Information Bulletin of the BRICS Trade Union Forum
Issue 22.2019
2019.05.27 — 2019.06.02
International relations
Foreign policy in the context of BRICS
China, Russia Should Join Forces To Promote Safe World For Pluralism - Chinese Investor (Китай и Россия должны объединить усилия для продвижения безопасного мира для плюрализма - китайский инвестор) / Pakistan, May, 2019
Keywords: global_governance, economic_challenges
Author: Zeeshan Aziz

MOSCOW (UrduPoint News / Sputnik - 29th May, 2019) China and Russia should work together to create a safe environment for pluralism where different countries would have plenty of space to pursue their own paths, Eric Li, a pioneer Chinese venture capitalist who founded Chengwei Capital, told Sputnik.

"Obviously China, going forward, wants a world of pluralism where different countries are allowed the space and the opportunities to pursue their own development paths without outside political interference ... I think both Russia and China, and many other countries, including many people in the US and Europe, have that outlook and objective in common. So they should work together to promote a world safe for pluralism.

Different ideas, different systems of governance could be given the space and live and let live, and they can compete on their own merits," he said.

China has been advocating this belief continuously throughout the decades after it initiated marketreforms and opened up to globalization four decades ago, Li added.

According to the prominent investor, China was more fortunate than Russia in this process since it was able to resist Western attempts to enforce its political and economic systems on others, meaning that the latter has "a lot more hard-learned lessons" to share with Beijing.

Points to prove (Доказывая свою точку зрения) / China, May, 2019
Keywords: expert_opinion, global_governance
Author: Jim O'Neill

G20 not adverse to making grand statements, but it requires actions to give it relevance

As we approach the Osaka G20 summit, a problem looms large. Namely, how effective is the G20? And what can be done to further improve its efficiency?

I have become known, at least in international business and economic circles, for coining the acronym BRIC, in light of the ongoing rise of the Brazilian, Russian, Indian and Chinese economies. In the very first paper where I mentioned the phrase, "The World Needs Better Economic BRICs", I argued that linked to their rise, as well as the beginning of the European Monetary Union on continental Europe, the world needed to shift away from the - then-dominance of G7 global governance.

By 2007, due to the global financial crisis, the G20 appeared on the scene, a much expanded group from the G7, which incorporated the four BRIC countries, as well as a number of other important so-called emerging economies. In its first 12 months of heightened importance, the G20 appeared to be an effective force, being credited after its initial late 2007 meeting, and especially after the London 2008 meeting, as ensuring that global monetary and fiscal policy would be coordinated to a degree that the fallout from the financial crisis could be managed.

Eleven years later, it is not so clear that the G20 would be able to repeat this feat or in areas outside of monetary and fiscal policy cooperation.

Let me step back further to the 1980s briefly to an era when I first started working in international finance. By 1985, years of sustained excessive dollar strength despite the widening US trade deficit led to a dramatic policy initiative from the finance leaders of the so-called G5 countries - the United States, Japan, Germany, France and the United Kingdom - at the time, the five nations that dominated world economic and financial affairs.

The infamous Plaza Accord, as it became known, was soon regarded as a major success in halting protectionist pressures in the US, although it didn't do much for the trend of the US trade balance. It certainly ended the period of dollar strength, and in subsequent years, repeated declines of the dollar were either allowed, or occasionally orchestrated by Western policymakers led by the US.

By late 1987, the G5 expanded to become the G7, with Canada and Italy added to the other five in recognition of their rise in global economic importance, and for most of the rest of the decade, the G7 countries sat at the heart of international economic, and with increasing frequency, international social and broader topics, and policymaking. With the collapse of the Soviet Union, the G8 was - temporarily - born when Russia joined the other seven countries, which certainly meant the G8 took on a regularly broader remit than mere finance and economics when the leaders held their annual meeting.

And it was more than apparent, as early as 2001, that a growing number of genuinely global economic and social challenges could not be successfully met unless some other big countries, China in particular, joined the group.

And so when President George W. Bush dragged the then little known established entity of the G20 to the forefront of global policy in late 2007, I was at the forefront of welcoming the foresight of this move. It might have, and still could, involve a lot more countries, but it was certainly a much more representative group for global governance.

It could be argued that all such international bodies frequently struggle to be effective, never mind efficient, and a realist might suggest that in practice any of these bodies are effective when their collective interests are vastly larger than their individual ones.

As it relates to the G20, certainly the scale of the 2007/8 financial crisis seemed to bring the best out of the group, with many countries happy to try to present their monetary and fiscal policy response in a collective way, which allowed observers to appreciate the massive scale of the economic policy response. However, what to do when there is no imminent crisis making headlines all over the world?

One thing to consider is to have each of the G20 countries give some kind of score card themselves for the progress they have made toward past initiatives that featured in G20 statements. It would, of course, be tricky and subject to gaming by some countries, and might - as with other ideas - suffer from the fact there is no permanent G20 staff or secretariat. One way around this would be to give that responsibility to the International Monetary Fund, which certainly on economic matters, would be relatively easy.

An example to specifically consider dates back to the South Korean-hosted G20 summit in 2010. Some countries, as well as giving the best policy response, shifted their attention to focusing on the underlying causes, and in this regard, the global balance of payments imbalances, especially between the US and China.

And there was a failed attempt to consider some kind of broad rule that when a country's current account balance went above a certain level (whether surplus or deficit) it would get called out, and result in some kind of G20 attention. This struck me as a rather good idea, but China and Germany appear to be quite opposed, not least as they regard these issues as sovereign.

In addition to asking each G20 country to record progress - or lack of - on any past initiatives, it might be an idea to really test countries, often the hosts, that want to bring a new issue on to the G20 agenda. For example, this year, it looks as though Japan is going to try to feature the issue of global governance of technology in terms of some common rules. Perhaps Japan needs to be pushed, as all other countries in the future who have ideas for new focus areas, as to precisely what they want to achieve in doing so. It is all very well to make very general grand statements, but unless anything specific occurs between and across G20 countries, what is the point?

The author is chair of Chatham House. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Investment and Finance
Investment and finance in BRICS
BRICS Account for 35% of Iran's Non-Oil Trade (На долю БРИКС приходится 35% ненефтяной торговли Ирана) / India, May, 2019
Keywords: economic_challenges

Iran's exports to BRICS members stood at $886.08 million during the month to April 20, indicating a 9.2% decrease while imports were worth $833.56 million, down 13.13% year-on-year

BRICS Account for 35% of Iran's Non-Oil Trade

Iran traded 4.62 million tons of non-oil commodities worth $1.71 billion with BRICS nations during the first Iranian month (March 21-April 20), registering a 48.02% rise in tonnage and 11.15% decline in value compared with last year's same month.

Latest data released by the Islamic Republic of Iran Customs Administration show Iran's exports totaled 3.94 million tons worth $886.08 million during the month, indicating a 47.13% growth in tonnage and 9.2% decrease in value year-on-year.

Imports stood at 679,803 tons worth $833.56 million, up 53.36% in tonnage and down 13.13% in value YOY.

The above figures indicate a trade surplus of $52.52 million in favor of Iran.

Korea dominates fund mobilisation; India's NSE leads the BRICS pack (Корея доминирует в мобилизации средств; Индийская NSE лидирует в БРИКС) / India, May, 2019
Keywords: economic_challenges, rating
Author: Bharadwaj Sharma

The total fund mobilisation by both NSE and BSE via issuance of equity and bonds stood at $30,119 million.

BRICS is an association of five major emerging economies — Brazil, Russia, India, China and South Africa.
Fundraising by issuance of equity and bonds across major global exchanges was dominated by Korea's Kospi Exchange at $52,338 million ($52.3 billion) during March. However, among the BRICS nations, India's National Stock Exchange (NSE) led the pack.

BRICS is an association of five major emerging economies — Brazil, Russia, India, China and South Africa.

During March, NSE raised $3,971 million through equity issuance and $24,822 million through bond issuance, according to data shared by World Federation of Exchanges (WFE). The Bombay Stock Exchange's (BSE) fund mobilisation was negligible in comparison to NSE, wherein $1,326 million was raised.

The total fund mobilisation by both NSE and BSE via issuance of equity and bonds stood at $30,119 million ($30.1 billion).

After India, Russia and South Africa led the pack with regard to fund mobilisation. Russia's Moscow Stock Exchange raised $21,140 million and South Africa's Johannesburg Stock Exchange mobilised $11,646 million in March.

Meanwhile, China's Shanghai and Shenzen stock exchanges mobilised $1,807 million and $4,926 million, respectively, in the month.

The total funds worth $2.8 billion in equity and debt raised by NSE were higher than the US's Nasdaq ($2,908 million) , NYSE ($7,104), France's Euronext ($1,410), Australian Securities Exchange ($2,923) and Hong Kong Exchanges and Clearing ($17,443).

WFE data shared by Sebi clarified that fund mobilisation data for equities are excluding investment funds and including alternative and SME markets.

As on April, annualised volatility of both NSE Nifty50 index and S&P BSE Sensex stood at 10.3% among BRICS.

Brazil's Ibovespa index and China's Shenzen index had the highest volatility — at 20.2 % and 20.9%, according to Bloomberg data shared by Sebi.

However, India's PE ratio still remains the highest at 29.3 (Nifty50) after Nasdaq composite index (33.5).

In its report, the regulator said the emerging market economies continued to grow, but the growth tempo has been slower this year. Though growth in India slowed down in the final quarter of 2018, India has recorded the highest growth among the major emerging markets.

"The Brazilian economy, which is Latin America's largest economy, has recorded weak recovery in last one year. Analysts have cut their 2019 growth forecasts for the economy in a signal of mounting investor pessimism, while performance of the Chinese markets was also average," Sebi said in the report shared on Friday.
Globalization: New Pathways Along the South–South Axis (Глобализация: новые пути по оси юг-юг) / Russia, May, 2019
Keywords: expert_opinion, economic_challenges
Author: Yaroslav Lissovolik, Zhang Henglong

The year 2018 was marked by escalation in trade tensions among the world's largest economies, mostly via bilateral trade restrictions. This was partly compensated by the advances in regional economic integration, particularly among the countries of the Global South, with the African Continental Free Trade Area (AfCFTA) being one of the most important advances in this direction. There is far more to come in 2019 in terms of regional economic integration, which is becoming the main neutralizing factor for protectionist pressures in the global economy. In particular, China is now emerging as one of the champions of trade integration and economic openness, with the Regional Comprehensive Economic Partnership (RCEP) potentially being the largest megabloc that could be launched in 2019. Furthermore, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP-11) comes into force on December 30, 2018, with significant liberalization impulses unlocked in 2019 on the back of implementation of this agreement.

While regional trading arrangements were long suspect of being potential stumbling blocks to globalism and multilateralism, in the current environment characterized by mounting protectionist pressures, regionalism may turn out to be one of the very few viable options in delivering liberalization impulses across the global economy. Indeed, this is precisely the pattern observed in the Trump era of rising trade barriers from the US – trade agreements are being reconsidered in the direction of greater protectionism (as is the case with the Trans-Pacific Partnership, NAFTA as well as trade bilateral agreements between the US and China), which is in part compensated by new regional integration agreements such as TPP-11 as well as RCEP.

Regionalism Versus Protectionism

In a world where global institutions prove to be too weak in the face of rising protectionist pressures, regionalism sustains the momentum in parts of the global economy towards greater openness and trade liberalization. In effect, the countries that launch protectionist policies lose the edge in forming and expanding their alliance networks even as other parts of the globe forge ahead with the formation of ever-greater trading blocs. Accordingly, when global trade rules fail, the changing combinatorics of regional alliances can put pressure on the protectionist countries to change policy course for fear of falling behind in the race to build extensive networks of economic partnerships. In other words, countries affected by protectionist policies can structure bilateral and regional alliances in such a way as to put pressure on protectionist countries to change their policy stance, and in the longer term this may turn out to be a heftier cost for protectionist countries than countermeasures in the form of reciprocal protectionism.

The positive impact of regionalism on the world economy would be even further enhanced if its evolution were not as haphazard and devoid of coordination among its various constituent parts. The lack of coordination among regional integration arrangements could be addressed on the global level via creating a comprehensive platform of regional governance that brings together all of the main regional integration arrangements. This new regional layer of governance may replicate some of the coordination mechanisms enforced among nation states.

There may also be a case for a set of core principles to govern this regional platform of cooperation:

  • Mutual recognition;
  • Representation in global organizations;
  • Non-interventionism;
  • De-politicization;
  • Possibility of mutual representations/embassies.
The formation of a common regional platform may also be accompanied by an agenda for global governance that may target the following priorities:

  • Dispute settlement among regional blocs and their members;
  • Connectivity among the regional blocs pertaining to the same region/ continent;
  • Financial crisis resolution – leveraging the resources of regional financing arrangements (RFAs) to promote a regional resolution to the crisis and pan-regional measures to reduce economic vulnerabilities;
  • Security issues – promoting greater security in coordination with global institutions;
  • Financial market regulation;
  • Cooperation on migration issues.
Ultimately, in the face of mounting protectionism regional impulses of trade liberalization will need to be also supported by reinforcement of the multilateral framework of the World Trade Organization (WTO). Members of G20 are preparing to advance proposals on revamping some of the key aspects of WTO operations, including the dispute settlement body as well as the scope and coverage of the global organization with respect to regional integration arrangements. The hope is that in 2019 realization of the economic costs of protectionism – including increasing market volatility, stock market declines, rising recession fears – will also lead to a reassessment of economic priorities amongst the largest players of the world economy.

New Impulses to Globalization: South–South Integration

The recent protectionist measures coming from the US appear to be particularly adverse for developing countries, and in seeking ways to neutralize the effects of such protectionism the developing world has achieved important progress. One venue that has already proven to be instrumental in boosting growth and modernization has been the rise in the South–South trade and the prioritization of South–South cooperation in trade and investment spheres.

The rising prominence of South–South trade and economic integration is borne out in the gures covering trade dynamics since the 1980s – these show that up until the current decade the volume of exports from the developing world has risen nearly five-fold, while the corresponding world growth .gure amounted to a three-fold rise. More than a half of total exports from the South were accounted for by South–South trade flows.[1] By 2014, the value of South– South trade reached nearly $5.5trn, which is close to the scale of North–North trade.[2] The higher potential residing in the South–South trade rests on a number of factors:

  • Higher growth performance and future growth potential;
  • Greater scope for trade liberalization, given that import tariffs remain elevated in the developing world;
  • Greater scope for production-sharing given the similarity of levels of development and competitiveness;
  • Strong complementarity in production and resource endowments between various segments of the developing world, including between the BRICS economies and low-income countries.[3]
The higher growth potential of developing countries that may in turn feed the higher growth in trade is reflected in the forecasts of international organizations. According to the WTO, GDP growth in the developing world is set to accelerate from 4.3% in 2017 to 4.6% in 2019, while the corresponding figures for developed economies point to a deceleration in growth from 2.3% to 2.2%, leading to a widening of the projected growth differential in the 2017– 2019 period from 2% to 2.4%. With respect to exports, developing countries are expected to exceed developed countries' growth trajectory by around 2%, Asia being the main growth locomotive in terms of trade flows at over 5% per year in 2017–2019.

Most recently, South–South cooperation started to receive more of a boost from BRICS as the growth in all economies of the bloc entered into positive territory in 2017. In particular, despite occasional bilateral tensions, India and China staged a nearly 20% rise in trade turnover in 2017 to an all-time record of $84.4bn. India's exports to China grew by 40% in 2017, while China for its part significantly increased its outward investment in India's economy. The trade turnover between Russia and China grew by 21% in 2017 and reached $84bn, with growth of more than 20% in January–April 2018, putting mutual trade turnover on course to exceeding $100bn in 2018.

Along with the acceleration in the South–South trade, regional integration is progressing further in the developing world against the backdrop of reversals in Europe and North America. In this respect, the activism of the Eurasian Economic Union (EAEU) in forging alliances with Southeast Asian countries such as Vietnam, the agreement between MERCOSUR and Southern African Customs Union (SACU), which is the first on the scale of 'integration of integrations', as well as the creation of a platform such as BRICS+ (potentially the most extensive South–South integration platform) – point to an important trend in economic integration that could serve to sustain world's economic growth. The UN Conference on Trade and Development (UNCTAD) analysis of India's and ASEAN's regional trade agreements (RTAs) with other developing Asian economies reveals expanded opportunities for exports and economic growth. At the same time, UNCTAD notes that for the South–South economic alliances to be effective, they need to be accompanied by infrastructure development as well as lifting of non-tariff barriers.[4]

The growth observed in recent periods in the South–South trade as well as continued South–South trade integration, despite the challenges of global protectionism, lay a firmer foundation for building integration platforms across the developing world.[5] These may range from standard free trade areas (FTAs) to investment platforms between national and regional development banks as well as sovereign wealth funds. For Russia, this is also an important trend to take into account in shaping its foreign economic strategy – the strategic Turn to the East needs to be part of a broader strategy of partnership with the entire developing world. The scope for forging such alliances in the Global South is enormous as is the potential growth and trade impulses emanating from mutual openness and inclusive development.

2018 as a Breakthrough Year for the Global South

As the year 2018 ended, it may be termed a breakthrough period in terms of the developing world advancing towards the goals of aggregating and structuring its economic integration platforms. The progress achieved thus far confounds the notion of a highly divided and fragmented Global South – the possibility of forming pan-continental integration platforms no longer appears unreachable, while forging of cross-continental alliances already appears to have been set in motion.

In particular, there is the launching of a pan-continental free trade area in Africa – AfCFTA, as well as the recent headway in building links between the Pacific Alliance and MERCOSUR in Latin America. In July 2018, the first high.level meeting took place between the representatives of the two largest trade blocs that account for nearly 90% of the GDP of Latin America. One of the key aspects of the high-level meeting was the signing by the presidents of the two regional blocs of a letter of intent to create a regional trade agreement.

On the Eurasian front, recent periods witnessed the accession of India and Pakistan to the Shanghai Cooperation Organization (SCO) in 2017, which transformed the regional grouping into one of the largest blocs in the world economy and strengthened the case for the SCO to serve as a nucleus/key platform for integration among the developing countries of Eurasia. Outside of the core of SCO, important impulses towards closer partnership are taking place among the developing countries of Eurasia. In particular, in May 2018, Iran concluded a temporary FTA with EAEU, with the latter also signing a non-preferential agreement with China.

Apart from this, there is the intensification in cross-continental linkages involving pan-continental groupings such as the Community of Latin American and Caribbean States (CELAC), which is actively developing ties with China and Russia. Another important dimension to cross-continental South– South cooperation in this respect is the strengthening of the China–Africa partnership as well as the BRICS+ initiative, which received further impetus in 2018 during South Africa's presidency in BRICS.

What emerges is a picture of increasing continental integration across all three continents of the South–South axis, with emphatic progress being made in 2018 in South America, Africa as well as Eurasia. Of the three continental groups, the greatest workload in completing the continental integration roadmap is in Eurasia, where much remains to be done in solidifying SCO, endowing it with more of an economic integration agenda, and extending its partnerships to other developing economies of the Eurasian world, such as Turkey, Iran, the Gulf states as well as ASEAN in the East.

With the significant progression in pan-continental economic integration across all three continental platforms, a new frontier opens up for developing economies in economic integration, namely the cross-continental trajectory that ties together the pan-continental trading arrangements in South America, Africa, and Eurasia. These sequential rounds of integration and liberalization will harbour the benefit of delivering strong impulses towards economic openness to the world economy slipping into increasing use of protectionist policies. Furthermore, such integration if achieved would bene.t the developing world by means of opening faster growing markets that at the same time are relatively more protected than those in the developed world (hence the higher is the preferential margin for the developing countries involved in trade liberalization).

The sequencing and the algorithm of how the formation of an extended South–South integration platform proceeds can follow multiple trajectories, including via the aggregation of the largest existing regional integration groupings led by the BRICS economies within the framework of BRICS+. However, a shortcut of sorts in pursuing such integration could be achieved through linking together the pan-continental integration platforms in South America, Africa, and Eurasia (represented by SCO+, CELAC and the African Union – referred to as the TRIA platform[6]). Importantly, this integration effort would be performed not via intermediation of global organizations or regional groupings of advanced economies but via a South–South exchange of trade preferences.

The benefits of concluding a transcontinental pact across the continental platforms of the developing world reside in significantly reducing the fragmentation of economic alliances in the developing world and raising the level of aggregation to the full potential of continental geography of the Global South. What this means for the world economy is a potential move to a different paradigm of diversified development instead of the rigid core–periphery pattern. It also raises the potential of the Global South to further shift the balance of economic weight into its favour as the liberalization impulses in the developing world could outpace those observed in the advanced economies.

Conclusion: In Search of a Global Integration Algorithm

In the end, the power of regional economic integration does not solely rest in expanding the growth opportunities for its members via lowering trade barriers and making goods cheaper for consumers. There are crucial external dividends that are reaped by successful and dynamic integration blocs, whereby soft power as well as the gravity pull of an expanding economic bloc improves the conditions for trade and investment with the outside world.

In economic integration success breeds success in many respects, including in terms of creating a sufficiently large economic mass whose gravity pull (in terms of the gravity model in international trade) becomes progressively stronger with respect to neighbouring economies. A case in point in this respect is the evolution of the EU integration that followed the pattern of building a critical mass of large economies in Europe with France and Germany as the key heavyweights. This served to attract trade flows away from neighbouring economies. The result of the gravity pull of trade flows was the so-called domino effect that led to more and more European countries opting to join the ever.expanding and massive European Union. Times have changed since, and with the EU facing the Brexit challenge, the next 'integration growth' cycle may be performed by the Global South, whose nation states and integration blocs are still largely fragmented, most notably in Eurasia.

The current system of a well-integrated developed world and a largely fragmented Global South may persist for quite some time lest developing economies step up their efforts to bring together their existing integration blocs within uni.ed integration platforms. The first undertaking in this process could be directed at building a critical mass first in Eurasia via bringing together India, China, Russia within an enlarged SCO format – SCO+, which forms the basis for attracting other regional blocs of the Global South in Eurasia, such as ASEAN, into the most extensive platform for developing countries in the continent. This also forms the basis for engaging the EU in a more active economic cooperation with the developing economies of Eurasia, while at the same time an enlarged SCO+ could also facilitate the creation of a global platform for South–South integration either on the basis of BRICS+ or TRIA.[7]

The corresponding sequencing of building a global framework of South– South cooperation that becomes significant enough to engender full-scale cooperation with the developed world may progress along the following stages:

  • The Russia–India–China triangle: closer coordination among India, Russia and China in promoting SCO as the core integration platform for the developing economies of Eurasia;
  • The Grand Eurasia: building an enlarged SCO+ framework that is large enough to engender closer ties with the EU in building a pan.continental alliance and forging ahead with connectivity integration;
  • The integration of the Global South: building a BRICS+/BEAMS[8] and/or TRIA framework that attracts other regional blocs from the developing world into forming ever broader coalitions and megablocs of the Global South;
  • A global North–South global platform: an enlarged integration platform of the Global South is likely to exert a stronger gravity pull vis-à-vis the developed world, including with respect to coordinating the creation of North–South integration frameworks/fora.
It hence appears that there is a certain sequencing that could be followed in building a more balanced global economic architecture. The most important part of the sequencing has to do with addressing the fragmentations and gaps in the regional layer of global governance (most notably within the Global South) that has become increasingly critical in the past decades for development and maintenance of macroeconomic stability. The attainment of a more coordinated framework in relations between developed and developing economic integration platforms is unlikely to exhibit breakthroughs without more active steps on the part of the Global South towards forging South–South integration. For the developing world, the two key integration tools in attaining greater connectivity with the developed economies have to do with the SCO+ framework (for building cooperation with the EU in Eurasia) and the BRICS+ framework (for engendering greater cooperation from the developed world on the global level).

Sustainable globalization or economic integration is unlikely to be secured solely on the level of global economic organizations and without progress in building a coordinated framework among the largest regional integration arrangements. Rather than performing minor adjustments to the system of global institutions, a comprehensive revamping of the regional layer of global governance and its greater consistency with other layers of global governance – may be the key to a successful restructuring of global economic architecture. In this respect, the Global South is likely to play an increasingly important role in shaping regionalism and a global economic architecture of the future.

The views and opinions expressed in this paper are those of the authors and do not represent the views of the Valdai Discussion Club, unless explicitly stated otherwise.

Valdai International Discussion Club

[1] Key statistics and trends in international trade. UNCTAD 2017. The status of world trade. New York and Geneva, 2018, p. 10

[2] Ibid.

[3] Bernhardt, T, 2016, 'South–South Trade and South–North Trade: Which Contributes More to Development in Asia and South America? Insights from Estimating Income Elasticities of Import Demand', CEPAL Review, no. 118, April, p. 97-114.

[4] South-South Trade in Asia: the Role of Regional Trade Agreements UNCTAD. 2008, p. xviii, en/docs/ditctabmisc20082_en.pdf

[5] Lissovolik, Y, 2018, 'The Integration Platforms of the Global South', Valdai Discussion Club, April 30. Available from:

[6] Lissovolik, Y, 2018, 'Imago Mundi: A South–South Concert of Continents', Valdai Discussion Club, January 31. Available from:

[7] See: Lissovolik, Y, 2018, 'Imago Mundi: A South–South Concert of Continents', Valdai Discussion Club, January 31. Available from:; Lissovolik, Y, 2018, 'The Integration Platforms of the Global South', Valdai Discussion Club, April 30. Available from:

[8] The platform that brings together the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), Eurasian Economic Union (EAEU), African Union (AU), MERCOSUR and Shanghai Cooperation Organization (SCO).

The crucial role of New Development Bank in the future of BRICS (Решающая роль Нового банка развития в будущем БРИКС) / India, May, 2019
Keywords: ndb, expert_opinion
Author: Prof. Karin Costa Vazquez

The big emerging markets of Brazil, Russia, India, China and South Africa (BRICS) have come a long way since their first summit in 2009, proving to be more than an "arranged marriage" as recently proclaimed in the media amid disagreements among the five members on Venezuela and WTO reform. Looking back in the history of the group, even the Doklam standoff and the China-India disagreement on Pakistan had a negotiated solution. The question therefore is not what separates the BRICS – as political divergences will always exist in any country arrangement – but what still holds the five countries together one decade after the creation of the group.

In order to answer this question, it is important to understand that the BRICS emerged not as a group whose strength lay in the individual capacity of each country but as a pragmatic relationship that pools the influence of its members to achieve common objectives. This is the case of the New Development Bank (NDB) and its potential to reshape the world of development finance. Three key features set the NDB apart from existing multilateral development banks: its commitment to close the infrastructure gap in emerging and developing countries without delays nor imposing conditionalities; sustainable development; and equity in power-sharing.

In less than four years of operations, the NDB seems to have laid down fairly solid foundations. It received AA+ international credit rating and built a portfolio of 35 projects worth USD 9.2 billion – nearly half of World Bank lending in 2018. During its 4th annual meeting last month, the NDB stressed the need for investments in social infrastructure in addition to its current lending for physical infrastructure development in recognition that both soft and hard infrastructure is needed to meet the developing needs of member countries. Once a contender, India also gave the green light to the expansion of the NDB membership. While helping to improve credit rating and increase the bank's subscribed capital, there is still no consensus among the five members on who should be invited.

As the NDB consolidates its operations, it is challenged by its commitment to sustainability. In 2019, five new projects totaling about USD1.2 billion were approved. Yet, the criteria under which these projects are selected and monitored remain unclear. So are the development results achieved to date. In South Africa, questions mark NDB loans to the indebted power utilities company Eskom. The expansion of the Durban port and the retrofitting of the Medupi coal-fired power plant also raise local communities' concerns about ecological degradation and increasing carbon emissions. In India, a road modernization project in Madhya Pradesh is suspect of land grabbing and property destruction. Failure to consult the stakeholders directly impacted by the projects as well as disclose project documents and social-environmental assessments can compromise the bank's development impact.

Assessing the development impact of NDB's projects and their contribution to the Sustainable Development Goals will become even more critical as the bank initiates the mid-term review of its general strategy later this year. So will hiring women for senior management and leadership positions, mainstreaming gender into the bank's operations, and securing a balanced loan allocation among the five members. This year China passed India as the top recipient, with 34 percent against 27.3 percent. Russia and South Africa follow in third place with 16 percent each. Brazil receives the lowest amount, totaling approximately USD621 million (6.7 percent). Dubbed as a differentiating feature of the NDB, the equal say in the bank's governance would be short-lived without a balanced allocation of loans among the five members.

Those who dismiss the BRICS as little more than an acronym might feel justified in their skepticism as political and economic turmoil shake emerging economies. Yet, their most tangible creation is making a surprising headway in establishing itself as a viable business. As the New Development Bank enters its fourth year of operations it must now prove the "development" in its name.

(The author is Associate Professor, Assistant Dean for Global Engagement, Executive Director, Center for African, Latin American and Caribbean Studies at School of International Affairs, O.P. Jindal Global University. Views expressed are personal.)

Washington Expects China to Back Down in the Trade War. But with Presidents Xi and Putin Meeting Next Week at SPIEF, What Happens if They Don't? (Вашингтон ожидает, что Китай отступит в торговой войне. Но когда президенты Си и Путин встретятся на следующей неделе в ПМЭФ, что произойдет, если они этого не сделают?) / China, May, 2019
Keywords: vladimir_putin, xi_jinping, top_level_meeting, political_issues, economic_challenges

This coming week's annual St. Petersburg International Economic Forum (SPIEF) takes on a rather greater significance given that Chinese President Xi Jinping and Russian President Vladimir Putin will be meeting and hosting dialogue at the event.

It thus becomes a forum at which future US-China trade talks could be defined – not least because a strategy China could adopt with the US is to tough out their trade war and seek supply chain development from non-US sources. Russia is a key player in determining whether or not that could happen.

This year's SPIEF theme is telling: 'Creating a Sustainable Development Agenda'. The SPIEF 2019 program agenda can be seen here.

Like last year, I will also be attending, this time with the Head of Dezan Shira & Associates' Russia Desk, Maria Kotova. She is based in Shanghai, and a large part of our time will be taken up to better understand the China-Russia trade dynamics as well as gain an overview of global investment trends, and especially in Eurasia.

That is possible because SPIEF has always been an international trade event, and this year's includes a number of country business dialogues that will be held to discuss bilateral economic cooperation between Russia and participants from Austria, China, Finland, France, Germany, India, Italy, Switzerland, Sweden, and African nations.

The agenda also includes a BRICS conference, EAEU–ASEAN business dialogues, and events dedicated to Russian-European cooperation and innovative cooperation within the CIS, European, and Asian countries.

Should readers wish us to ask, or listen out for specific business and trade issues, you may let us know in advance here and we will get back to you either during or immediately after the event with our comments.

What can be expected, however, is more of a push-back against current US trade policies. That manifested itself last year when the underlying attitude was the global betrayal of trust.

While part of that last year was based upon Russia's own recent experiences with the US, not purely limited to sanctions but also over issues concerning conflicts in Syria and elsewhere, it was also seen to be supported by similar views from other regions, including within the Middle East, Africa, as well as other countries, such as Turkey.
That attitude has now developed further, and is reaching out more vigorously to China, who this week accused the US as promoting trade disputes in the manner of "naked economic terrorism". Those are pretty harsh words, even for China, long given to inventive insults when it chooses to verbally defend its interests.

They are words that the Mexican President, Andrés Manuel López Obrador, will also be reflecting on, as yesterday President Trump suddenly announced tariffs on all goods imported into Mexico "Unless illegal immigration stops". Those commence on June 10 and are at an initial five percent, rising to 25 percent by October 1 if Trump isn't satisfied.

This has taken place just when discussions of the US-Mexico-Canada Free Trade deal (USMCA) is still in the process of being ratified, and brings home the fact that, yet again, in the eyes of an increasing number of countries, the United States cannot be relied upon as a sustainable, predictable trade partner – the very qualities that global supply chains depend upon.

One of the questions SPIEF might answer, then, is how widespread is this view and what can be done about it?

A question for Washington-focused China hands is whether or not the current administration views such vernacular as being pure bluff. The danger is that China means it and will take steps, in the words of the SPIEF agenda this year, to "create a sustainable development agenda".

In St. Petersburg, that will undoubtedly mean reducing exposure to the US in terms of trade, supplies, and infrastructure. It will also pose the question as to whether China can rally other significant nations alongside Russia to develop non-US alternatives.

This is partially happening.

The US, for example, is in effective control of the existing global financial transaction system and has introduced the system of using US intermediary banks and the SWIFT payments system to process all international transactions. That was originally introduced to combat money-laundering and terrorism.

However, in the eyes of China, Russia, and countries such as Iran and Turkey, among others, it is now being subverted and used as a creature of punishment – being a mechanism used for cutting off global economies from international trade based upon whatever the current US trade policy is.

SWIFT has become a switch that can be turned on and off with no warning. New trade policies can be introduced overnight. This is why the "sustainable" aspect of this year's SPIEF is going to be important – sustainable as in non-interventionist.

China and Russia have been leading the way in terms of developing an alternative to SWIFT, by introducing Union Pay as an alternative.

The BRICS nations of Brazil, India, and South Africa along with Russia and China are developing a cloud based "BRICS Pay" system specifically to avoid US dollar trade.

Other nations are following; the desire to avoid the US dollar is fast becoming a trend. Will these new payment structures become alternative, non-US dollar global networks?

China has also been busy developing a global trading network of its own. Over the past 20 years it has been extremely active in signing off trade agreements.

These include bilateral trade agreements with over 100 countries and economies, which typically cover expropriation of funds, arbitration, most-favored-nation treatment, and repatriation of investment proceeds.

In addition, China has 14 full blown free trade agreements (FTAs), and is negotiating or implementing an additional eight. China's FTA partners are ASEAN, Singapore, Pakistan, New Zealand, Chile, Peru, Costa Rica, Iceland, Switzerland, Hong Kong, Macau, and Taiwan. China has also recently signed FTAs with Korea and Australia, both of which include a chapter on investment, as well as a non-preferential FTA with Russia's Eurasian Economic Union.

These FTAs deal with trade and service specifics and are immensely advantageous to those savvy enough to realize China needs to both consume as well as export.

This is in contrast to the US, which has been tardy in updating its own trade agreements, many of which date back to the early 1990s, and are in urgent need of rewriting to include new technologies and IT.

The US also currently has FTAs with 20 countries but none with any major blocs such as ASEAN. In terms of trade deal volume, it lags behind China, and both recently pulled out of the TPP deal while threatening to withdraw from the WTO.

Again, that issue of trade sustainability will come to the fore. It is not an agenda President Trump has shown much interest in.

China, however, is and has just announced it will set up an 'unreliable entities' list to combat foreign firms that cut supplies to China and that details will be announced shortly.

That will amount to an essential blacklist of businesses that follow US trade policy and cease supplying to China – another example of what SPIEF is terming "sustainability" and another indication that China is fully prepared to develop non-US based supply chains.

SPIEF 2019 therefore will further build on last year's underlying theme of excluding the US from building future global infrastructure due to its perceived and continuing political and trade unreliability.

China, for example, already appears to have won the race to install a global 5G network, an issue that was largely behind the recent Huawei spat and that I wrote about here. China is ready to invest in and develop supply chains for semi-conductors for the global 5G network from non-US sources.

How far this trend develops and how fast it will take shape are issues to be determined. But SPIEF 2019 and the meetings being held between Presidents Xi and Putin will go a long way to working out how building alternative global systems not reliant upon the US can be realized.

China, meanwhile, is preparing to become a major technical and economic global architect. With Asia and Africa largely on board, and the EU in the balance, SPIEF will go some way to answering who its trusted participants are likely to be.

Aviation Links Among BRICS Countries Discussed (Обсуждены авиационные связи между странами БРИКС) / South Africa, May, 2019
Keywords: business_council, top_level_meeting, cooperation
South Africa

The Regional Aviation Working Group of the South African Chapter recently hosted their counterparts in Johannesburg as part of the BRICS Business Council Mid-Term Meeting and handover.

According to Javed Malik, chair of the Regional Aviation Working Group BRICS Business Council SA Chapter, it was characterised by robust discussion and engagements under the theme "Collaboration for Inclusive Growth and Shared Prosperity in the 4th Industrial Revolution".

Present were representatives of aircraft manufacturers such as Embraer (Brazil), COMAC (China) and Sukhoi (Russia). Representatives of South African Airways (SAA), China Eastern Airlines, Airports Company South Africa (ACSA), the SA Department of Public Enterprises and Denel SOC were also present.

Associations in attendance included the Commercial Aviation Association Southern Africa (CAASA), the Board of Airlines Representatives of South Africa (BARSA), the Black Business Council (BBC), as well as South African private airlines and air charter companies.

According to Malik, it was agreed that, following the tenth BRICS Summit (2018) at the Sandton Convention Centre, Johannesburg, at which the signing of the BRICS Memorandum of Understanding on Regional Aviation by all BRICS Ministers of Transport took place, the vision should be to expand and deepen cooperation in regional aviation.

Report backs on five projects were presented by each of the countries - Brazil, Russia, India, China and South Africa.

Delegates were mandated to come up with a detailed feasibility reports and market forecasts linking route networks between BRICS countries. The outcome of this report would enable a way forward to plan direct flights and bilateral cooperation between BRICS countries.

Also launched, was a programme named Aviation2Rise, which was presented by South Africa and validated by the five nations of the working group. To be held every year during the BRICS Annual Meeting, this concept will connect aerospace innovations and start-ups to aviation stakeholders from the BRICS.

Political Events
Political events in the public life of BRICS
Apartheid: We 'll never betray support we received – South African Envoy (Апартеид: мы никогда не предадим поддержку, которую получили - посол Южной Африки) / South Africa, June, 2019
Keywords: quotation, political_issues
South Africa
Author: Aidoghie Paulinus, Abuja

South African High Commissioner to Nigeria, Bobby Moroe, has said the Republic of South Africa will never betray the support it received from African countries and the world during its struggle for freedom.

Moroe made the remark recently while celebrating the 25th anniversary of South Africa's National Freedom Day in Abuja.

"Our promise to the continent and to the world is that the 25 years of freedom that we are celebrating today, which did not come easily, came through the support of the continent and the international community. Our promise is that we will never betray the support that we have received," Moroe said.

Moroe further said the role South Africa has played in global governance in the past 25 years, demonstrated South Africa's commitment to ensuring that it consolidated on the African agenda within the context of regional integration and Southern African Development Community (SADEC), working together with West Africa through the Economic Community of West African States (ECOWAS) and other international bodies.

Moroe added that South Africa's membership of IBSA (Indian, Brazil, South Africa) Dialogue Forum and (Brazil, Russia, India, China and South Africa (BRICS), did not exclude other African members.

Moroe also said South Africa's membership of BRICS did not only benefit South Africa, but the entire continent of Africa.

"You know that in the previous summit that we hosted under the BRICS banner, our presidents have made sure that they invited heads of state from many African countries to come on board to say to them; look, although South Africa is the only member of BRICS in the continent, it is through our membership that you will also enjoy the benefits that we derive.

"South Africa's membership of BRICS does not only benefit South Africa, it is to the benefit of the entire continent. And we have made sure that we walk the floor, we fold our sleeves, we sweat, we walk by our sweat and we speak truth to power, and we represent the continent.

"So, we continue to make use of our strengthening of the African agenda and South Africa's foremost foreign policy principle, and we are not about to stop that," Moroe stated.

World of work
Social policy, trade unions, actions
International anti-corruption poster, video competition in India (Индия проводит международный конкурс постеров и видео, посвященных борьбе с коррупцией) / India, May, 2019
Keywords: sustainable_development

At Russia's instance, an international anti-corruption poster and video competition will be held in the country on the theme of "Together Against Corruption".

During the BRICS anti-corruption working group meeting held in January 2019 at Tokyo, the Russian Federation made a presentation on the anti-corruption poster and video competition promoted by the Russian General Prosecutor's office and suggested that a similar initiative be organised with the participation of all BRICS countries.

India agreed to participate in the contest.

"The event is being organised by the Department of Personnel and Training (DoPT) in association with the Central Vigilance Commission and the Ministry of External Affairs on the contest theme 'Together Against Corruption' through the active involvement of Chief Vigilance Officers as well as the Vigilance Study Circles (VSCs)," an order issued by the Central Vigilance Commission said.

The competition will be open for participation in India from June 1 to September 30, under two categories -- 'The Best Poster' and 'The Best Video'.

At national level, a committee is being constituted by the DoPT for evaluation of the works of the contestants after appraisal and submission of the shortlisted entries by the VSCs.

The winner and the two prize winners (for both poster and video) at National level would be awarded prizes, the Commission said.

International Festival of Theater Schools of the BRICS Countries (Международный фестиваль театральных школ стран БРИКС) / Russia, May, 2019
Keywords: social_issues

From May 27 to June 5, the 3d International Festival of Theater Schools of the BRICS countries is being held on the stage of the Large Amphitheater in Zaryadye Park.

The festival participants are students and professors of drama schools from Brazil, India, China, and South Africa. Students of the Institute of Theatrical Art named after People's Artist of the USSR I. Kobzon will represent Russia. Special guests of the festival are delegations from the Republic of Belarus (Belarusian State University of Culture and Arts) and Armenia (Yerevan State Institute of Theatre and Cinematography). In total, 420 people will take part in theater activities.

This year, the festival is based on the immortal tragedy "Oedipus Rex" by Athenian playwright Sophocles. Spectators will have a chance to see the different scenes from the performance prepared by the delegations. During 10 days, an entire era will be reconstructed, filled with emotions and passions, and on the final day of the festival, participants will show a single production, created from different cultures, but understandable without translation.

The format of the festival "Let's play together!" became a new unique theatrical event that has no analogues in the history of the theater, it was awarded the Grant of the President of Russia V. Putin as a particularly significant project in the field of culture and art.

The festival is organized by the Institute of Theatrical Art named after People's Artist of the USSR I. Kobzon with the support of the Presidential Grants Foundation, the Ministry of Foreign Affairs of Russia and personally Minister of Foreign Affairs S. Lavrov, as well as the Department of Culture of Moscow.
Fudan University signs intl higher education cooperation deals (Университет Фудань заключил международные соглашения о сотрудничестве в сфере высшего образования) / China, May, 2019
Keywords: social_issues, cooperation

Fudan University signed a raft of cooperation deals with international higher education institutions to promote exchanges among academic circles and the younger generation.

The inaugural Annual General Assembly of BRICS Universities League and the 2019 Fudan-Latin America University Consortium Council Meeting were held over the weekend at Fudan, as the university hosted its iconic annual gathering, the Shanghai Forum, for the 15th time.

During meetings, delegates from universities and research institutions in BRICS countries and top representatives from over 10 Chinese universities discussed the constitution and governance structure of the alliance, as well as the initiative of building a community with common health for people in the five BRICS countries.

Meanwhile, the Fudan-Latin America platform is expected to boost exchanges and strengthen mutual understanding between China and Latin America.

Also over the weekend, Fudan University and the University of Sydney signed a Memorandum of Understanding on a cooperative relationship in realms like teaching, training, and research projects.

It also teamed up with the London School of Economics to unveil a joint research center on global public policy.

Fudan University will celebrate its 114th anniversary on Monday.

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