India
Source: www.business-standard.com

Russian President Vladimir Putin here on Friday said all sorts of collaborations were possible among BRICS nations, and that cooperation in the field of art and in humanitarian affairs was being looked into.

"Be it in the field of finance or economic partnerships, BRICS brings meaningful content to various areas. Art and humanitarian cooperation are all possible.

"We are thinking about it... We will discuss with our colleagues and look at agendas in this direction," Putin said, while interacting with young innovators from India and Russia.

He said interaction among the young people specially school students will contribute to strengthening the relations between India and Russia.

"We can together work in many interesting areas like artificial intelligence and also human intelligence."

Prime Minister Narendra Modi and the Russian President jointly interacted with a group of 20 talented students -- 10 Indian and 10 Russian -- who are currently part of a collaborative innovation workshop in IIT-Delhi.

Putin appreciated the efforts made by scientists towards the development of the world, saying: "I really envy those who have devoted their lives to science. Science as an art is the most significant thing that one can do."

"Humankind exists with developments in science and mathematics. We should understand it in a broader sense. It is also very important to research the origins of the universe.

"States like India and Russia that enjoy good scientific growth should work in this direction," he said.

Modi said the innovation workshop, combining the students of Russia and India, was a great present to him by Putin.

"I share a very strong friendship with President Putin. The best gift from him for me is that he gave me a chance to meet all you talented kids.

"For the future of Russia, President Putin's biggest contribution is that he utilised his intelligence and emotions in this direction (indulging with the young innovators)," he said.

Urging the youngsters to have a scientific temper, he said: "You have to have a scientific temper to show what can be be given to the world, to the poor and the future generations."

"At every stage, we need to have a scientific temper... Without innovation, the world would have been stagnant," Modi said.

Russia
Author: Yaroslav Lissovolik
Source: valdaiclub.com

Our ability to reach unity in
diversity will be the beauty and the
test of our civilization.

Mahatma Gandhi

One of the key strengths of BRICS resides in their diversity and in their capability to offer multiple paths to modernization. In effect BRICS harbor the potential for driving the development of the global economy along the multiple paths of economic models rather than convergence towards one set of prescriptions. A crucial component of this multiplicity in economic models will be diversity of economic alliances and regional integration patterns pursued by the developing economies. In this regard, perhaps the most striking commonality in all five BRICS countries is the legacy of some of the foremost schools of thought and visions of continental, regional and global integration. All five BRICS countries have a rich legacy of aspiring for greater unity and cooperation across borders, regions and continents.

In Russia's case that kind of vision of continental integration is represented by the Eurasian school of thought (most notably by Petr Savitskiy, Georgiy Vernadskiy and Nikolay Trubetskoy) that emerged nearly a century ago. The theory holds that Russia's development strategy should take into account factors what make it distinct from other countries, namely, its geographical, historical, cultural, and economic peculiarities. According to Lev Gumilev, one of the foremost theorists of the Eurasian school of thought, a key tenet of the theory is polycentrism, which implies that "there are many centers in the world. Europe is the center of the world, but so is Palestine. And the same goes for Iberia and China". Another important facet of Eurasianism is the commonality of the Eurasian space, which makes it amenable to integration and closer cultural and economic ties. From a present-day perspective, the heritage of Eurasianism has particular relevance for pursuing Eurasian continental integration through the creation of economic alliances and transport corridors linking Asia and Europe.

Elsewhere in the developing world, a rich integrationist tradition emerged in Latin America, where one of the early champions of the unification cause in the region was Simon Bolivar, who back in 1815 (Cartagena manifesto) called for the Spanish American provinces to act together in the face of external aggression. He worked on various integration projects such as "Gran Colombia" as well as the "Bolivian Federation", with continental unification being the loadstar of his efforts as a statesman, whose call to the nations of the continent was: "In the unity of our nations rests the glorious future of our peoples."

Brazil for its part in the last quarter of the 19th century presented a whole group of statesmen and intellectuals who advanced the cause of Latin American unification and closer partnership, including such figures as Quintino Bocaiuva, Oliveira Lima, Eduardo Prado, Rio Branco, Rui Barbosa, Joaquim Nabuco. This was the generation of intellectuals that transformed the vision of Brazil from that of an "island" to that of an integral part of the continent. One of the projects of closer partnership that originated on the back of these greater contacts between Brazil and other Latin American countries was ABC – closer partnership between Argentina, Brazil and Chile (accord reached in 1915).

In China the key figure to lead the intellectual struggle against colonialism through closer cooperation among Asian nations was Sun Yat-sen (1866–1925), who called on the Asian nations to fight against colonialism under the banner of "Greater Asianism". In the words of Sun Yat-sen, "we advocate Pan-Asianism in order to restore the status of Asia. Only by the unification of all the peoples in Asia on the foundation of benevolence and virtue can they become strong and powerful."

In Africa Ghana's Kwame Nkrumah presented one of the most fervent calls for Africa's unification: "If we are to remain free, if we are to enjoy the full benefits of Africa's rich resources, we must unite to plan for our total defence and the full exploitation of our material and human means, in the full interests of all our peoples. "To go it alone" will limit our horizons, curtail our expectations, and threaten our liberty".

This mission was carried on by South Africa's Nelson Mandela who advanced his vision of regional and continental cooperation. In his 1993 article in Foreign Affairs he wrote: "In forging links with our neighbours, the ANC will draw on an African tradition, of which we are part, for promoting greater continental unity. We are currently involved in consultations with the Southern African Development Community, and the Eastern and Southern African Preferential Trade Area. We look forward to a mutually beneficial association with both of these important vehicles for promoting regional prosperity. We likewise look forward to becoming involved in the process of reforming the Southern African Customs Union, linking our country to Botswana, Lesotho, Namibia and Swaziland".

Indeed, Mandela actively worked to improve the regional integration institutions in Africa, including the SADC, SACU and the African Union. In his words, "South Africa cannot escape its African destiny. If we do not devote our energies to this continent, we too could fall victim to the forces that have brought ruin to its various parts. Like the United Nations, the Organization of African Unity needs to be attuned to the changes at work throughout the world. We are inextricably part of southern Africa and our destiny is linked to that of a region, which is much more than a mere geographical concept".

As for India, the philosophical concepts on integration and trans-border cooperation was expressed by Mahatma Gandhi who went beyond the regional ramifications to take the vision of partnership among developing nations to a global level. This was encapsulated in Gandhi's advocacy of the creation of a World federation of free nations on the foundation of nonviolence and the abandonment of weapons in international relations: "The better mind of the world desires today not absolutely independent States warring one against another, but a federation of friendly inter-dependent States. The consummation of that event may be far off. I want to make no grand claim for our country. But I see nothing grand or impossible about our expressing our readiness for universal inter-dependence rather, than independence."

The gamut of all these integrationist legacies of the BRICS countries serves as an important reference point for efforts to breathe new life and energy into BRICS and their interaction with the developing world. Despite the tremendous difficulties faced by developing nations over the course of the past century, the above visions of greater integration and partnership at the regional level have materialized to a significant degree in the form of regional integration blocks like MERCOSUR, the Eurasian Economic Union, the South African Customs Union, the Shanghai Cooperation Organization (SCO), BIMSTEC and many others. Now may be the right time to bring these blocks closer together to take the process of South-South integration to a whole new level.

Russia
Author: Samir Saran
Source: valdaiclub.com

As Russia repositions itself as an Asian power, it has a unique role to play in the region, believes Samir Saran, President of the New Delhi-based Observer Research Foundation. In an interview with valdaiclub.com he shared his view of the emerging Asia-centric world order and Russia's place in it.

"Russia always identified itself as a European power, and Eurasia was a compromise," he said on the sidelines of the Eastern Economic Forum in Vladivostok earlier in September. "It is now starting to see itself as a key actor, interlocutor and power in the Asian century."

"Russia is a continental and maritime power simultaneously," said Saran. "Which is why there can be no Asian order without Russia being a central part of the bargain," he added. "There can be no Eurasian integration, and no Pacific or Arctic arrangement without Russia having an important stake in framing the rules."

According to Saran, Russia must closely consider whether it is prepared to play this role. "Sometimes I think that Russia does not fully realize its own potential: it often sees itself as a disruptor; but not as a manager-- a benefactor that must sustain and stabilize the system," he pointed out.

"For that to happen, Russia's economy has to grow in the coming decade to about 4 trillion dollars. Otherwise, Russia will be tempted to play the role of a political interrupter rather than that of a political guarantor - a responsibility it must bear if it is be a consequential actor in the 21st century. To guarantee the Asian order, Russia will have to grow its ambitions, its economy and its institutions."

That said, the two crucial powers defining the future Asian order are China and India. The question is whether they will try to create something new or adopt existing institutions and practices. According to Saran, the answer is both. "India and China have grown exponentially in less than three decades. India still has a journey to complete – maybe another 15 years before it becomes a ten trillion dollars economy. Still, neither are fully capable of upending the rules of international institutions altogether. They will have to, in many ways, rely on the old ones, and maybe change and reform them."

This means that the old institutions will work in new ways. "If one looks at some of the Western institutions like the OECD, the UN, and the World Bank – many of them are operating in consonance with China's infrastructure projects and international agenda," Saran said. "In that sense, China's rise has changed the very character of international institutions."

According to Saran, the same will happen with India within the next 15 years: "Size matters, and both India and China have reached their critical point. It is impossible for the world to be stable and prosperous without these two actors having an important role in the order of things."

However, it would be wrong to suggest that the Asian order will be dominated by a few powers. It should be more plural than the current one, Saran believes. According to him, it will take seven or eight countries for the Asian order to finally emerge. Apart from China, India, and Russia, these would include Japan, some of the ASEAN states, and possibly Iran and Saudi Arabia.

On the institutional level, "any organization that allows the countries to talk and synthesize diverse political systems, economic models, and ideas on peace and security will work," Saran said. But since Asians are "highly sovereign," any such arrangement has to be democratic and plural; it must be based on the "one country-one vote" principle.

Asked if the Shanghai Cooperation Organization could serve as a prototype for such an institution, Saran said that in its current version it is a "good beginning."

"I think that institutions like the SCO are important, but this does not mean than the SCO is the best option. If is starts serving only Shanghai, then it will lose its meaning. But if it becomes a 'round table,' where seven or eight large countries could sit down and discuss key questions, then it is becomes useful and meaningful," he pointed out.

Russia
Source: en.kremlin.ru

Prime Minister of India Narendra Modi (retranslated): Your Excellency, President of the Russian Federation and my dear friend Mr Putin, delegates and representatives of our countries, good afternoon.

It is a great honour and privilege for me to welcome President Putin and his delegation to India as part of the 19^th annual summit meeting. We welcome the President of a country with which we share unmatched and solid ties.

In addition, the President's personal contribution to these relations can hardly be underestimated. Everyone who was at our meeting in Sochi, and its outcomes are all still fresh in my memory. This meeting was truly special, offering both of us an opportunity to hold frank and meaningful talks.

See also

Russian-Indian talks October 5, 2018
Mr President, India attaches special importance to our relations with Russia. Our relations still matter a great deal in this rapidly changing world. This 19^th summit meeting provided a new impetus and a new direction to our special privileged strategic partnership. In addition, our meeting gave new meaning and purpose to our cooperation on the global agenda. Your visit has helped us outline the strategic path for our cooperation.

The landmark decisions that were adopted today will breathe new life into our relations that will last for a long time to come. In addition, these decisions will strengthen the pillars on which our relations rest by promoting cooperation in trade, investment, the peaceful use of nuclear energy, as well as in solar energy, technology and economic cooperation. We are set to further strengthen, develop and diversify our relations on land, at sea and in space.

In fact, we have taken our relations beyond their traditional framework. Moreover, we have consolidated the foundation for our relations. Russia has always stood hand in hand with India in its effort to develop the energy sector. We have now set a new goal in space exploration: we have a programme to send an Indian cosmonaut to space. We hope that Russia will support us in this undertaking. We have already discussed a number of innovative ideas during the afternoon session. These ideas were developed by having talented children from India and Russia work together.

India and Russia have a track record of close cooperation in a number of areas. I am delighted to have this opportunity to take part in the Russian-Indian Business Summit that will bring together some 200 business leaders from both countries.

India and Russia also cooperate closely in all areas of mutual interest. President Putin and I talked about this at length today.

India and Russia believe in strengthening the multipolar world order and multilateralism in this rapidly changing world. This meets the interests of both our countries. Together, we can fight terrorism and seek a solution to the situation in Afghanistan and climate change, as well as promote cooperation within the regional frameworks, for example, the SCO, as well as multilateral organisations such as ASEAN and the G20.

As for international organisations, we must continue our mutually beneficial cooperation and further coordinate our initiatives.

We were truly impressed by the steps undertaken by President Putin to develop Russia's Far East. India stands ready to work with Russia to develop this region. The decisions we adopted today will enable us to step up our cooperation, making a contribution to restoring peace and stability across the world with all its challenges.

Friends,

Goodwill and positive people-to-people contacts are the driving force behind Indian-Russian relations. Today, we discussed various measures that will pave the way to further expanding people-to-people exchanges, as well as raise awareness among our people about their friends abroad. This will lay the foundation for friendly relations between Russia and India in the future.

Friends, I can say with full confidence that the friendship that Russia and India share is truly unique. I strongly believe that through President Putin's commitment to further advancing these relations we will add new momentum to our relations in the spirit of trust and friendship between our countries. Our relations will become only stronger moving forward, elevating our special privileged strategic partnership to new heights.

Thank you.

President of Russia Vladimir Putin: Dear friend, Mr Prime Minister, ladies and gentlemen,

We always come to India with great pleasure and even excitement because we know that here we will find an atmosphere of very sincere friendship and business cooperation.

Our nations have enjoyed long and close relations of friendship, mutual respect and sympathy. Yesterday, during my working dinner with the Prime Minister – by the way, I am very grateful for this sign of friendship – we were able to talk face-to-face without any rush about the critical problems in the world, discuss issues of principle in the development of Russian-Indian cooperation and lay out new horizons. And today, first in a restricted format and later with the participation of our delegations, we discussed key areas of cooperation, held substantive talks on the entire range of issues related to bilateral cooperation and examined topical matters on the global and regional agenda in detail.

Following the talks, we adopted a joint statement that reflects almost all aspects of Russian-Indian cooperation and drafts large-scale and long-term plans. An impressive package of interdepartmental and corporate documents that was signed just now was specially prepared for the visit and aims at further promoting bilateral times in various spheres.

Of course, during the talks, we had a detailed discussion of trade and investment cooperation, to the expansion of which Mr Prime Minister and I both devote great attention.

Some time ago, we set the goal of increasing trade to $30 billion by 2025, and the volume of mutual investment to $15 billion. In this context, we were satisfied to note that last year mutual trade grew by 21 percent to over 9 billion, and increased by another 20 percent during the first seven months of this year. If we continue at this rate, we will not only reach the goal we have set, but we will do so earlier and move further.

Business communities in Russia and India maintain close contacts and implement large joint investment projects. An Indian delegation took part in the St Petersburg International Economic Forum and the Eastern Economic Forum in Vladivostok. I am pleased to repeat my invitation for the Prime Minister to attend the economic forum in Vladivostok as the main guest next September.

New Delhi is hosting the Russian-Indian business forum, and Mr Modi and I will address its participants and support useful business initiatives to develop cooperation in key economic and financial sectors.

Promoting cooperation in energy was a topic the Prime Minister and I focused on. We praised the implementation of the interdepartmental cooperation programme in this area, which is strategic for our countries.

Russia is a reliable supplier of hydrocarbons to India. Rosneft and Gazprom have long-term contracts to provide Indian economy with fuel, which are being successfully implemented. India imports Russian liquefied natural gas from the Sakhalin 1 field, where our Indian partners own 20 percent. This June the first LNG delivery was made to the Indian market as part of the contract between Gazprom and India's Gail.

In turn, we welcome Indian energy companies' interest in expanding their operations in Russia. We are ready to examine the opportunity to cooperate in the framework of such programmes as Far Eastern LNG, Arctic LNG and other projects aimed at exploring the natural resources of Siberia, Yamal and the Russian continental shelf.

We had a detailed discussion on the Kudankulam Nuclear Power Plant, a flagship project in the peaceful use of the atom. The first two units are gradually reaching their full capacity, and the third and fourth units are under construction. They are soon to be followed by the fifth and the sixth.

According to our agreements, it is planned to build 12 nuclear power plant units in India over 20 years using advanced Russian technologies.

We discussed matters of deepening industrial and investment cooperation, specifically in machine-building, metals, agriculture, medicine, pharmaceuticals and bio-chemical technology. We believe there are good prospects for cooperation on major infrastructure projects. In particular, Russian Railways is ready to join the project to build modern railways in India.

The participants agreed that Russia would help Indian partners in space exploration. Roscosmos is planning to take part in elaborating the Indian national programme to launch a manned spaceship.

Naturally, we discussed in detail the prospects for military-technical cooperation (MTC). Russia and India have cooperated successfully in this area for many decades. Our countries have developed genuinely close and mutually beneficial relations that are part and parcel of the Russian-Indian strategic partnership.

MTC cooperation is not limited to Russian arms' supplies. Our countries have organised the joint development and production of modern military products. Our defence ministries and general staffs maintain regular contacts and work to enhance the combat readiness of our armed forces. In August, Indian units were involved for the first time in the Peace Mission 2018 counter-terrorist exercises on Russian territory. Indian service members take an active part in the International Army Games, the tank biathlon and competitions of the alpine special troops.

By tradition, the talks focused on humanitarian cooperation. Russia and India have always been interested in each other's culture and spiritual heritage. This is confirmed by the great success of the Indian Festival in Russia, which will last until March 22 and will span 22 cities. India will host a festival of Russian culture. I am sure these events will bring our nations even closer together.

Nearly 10,000 Indian students are studying in Russia. Every year Indian citizens receive about 100 scholarships. India is a popular destination for Russian tourists. About 220,000 Russians visited India in 2017 and we received 94,000 Indians in Russia.

Discussing international issues, we reaffirmed that Russia and India have identical or similar positions on key global problems. In this context, we agreed to enhance our cooperation at international venues, in particular, the UN, BRICS, the SCO and the G20.

We will be also closely working to enhance security and cooperation in Asia and countering together such modern challenges and threats as international terrorism, drug trafficking and cross-border crime. In this context, we discussed the economic recovery and stable political development of Afghanistan, and exchanged views on the situation in the Middle East. I told the Prime Minister about the developments in Syria. We also discussed the situation that was triggered by the US unilateral withdrawal from the Joint Comprehensive Plan of Action on the Iranian nuclear programme.

In conclusion, I would like to thank the Prime Minister and all our Indian friends and colleagues for meaningful and constructive talks. I am convinced that their results will facilitate the further development of the Russian-Indian strategic partnership and consolidation of friendship between our nations.

As I have already said, Mr Prime Minster and I will meet with representatives of the business community and talented Indian children and their peers from the Russian educational centre Sirius, who are visiting India at the invitation of Mr Modi. I will also meet with the President of the Republic of India.

The Prime Minister suggested several other humanitarian initiatives: resuming the publication of Russian and Indian books and establishing new areas of humanitarian cooperation. I consider this very important. Naturally, we will support this because humanitarian cooperation and direct human contacts are bound to promote friendship between the peoples of India and the Russian Federation.

Thank you for your attention.

India
Source: en.kremlin.ru

Talks between Vladimir Putin and Prime Minister of India Narendra Modi have been held in New Delhi.

Following a conversation held in a restricted format, delegation members joined the talks to discuss key aspects of further developing the special privileged strategic partnership between Russia and India, as well as current international and regional matters.

Following the talks, the President of Russia and the Prime Minister of India adopted the Joint Statement Russia – India: Reliable Partnership in a Changing World. In addition, Vladimir Putin and Narendra Modi attended a ceremony held to exchange documents signed during the Russian President's official visit to India.

The signed documents are related to the consultations held by the Russian and Indian foreign ministries, joint operations in the framework of a manned space programme, cooperation in nuclear energy, joint projects in mineral fertilisers, cooperation in transport training and interaction in the economy, railway transport and small businesses.

Vladimir Putin and Narendra Modi also made statements for the press.

* * *

Beginning of Russian-Indian talks in an expanded format

Prime Minister of India Narendra Modi (retranslated): Your Excellency, once again I welcome you and your high-level delegation that accompanies you to India.

India is proud of its historical friendship with Russia. Last year, we marked the 70^thanniversary of diplomatic relations between our countries. That said, relations between our civilisations and cultures date back centuries.

The special privileged partnership between India and Russia is important not only for our two countries, but for the entire multipolar world. The relations between India and Russia span culture, security and prosperity. We cooperate in a number of spheres, and I am pleased to have the opportunity to host the 19^th annual summit meeting between our countries.

We had very useful talks on security, as well as other strategic matters, so now we can discuss cooperation in the economy and other spheres. Once again, I would like to extend a warm welcome to you and your delegation.

Your Excellency, I am also pleased to note that following up on our meeting in Johannesburg we will hold today the first business summit with business leaders. I think that this is a very worthy undertaking.

I am also pleased to note that India's cumulative investment in Russia reached $18 billion by 2017, while Russia invested more than 30 billion euros in India. Indian companies shared their experience and expertise with Russian companies, and vice versa, in energy, healthcare and other areas.

Russia started LNG supplies to India, and a deal has been signed for 23 years of deliveries. This agreement creates new opportunities for the future and will benefit both countries, helping meet the demand for energy in a new India.

I would also like to note that Moscow hosted a meeting of the Intergovernmental Commission on September 14, during which delegations reviewed our cooperation and adopted a protocol, laying the foundation for creating a strategic partnership forum. Our economic development ministries will sign a memorandum of understanding today, and the first meeting of this kind is to take place in Russia this year.

We believe in the importance of this platform, since it will bring together prominent business leaders, which could help expand bilateral trade. In addition, this will also be an opportunity to explore new avenues for cooperation.

We are already running a bit late, but let me tell you that the time we spent on these talks was not wasted. We had a very meaningful conversation, so now we can have lunch, during which we can discuss matters of mutual interest for our countries.

Thank you once again for the honour to receive you and your delegation here. Thank you very much for coming to India.

President of Russia Vladimir Putin: Mr Prime Minister, friends, colleagues,

It is a great pleasure to be here in India with our friends. India is our good friend, and we share a special relationship with this country. We call it a special privileged strategic partnership, marked by mutual respect, trust and a constructive dialogue.

A number of joint projects are underway in industrial cooperation, space, aviation, the nuclear and oil and gas industries, and military technical cooperation.

This visit was preceded by serious preparations by our ministries, agencies and businesses, and a solid package of bilateral documents was approved. This includes the energy, nuclear and space sectors, as well as investment and banking. We will also adopt a comprehensive joint statement.

Political dialogue has been gaining momentum. In fact, this is our third meeting over the past six months, and we will meet again with you, Mr Prime Minister, at the East-Asia Summit and the Group of Twenty before the end of 2018. I would like to once again invite you to attend the Eastern Economic Forum in Vladivostok, Russia, in September 2019 as its main guest.

Our two countries play a major role on the international arena in terms of sustaining global world order. We work in close coordination within the UN, the Shanghai Cooperation Organisation, BRICS and the G20. Russia and India also work together on building a new architecture of security and equal cooperation in the Asia-Pacific Region.

We attach great importance to inter-regional and humanitarian cooperation between our countries. We have already discussed all these topics, and this conversation will continue as part of our current agenda.

Thank you very much for your invitation.

South Africa
Source: www.e-ir.info

Introduction

Due to multiple financial crises in the 20th and 21st centuries, there seems to be a consensus that there is a dire need for a reform of the Global Financial Architecture (GFA). This essay seeks to understand the role of the G20 and BRICS in this reform. First, this essay briefly discusses the need for reform. Consequently, the current and the ideal suggested role of the G20 is discussed. Third, the current and ideal role for BRICS is discussed. Finally, the essay concludes with a brief review of the future of reform in the GFA.

Global Financial Architecture Reform

The Global Financial Architecture is the "collective governance arrangements at the international level for safeguarding the effective functioning of the global monetary and financial systems" (Elson 2010: 17). The post-Asian crisis GFA is characterised by a more structured system than ever before. Arner and Buckley (2010: 201-202) argue that the contemporary GFA has four structural characteristics: first, a global consensus on what sound financial and regulatory systems should look like. Second, the creation of sound principles and practices by technocratic institutions such as Basel Committee on Banking Supervision. Third, the use of markets to incentivise the use of sound principles. Finally, the promotion of sound principles by multilateral institutions such as the IMF, an example being conditional loans which encourage structural adjustment.

The GFA is characterised by the integration of financial markets and government deregulation (Crotty 2009: 564). This encourages risk taking, which in turn increases profits during 'market booms' and ultimately leads to market crises such as the 2007/2008 housing market crisis (ibid.: 565). It seems then as if market failure is structural and is caused by the new GFA (Stiglitz et al. 2009: 8). This is why there needs to be a reform of the system. However, the changes made so far have been incremental at best, which has left the global community at risk for further failures (Ocampo 2011: 316).

The role of the G20 in GFA reform

The Group of 20 (G20) is an informal political and economic forum comprised of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United Kingdom, the United States and the European Union (G20 2018). The G20 was founded after the Asian financial crisis at the end of the 1990s as a way for major economies of the world to take responsibility for the Global Financial Architecture (Panitch 2015: 64). From this one can discern that the G20's purpose is inherently intertwined with that of GFA reform.

The G20 has played the role of the main coordinator of global financial issues and has responded to crises in the GFA since 2008 (Arner & Buckley 2010: 206). Through regular meetings, the G20 has created a set of proposals that focus on responses to crises, and prevention through regulation (ibid.: 208). Due to the informal nature of the G20, it mostly serves as a forum for communication (ibid.: 218). Goyal (2010: 238) argues that the G20 is absolutely necessary for GFA reform. However, the role of the G20 is mainly to place pressure on the international community, to facilitate dialogue, and to institutionalise a new power balance. This is because any proposals, policies, or principles that the G20 adopt are non-binding. Ultimately, the G20 appears to be a norm entrepreneur more than anything else.

There are several issues with the G20 leading the reform process. Firstly, the G20 is not a united coherent body, and is plagued with internal division (Wright 2017). Where some want to protect the liberal status quo, others (notably BRICS members Russia and China) appear to want a complete overhaul of the system. This means that not all G20 members are complying equally to the reforms. The difference in compliance is stark, with some as high as 90% compliant (e.g Germany), and others as low as 30% (e.g. Saudi Arabia) (Warren 2017: 2).

The second issue is that of the overall reform process. According to Warren (2017: 7) the total average compliance of G20 members stands at 71% in 2017. Overall, the G20 is praised for astounding success (Financial Stability Board 2017). This would lead one to believe that reform is nearing success, and that the systems and issues that we are facing should be very different to those of 2008. However, the G20 is still trying to cultivate resilient and consistent systems (Allen, Krahnen & Rey 2017). The G20 itself admits that implementation of reforms has been significantly slower than they originally planned (G20 2017: 2). From this we can conclude that either compliance is greatly overexaggerated, or the reforms that are being made are too incremental to make any significant change.

One must consider that the G20 is a self-appointed elite body, making up 80% of global economic output (Garcia Diez & O'Donnell 2017: 14). It seems that for most members, the system has been working, and there is a strong push to return to the status quo from certain leading states within the G20 (Wright 2017). This has led to the G20 often ignoring their own policies. An example of the G20 ignoring their own regulation is the G20 engaging in protectionist policies a mere four months after pledging not to (Stiglitz et al. 2009: 17). Rather than a complete overhaul of a flawed system, it appears that the G20 is going about business as usual with minor changes, ultimately limiting the effect that the body can have on GFA reform.

It is also clear that the focus of the G20 has shifted. During the G20's early days (2008-2010) there seemed to be success in their goal of macroeconomic cooperation. This was due to the urgency created by the crisis. However, as the crisis dissipated the urgency disappeared. In 2018, it is clear that many of the initial goals, such as strengthening the global safety net and reducing debt, has not been successful (Triggs 2018: 1335-1337). The G20 articulated their focus to be on sustainable development, reducing poverty, and ensuring decent living standards (G20 Development Working Group 2017: 14). This shift could explain the apparent lack of will in pushing for systemic reform.

Clearly, reform under the G20 is not optimal. The question then is, should we perhaps consider alternative bodies, such as the BRICS grouping?

The Role of BRICS in GFA Reform

BRICS (Brazil, Russia, India, China, and South Africa) is a block of emerging economies, all of which are major regional powers (Tian 2016: 112). All the members of BRICS are developing countries that are showing economic potential, they all have systemic importance (i.e. a significant effect on the GFA), and they all have influence over global financial governance (ibid.). Thus, the members are all strategic and influential players in the global arena. According to BRICS, the main reason for the formation of the block is a shared interest in reforming the GFA (Abdenur 2014: 87). It is clear then that the purpose of the BRICS block, like that of the G20, is inherently tied in with GFA reform.

BRICS is commonly positioned as an alternative to the G20. This is because of significant capital reserves and the members' positions as emerging economies (Chernyshova 2013). The 2008 crash created a crisis in legitimacy in the international order, and the relative economic stability of the BRICS grouping banded them together into an influential block (Steunkel 2013: 612). Furthermore, the institutions set up by BRICS, such as the New Development Bank, appear to be a counterweight to the Neoliberal financial system. BRICS appears to be a formidable challenge to the status quo. However, one must consider whether it is so different from the G20.

The first factor one needs to consider is this: are the institutions that BRICS is setting up real alternatives to the mainstream GFA? The two most prominent institutions are the New Development Bank (NDB), and the Contingent Reserve Arrangement (CRA). BRICS does not seem to understand the New Development Bank as an alternative to the existing architecture, but rather as a support. This is illustrated most clearly in the founding documents of the New Development Bank:

Article 1

Purpose and Functions

The Bank shall 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." (BRICS 2014: 1).

The Purpose and Function clearly illustrate the NDB as a complement to the current architecture, rather than a challenge. Both the NDB and the CRA rely heavily on the dollar and require an existing relationship between the recipient state and the IMF (Bond 2015: 290; Cattaneo, Biziwick & Fryer 2015). Additionally, it is often required that recipient states enter into 'swap arrangements' that are based on the US Dollar, which drives up the value of the Dollar (Reddy 2015: 274). Furthermore, BRICS has articulated their support for the G20 playing a bigger role in economic governance (BRICS 2011). It becomes clear then that the institutions set up by the BRICS block are not so far removed from the current system, and the only real change that they are pursuing is the ability to bend the system in their favour.

The BRICS block shares some other crucial similarities with the G20. There is a lack of coherence, as illustrated by the varying success of BRICS to coordinate within the G20 (Steunkel 2012: 9-10). There is also an inability to make any binding decisions. This in conjuncture to the neoliberal bias of the BRICS block places the G20 and BRICS on the same level: no actual systemic reform with a vested interest in the current system. Ultimately, it appears as if neither body is an appropriate leader of GFA reform.

The Future of GFA Reform

The lack of an appropriate leader in two main contenders in reform is worrying. It appears as if GFA reform is in the same hostage situation as the United Nations Security Council, in which those with the abilities to reform the system are actively benefitting from it. Neither the G20 nor BRICS has shown serious commitment to an overhaul of the system, and it is doubtful that they will. Ultimately the global community needs to start at the bottom and reform the way in which we handle reform. Perhaps the best option is a new grouping which can be held more accountable and has less interest in maintaining the current GFA.


It does not seem as if a body like this currently exists. It would require dedication and resolve from the top minds and leaders of the world to conceptualise this type of institution and to avoid falling into the same traps as the G20 and BRICS. Until this commitment is taken seriously, the researcher is not optimistic about achieving the necessarily radical systemic reforms that are needed to not only stabilise the system, but also to make it more inclusive, equitable, and human centred.

Conclusion

This essay has examined the role of the G20 and BRICS in GFA reform. It has found that both groups have an interest in the system, as they are currently benefitting from it. Consequently, the reforms that are being made are incremental at best, and not achieving the necessary systemic change. Although BRICS has framed itself as an alternative, it is clear that they are interested in the current system. As such, the global South that they claim to represent will not benefit from the growing prominence of BRICS. The essay then suggested that work should go into conceptualising a new body that is more accountable, and possibly less embedded in the system.

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Written by: Gabriella Vermeulen
Written at: University of Pretoria
Written for: Rentia Pretorius
Date written: April 2018

South Africa
Source: www.businesslive.co.za

The New Development Bank (NDB) — popularly known as the Brics bank — will make use of its strong credit rating to launch a rand bond programme which will enable it to provide funding for SA public entities. This could then be on-lent at a competitive rate, its Africa regional head Monale Ratsoma said in an interview last week.

The bank has also extended a $300m line of credit to the Development Bank of Southern Africa (DBSA) in what will be the third loan arrangement with an SA public entity.

The Brics bank was established in 2013 with R2bn paid in capital from each of the five member countries to mobilise resources for infrastructure and development, as an alternative to the IMF and World Bank. In August it was awarded the second-highest credit rating — AA+ — by agencies Fitch and S&P. It has pledged that its first loans will be to member states for renewable energy projects.

The loan to the DBSA, which will be drawn on when necessary, will be used to lend-on "for renewable energy projects as well as other projects that will reduce greenhouse emissions within SA", said spokesperson Sebolelo Matsoso.

The DBSA is also an infrastructure bank, lending to municipalities and state entities such as Eskom for capital projects.

Ratsoma said that the intention was to use the strong credit rating to raise money at a lower cost than could be done by public entities in SA in their own right, most of which hold the same or lower rating than the SA sovereign. Only Moody's still rates SA's sovereign debt as investment grade at Baa3 while Fitch and S&P have it in noninvestment territory.

"We hope to utilise the rating strength of the NDB to raise money in a more cost-effective way. The DBSA should then be able to competitively on-lend to its clients. We also want to use the rating strength to issue a rand bond. Regulatory processes with the JSE and SA Reserve Bank towards that are fairly advanced," said Ratsoma.

The size of the bond programme would depend on the appetite in the market, which was still being assessed, he said.

The Brics bank's two other loans to SA entities include one to Transnet for $200m for the deepening of the Durban container port and a $180m loan to Eskom for the strengthening of the transmission grid to facilitate the connection of renewable energy power producers.

The Eskom loan, which was sanctioned by the Brics bank board more than two years ago but held in abeyance, was back on track, Ratsoma said.

"As soon as it became clear [in April] of the direction government had decided to take on, the independent power producers negotiations resumed. As it is, the first loan between SA and the NDB it will form a very useful template, so it is taking some time to finalise," Ratsoma said.

The Brics bank hopes to reach between $10bn and $15bn of loans by 2021. However, it remains tiny in comparison to the IMF, which makes provision for "special drawing rights" for its 180 member countries, equivalent to $300bn in value.

But developing countries, SA among them, have been reluctant to draw on IMF funding due to the conditionalities attached.

Russia
Source: tass.com

A bill allowing foreign legal entities to join Russia's alternative to SWIFT - the system for transfer of financial messages (SPFS) - has been submitted to the lower house of parliament, the State Duma, Kommersant writes. The bill offers a direct exchange of messages for both Russian and foreign companies. The goal is to safeguard accounts between sanctions-hit companies and foreign contractors.

Negotiations are currently underway between the Eurasian Economic Union and BRICS, and lawmakers believe that it's highly likely that agreements may be reached on providing access to the Russian system for China, Iran and Turkey.

According to the Bank of Russia, the SPFS system currently has 400 participants, including banks, the Federal Treasury, legal entities, and corporate clients. "Inside the country, our system fully solves the problem of sending financial messages," the regulator said. "Speaking about transborder operations, their implementation would be possible only provided that an agreement between several countries was reached. Such discussions are being held between the EAEU and BRICS."

"Although they plan to have accounts with Russia in national currencies, they do not rule out that the accounts may be carried out through Russia's alternative to SWIFT," said head of the State Duma's Committee for Financial Markets Anatoly Aksakov.

The SPFS was launched in December 2014 to safeguard Russian banks from the risk of being cut off from SWIFT, an international banking system for transferring information to carry out payments, after the first US and EU sanctions were introduced against Russia.

Soon, a European alternative to SWIFT may be also introduced, the paper says. In August, German Foreign Minister Heiko Maas said that the EU needed to create an independent counterpart to SWIFT to protect European companies from US sanctions.

South Africa
Source: www.iol.co.za

JOHANNESBURG - Finance Minister Nhlanhla Nene told the Zondo commission that former president Jacob Zuma had fabricated his supposed deployment to the Brics Bank when he fired him in December 2015.

Nene said Zuma had no business deploying him to the bank as he (Zuma) had no authority to do so.

The minister was detailing the events leading up to his firing as the minister of finance on December 9, 2015.

A decision that caused a dent in the financial markets after an unknown ANC parliamentary backbencher, Des van Rooyen, was appointed to replace Nene.

Nene said Zuma had called him into a meeting on December 9, following a Cabinet meeting, and told him that he was to be deployed to the Brics Bank.

The bank was established after a signed agreement between member countries - Brazil, Russia, India, China, and South African - in June 2014.

Nene said Zuma spoke in IsiZulu and said the ANC top six had agreed to deploy him to the Brics Bank immediately.

"He (Zuma) said we discussed this matter with the top six and we agreed that we should put you there. I asked him when the decision was to take effect and he informed me that he would be making an announcement shortly. I thanked the president for having provided me with the opportunity to serve the country as the minister of finance and we shook hands and I left," said Nene.

He said in the meeting, that took two to three minutes, Zuma did not divulge reasons why he was being removed.

"There is no protocol [if] you are in a 24-hour notice. He did not provide me with reasons for my removal and I did not ask him for reasons. This was the first and the last time we ever spoke about the position at the Brics Bank," he said.

Nene said he concluded that Zuma had fabricated the story of his deployment because he had no authority to appoint him in such a position.

"It's obvious that the deployment to the Brics Bank was a fabrication. I say so because the president had no authority to offer me a position or to deploy me to the position in the Brics Bank. Nor could such an appointment be considered at that stage, at least without due process which also involved other member countries."

"My understanding is that there are formal processes for appointments at the Brics Bank which were followed now that we have appointed someone there. Furthermore, there is a clear line of authority at the Brics Bank, it is the vice-presidents who are responsible for various functions within the banks and appointments at the bank. As a head of state, his role is limited to summits," said Nene.

The seat of the head of Brics Development Bank remained vacant until this year when former Treasury DDG Monale Ratsoma was appointed in April.

"The offer did not materialise until I returned as minister of finance and have since appointed the current holder of that position," said Nene.

The inquiry will resume on October 10 with the testimony of the Minister of Public Enterprises Pravin Gordhan.

Russia
Source: sputniknews.com

MOSCOW (Sputnik) - Development of trade and economic cooperation with Russia will provide Africa with an opportunity to expand into the markets of Eastern Europe and Central Asia, the executive vice president of the African Export-Import Bank (Afreximbank), George Elombi, told Sputnik.

According to Elombi, the bank's strategic plan for 2017-2021 puts a special emphasis on strengthening economic and trade ties with BRICS countries.

"Russia, with its diversified economy and strong export-oriented industrial and manufacturing sectors, offers a great opportunity for African countries to diversify beyond their traditional markets, namely OECD [the Organisation for Economic Co-operation and Development] countries. Fostering economic and trade relationship with Russia will open African economies to huge markets not only in the Russian Federation but also in Eastern Europe and Central Asia, two regions where Russia plays a leadership role," Elombi said in an interview.

Russia's experience will be also beneficial to all African nations, as they are embarking on industrialization and export-oriented manufacturing, the senior manager stressed.

Afreximbank was established in 1993 as a joint venture of African governments, African and non-African private investors and financial institutions in order to develop trade on the continent and outside it. The Russian Export Center has been one of the bank's stakeholders since December 2017.

China
Source: www.china.org.cn

BRASILIA, Oct. 3 (Xinhua) -- Brazilian presidential candidate Fernando Haddad said Wednesday he would strengthen ties with countries that make up the BRICS and the Southern Common Market (Mercosur) should he win in the country's upcoming election.

"Brazil is timid, closed in foreign policy. The first thing we have to consider is the BRICS countries, which are very important markets for Brazil, and we need to strengthen bilateral and multilateral agreements with those partners in order to create jobs," Haddad of the Workers' Party said.

Brazil is a founding member of the BRICS, which is made up of Brazil, Russia, India, China and South Africa, as well as a member of Mercosur, which also comprises Argentina, Paraguay, Uruguay.

Haddad added that he would seek closer ties with Mexico and make progress in the relationship with the European Union.

In terms of Mercosur integration, Haddad said, "it cannot maintain its current pace" and that he has already been in contact with the Argentine government officials.

"We are going to have to deepen (the integration). I have stayed in contact with Argentine officials to look for an approach, because Brazil can be a solution for Argentina and Argentina can be a solution for Brazil with more integration and trade," he added.

According to analysts, if Haddad wins the election, he will seek to revisit the foreign policy approaches of ex-president Luiz Inacio Lula da Silva, his political mentor. Enditem

South Africa
Source: www.iol.co.za

JOHANNESBURG – The BRICS Business Council's South African chapter has launched the inaugural BRICS 2018 Future Skills Challenge and Expo to discuss the future of work. The expo drew entrepreneurs and innovators from the BRICS countries of Brazil, Russia, India, China and South Africa, which showcased the latest in cutting edge technology relating to the much-touted Fourth Industrial Revolution (4IR).

Gauteng school pupils also attended to witness the exhibition of future technologies in the fields of cyber-security, data analytics, automation, industrial robotics, 3D printing and drone technology, as well as other future skills in the engineering, transport, ICT and manufacturing sectors.

Speaking to Business Report on the sidelines of the expo, merSETA board chairperson Lebogang Letsoalo said the concept was launched in July in partnership with the BRICS Business Council Skills Development Working Group.

Letsoalo said they wanted to achieve and increase, among other things, bilateral and multilateral co- operation between BRICS countries as far as skills development for Industry 4.0 were concerned.

"We also want to ensure that innovation is informed by Industry 4.0 and that whatever is taught at institutions of higher learning is informed by advanced technology."

She said the industry needed to start brainstorming ideas on how to align itself with the changing future of work.

"The current workforce has to be up-skilled for future jobs. Look at blue collar jobs, they are turning out to be white collar jobs now because of robotics and artificial intelligence," said Letsoalo.

"The Internet of Things, cyber-security, robotics and drone technology - all of those things affect the future of work, especially work in the logistics sector."

With almost 5.7 million jobs in the country reportedly currently at risk of digital automation within seven years, Letsoalo said merSETA was doing a lot of work in promoting 4IR and how industries needed to adapt to it.

"Going forward we will continue with the collaboration between the industry, academia and the education system as well. We want to bring practical solutions and build entrepreneurship skills in the manufacturing sector."

BRICS Business Council SA chairperson Dr Iqbal Survé said: "It has become increasingly important to skill-up our young people. In particular, to participate in an economic system which is being promulgated by the Fourth Industrial Revolution."