South Africa
Source: www.iol.co.za

Pretoria - President Cyril Ramaphosa's inauguration was like none other seen since 1994. Instead of being a select elite crowd attending with all the pomp and ceremony of the Union Buildings as in years gone by, this time the president was with the people - tens of thousands of them all in one stadium.

The event still had all the grandeur of the occasion with the flags, red carpets and jets flying overhead, but with a distinct difference - the common touch.

Symbolically the choice of venue could have been seen as an attempt to bridge South Africa's gaping wealth divide that tends to separate the haves from the have-nots.

As a Foreign Editor it was particularly interesting to observe which foreign dignitaries graced the occasion with their presence. The strong showing from African countries was expected, but it was not the usual suspects of previous eras - Robert Mugabe, Joseph Kabila, and the like.

All the SADC Heads of State were in attendance, in a genuinely robust display of regional solidarity. The SADC states have shown remarkable regional solidarity in recent years on local issues and in terms of international solidarity whether on Western Sahara, Palestine, or even Venezuela. It is the SADC states which also lobbied hardest for Ramaphosa to exercise a leadership role on the continent as AU Chair next year.

Ethiopian President Sahle-Work Zewde was also in attendance as the Chair of the Regional Economic Community of IGAD, representing a country that has been set on a new trajectory of tolerance, plurality and dialogue.

President Felix Tshisekedi was also a welcome break from the Kabila monopoly on power, even though he is yet to chart a new road map towards people-centred development in his country.

Nigeria, as the other continental heavyweight, was represented by the highly respected Nigerian Vice President Yemi Osinbajo, who is also a professor and senior advocate.


Perhaps most interesting were those chosen to represent the BRICS countries. Russia was represented by the Minister of Natural Resources Dmitry Kobylkin, who also happens to be the co-chair of the bilateral commission on trade and economy. This choice seems to underscore the importance Russia attaches to trade, particularly in natural resources between the two countries.

China was represented by the vice chairperson of the Standing Committee of the National Peoples' Congress, Hao Mingjin, who is an important figure in the Chinese political lexicon - the equivalent of a vice-president. In terms of BRICS representation, China sent the most senior government representative out of the four countries.

Brazil was represented by the powerful Minister of Defence Fernando Azevedo e-Silva, who is perhaps the closest in the Brazilian cabinet to President Jair Bolsonaro, who is chairing BRICS this year. It was an interesting choice of ministers given that Bolsonaro has been accused of the militarisation of Brazilian politics, and has stacked his cabinet with military generals. But the fact that the Defence Minister was sent to represent Brazil shows that Bolsonaro chose one of his closest allies to represent him at the inauguration.

India, which has recently been in the final stretch of their protracted electoral process, did not send a cabinet minister, but was represented by the newly arrived High Commissioner Jaideep Sarkar. Dynamics in India this week were at fever pitch with Indian Prime Minister Narendra Modi claiming a landslide victory on Thursday, cementing him as a formidable Hindu nationalist leader. Had the timing been different, India would have likely sent a minister.

All in all there were 34 VIPs, with all the heads of state coming from Africa - very much reflecting the reality that Africa lies at the heart of South Africa's international relations.

USA
Source: thediplomat.com

The Eurasia Society sponsored the "Doing Business with the BRICS" Conference in Washington, D.C. on May 15 at Africa House, the African Union's Representational Mission to the United States. Diplomatic representatives of four of the five BRICS nations, including key stakeholders and partners in the economic development of developing countries, including the Asian Development Bank, the World Bank, and a variety of legal, business, and risk management specialists, all had places at the speakers' table.

Of the BRICS nations, only China did not make a presentation to the audience of well over 100 gathered specialists. Indeed, one of the more intriguing questions that came out of the conference was, "Where was China?"

"BRICS" stands for Brazil, Russia, India, China, and South Africa, the five major nations that are identified – and identify themselves – as major emerging, fast, and high growth economies, destined to dominate a larger share of the global economy in the coming decades of the 21st century.

The BRICS concept was originally coined as "BRIC" in a paper written in 2001 for Goldman Sachs by Jim O'Neill (later made Baron O'Neill of Gatley), a British economist.

Several years later, O'Neill's idea began to take concrete shape in a meeting held between the then-leaders of China, Russia, and India on the fringes of a G-8 outreach summit in St. Petersburg, Russia.

By 2009, with Brazil added into the mix, the first BRIC Summit was held in Yekaterinburg, Russia. In 2011, South Africa joined the grouping, and BRIC became "BRICS."

By 2014, BRICS had institutionalized itself. The establishment of the New Development Bank, headquartered in Shanghai, gave voice, money, and purpose to the BRICS concept. Each of the five BRICS nations contributed equal shares of the initially subscribed $50 billion in capital. Each country has an equal voice in the bank's governance.

The Eurasia Society conference in Washington featured presentations from a number of official representatives from both the BRICS countries and multilateral institutions. Chinese Embassy officials were in the audience, but none of their representatives took to the stage to tout their own economic opportunities, unlike all of the other four BRICS nations. Why?

This was a lost opportunity for China. The level of representation from the rest of the BRICS group was substantial – those from the embassies held the position of minister of their economic sections — and it cannot have been lost on them that China chose to disassociate itself from the conference except as a passive observer. China's backseat presence is all the more interesting given the atmosphere of the U.S.-China trade war, which ostensibly drives it to expand its economic relationships in and with other parts of the world.

China does billions of dollars of business with the other four BRICS nations, as well as with the developing world in general. Much of that business falls under its Belt and Road Initiative (BRI) umbrella, the ambitious investment and infrastructure-building global plan laid out by Chinese President Xi Jinping six years ago. BRI projects and China's financing agreements in debt-laden poor nations have drawn scrutiny and criticism, but at this conference in Washington last week, China was in an ostensibly friendly space, albeit among rivals such as India. China is the dominant economy of the BRICS nations, it hosts the BRICS bank (as the New Development Bank is now commonly called), and it seems to be looking for forums to show its strength and resolve in the face of the U.S.-China trade war.

One wonders if, in the end, China's silence at this small but important gathering was indeed a defensive measure. And if so, against what is it defending?

Russia
Author: Georgy Toloraya
Source: infobrics.org

As preparations for Russia's BRICS chairmanship that started in the spring of 2019, are in full swing, the process of grasping the phenomenon is underway globally and in the Russian politics.

When working out the chairmanship highlights, one should bear in mind that initially BRICS was meant primarily as a political project, a project of political elites of non-Western countries aimed at raising their caliber on the international arena and fortify the positions in global management of both political and economic processes.

Does the project still stay in line with its original objective?

Indeed, we are witnessing a gradual increase of the role of caliber and strengthening of BRICS states' position in global management. Though separately, not together. Probably our countries have not yet prepared, not yet become mature enough for assuming a collective responsibility for the processes that the humanity is undergoing. Moreover, certain subjective and short-term factors also play a role here. The political elites of BRICS countries hardly exist in outer space, they depend to different extents on known global management institutions, on the hegemony of the modern world order, both objectively in the politics and economy, and subjectively, frequently at the level of interests of certain individuals.

Escalating inconsistencies of national strategies of member-states have joined the list of negative factors of global environment complicating rapprochement within BRICS over the past couple of years as well. That concerns China's relations with other countries in the first place.

It feels like China, which initially, by President Putin's behest, considered BRICS as one of major projects for bolstering its global influence, and as a platform for consolidating non-Western developing nations that it ranks with, has disengaged from that format in a way over recent years, particularly as the most important instrument for reaching that goal. Beijing has focused on its Belt and Road project, which slightly shaded BRICS. For example, symptomatic was the fact that China focused on the establishment of Asian Infrastructure Investment Bank instead of New Development Bank BRICS, which was being created specifically at that same time, which signaled somehow that China is not estranging itself from BRICS, of course, but does not view it as a priority task in its long-term geopolitical strategy either. The recent Belt and Road Forum in Beijing has emphasized the significance of the project not only for China, but also for Russia, compared with SCO and BRICS/RIC, let us say.

The frictions between China and India, which have recently come to the fore, made the prospects of particularly political development of BRICS even more ominous. It became clear that the tensions between the two countries are not simply of short-lived (such as another escalation of the boundary dispute), but deep-rooted systemic nature. There is definitely inconsistency of national geopolitical strategies. Anyway, for India counteracting China is becoming one of the key tasks of the development of its foreign policy – notably of the ruling class in general, not only the present government, and for a long period. The fact that India has signed off on an Indo-Pacific concept, anti-China in its essence, at the US' instigation, though promoting its own version, has been yet another indication of that.

Currently there are animosities between China and Brazil as well due to a new international political focus of Brazil and the ongoing domestic policy processes in the country. South Africans are also watchful of China's expansion over the African continent. Finally, I dare say that the Russian-Chinese relationship has come to its peak as well. Following the peak, the movement is either flat or downward.

All that makes one wonder what BRICS's mission is under those circumstances? Since it is not really ready to undertake the geopolitical mission, meaning the creation of a new political system of global management yet.

BRICS started as a phenomenon related to economic issues, to overcoming the 2007-2008 crisis. Is it safe to say that it is back on the 'economic rails' now, at a new twist of development as well, to focus particularly on the problem of development and cooperation?

If so, we have to adjust to that reality. Without forestalling events, it seems that the tone of BRICS Summit in Russia will be more practically applied, economic, rather than globally political.

Of course, at the new twist of development, BRICS is not the one it was in its 'infancy' ten years ago. A multi-way and quite serious mechanism of cooperation within the integration has been created, which is an apparent achievement of the past years. We have reiterated the necessity of a formal institutionalization of BRICS, though a number of states feared its supra-national nature. Currently it is virtually happening 'bottom-up'. An array of dialogue mechanisms has been formed, joint projects are being implemented, though not always as efficiently as one would like to. But that chain of relationships and contracts between departments and specialists and engagement with collaboration among members in separate sectors and fields is already evident. Coupled with institutional projects, such as New Development Bank, Energy platform, possibly, a single payment system and other financial instruments, it makes it possible to state that BRICS has already laid the foundation for dealing with ambitious tasks.

The development and implementation of a certain new model of social and economic development catering to the needs of the epoch is among those big ambitious long-term tasks, the main one in our view, though abstract.

As of now, the fact that 'liberal capitalism' is becoming irrelevant has come into the spotlight even in America as the term 'progressive capitalism' has been minted. Capitalism, which does not envision such a notable income gap, social differences, negative environmental consequences of the development. Since even America has given though to it, it is necessary to decide particularly within BRICS, which social and economic development pattern BRICS can offer – both to countries belonging it and the 'circle of friends', as a sample and as a potential alternative to liberal capitalism, which in many aspects has clearly reached its limit.

In this view, it pays to delve into Sustainable Development Goals (SDGs) – arguably, many tasks related to what a model like that should address, have been formulated already. That implies that each separate BRICS nation should incorporate those sustainable development goals into own national strategies not verbally, but virtually. That said, each state should be guided by the priority of any goals, both from the viewpoint of the importance of resolving the problems in the field specifically for it, and from the viewpoint of demonstration of its strong points, gaining ground inside BRICS itself.

Countries cannot be ranked, as the west is attempting to do, by the degree of their "compliance with the standard" of SDGs. Though the countries themselves can well rank particular goals from those objectives considering their national interests. How can BRICS states sort out priorities?

Speaking about Russia, in which fields can it try to demonstrate a kind of example to other BRICS nations, and is it equipped to deal with it? Is there enough political willpower and other goal-setting skills? It is necessary to draw a distinction between what Russia should lay political emphasis on within BRICS, what should be prioritized, and what should resources, energy and the potential of joint engagement be spent on. And before the chairmanship starts, that should be resolved, at least in the scientific-theoretical way.

Russia
Author: Valeria Gorbacheva
Source: infobrics.org

The initiative of trilateral contacts between Moscow, Delhi and Beijing belonged to Yevgeny Primakov (Russia's Foreign Minister in 1996-1998.) Back in the 1990-s Primakov foresaw the strengthening of Russia, India and China, which eventually would make these large continental powers an integral part of the new world order.

New format

Foreign Ministers of Russia, India and China held their first meeting in 2002, on the sidelines of the UN General Assembly session. Since then, foreign ministers meet regularly (annually or every 1.5-2 years). The RIC format of ministerial meetings is constantly evolving, complemented by new mechanisms, such as consultations on the level of foreign policy agencies, secretariats of the Security Councils, academic forums and, finally, summits.

The first meeting of the leaders of Russia, India and China was held in 2006 as part of the G20 summit in St. Petersburg. With the rise of new centers of power, the troika format formed the core for a new integration association - BRICS (Brazil, Russia, India, China, South Africa).

The first summit of BRICS (the "Five") was held on Russia's initiative in Yekaterinburg in 2009. The new format of BRICS, the core of which was RIC, was set to be the main platform for holding regular meetings of the heads of five states. However, 12 years later, the RIC format received a new impetus: at the end of 2018, the leaders of the three powers gathered on the initiative of Russia on the margins of the G20 summit in Buenos Aires. The leaders of India and China supported the statement by Russian President Vladimir Putin that such meetings should become regular.

In search for compromises

According to Russian Foreign Minister Sergey Lavrov, the RIC format became one of the driving forces of regional efforts to enhance the architecture of interstate relations in the Asia-Pacific Region (APR)." The parties are counting on the ongoing development of multilateral cooperation in order to promote a joint approach to ensuring global and regional security and sustainable development based on the principles of international law, good neighborliness, equality and mutual respect. The RIC format is an example of how to search for compromises and how to find them. Despite the peculiarities of holding tripartite negotiations, where each country seeks to act according to its national interests, the parties always come to a common decision.

Today, the RIC format remains in demand as a tool for finding answers to the key challenges of our time. Strengthening tripartite contacts is in the interests of the whole world, since it contributes to the coordination of efforts in building a more democratic and fair system of international relations. The stabilizing nature of RIC gives strength to other international formats. The consolidation of the foreign policy coordination of the three countries continues within the framework of the UN, the G20, BRICS, the Shanghai Cooperation Organization (SCO), the East Asia Summit, the Asia-Europe Meeting (ASEM), etc.

It is no secret that the history of Russia's relations with its partners in the "triple alliance" is strategic. As the largest players in the region, Russia, India and China are actively developing partnerships on a bilateral basis, while stable channels of strategic ties allow them to skillfully maneuver in terms of the implementation of their foreign policy ambitions in Greater Eurasia and the Asia-Pacific Region.

Russia-China: dialogue among equals

The USSR and the People's Republic of China established diplomatic relations in 1949. The USSR became the first foreign state to announce the recognition of the PRC. The basic principles and directions of bilateral cooperation are reflected in the Treaty on Good-Neighborliness and Friendly Cooperation between the People's Republic of China the Russian Federation signed in 2001.

Traditionally warm relations between Russia and China allow them to further strengthen their comprehensive, equitable, trusting partnership and strategic interaction at all levels. At the same time, the countries do not bind each other in relations with third states, and the potential for the development of bilateral conflict tends to zero.

The two geopolitical giants (however, the economic weight of China is unquestionably higher than that of its neighbor, Russia) feel quite comfortable at a certain distance from each other. China's economic power will continue to grow, and Russia needs to expand its advantages (natural resources, agriculture, military and civilian technologies) to maintain influence in the region. In addition, the process of connecting the Eurasian Economic Union (EAEU) with China's One Belt and One Road initiative will serve as an incentive for the Russian economy - extensive infrastructure projects will connect China and East Asia with Europe by land, air and sea (Northern Sea Route).

In general, the political dialogue between Russia and China is very intensive. The leaders of the two countries meet at least five times a year. There is also a mechanism for regular meetings of the heads of government of Russia and China. Consultations on strategic security are underway. A course has been taken to deepen trade and economic cooperation (primarily on infrastructure and energy), as well as military-technical and humanitarian cooperation. The countries have intensified cooperation for the development of the Far East. Since 2010, China has been Russia's largest trading partner. The two states are also intensively developing cooperation in such areas as education, science and culture.

Russia-India: strategic partnership in action

Russia has accumulated 70 years of experience in mutually beneficial partnerships with India. Diplomatic relations between the USSR and India were established in 1947. After the breakup of the Soviet Union, Russia and India signed the Treaty of Friendship and Cooperation in 1993. This became the founding document of the bilateral relations. In 2000, the two countries signed the Declaration on Strategic Partnership.

Today, India is actively developing, strengthening its economic and military-political potential. Together with China and Russia, it is becoming one of the main driving forces in the area of Greater Eurasia (in fairness, Europe should also be counted among these centers of power). Considering India's lightning-fast rapprochement with the United States, fueled by geopolitical ambitions to build the Indo-Pacific regional initiative and the desire of the United States to gain a firm foothold in the Asian Pacific region, Russia needs to build comprehensive, privileged partnership with India. High density of political contacts is the best way to strengthen bilateral dialogue.

The leaders of Russia and India meet regularly, both on bilateral summits and "on the margins" of multilateral forums.

Military-technical, trade-economic and scientific-technical cooperation is actively developing. Russia is an important partner of India in the development of peaceful nuclear energy. The countries are developing cooperation in oil and gas sector and implementing large-scale infrastructure projects. They also pay special attention to the development of intercultural dialogue.

India-China: growing ties

Although the diplomatic relations of modern India and China were established in 1950, the history of cultural and economic cooperation of the two most ancient civilizations dates back over 2,000 years (the Great Silk Road).

Today, India and China are the two fastest growing centers of power. Both countries are large players, each of which is seeking to occupy a leading position in the region. There will hence be healthy competition and emerging territorial disputes.

In the late 1980s, the countries embarked on a course of building up diplomatic and economic ties. Today, despite the opposition of Washington, India and China are developing a strategic partnership aimed at peace and prosperity.

However, the geopolitical ambitions of India, which positions itself as an Indo-Pacific power, its close ties with the United States and its allies among the maritime powers - Japan, South Korea, New Zealand, Australia, and others - can lead to an imbalance in the region, where the situation is already very unstable.

India's choice in favor of this or that alliance (RIC or "a diamond of democracies") will be crucial not only for Eurasia, but for the whole architecture of international relations. Today, sustainable development of the Eurasian region is the key to sustainable global security is the stability. However, it is known for certain that India will continue to develop a multi-vector foreign policy, and one has to live with it.

It is in the interests of Russia that the formal RIC could become a permanent consultative mechanism on security, stability and sustainable development issues throughout the Eurasian region. The ongoing tripartite strategic dialogue will enable Russia to ease tensions between its two largest Asian partners. For this purpose, it is necessary to step up interaction in four main areas acting in the spirit of openness, solidarity, mutual understanding, trust and respect: regional and global security, economic development, exchange of experience in the areas of mutual interest, cooperation in countering new challenges and threats.

What is on the agenda?

Traditionally, the negotiations in the RIC format have a very extensive agenda. The parties freely and frankly exchange views on the situation in Venezuela, Syria and Afghanistan, discuss the Iranian nuclear program and arms control, the situation on the Korean Peninsula and other issues.

As for the economy, the countries are striving together to protect the principles of fair competition in world trade and finance, to promote the formation of the most open system of international economic relations, free from protectionism and politically motivated restrictions, to develop integration associations.

In particular, at the recent meeting in Uchzhen, the Foreign Ministers of Russia and China discussed the details of the Russian-Chinese "road map" on the Korean settlement. Today, even Washington admits the need for this joint initiative of Russia and China. The ministers also discussed preparations for the visit of Russian President Vladimir Putin to Beijing for taking part in the Belt and Road Forum and participation of Chinese leader Xi Jinping as the main guest at St. Petersburg International Economic Forum.

In turn, Russia and India discussed the schedule of upcoming bilateral contacts and the preparation of Indian participation in the Eastern Economic Forum in Vladivostok.

The three parties made an important decision for the development of RIC – they agreed to continue trilateral coordination at other levels and, if necessary, to create additional interaction mechanisms. In particular, they agreed to consider creation of a mechanism for regular meetings of the Defense Ministers of the three countries. This, however, does not mean that RIC will turn into a military-political alliance. The Chinese party even proposed going further by developing the RIC-plus format. The next meeting of the foreign ministers of Russia, India and China will be held in Russia.

China
Source: www.ndb.int

Strengthening the New Development Bank's strategy and its operations in Brazil was the main focus of discussion between Mr. K.V. Kamath, the NDB President and Gen. Hamilton Mourão, the Vice-President of Brazil during their meeting on 20 May 2019. The meeting was held at the Bank's office in Shanghai, during the official visit of the Vice-President to the People's Republic of China.

"The NDB is a 21st century bank, designed to provide the necessary financial support to emerging economies. We welcome the upcoming inauguration of the NDB Americas Regional Office, based in São Paulo, with a branch in Brasília. Such Office will allow the NDB to become more familiar with the Brazilian business culture and regulatory environment, thus contributing to our efforts to foster investment in infrastructure and sustainable development," said Gen. Hamilton Mourão.

Mr. K.V. Kamath briefed Gen. Hamilton Mourão on the progress of the NDB, including the growth of the Bank's portfolio of approved projects.

"It's a privilege to host Gen. Hamilton Mourão in NDB's Headquarters. The NDB is fully committed to supporting Brazil's agenda of infrastructure investments as formulated by the Brazilian Government with a greater participation of the private sector, in line with the Bank's mandate of mobilizing resources for infrastructure and sustainable development. We are looking forward to opening the Bank's Americas Regional Office later this year, which will play an important role in project identification and preparation," said Mr. K.V. Kamath

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 Bank received AA+ long-term issuer credit ratings from S&P and Fitch.

Russia
Author: Yana Grigoryeva
Source: infobrics.org

Relations between Russia and China in recent years have reached a significantly new level. The People's Republic of China is becoming the leading strategic and political partner of Russian Federation, supporting its initiatives and often acting together in the political arena.

Over this mutual understanding, until recently, the economic component of Russian-Chinese relations was not as developed as political one. However, now big number of closed contracts and new initiatives became operational. At the end of 2017, the trade turnover between Russia and China grew by 20.8% and amounted to more than 84 billion dollars. This year, this number may exceed 100 billion.

Chinese and Russian experts expect that by 2020, the figure will double. In early June 2018, Russian President Vladimir Putin paid a visit to China, in which with Chinese leader Xi Jinping they discussed political and economic cooperation questions. The parties mentioned the signing of a large-scale trade agreement that could be an alternative to the American Trans-Pacific Partnership. Such an agreement can not only give a completely new dimension to Russian-Chinese economic cooperation, but also become the basis for the formation of a new economic center of power in the world arena.

For Russia, business prospects in the Asian direction are much more ambitious and attractive than in the already well-developed European one. Business is keenly catching these trends and reacting to them faster than a government mechanism, which needs time to contemplate. It is no coincidence that more and more companies and banks are beginning to focus specifically on working with China and South-East Asia in general.

In addition to standard banking, a lot of banks started to provide a wide range of products and services for clients whose lives and professional activities are related to China. These are fast money transfers without opening an account in Russia or in another foreign country; currency exchange at the most favorable rate; a wide range of deposits in rubles and yuan.

There are unique banking products related to the Asian market. For example, payments WeChat Pay in Russia. The Chinese payment service WeChat Pay entered the Russian market, which allows you to pay for goods using an app on your mobile phone. WeChat Pay works on the basis of the WeChat messenger, which, according to the company, installed more than 900 million Chinese. For payment at the checkout, generated by the system QR code has to be scanned. Russia has become the 17th country in the world with launched WeChat Pay, according to the website of the payment system Sendy, a Russian partner of WeChat Pay. The service is aimed at the Chinese who come to Russia: for now, WeChat Pay is available only for China citizens.

In addition, banks offer to the participants of foreign trade economic activity products and services that minimize financial and reputational risks, which is important in the difficult conditions of modern world. These are trade finance, letters of credit, guarantees; foreign exchange control; consulting and expert support.

China is systematically taking actions to internationalize the RMB - the alternative SWIFT payment system in RMB «CIPS» is already in place with more than 690 banks as participants. Chinese banks, financial bodies deliberately limit payments in dollars and euros, some of them completely stopped opening accounts in foreign currencies. China has sufficient economic and geopolitical potential to reflect attempts to impose their values, including in the field of finance. Settlements in national currencies have a number of advantages: time economy, economy on the commission, favorable RMB course, stability of payments, payment for goods from settlement account in China.

The presence of direct correspondent relations allows to make payments with a minimum commission in the shortest possible time and create unique banking products.

In order to create a platform for open and effective cooperation, on October 15, 2015, the Russian-Chinese Financial Council (RCFC) was officially established in Harbin, China. RCFC was established at the initiative of Sberbank of the Russian Federation and the Bank of Harbin. The main aims of the RCFC are to enhance the exchange of experience in the areas of financial services, risk management, employee training, and active information exchange in the field of legislation and regulations relating to the financial cooperation between Russia and China. Building correspondent relations, settlements in the national currencies of Russia and China, cash transactions, international trading and trade finance, syndicated lending, operations in global markets and other areas. RСFС intends to assist in the implementation of the "One Belt- One Road" strategy, as well as in the creation of the economic corridor China-Mongolia-Russia.

In November 2017, China and Russia held a currency swap of 150 billion yuan and 1.3 trillion rubles. The published statistics of the People's Bank of China indicates an increase in mutual settlements in national currencies, in particular, in January-November 2018, the volume of mutual settlements in national currencies in cross-border trade between the two countries increased by 48%. In the first quarter of 2018, the share of rubles and yuan in payments for the export of goods and services from the Russian Federation to the People`s Republic of China amounted to 8.8%, for imports to Russia from China - 21%. The volume of trade between Russia and China in the first two months of 2019 increased by 1.7%, according to the General Customs Administration of China. To date, the volume of trade between the two countries is $ 16 billion, of which 7.07 billion - exports from the PRC to the Russian Federation, and $ 8.97 billion - imports of Russian goods and services to China. The settlements of the Russian Federation and the People's Republic of China are still being made at 55% in dollars, and only at 35% in yuan. This situation will change soon.

Chinese authorities plan to take a set of measures to increase the openness of the financial sector in order to create a favorable environment for foreign investors and improve the quality of service of the real economy. This was announced in March 2019 on the fields of the Chinese Development Forum in Beijing by the deputy head of the State Committee for Banking and Insurance Control of China, Wang Zhaoxing. First of all, this is expanding access to the market. In terms of the banking and insurance sector, there are a number of quantitative restrictions - the scale of enterprises, the duration of operation, the shareholders structure. China is thinking about easing and eliminating these obstacles. secondly, China has to increase the variety of financial services provided, as well as create an optimal regulatory framework.

The BRICS countries started to create a single payment system, BRICS Pay, as part of developing a common platform for retail payments and transfers in the participating countries. In the near future there will be a special cloud platform connecting the national payment systems of the BRICS countries. They want to create the online wallet with access to these payment systems, as well as a mobile app similar to Apple Pay, which can be installed on a smartphone and pay for purchases in any of the five countries of the BRICS group, regardless of the currency of funds in the account of the buyer.

Thus, Brazil, Russia, India, China and South Africa will be able to use national currencies as a medium of exchange and means of payment for external settlements. It will be a serious step towards de-dollarization.

At the same time, BRICS Pay will increase the popularity of national payment systems, which are gradually replacing Visa and MasterCard. This process is especially noticeable in Southeast Asia, where China UnionPay is the leader, which in 2015 surpassed Visa in terms of total operations. UnionPay has already issued more than 6 billion national bank cards.

The scale of the Chinese economy, the size of the domestic market, the number of people and the development of outbound tourism support the growing popularity of UnionPay. Now the Chinese telecommunications corporation Huawei, together with UnionPay payment service, is launching its own Huawei Pay system in Russia. Russia is becoming the second country after China, where Huawei Pay service will work.

Any steps taken by the BRICS countries to create and maintain their own technologies and infrastructure in their territories are economically justifiable. It will help ensuring their political and economic independence.

Pakistan
Source: infobrics.org

Having mutual payments in national currencies is a priority task for BRICS, Head of BRICS Office at Russia's Ministry of Foreign Affairs Mikhail Kalugin told Sputnik.

"This [the issue of mutual settlements in national currencies] is a very important issue, the leaders of five countries regularly address it during the summits," Kalugin said. "The work is underway, and Central Banks are discussing the possibilities of such settlements in national currencies, looking at the mechanisms."

Kalugin stressed that initially the work will be in bilateral formats, for example, about calculations, the payments between Russia and India in national currencies, or between Russia and China.

"But for a five-sided dialogue, everything should mature. When the conditions for this will be created, we, of course, will be ready to explore the possibilities that such mechanisms provide. This is a priority task, but, I repeat, it must be approached gradually, step by step," Kalugin stressed.

Kalugion confirmed that mutual settlements in national currencies can be a good tool for overcoming the consequences of sanctions.

"As a diplomat, I will tell you, of course, this is a good tool," he added. "But to create a working tool, takes years, gradual steps towards this. This is the goal and these steps will be taken. We are conducting these consultations. But no one wants to create artificial mechanisms. Mechanisms that do not work. So, I do not exclude that in 5-10 years of mutual trade of BRICS in national currencies may increase significantly."

Kalugin spoke on the sidelines of "Doing Business With the BRICS" Conference organized by the Eurasia Center and the Eurasian Business Coalition.

The seventh annual conference brought together various experts and officials from Brazil, Russia, India, China and South Africa seeking to expand trade, direct investments and business opportunities, as well as open communication.

Uganda
Source: infobrics.org

Support for national and multilateral development banks has grown worldwide in the decade since the global financial crisis. And the continued success of national development banks (NDBs), in particular, will be vital to achieve more sustainable economic growth in the future.

Development banks help to counteract the pro-cyclical nature of the private financial system, which lends too much in booms and rations credit during crises. The private sector also often fails to provide enough financing for small and innovative companies and infrastructure projects. Nor does it support enough of the investments in innovative activities, credit to small producers, and environmental projects that are urgently needed to make economies more dynamic, inclusive, and sustainable.

Although governments provide their paid-in capital, development banks raise funds on national and international capital markets. Moreover, these banks' loans are typically co-financed by the private sector, which is especially helpful for governments facing budget constraints during and after economic crises.

The World Bank and regional multilateral development banks (MDBs) sharply increased their lending during and after the 2007-2009 financial crisis. The European Investment Bank, the largest MDB, doubled its paid-in capital and is playing a central role in implementing the European Commission's so-called Juncker Plan, which aims to generate €500 billion ($561 billion) of additional investment across the European Union by the end of 2020. In addition, the recent establishment of two other large MDBs – the Asian Infrastructure Investment Bank and the New Development Bank established by the BRICS countries (Brazil, Russia, India, China, and South Africa) – will contribute further to a more balanced public-private mix in development finance.

The financial crisis also prompted some European, African, and Asian governments to establish new NDBs, and other countries to expand theirs. As a result, the total assets of NDBs reached approximately $5 trillion in 2015. Today, they are an important feature of most developed and middle-income countries' financial sectors, notably in China, Germany, India, and South Korea. And large NDBs can have a big impact, especially in emerging economies.

Unsurprisingly, academic researchers are finally starting to pay more attention to NDBs after a long period of neglect. They are looking to understand how these banks operate, which instruments, incentives, and governance structures work best, and how such institutions interact with the private sector and government policies.

In a recent book, we analyzed NDBs in seven countries – China, Germany, Brazil, Mexico, Chile, Colombia, and Peru – and concluded that these banks tend to be successful overall. They have been broadly efficient instruments of national development strategies in their respective countries, and they have helped to overcome major market failures in a flexible way.

Our research identifies five crucial functions of NDBs in the development process: providing counter-cyclical finance; encouraging innovation and structural transformation; enhancing financial inclusion; supporting infrastructure financing; and promoting environmental sustainability, in particular by combating climate change.

NDBs were strongly counter-cyclical in the wake of the global financial crisis. According to World Bank data, NDBs increased their lending from $1.16 trillion in 2007 to $1.58 trillion in 2009. This 36% increase was far greater than the growth in private bank credit in the same countries over that period.

NDBs have been innovative, notably in supporting new activities. China's CDB, Germany's KfW, and Brazil's BNDES have financed technological advances, for example, while others, including Chile's CORFO, have supported entrepreneurship. Such banks have also introduced guarantees and established new equity (including venture capital) and debt funds. Furthermore, they have developed new programs to increase financial inclusion, such as "correspondent" stores and post offices that provide financial services from one or more banks.

In addition, NDBs have been prominent supporters of important new sectors, such as renewables and energy efficiency. For example, KfW was initially the sole lender to private companies investing in solar energy in Germany; private banks got on board later. In China, CDB helped to design policies to encourage investment in renewable energy – particularly solar – and provided significant initial funding. As a result, Germany and especially China have been major global promoters of solar power, helping to make it increasingly competitive relative to fossil-fuel energy.

To be clear, we favor "good" development banks: well-governed institutions with highly professional staff and clear mandates that fulfill their functions well. Such banks should maximize their development impact rather than profits, while ensuring some minimal level of return.

Countries that already have NDBs should aim to expand their role, while others should consider establishing them. Doing so would help to create a financial system that better serves countries' economic and social needs.

Stephany Griffith-Jones is Financial Markets Director at the Initiative for Policy Dialogue at Columbia University. José Antonio Ocampo is a board member of Colombia's central bank, a professor at Columbia University, Chair of the UN Economic and Social Council's Committee for Development Policy, and Chair of the Independent Commission for the Reform of International Corporate Taxation. They are co-editors of The Future of National Development Banks.

Russia
Source: tass.com

Moscow, May 24. Sessions on the innovation agenda are going to be held as part of the St. Petersburg International Economic Forum's business programme. During the session 'Innovation in BRICS Countries: Main Directions and Prospects for Cooperation', participants will review innovations as one of the most important drivers of economic development for BRICS countries. Sergey Katyrin, President of the Chamber of Commerce and Industry of the Russian Federation, will be the session's moderator. The discussion will be attended by: Bridgette Radebe, Executive Chairperson of Mmakau Mining Pty; Lirong Xu, Chairman of the Board of Directors of China COSCO Shipping Corporation Limited; Vladimir Kazbekov, Vice President of the New Development Bank; Anna Nesterova, Founder and Chairman of the Board of Directors at Global Rus Trade; Alexey Texler, Acting Governor of Chelyabinsk Region; Miron Tatsun, President of the Union of Timber Manufacturers and Exporters of Russia, and others. Participants will discuss the prospects for development of innovative cooperation between the association's five countries, the possible ways to improve the tools of government support for innovation, and the participation of the BRICS Development Bank in funding joint investment projects and innovative research.

Another subject of the innovation economy will be the "smart specialization in the regions." In order to increase the efficiency of government support measures, promising economic specializations have been determined by the Spatial Development Strategy for all regions, based on their competitive advantages. "Smart specialization" may become one of the tools for "landing" the effective specializations and increasing the innovative activity of the regions. Alexander Ivlev, EY's CIS Managing Partner and Deputy Regional Accounts Leader for Central, Eastern and Southeastern Europe & Central Asia, will moderate the session called 'An Innovation Economy: Opportunities for Smart Specialization in the Regions'. Participants of the meeting will include Pavel Grachev, Chief Executive Officer of Polyus; Aleksey Kozlov, Member of the Management Board and Managing Director of SIBUR; Mikhail Kotyukov, Minister of Science and Higher Education of the Russian Federation; Evgeniy Nikitin, Chief Executive Officer of the United Company RUSAL; Andrey Filatov, Chief Executive Officer of SAP CIS. Key topics for discussion at the session: What approach is used in Russia to provide state support for sectors of the economy? What methodology is used to select priorities for smart specialization and adapt it in Russia? What management system, mechanisms, tools and implementation procedures are needed at the federal level to implement smart specialization? Who should play the leading role in defining smart specializations – the state, regions or business? How should territorial support instruments correlate to the requirements of international organizations?

"Part of the transition to sustainable development is the implementation of plans in accordance with the strategy for Russia's innovative development up to 2020. Introducing innovations in a timely fashion is a strategic task; our country's competitiveness on the global arena in the near future depends on it," - notes EY's CIS Managing Partner Alexander Ivlev.

The Roscongress Foundationis a socially oriented non-financial development institution and a major organizer of international conventions, exhibitions, and public events.

The Roscongress Foundation was founded in 2007 with the aim of facilitating the development of Russia's economic potential, promoting its national interests, and strengthening the country's image. One of the roles of the Foundation is to comprehensively evaluate, analyse, and cover issues on the Russian and global economic agendas. It also offers administrative services, provides promotional support for business projects and attracting investment, and helps foster social entrepreneurship and charitable initiatives.

The Foundation's events draw more than 80,000 participants each year from 195 countries, with more than 10,000 media representatives working on-site at Roscongress' various venues. The Foundation benefits from analytical and professional expertise provided by 2,500 people working in Russia and abroad. In addition, it works in close cooperation with economic partners from 75 countries worldwide.