steer the global economy toward greater openness, inclusiveness, balanced growth and win-win outcomes for all," he told the 1,000-plus business leaders present.

Among those present at the summit was Alan Mukoki, CEO of the South African Chamber of Commerce and Industry, which groups approximately 20,000 small, medium and large enterprises.

Mukoki said as desirable as having open economies among the BRICS countries is, it may have negative implications for those members not as developed as the others.

"You need to manage those things correctly, you need to say 'let's all start on an equal footing'. We start together and then when we are equal, we can then go and race an open race," he told FORBES AFRICA.

"Even though I look fit, you can't say that I should run the same race as Usain Bolt. It is not going to happen…otherwise we will destroy and decimate the economies of the region. South Africa's economy cannot be big if the economies of the region are actually small," he said.

Mukoki said the right mechanisms and strategies should be put in place in order for each member state to compete equally.

Others however remain hopeful.

South Africa's Minister of Trade and Industry, Rob Davies, chose his words carefully when describing what South Africa is looking for regarding trade and investment in an open economy.

"It's all about building regional value chains allowing us to up the value chain and become more sophisticated producers of industrial products and more value-added products," he told FORBES AFRICA.

For South Africa, the involvement in BRICS is an opportunity to strengthen intra-Africa ties. A number of countries were invited to an outreach program of the BRICS summit, including Ethiopia, Angola, Zambia, Namibia, Senegal, Jamaica, Gabon, Togo, Uganda and Rwanda. Each presented opportunities to deepen their partnerships with BRICS countries.

"BRICS is not in competition with anyone, BRICS seeks to work with the entire global community for the betterment of humankind," said Anil Sooklal, ambassador for BRICS, to FORBES AFRICA.

"The summit is not the end, the summit is the beginning of a process."

– By Gypseenia Lion and Karen Mwendera
BRICS bank 'successfully implements' projects worth $5.7 billion (Банк БРИКС успешно реализует проекты на сумму 5,7 млрд долларов) / Russia, September, 2018
Keywords: investments, ndb

The infrastructure bank run by developing BRICS countries has been successfully implementing its projects, according to its senior manager.

"We have 23 projects approved for all BRICS countries. Their total cost is $5.7 billion. By the end of the year, I think another $1.5 billion will be added. Next year, we plan to expand projects to somewhere around $7.5 billion,"
BRICS New Development Bank Vice President Vladimir Kazbekov told TASS news agency.

According to Kazbekov, the bank has received a AA+ rating from Standard & Poor's and Fitch agencies, which is enough to confidently enter the international financial market with its debt instruments and receive funding from international investors at low interest rates.

The bank's capital is being boosted every year. "Next year, the plan is $7.5 billion. And according to the strategy, in my opinion, by 2022 we should have about $44.5 billion in capital. Our capital is being formed quite on schedule, Russia and China are contributing ahead of time,"he said.

The BRICS group, which includes Brazil, Russia, India, China and South Africa is home to 43 percent of the world's population. Four of the top BRICS economies are ranked in the world's top 15 by GDP size, namely China (2nd), India (6th), Brazil (8th) and Russia (11th).

The bank's capital is up to $100 billion and it says all members of the United Nations could join it. However, the BRICS nations can never have less than 55 percent of the voting power.
NDB Board of Directors Approves Three Projects in India and Russia with Loans Aggregating USD 825 Million and Establishment of Bond Programme in South African Debt Capital Market (Совет директоров НБР одобрил три проекта в Индии и России с кредитами, объединяющими 825 миллионов долларов США и создание программы облигаций на южноафриканском рынке долгового капитала) / China, September, 2018
Keywords: ndb, concluded_agreements, investments

On 18 September 2018, the 16th Meeting of the Board of Directors (Board) of the New Development Bank was held in Shanghai. At the Meeting, the Board approved three infrastructure and sustainable development projects in India and Russia with loans aggregating USD 825 million.

The NDB will provide a loan of USD 350 million to the Government of the Republic of India for Madhya Pradesh Major District Roads Project II. The loan will be used by the Government for on-lending to the State Government of Madhya Pradesh for rehabilitating major district roads with a total length of about 2,000 km to improve connectivity of the rural interior with the national and state highway networks. The Project will improve road conditions and enhance transport capacity, which will lead to benefits of less travel time, reduced vehicles operating cost, reduced emissions, and improved road safety. The positive impacts of the Project also include promoting inclusive development of the rural communities of the State of Madhya Pradesh and stimulating regional economic development.

The NDB will also provide a loan of USD 175 million to the Government of the Republic of India for Madhya Pradesh Bridges Project. The objective of the Project is to tackle the weak links of the road network, the bridges of Madhya Pradesh State, to realize the full benefits of upgrading the state highways and major districts roads, through constructing and upgrading about 350 bridges in the State of Madhya Pradesh. The positive impacts of the project include promoting inclusive development of the rural communities of the State of Madhya Pradesh and stimulating regional economic development through improved connectivity, enhanced accessibility and increased job opportunities.

The Board approved a non-sovereign loan of USD 300 million to SIBUR Holding, PJSC for environmentally sustainable infrastructure development related to ZapSibNefteKhim project. NDB will provide financing including reimbursement of expenses for construction of utilities including water treatment facilities, transport and logistics infrastructure.

The Board approved the establishment of a Bond Programme of up to ZAR 10 billion in the South Africa Debt Capital Market.

The Board also considered a Policy on Sovereign Guaranteed Projects in Non-Member countries and agreed to submit the Policy to the Board of Governors for approval. The Board approved amendments to the Policy on Transactions without Sovereign Guarantee as well as the Board Governance Structure.

On September 17, 2018 a meeting of the Audit, Risk and Compliance Committee ("ARC") of the Board of Directors took place. The ARC considered the Quarterly Audited Financial Statements for the period ended June 30, 2018 as well as the Quarterly Unaudited Financial Statement for the Project Preparation Fund for the period ended June 30, 2018. Risk Reports for the period ended June 20, 2018 were also considered as well as the Internal Audit Report and Compliance Update.

A meeting of the Budget, Human Resources and Compensation Committee ("BHRC") of the Board of Directors also took place on 17 September 2018. The BHRC considered the Budget Utilisation Report, Revised Organisation Chart and was provided an update on the recruitment process and compensation related matters.

Background Information

The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. To fulfill its purpose, the NDB will support public or private projects through loans, guarantees, equity participation and other financial instruments. According to the NDB's General Strategy, sustainable infrastructure development is at the core of the Bank's operational strategy for 2017-2021. In August 2018, the NDB received AA+ long-term issuer credit ratings from S&P and Fitch.
Political Events
Political events in the public life of BRICS
South Africa's Ramaphosa unveils stimulus plan (Президент ЮАР Рамафоса обнародовал план стимулирования экономики) / South Africa, September, 2018
Keywords: cyril_ramaphosa, economic_challenges
South Africa

South African President Cyril Ramaphosa on Friday unveiled his stimulus and recovery plan to boost economic growth after the economy entered a technical recession in the first half of this year.

"Fellow South Africans, it is generally agreed that in order for our economy to grow at a rate that will lead to job creation on a meaningful scale we need to significantly increase the level of investment," said Ramaphosa in Pretoria.

In recent months, structural weaknesses such as a low skilled workforce, inefficient state-owned enterprises and a lack of trust between government and the private sector due to "state capture" have been compounded by a higher oil price, weaker sentiment towards emerging markets, and global trade tensions.

The plan focuses on youth, women and small businesses, but was short on detail and seemed to lack urgency as the timelines were given in terms of months, not days.

For instance within the next few months, the government will review the list of countries requiring visas, an e-visa pilot will be introduced and visa requirements for highly-skilled foreigners will be revised.

In order to reduce the cost of doing business and to boost exports, the government will review various administered prices including electricity, port and rail tariffs, but once again the timeline is months.

On mining, Ramaphosa said the Cabinet has approved the revised mining charter which should provide "certainty" to investors, but as yet this revised mining charter is not in the public domain. The previous draft was rejected by the Minerals Council as the proposed 10% free carry in new projects would kill new investment in the industry.

"It is imperative that South Africa restores investment and exploration levels in the mining sector as mining has significant potential to drive long term growth, enhance exports and increase job creation," he said.

Another area with "huge potential" for job creation is in agriculture, the president said, but farm land prices have fallen by more than 30% this year in response to the proposed Constitutional change that would allow expropriation without compensation.

The private sector has been invited to join with the government for a new infrastructure fund, with banks, insurance companies and pensions funds said to be 'hugely excited' about it after Statistics South Africa reported earlier this year that public sector capital expenditure spending had dropped in nominal terms in 2017 for the first time since 2010 with a 4.3 per cent drop.

Ramaphosa said roads, schools, and public transport were some of the areas set to benefit from the renewed focus on driving infrastructure spend.

Professor Raymond Parsons from the North West University Business School said the plan was a step in the right direction.

"Given the constraints under which any economic stimulus package must now be prepared in South Africa, what was announced today by President Ramaphosa is a necessary step in the right direction of wanting to address certain key issues which have been badly damaging SA's economic performance," Parsons said.

It could help to move South Africa out of its recession talk and underpin prospects for modest positive growth in 2018. Much of it emphasizes better planning and improved use of existing resources in order to boost growth and employment, especially investment in agriculture, townships and infrastructure.

This should be welcomed but details will only be available in the Medium Term Budget Policy Statement on October 24.

The private sector

There seems to be a larger role being assigned to the private sector and in reducing uncertainty in sectors such as mining, tourism and land reform.

Although the package shows renewed political determination the success of yet another economic 'plan' will depend on the efficacy of President Ramaphosa's restructured implementation processes, as well as the extent to which the latest package reduces the 'trust deficit' between the public and private sectors.

The package will succeed to the extent it ultimately helps to rebuild consumer and business confidence, which time will tell," Parsons told The BRICS Post.

Opposition political parties were not enthused about the stimulus plan.

"The 'stimulus and recovery plan' is aimed at speeding up the implementation of existing economic policies, rather than introducing new economic policies, such as exempting small businesses employing fewer than 250 employees from complying with restrictive labour legislation, other than the basic conditions of employment, in South Africa," official opposition Democratic Alliance (DA) Shadow Minister of Finance David Maynier said.

"In the end, the 'stimulus and recovery plan' is likely to have a modest effect on economic growth and job creation, and it is likely to be compromised by reckless economic policy proposals being considered, such as the formation of state banks, land expropriation without compensation and the nationalisation of the South African Reserve Bank," Maynier added.

The populist socialist Economic Freedom Fighters party was equally scathing in its reaction.

"Ramaphosa has announced nothing new, but an attempt to repackage old neo-liberal economic plans that have proven futile; they have failed to grow the economy and create sustainable jobs.

The stimulus package has nothing to do with the overall structural changes of the economy.

The promise of radical economic transformation which he made noises about prior to being elected President has been compromised at the table of cosmetic changes to an economy whose essence is the marginalisation of the black majority from the country's wealth," the Economic Freedom Fighters said.

Western Cape MEC of Economic Opportunities Alan Winde, who is the DA candidate for the premiership of the Western Cape in 2019, welcomed the announcement of a friendlier visa regime as the Western Cape is one of the country's tourist hotspots.

"The tightening of the visa regime in 2014 had severe consequences for our tourism sector, a major income provider for residents in our region. The hospitality sector reported widespread cancellations, with travel from some markets, such as China, being particularly constrained," he said.

The Tourism 2017 report by Statistics South Africa showed that although there was a strong rebound in 2016 and 2017, the country was still suffering from the misguided imposition of more stringent visa requirements in October 2014, as the number of overseas tourists from South Africa's BRICS partners, remained below their 2013 levels.

The visa requirements were relaxed and the capacity to process them was improved in 2015 and 2016 in a belated attempt to mitigate the effects on the tourism industry.

As ten tourists are estimated to create one job, the 84 110 drop in BRIC tourist numbers from 359,429 in 2013 to 275,319 in 2017 has cost some 8,000 jobs at a time when the unemployment rate exceeds 27 per cent.

Helmo Preuss in Tsitsikamma, South Africa for The BRICS Post
Public Lecture by Deputy Minister Reginah Mhaule on the Outcomes of the 10th BRICS Johannesburg Summit at the Sol Plaatje University, Kimberley, Northern Cape, 19 September 2018 (Публичная лекция заместителя министра Регины Мауле по итогам 10-го саммита БРИКС в Йоханнесбурге в Университете Сол Плаатье, Кимберли, Северный Кейп, 19 сентября 2018 года) / South Africa, September, 2018
Keywords: speech, summit
South Africa

Our Programme Director, Prof Mary Jean Baxen,
Prof Collin Miruka,
Prof Patrick Fitzgerald,
Members of Senate and Council present,
MEC of Education, Ms Barbara Bartlett and other members of Exco present,
Academics and Staff,
Provincial Chairperson of the ANC, Dr Zamani Saul, the leadership and all other political parties present,
President of SRC, Mr Zolani Jack, Members of the SRC and the entire student leadership present,
Officials present here,
Esteemed guests,

I am honoured and of course delighted to interact with you today, particularly because of our focus of engagement which is the outcomes of the recently concluded 10th BRICS Summit which was held in Johannesburg in July this year. You will recall that before the commencement of the Summit, we criss-crossed the length and breadth of our country presenting and informing our people what our partnership within the BRICS entails. We further focused on ensuring that South Africans understands the importance we attach to the BRICS formation and the benefits we derive thereof.

In this context we made a commitment to get back to the people and report on the outcomes of the Summit. Certainly this is our first public lecture of this kind which is held at the university named after the first Secretary General of the South African Native National Congress, later named African National Congress (ANC) and also the first Black South African to write a novel, Solomon Tshekisho Plaatje.

The summit took place during the 10th anniversary of the BRICS formation which coincided with a very significant year where South Africa celebrates the centenary of the two giants in our liberation, namely Mama Albertina Sisulu and former President Tata Nelson Mandela. Whose contribution shape our current democratic dispensation and internationalist character.

The Summit indeed afforded us a fitting platform to again reflect on the important pillars of our foreign policy, particularly our cooperation with countries of the South. Tata Madiba alluded to this in his inaugural State of the Nation Address (SONA) on 24 May 1994 when he said: "We will also be looking very closely at the question of enhancing South-South cooperation in general as part of the effort to expand our economic links with the rest of the world."

I can inform you that it is in this context that South Africa accepted the invitation to join BRICS in 2011. We believe that economic cooperation remains an important instrument to pursue our national interests and improve the living conditions of our people while contributing to the well-being of our fellow Africans and all those in communities across our nations.

Having said that, I would like to take an opportunity to briefly reflect on the history of our membership to the BRICS formation before outlining the outcomes of the summit and the benefits we have leveraged from the opportunities it continues to provide.

Ladies and Gentlemen,

It must be public knowledge that our foreign policy outlook and continued focus on strengthening relations with formations and people of the South is largely informed by our history as well as identity. We however must emphasise that we are Africans who share historic commonalities with countries of the Global South which includes amongst others, the struggle against apartheid and colonialism. We also share common aspirations in regard to the kind of the world we wish to live in and the shared future which can benefit humanity.

Similarly, the BRICS formation in this context signifies a long standing tradition of solidarity that was firmly established 63 years ago, in April 1955. This was when countries of Asia and Africa met at the historic Bandung Conference in the emerging Cold War era situation of which the meeting's significance and outcomes are well documented. I must however remind you that the Bandung Conference resulted in the formation of the Non-Aligned Movement (NAM) in later years.

Amid pressure from the Cold War bipolarisation, those countries were able to concertedly affirm that they would choose neither the East nor the West, but pursue their own path and strategy under the "Bandung Principles" of the Afro-Asia solidarity. For us it is important to recall that South Africa was at the Bandung Conference, represented by selected ANC leaders.

Subsequently, with the attainment of our democracy, it is again common knowledge that South Africa shared the same socio-economic and underdeveloped challenges as countries of the Global South. To a certain extent our challenges continue to be compounded by an international system that perpetuates the marginalisation of the Global South and the poor in every corner of the globe.

The BRICS formation has demonstrated potential to change the world. This is possible considering that the BRICS formation has joined an array of inter-regional bodies that contribute to global diffusion of power. Of course we joined the BRICS formation to advance our foreign policy objectives that are predicated on our domestic interests and the promotion of the African Agenda.

Esteemed Guests,

We can, once again, underscore that our 2018 Chairship of the BRICS Forum has been guided by our commitment to ensure that the African Agenda, as well as that of the Global South, remain on the Agenda of BRICS, particularly as it relates to garnering BRICS support for industrialisation and infrastructure development. We have sought to harmonise policies adopted in regional and international fora with those pursued in BRICS, more notably the African Union's Agenda 2063 and the United Nations 2030 Agenda for Sustainable Development.

The benefits that South Africa and the African derive from our membership of the BRICS are both practical and tangible. A case in point is that South Africa-BRIC trade has grown from $28bn in 2010 to $35bn in 2017.

Additionally the establishment and operalisation of the BRICS New Development Bank as well as the Africa Regional Centre (ARC), which we proudly host in Johannesburg, has brought closer the alternative project funding institution to our people and the continent.

Just as a reminder, infrastructure and sustainable development project funding by the BRICS bank will also be extended to countries that are not members of the formation, and therefore African countries will benefit a great deal. I can say without any fear of contradiction that the ARC will enable us to identify projects that will enhance economic connectivity and bolster intra-Africa trade, among others.

It must further be noted that we witnessed with pride the first tranche of NDB project loans disbursed in 2016. I recall that this trench included a project in renewable energy amounting to 180 million USD to our own country. This has enabled us to stabilize our electricity grid supply and keep the much-needed jobs through continued operations in factories. There are those who are already saying the NDB could be the new World Bank, as far as I know this was not the objective of its creation. In May 2018 South Africa was granted an additional loan of USD 200 million by the NDB for expansion of the Durban port. It is worth noting that thus far the NDB has disbursed loans totaling USD 5.1 billion.

Programme Director,

Let me at this juncture turn my focus to some specific outcomes of the 2018 10th BRICS Summit. South Africa in its capacity as Chair of the BRICS grouping hosted the Johannesburg Summit on the 25-27 July 2018, in Sandton, Johannesburg, under the theme, "BRICS in Africa: Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution".

President Ramaphosa in his opening address to the Summit expanded on the theme, further stating, quantum leaps in technology and innovation present enormous opportunities for growth, development and human progress. The president also indicated that the surge in innovation has the potential to dramatically improve productivity and to place entire countries on a new trajectory of prosperity. It has the potential to solve many of the social problems we face, by better equipping us to combat disease, hunger and environmental degradation.

Esteemed guests,

A report by the World Economic Forum predicts that by 2020, which is roughly two years from now, three most important skills for an employee will be complex problem-solving, critical thinking and creativity. Admittedly this require emerging markets to institute innovative programmes to re-skill the current workforce to be able to match the advances in technology. This of course will be achieved within the context of BRICS and also in cooperation with other formation across the globe.

In line with the theme, we informed our guests that, as a country, we have already committed to establish a Digital Industrial Revolution Commission. It will include the private sector and civil society, among others. In this regard, the BRICS Summit has adopted the Johannesburg declaration and an Action Plan based on this thematic focus and other pressing international issues. The BRICS Heads of State also presided over the signing of a couple of memorandums of understanding.

During deliberations of the Annual Meeting of the BRICS Business Council, we recognised the achievements and progress the Council had made over the past year and analysed the opportunities and challenges facing the emerging economies. The five BRICS countries reinforced their ongoing commitment and agreed on the importance of ensuring greater economic, trade and investment ties amongst the BRICS countries.

The three major focus areas identified during South Africa's BRICS Business Council's rotating chairmanship were:

1. Youth – Fostering Entrepreneurship
2. The Digital Economy – Skills Development for the 4th Industrial Revolution
3. Agriculture and Food Security

Perhaps I must state that, flowing from the above and our commitment to the Establishment of the BRICS Credit Rating Agency, there is growing global interests in how we manage the BRICS affairs. Just a few week ago, two of the 'Big Three' rating agencies has given the BRICS New Development Bank positive ratings, Standard & Poor's (S&P) has assigned its AA+ long-term and A1+ short-term issuer ratings with a stable outlook while Fitch assigned the NDB a long-term issuer default rating (IDR) of AA+ with a stable outlook and a short-term IDR of F1+. This is a positive development in that it provides the NDB with a unique opportunity to establish itself as an important player in the multilateral development finance space. This further negates the perception of naysayers that the BRICS grouping lacks the required clout to influence global power dynamics.

Also, the Council reviewed the major work and achievements during South Africa's presidency in 2018 and listened to the reports presented by the nine working groups, on energy and the green economy, financial services, deregulation, manufacturing, infrastructure, agribusiness, skills development, regional aviation and the digital economy.

Further moves towards enhancing economic development came in the form of the establishment of a BRICS Tourism Track and the BRICS Women's Initiative.

On a separate matter, a proposal was made to the Summit, arising from deliberations from the 2018 BRICS Youth Summit, to consider the establishment of a Youth Working Group, as the 10th Working Group of the Council. This matter is receiving the attention it deserves.

Ladies and Gentlemen,

Let me underscore that all the BRICS partners utilised the summit occasion to recommit to the pursuit of a rules-based, transparent, non-discriminatory, open and inclusive multilateral trading system, as embodied in the World Trade Organisation (WTO). Importantly, this commitment of the BRICS Leaders was also strongly supported by the BRICS Outreach partners.

This brings me to an important aspect of our hosting. We convened, on the margins of the summit, the BRICS-Africa Outreach Dialogue and the BRICS Plus Initiative. Thus the following Heads of State/Government attended the Summit: Rwanda, Ethiopia, Angola, Zambia, Namibia, Senegal, Gabon, Togo, Uganda, Jamaica, Argentina, Turkey, Botswana, DRC, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Seychelles, Tanzania and Zimbabwe.

I must indicate that both the Outreach Dialogue and the Initiative were held simultaneously to reflect the broad partnerships BRICS has stimulated with the African continent and the Global South.

Key outcomes of the Johannesburg Declaration, included amongst others: establishment of a BRICS Working Group on the 4th Industrial Revolution through the BRICS Partnership on New Industrial Revolution (PartNIR) and its Advisory Group consisting of respective representatives of BRICS Ministries of Industry; BRICS Networks of Science Parks, Technology Business Incubators and Small and Medium-sized Enterprises were established to further support initiatives of the 4th Industrial Revolution; BRICS Vaccine Centre was established here in South Africa.

The declaration, which was reached to the principles of consensus further committed to the principals of mutual respects, sovereignty, equality, democracy, inclusiveness and strengthened collaboration in key subthemes; namely: Strengthening multilateralism, reforming global governance and addressing common challenges; Strengthening and consolidation BRICS cooperation in International peace and Security; BRICS partnership for global economic recovery, reform of financial and economic global governance institutions, and the Forth Industrial Revolution; and People to People Cooperation.

Ladies and Gentlemen,

In conclusion, allow me to turn my attention to education as a matter that received a focused attention of the summit. Our leaders agreed that there is a need to develop an outcome based education that will assist us in meeting the developmental challenges brought by the Fourth Industrial Revolution. In this vein the BRICS Heads of State/Governments reaffirmed the importance of higher education exchange for BRICS and called for a network of universities across the BRICS countries to collaborate and exchange knowledge and research experience.

Again, I am alluding to this so that the Institution we visiting today, knows that it also has a role to play in the development of the BRICS educational Programme. The BRICS University Network is therefore an important structure that will undertake the research that is needed to inform the overall BRICS collaboration and how it must evolve.

There are pockets of excellence in all our universities and our goal should be to benefit all.


World of work
Social policy, trade unions, actions
NATO and BRICS: The Start of The New Digital Race (НАТО и БРИКС: начало новой цифровой гонки) / Russia, September, 2018
Keywords: political_issues, digital

Progress can be stopped neither by a ban nor by limits. Despite the yet undefined legal status of virtual assets the Cabinet of Ministers of India has approved the research in the sphere of the distributed ledger technology. Moreover, the Memorandum of Understanding was signed within the organization of the BRICS Economic Cooperation.

The competition between the economic and military-political blocks continues exists not only in the sphere of new weapons systems development but also in the high-tech economy area.

On the part of India, the state Exim Bank will participate in the research. China, Brazil, Russia, and South Africa are represented by the Chinese Development Bank, the National Department of Economic Development of Brazil, Vnesheconombank and the Development Bank of South Africa respectively. Joint research should help countries better adapt the technology of decentralized databases to the needs of national financial systems, as well as to the public sector of the economy.

Meanwhile, each country is working its own way to introduce modern digital solutions.

For example, China is creating a national standard for the operation of distributed ledgers and applications to them. The document will contain several applications, including the rules of the decentralized platform for state organizations and for business.

The Central Bank of Brazil has launched a distributed ledger for the fast and reliable exchange of information between regulators. Along with the Central Bank, the Securities Commission, the Office of Private Insurance and the National Bureau of Pension Funds will also use the service.

The Central Bank of Russia has recently conducted a trial ICO. Successful one, according to the management. In addition, the state corporation Rostech has signed the agreement with one of the national companies-operators of the distributed ledger to create a project office for the implementation of ideas within the Digital Russia Program. The cost of the contract is $2 million.

The Central Bank of South Africa has also successfully tested a decentralized system of the interbank information exchange. According to a press release, the system will store information about banks' balances.

So, gradually, each of the states, despite the restrictions and bans in some countries and the undefined legal status of virtual exchange technologies in others, is studying a new digital reality and making the first, not always confident steps. Time will pass, and the project of a unified digital currency for the BRICS countries (previously, a project of the fiat payment system was considered) will look not that fantasy. The exchange of payments can accelerate several-fold.

At the same time, NATO countries are developing solutions based on a distributed ledger for the military industry. First of all, we are talking about logistics and military finance. It is expected that such services will be able to monitor military supplies from the producer to the consumer better, and also to find the optimal routes for troops' movements.

Moreover, the US Department of Defense, through the Defense Advanced Research Agency, has requested the development of a secure messaging system based on the DLT technology. So far, nothing is known about the results of the contest, but, most likely, they already exist.

In the 40s-90s of the last century, the Cold War and the Arms Race resulted not only in the dissociation of the mankind but also in a real technological breakthrough. We owe the man's flight to the Moon and the advent of the Internet to the competition between two systems. It is bitter to admit, but the war and nothing else was the motivation for the development of peaceful technologies.

As we see, the rivalry has continued, and this is a good sign for the digital economy. Like any battle for the leadership, this one can push such conventionalities as the pressure of the traditional fiat economy into the background.
'We don't want 2nd fiddle role': Russia may drop lunar station project with NASA, mulls own («Нам не нужна роль второй скрипки»: Россия может отказаться от проекта лунной станции с НАСА и обдумывает собственную) / Russia, September, 2018
Keywords: space

Russia may walk out of a joint project with NASA to build a lunar station as it doesn't want to "play second fiddle" in the effort. Instead, Moscow mulls joining forces with BRICS countries, a Roscosmos head has confirmed.
The fate of the joint program to build a Russian-American station to explore the moon is now at odds as both sides disagree on parts of the burden they would share in the effort.

"The Russian Federation cannot afford to play the second fiddle role in it," Dmitry Rogozin, the head of Roscosmos, said.

Roscosmos and NASA agreed to develop the Lunar Orbital Platform – also known as the Gateway – last year. Russia now maintains that the US wants it to only partially contribute to the ambitious project.

According to reports, NASA wants Roscosmos to build a docking compartment and an adjacent module. But both parts must be able to accommodate US space suits and be designed in compliance with American technical guidelines.

If Roscosmos and NASA don't come to terms, Russia will consider a similar project with BRICS countries, Rogozin said. Without elaborating on the issue, he said: "Whether it will be a Russian or international station is yet to be negotiated."

Deep Space Gateway can help "gain experience for human missions that push farther into the solar system, access the lunar surface for robotic missions but with the ability to return to Earth if needed in days rather than weeks or months," NASA said earlier in March.

In 2015, Rogozin, then deputy prime minister, said Moscow may team up with Beijing to create a scientific station on the moon. Bringing China in "as the main partner in creating a lunar scientific station" was discussed with Roscosmos. And earlier this year, both agreed to create a joint data center for lunar and deep space projects.

Formerly known as the Deep Space Gateway, the development of the current lunar station is spearheaded by the International Space Station contributors, among them ESA, NASA, and Roscosmos. The project is intended to help expand humanity's presence to the moon, Mars, and farther into the solar system.
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