Information Bulletin of the BRICS Trade Union Forum
Issue 11.2017

2017.03.06 — 2017.03.10
International relations
Foreign policy in the context of BRICS
Potential Pakistan Entry in BRICS Via China's BRICS Plus Leaves India Concerned (Возможное вступление Пакистана в БРИКС заставляет Индию беспокоиться) / Russia, March, 2017
Keywords: International relations, BRICS Plus, India, Pakistan
Source: Sputnik News

China has come up with an idea of inviting some developing countries under the banner of BRICS Plus in BRICS meetings.

New Delhi (Sputnik) – The concept of BRICS Plus within BRICS, the brain child of Chinese Foreign Minister Wang Yi, has put India on the back foot, primarily since the Plus grouping could mean a invite for rival Pakistan into the grouping.

On the Indian side, there is also concern that China might ultimately highjack the BRICS. "BRICS is an important platform and India has chaired the BRICS Summit last year. Every one of the BRICS Chair in its turn has arranged outreach alongside BRICS events and brought a flavor of its geography to the participants. We await details of the Chinese suggestions," Ministry of External Affairs spokesperson Gopal Baglay told media.

In fact, Chinese Foreign Minister Wang Yi, on Wednesday said that, China would explore modalities for BRICS Plus, to hold dialogues with other major developing countries. India is apprehensive that China would include those countries under the 'BRICS Plus' who are its close allies which will thwart India's interests in BRICS.

"In fact, China wants to expand BRICS and include Mexico, Pakistan and Argentina under BRICS Plus. China wants to induct its friendly countries into BRICS under the banner of BRICS Plus. In the initial stage, BRICS was only BRIC but after China's initiative South Africa was added into the grouping. India was not enthusiastic initially, but supported the inclusion of South Africa as India has good relations with South Africa. The forum will become ineffective due to the increase in the number of member countries as mutual differences will override cooperation. India does not want that BRICS should become a political forum but China is interested in making it a political forum. Therefore, India will not support BRICS Plus," Arun Mohanty, Professor at the Centre for Russian and Central Asian Studies in New Delhi's Jawaharlal Nehru University, told Sputnik.
BRICS nations leading global governance (Ведущее мировое управление стран БРИКС) / Bangladesh, March, 2017
Keywords: International relations, global governance
Author: Jia Jinjing
Source: The Independent

"BRICS nations are shifting from participants to leaders regarding global governance." This was the judgment of the first BRICS national coordinators meeting held recently. The judgment not only highlighted the cooperative achievements of BRICS nations over the past ten years, but also indicated a course of action for the BRICS mechanism over the next ten years.

BRICS nations need to deepen cooperation and explore new development possibilities across four areas in order to lead global governance.

The first of these involves blazing a new path for global governance through discussion and collaboration. Instead of imposing their will upon others, BRICS nations seek their own development while providing more public goods. They have blazed a new global governance path by achieving shared growth through discussion, collaboration and win-win cooperation. They have also contributed a new model for global governance that warrants further study and promotion.

Second: Creating win-win economic situations through connectivity. BRICS nations complement each other in many areas. They can build an interconnected market by vigorously promoting infrastructure connectivity, increasing mutual trade and investment, while also facilitating monetary and financial cooperation. They have ushered in a new stage of coordinated economic growth and win-win development.

Third: Deepening cooperation to increase cultural exchanges. BRICS nations are located on different continents and each representing different regional cultures. Through all-around cultural exchanges among business circles, academia, media, think tanks, literature and art organizations and other spheres, BRICS nations can enhance communication among their peoples and in turn promote the construction of a community of common destiny for all mankind.

Fourth: Accelerating institutional building through innovation in economic models. If BRICS nations, like the Group of Seven, establish a model of overall cooperation, they can provide a new cooperative platform for the emerging-market and developing countries which account for 80 percent of the world's population. In this way developing countries will share in the fruits of development. (The author is chief researcher at Renmin University of China.)
Interview: China is playing leading role in promoting South-South cooperation, senior UN official says (Интервью: Китай играет ведущую роль в развитии кооперации Юг-Юг, заявил высокопоставленный представитель ООН) / China, March, 2017
Keywords: International relations, South-South cooperation, China, UN
Author: Gu Zhenqiu
Source: Guangming Online

UNITED NATIONS, March 9 (Xinhua) -- China is playing a leading role in promoting South-South cooperation as the world's largest developing country will host two important diplomatic events this year, a senior UN official has said.

The two high-level events -- the first international cooperation summit forum on the Belt and Road Initiative and the 9th Brazil, Russia, India, China and South Africa (BRICS) summit -- are closely associated with South-South cooperation, said Jorge Chediek, the UN secretary-general's envoy on South-South cooperation.

"China is now one of the main actors in South-South cooperation," he said in a recent interview with Xinhua.

Chediek, who is from Argentina, was appointed as the UN secretary-general's envoy on South-South cooperation in March 2016. Since October 2015, he has been the director of the United Nations Office for South-South Cooperation (UNOSSC) leading United Nations system-wide promotion and coordination of South-South cooperation for development.


The high-level forum on the Belt and Road initiative is to be held in Beijing, the Chinese capital, in May to brainstorm about interconnected development.

"We consider the Belt and Road Initiative, one of the most important, a partnership that has been developed in the world in the last few years," said Chediek.

The Chinese initiative "is basically attempted to reshape the economic geography of the world and to really integrate the South and also some parts of the North through access of the road into a new economic space that we bring prosperity and friendship throughout that region."

"So really it is a model on how the South-South cooperation can be conducted on a massive scale," he said.

China proposed in 2013 the initiative of jointly building the Silk Road Economic Belt and the 21st Century Maritime Silk Road, collectively known as the Belt and Road Initiative.

The Belt and Road run through the continents of Asia, Europe and Africa, connecting the vibrant East Asia economic circle at one end and developed European economic circle at the other, and encompassing countries with huge potential for economic development.

Some 60 countries are along the Belt and Road, accounting for 60 percent of the world population, 30 percent of the world gross product, 40 percent of the world trade, and more than 50 percent of the population under the extreme poverty line.

"By definition, the Belt and Road Initiative is a really South-South cooperation initiative," Chediek said. "So we would like to work in partnership with the government of China and other governments in the region to facilitate a mechanism for the South-South cooperation to materialize."

At present, UNOSSC has a partnership with the government of cities along the Chinese part of the Silk Road and the Maritime Silk Road to promote their engagement, he said.

"This partnership should not be limited to the central government, but to involve the local governments, local authorities, civil society and private sectors because this is an initiative that is decided on the concept that we bring prosperity and sustainable development to a very important part of the world," he said.

The Chinese initiative can not only increase trade and investment in the countries along the Belt and Road, which is conducive to economic growth in these nations, but also help these countries expand their trade with other countries far away from the Belt and Road, he said.

Meanwhile, the Chinese initiative can also play a very positive role in helping countries along the Belt and Road in their efforts to reduce poverty and boost infrastructure construction.

"We really commend the commitment of the government of the People's Republic of China in leading this initiative," he said. "We are very confident that this will offer a lot of opportunities to re-launch and obtain even more commitments of other countries and other partners with this great initiative."


"BRICS countries are very important partners in the South," Chediek said. "Their collective work is very important in developing the multiple world that we are aspired to."

BRICS represents 40 percent of the world's population and 25 percent of global GDP.

China is scheduled to convene the summit of the emerging-market bloc of BRICS in September in eastern China's Xiamen City. China voices its hope that the 9th summit will help BRICS countries forge a stronger partnership for a brighter future.

The BRIC cooperative mechanism was established in 2006, with the first BRIC summit held in Russia's Yekaterinburg in 2009. South Africa was admitted in 2010, adding the "S" to the original grouping.

"The work that China is doing both in cooperation and economic collaboration with many countries of the South is an example for the world and also becomes a source of prosperity for many countries," Chediek said.

"The contributions of China in terms of South-South cooperation are essential, we really welcome the engagement that has been made so far, and we look forward to continuing the engagement and from our part to continue the partnership to show that China has too much to contribute."

Apart from resources and technology, China has also provided an alternative vision of development, like different ways of administrating economy and administrating the development process, that it is also helping many countries to bypass different stages of development, he said.

"It is really essential that China remains engaged in South-South cooperation," he said. "So we express our gratitude to the people and government of China for engaging in this activity in building a better world."
Major-power diplomacy, Chinese style (Дипломатия мировой державы в китайском стиле) / China, March, 2017
Keywords: International relations, BRICS Plus, One Belt One Road, China GDP
Author: Zhong Feiteng
Source: China Daily

Achieving shared growth through discussion has become a core element of diplomatic philosophy

China will continue to promote justice and equity, contribute to world peace, facilitate global development and back international order, Premier Li Keqiang said in a soaring description of the country's self-image as he delivered the Government Work Report to the fifth plenary session of the 12th National Peoples' Congress in Beijing on March 5.

It is only recently that China has learned to express such global ambitions and preferences clearly. For a long time, it was accustomed to saying "no" in international affairs. But active engagement with the rest of the world compels it to adopt international norms and rules. China has gradually come to recognize that it needs to play as a stakeholder in international society and exert a positive influence.
In both landmass and population, China is clearly a big player. Its long history and culture also formulate a unique Chinese worldview. Even though China is not a fully developed country, it seeks to help others. Nowadays, China is powerful enough to let other countries share its development dividend.

"Rather than talking about leadership, we should really be talking responsibility," Foreign Minister Wang Yi said as he described the new thinking behind major power diplomacy on the sidelines of the two sessions on March 8.

In a Chinese context, the word "leadership" has a somewhat bureaucratic connotation. Some people are regarded as subordinate to others. But China will not become a center issuing orders; rather, it would like to jointly participate in international affairs with other countries.

In fact, the principle of achieving shared growth through discussion and collaboration has become a core element of China's diplomatic philosophy. The BRICS organization and the Belt and Road Initiative are the products of this philosophy.

Wang noted that China will host the BRICS summit later this year. To satisfy the new conditions, the organization of major emerging economies - Brazil, Russia, India, China and South Africa - will add political and security cooperation to its mission, and is planning its first official meeting of foreign ministers. It will also explore the "BRICSPlus" model to establish a more extensive partnership with other countries.
On China's Belt and Road Initiative, there was a big change in the 2017 Government Work Report: The Belt and Road Initiative is directly connected to China's reform and opening-up policy and considered a top-level project. In 2016, various local governments in China took measures to contribute to the platform. To a larger extent, the consensus is shared by domestic society. At the same time, the central government has worked closely with related countries and signed many bilateral agreements.

The forthcoming high-level forum on the Belt and Road will help formulate and upgrade multilateral consensus among affected countries.

"The forum in May will build consensus and connect the development strategies of various countries," Wang said, adding that the cooperative scheme will add a new dynamic to the global economy.

China, the world's second-largest economy, accounted for more than 30 percent of global growth in 2016. Last year, the economy grew at a rate of 6.7 percent, compared with the United States at 1.6 percent. It seems that China is now playing a bigger role than the US in promoting global economic health.

According to the Word Bank, the average growth of per capita GDP in China from 1961 to 2015 was 6.9 percent. From 1978 to 2015, it was 8.7 percent. Such lengthy sustainable growth has never before been witnessed in world history. And it produced various effects at regional level, as well as globally.

In a strategic sense, the astonishingly high growth pace of the Chinese economy over past three decades will eventually help China become an important player in international politics.

Parallel to this impressive economic growth, China's defense budget has also experienced double-digit growth over a decade. However, this is the second year that China has constrained the growth of its military budget. Fu Ying, spokeswoman for the NPC, announced a 7 percent rise for 2017, compared with 7.6 percent in 2016.

A simple reason is that China's economic growth rate will go down from 6.7 percent in 2016 to about 6.5 percent in 2017. In this sense, the slowdown of defense spending will be in line with overall economic performance. Fu said the proposed budget was based on defense needs as well as the national economy.

A major shift in China's military spending will be aimed at enhancing maritime power. With the growing importance of overseas interests, China needs to develop its own maritime force to protect it. Premier Li promised that China will continue "improving its overseas interest projection mechanism and capacity construction".

What should be kept in mind is that China is attempting to strike a balance between domestic civil needs and effective defense. To China, military power is not the first priority. However, US President Donald Trump has proposed boosting the US military budget by 10 percent. To Trump, absolute US military advantage is using "force for peace".

The logic seems quite different for the Chinese government. It believes that China will benefit from reform and globalization. In fact, a stable and open outside environment allows China to import capital, technology and ideas from the rest of the world, at the same time as it's exporting products to other countries. It is a win-win situation.

The EU-China relationship is one such example. Foreign Minister Wang illustrated the strategic importance of the EU, saying that China will continue to support European integration, in the hope of seeing a more stable, united and prosperous European Union.

The changing attitude toward globalization has aroused concern within and outside advanced countries. Premier Li pointed out in his report that "the deglobalization trend and protectionism are growing", which creates uncertainty.

"There are many uncertainties about the direction of the major economies' policies and their spillover effects," he said.

The Chinese government has promised to support multilateral institutions. An inclusive, equitable and reasonable new globalization is necessary for world peace and development.

The new type of globalization needs a political foundation and security. China benefited from the last wave of globalization, and promises to be a facilitator of development going forward. As Premier Li stated in delivering the Government Work Report, "China will actively provide constructive schemes for global as well as regional hot issues." It might be expected that China will also add inputs in counterterrorism, international peacekeeping and ocean escort.

China has entered a new stage with its growing power. The world will see it use this power correctly and positively. As President Xi Jinping emphasized, the great powers should avoid the old ways and find new solutions, and China has worked to establish a new type of international relations. In this way, Xi is proposing major-power diplomacy with Chinese characteristics. It promises to create new opportunities.

The author is a senior research fellow, National Institute of International Strategy, Chinese Academy of Social Sciences.

The views do not necessarily reflect those of China Daily.
Abstract from the Transcript of Weekly Media Briefing by Official Spokesperson (March 09, 2017 (Отрывок из расшифровки еженедельного медиабрифинга с официальным представителем (9 марта 2017)) / India, March, 2017
Keywords: International relations, BRICS Plus, India
Source: Ministry of External Affairs

Question from Sakal: Welcome Gopal. The Chinese Foreign Minister Mr. Wang Yi yesterday in a press conference mooted the idea of BRICS Plus countries, which means that they want expansion of BRICS and secondly he said that a tri-lateral cooperation between USA, Russia and China for the development of peace in the world. So what is your position on these two particular ideas?

Official Spokesperson, Shri Gopal Baglay: As far as your first question goes about the proposal of the Chinese Foreign Minister for BRICS Plus, as you know BRICS is a very important platform. India, as you all know, chaired the BRICS Summit last year and you would also recall that every BRICS Chair has brought an outreach program when the summit or other events have been held and you would also recall the India arranges the outreach for BIMSTEC, so the BRICS chair have brought together a flavor of their own geography to the other participants. We would await details of this suggestion from the Chinese side.

As to your question about the cooperation among China, Russia and USA, as you know we ourselves engage with Russia and China both bilaterally and also in the trilateral RIC framework, we consider that as large countries in the world, we all have to consult and coordinate together and contribute to peace and development not only in the region but the world as a whole.
China wants 'BRICS plus' to include 'friendly' countries, plan might hurt India's interests (Китай хочет включить "дружественные" страны в БРИКС Плюс, это может навредить интересам Индии) / India, March, 2017
Keywords: International relations, BRICS Plus, India, One Belt One Road
Author: Saibal Dasgupta
Source: Times of India

BEIJING: China's Foreign Minister Wang Yi has come up with the idea of extending the remit of BRICS by inviting other developing countries under a new banner, BRICS Plus.

Addressing his annual press conference on Wednesday on the sidelines of the National People's Congress, the Chinese parliament, Wang said China would "explore modalities for BRICS-plus, to hold outreach dialogues with other major developing countries".

"We hope to establish extensive partnerships and widen our circle of friends to turn it into the most impactful platform for South-South cooperation," he said. China, which is the rotating president of BRICS this year, will host the next summit in September.

Analysts said China is trying to expand its influence by inviting its allies, and the move might result in the dilution of role played by India and other countries in BRICS. The club has five countries-Brazil, Russia, India, China and South Africa.

"India would be the worst affected among BRICS partners. After expansion, the organization would lose its focus and coherence on development issues and become more like a political platform for China," Mohan Malik, professor at the Asia-Pacific Center for Security Studies at Honolulu in US, told TNN.

China may invite pro-Beijing countries like Pakistan, Sri Lanka and Mexico to join, Malik said. China may be trying to turn BRICS into a China centric organization along the lines of Shanghai Cooperation Organization, he said.

"At the 2016 BRICS summit in Goa, Beijing was successful in thwarting India's attempts to isolate and condemn its ally Pakistan over cross-border terrorism," Malik pointed out. "The BRICS Plus concept would nip in the bud any future attempts at isolating China and its friends," he said.

The Chinese foreign minister said China's goal is to strengthen the BRICS partnership. It planned to introduce a system of stand-alone meeting of foreign ministers, hold sports and cultural events among BRICS countries.

"As President Xi put it, BRICS are like five fingers each with their own strength but when we come together we are a fist that can punch. When we stay united we won't lose lustre but will shine more brightly," he said.

The premier said that, "BRICS countries represent emerging economies," he said. "Over the years, their fortunes may have risen or fallen, and each faces challenges."

Analysts said China might find it difficult to obtain India's approval to the idea of BRICS Plus.

"India surely will not be interested in expansion at this time," Swaran Singh, professor at at the School of International Studies in Jawaharlal Nehru University told TNN. "BRICS will be focussed on consolidating at this time," he said pointing to political instability in Brazil, economic slowdown in South Africa, and difficult relationship between India and China. Singh said India would avoid taking any decisive political positions because it is still analyzing the Donald Trump presidency in the U.S.

One of China's goals is to extend the One Belt One Road to countries like India which has been reluctant to participate enthusiastically. Beijing is holding a forum on the Silk Road program in May.

"With protectionism and unilateralism on the rise, the Belt and Road will find common cause where all countries roll up their sleeves and pitch in together. We will help rebalance globalisation," Wang said.
China wants to include allies as part of BRICS plus? (Китай хочет включить союзников в БРИКС Плюс?) / India, March, 2017
Keywords: International relations, BRICS Plus, India, One Belt One Road
Author: Asmita Sarkar
Source: International Business Times

On Wednesday, China's Foreign Minister Wang Yi said China would "explore modalities for BRICS-plus to hold outreach dialogues with other major developing countries."

China wants to include other developing countries in the BRICS with a new name -- BRICS plus. The current members are Brazil, Russia, India, China and South Africa.

China would find opposition from India for the expansion as India is still analysing the effect of US President Donald Trump on it and it is wary of China bringing countries favourable to itself. India and China have had contentious relations in the recent past with China blocking India's move to declare Pakistan-based Jamaat-ud-Dawaa chief Hafeez Saeed as a terrorist. India also raises opposition to the CPEC corridor running through Pakistan Occupied Kashmir.

On Wednesday, China's Foreign Minister Wang Yi said China would "explore modalities for BRICS-plus, to hold outreach dialogues with other major developing countries."

"We hope to establish extensive partnerships and widen our circle of friends to turn it into the most impactful platform for South-South cooperation," he said. The presidentship of the organisation is rotating. For the current year, it is China, which will also host the summit in September.

Apart from China seeking expansion of BRICS -- which could include Pakistan if approved -- Pakistan seeks to extend the membership of South Asian Association for Regional Cooperation (SAARC) to include China and Iran.

Both moves would undermine India's influence in the region and could isolate them, eventually pressuring them to join the One Belt One Road project. The Chinese media have repeatedly said that India needs to join the project for it to be a complete success for China as well. It is to be seen if India would join it at all or would be strong-armed into it.

"India would be the worst affected among BRICS partners. After expansion, the organization would lose its focus and coherence on development issues and become more like a political platform for China," Mohan Malik, professor at the Asia-Pacific Center for Security Studies at Honolulu in US, told TNN. He added that Beijing would invite allies like Pakistan, Sri Lanka and Mexico. He further said that Beijing is trying to make BRICS into a China-centric organisation along the lines of Shanghai Cooperation Organization.

"At the 2016 BRICS summit in Goa, Beijing was successful in thwarting India's attempts to isolate and condemn its ally Pakistan over cross-border terrorism," Malik pointed out. "The BRICS Plus concept would nip in the bud any future attempts at isolating China and its friends."

"India surely will not be interested in expansion at this time," Swaran Singh, a professor at the School of International Studies in Jawaharlal Nehru University told TNN. "BRICS will be focused on consolidating at this time."
Awaiting details of Chinese suggestion on BRICS: India (Ожидая детали по предложению Китая по БРИКС) / India, March, 2017
Keywords: International relations, BRICS Plus
Author: Asmita Sarkar
Source: International Business Times

"We will widen the circle of friends and turn BRICS into the most-influential platform for south-south cooperation in the world," said Chinese Foreign Minister Wang Yi.

A day after China, the current chair of the BRICS, indicated "widening" of the five-nation grouping during its summit later this year, India on Thursday said it awaits details of the Chinese suggestion. Maintaining that BRICS (Brazil-Russia-India-China) is an important platform, External Affairs Ministry Spokesperson Gopal Baglay said, "We await details of the Chinese suggestion."

He was replying to a query on Chinese Foreign Minister Wang Yi's comments in Beijing yesterday that the grouping will build a platform for "south-south" cooperation, exploring a 'BRICS-plus' model by holding talks with other developing countries to establish a more extensive partnership.

"We will widen the circle of friends and turn BRICS into the most-influential platform for south-south cooperation in the world," Wang had said.

Baglay also noted that every BRICS Chair in its turn has arranged outreach alongside BRICS events and brought a flavor of its geography to the participants. India had chaired the BRICS summit last year in Goa and also held BIMSTEC meet as part of its outreach event.

This year's summit is scheduled to be held in September in the southeastern Xiamen city of China. Asked about China's warning to India against visit of Tibetan spiritual leader Dalai Lama to Arunachal Pradesh, the spokesperson said India's position on the issue is consistent.

"He is a revered religious figure who is treated as such by the government and the people of India. The government has no say in his travels within India and no political meaning should be attached to them as such," Baglay said.

During a briefing in Beijing last week, Chinese Foreign Ministry spokesman Geng Shuang had warned India against allowing the visit, saying it would cause "serious damage" to the bilateral ties and peace in the "disputed" border region.

"China is gravely concerned over information that India has granted permission to the Dalai to visit Arunachal Pradesh," Geng had said.
India's Freaking Out Over China's "BRICS-Plus" Proposal (Индия в ужасе от предложения Китая о создании БРИКС Плюс) / Russia, March, 2017
Keywords: International relations, BRICS Plus
Author: Andrew Korybko
Source: Regional Rapport

Its unfortunate if India refuses to participate in the Chinese-led BRICS-Plus framework and begins to de-facto disengage from the organization.

Chinese Foreign Minister Wang Yi announced on Wednesday that China would "explore modalities for BRICS-plus, to hold outreach dialogues with other major developing countries" because "we hope to establish extensive partnerships and widen our circle of friends to turn it into the most impactful platform for South-South cooperation."

This instantly prompted a jingoistic paroxysm in the Indian media and "academia" communities, with the country's yellow press giving prominent space to an over-hyped 'expert' who anxiously fear mongered that: "India would be the worst affected among BRICS partners. After expansion, the organization would lose its focus and coherence on development issues and become more like a political platform for China… China may invite pro-Beijing countries like Pakistan, Sri Lanka and Mexico to join… China may be trying to turn BRICS into a China centric organization along the lines of Shanghai Cooperation Organization."

Instead of being jealously fearful of China's economic-strategic outreaches to other countries, especially those which could be conducted multilaterally through the BRICS format, India should embrace Beijing's model of peaceful development and win-win investments. The fact that it isn't, however, is a very worrying sign and confirms what the author forecasted last year about how "India Is Now A US Ally" which could lead to it eventually "Break Up The BRICS".

It's evident that the government-aligned Mainstream Media in India is already building up the narrative for justifying the country's forthcoming further disengagement from BRICS under the implied auspices that it's becoming "China-centric", which would play into the US' hands by exacerbating the already fraught Chinese-Indian relationship and contributing to mutually disadvantageous internecine rivalry in the emerging Multipolar World Order.

I wrote more about the specifics of how the US is using India as its cat's paw for dividing the Multipolar Community in a series of articles that I linked to in my 2017 forecast for South Asia for the Moscow-based Katehon think tank, so the reader can reference them if they're interested in learning more about this topic. In this article, however, I plan to continue with a few points about why China's "BRICS-Plus" model would be a blessing for the non-Western world and how it actually follows in the footsteps of what the Chief Economist at Russia's Eurasian Development Bank earlier suggested.

Mr. Yaroslav Lissovolik wrote an intriguing proposal early last month for the prestigious Valdai Club expert portal in which he urged the bloc to prioritize the creation of two complementary 'circles' which he termed "BRICS+" and "BRICS ++". The first one, he said, should include regional integration organizations which are partnered with the BRICS countries, specifically the ones in which BRICS member states are the core. He listed off Russia's Eurasian Union (EAU), China's Shanghai Cooperation Organization (SCO), India's South Asian Association for Regional Cooperation (SAARC), South Africa's Southern African Development Community (SADC), and Brazil's Mercosur as examples for what he meant.

As can be seen, Kazakhstan and Kyrgyzstan jointly belong to the EAU and SCO, while India and Pakistan are members of both the SCO and SAARC.

Taking his framework a step further, Lissovolik recommended that the second circle of BRICS++ be comprised of "countries and/or regional blocks that have concluded agreements with BRICS countries' regional blocks", as this "not only broadens the possibilities for integration, but also improves their optionality as each country can vary integration within the network and render it more piecemeal and gradual." If implemented, then the combination of both BRICS circles would essentially encompass most of the global economy due to the indirect involvement of the US, EU, and ASEAN. Lissovolik is basically implying that the BRICS platform can be broadened in order to set the basis for free trade all across the world.

As the reader is aware, this is only a theoretical outlook which has a very slim of ever fully happening in practice amidst this era of "New Populism" and internally oriented Western societies, but it could very well see some stunning success in the multipolar corners of the non-Western world, which is what China's BRICS-Plus proposal seems to be focusing on in reference to South-South cooperation. It should be reminded at this point that China has already been supporting non-Western economies through its One Belt One Road (OBOR) global vision of New Silk Roads and accompanying Chinese model of globalization, but that Beijing has now decided to bring the rest of its BRICS partners on board with it in this transformative worldwide project.

Therein lies the problem, however, since India is adamantly opposed to OBOR on the stubborn principle that its flagship China-Pakistan Economic Corridor (CPEC) project passes through the Pakistani regions of Azad Kashmir and Gilgit-Baltistan, which New Delhi claims is "occupied" Indian territory per its unflinching maximalist approach to the Kashmir conflict. This explains why it's been waging the Hybrid War on CPEC, which has recently prompted Pakistan to respond with cross-border shelling against the Afghan-based terrorists which Islamabad believes are receiving covert support from India's Research & Analysis Wing (RAW) intelligence service.

The whole point in referencing all of this is because it demonstrates the high level of sensitivity that India attaches to all OBOR projects, and is why New Delhi is now becoming suspicious of BRICS ever since China hinted that the organization could cooperate with OBOR through the new format of BRICS-Plus. India's worst nightmare is that Russia could use China's proposal as a 'cover' for finally achieving the creative justification that it's been searching for to indirectly participate in CPEC, thereby allowing Moscow to sidestep New Delhi's concerns that the project violates its "sovereignty" by plausibly pleading that it's just one infrastructural part of BRICS' worldwide infrastructural investment network and nothing to get too upset about.

Given the unprecedentedly rapid pro-Western trajectory of the ruling Indian elites, it's extremely doubtful that they'll accept any such case which Russia might make in regards to working with CPEC via the BRICS-Plus platform, let alone would New Delhi even cooperate on any aspects of this proposal in general. India rightly assess that China's BRICS-Plus and Russia's two BRICS circle proposals (BRICS +/++) are really all about infrastructural connectivity through OBOR, whether they openly say so or not, and that's why its decision makers and strategists are extremely hesitant to agree to any part of them because of their obsession over CPEC, which transits across what they ridiculously claim is their "sovereign (Greater) Kashmiri territory" inside what are Pakistan's internationally recognized borders.

It would be very unfortunate if India refuses to participate in the Chinese-led BRICS-Plus framework and begins to de-facto disengage from the organization as a whole in response, but whether the country ultimately goes along with it or not, New Delhi is powerless to stop the spread of New Silk Roads all across the world no matter how many Hybrid Wars it wages at the US' behest.

India will just ultimately end up being left out of the emerging Multipolar World Order just like its new Western allies which also are blind to the new paradigm of win-win cooperation and stuck on the adversarial New Cold War thinking of "zero-sum" outcomes. Nevertheless, it can be expected that Russia will certainly back its Chinese partner in Beijing's newest multilateral and multipolar global initiative, and it'll be New Delhi's (American-influenced) prerogative whether or not this harms the Russian-Indian Strategic Partnership or alternatively presents an opportunity for strengthening it.

DISCLAIMER: The author writes for Regional Rapport in a private capacity which is unrepresentative of anyone or any organization except for his own personal views. Nothing written by the author should ever be conflated with the editorial views or official positions of any other media outlet or institution.
FM: Belt and Road 'belongs to world' ("Один пояс и один путь" принадлежит миру) / China, March, 2017
Keywords: International relations, One Belt One Road, China
Author: Zhang Yunbi
Source: Regional Rapport

More than 20 state leaders and government heads will travel to Beijing to attend the Belt and Road Forum for International Cooperation in May, Foreign Minister Wang Yi confirmed on Wednesday.

The event will also welcome more than 50 heads of international organizations, over 100 minister-level delegates and more than 1,200 guests from around the world, Wang told a news conference on the sidelines of the ongoing two sessions.

The idea of the Belt and Road Initiative came from China but it belongs to the world with its benefits flowing to all countries, Wang said.

While the trends of protectionism and unilateralism are rising, the Belt and Road Initiative has become the common cause of the world and will help rebalance economic globalization by making it more universally beneficial and inclusive, he said.

The forum will build consensus and connect development strategies of various countries. It will also examine cooperation in key areas and finalize major projects in infrastructure connectivity, trade and investment, financial support and people-to-people exchanges, he said.

President Xi Jinping proposed the Belt and Road Initiative in 2013.

Zhang Yunling, a senior researcher on Asia-Pacific studies at the Chinese Academy of Social Sciences, said the forum "will nurture more consensus and catalyze cooperative programs".

The Belt and Road Initiative geographically connects the Asian, European and African continents and covers an overwhelming majority of the world's population, which means it has vast potential, Zhang said.

Wang also spoke on potential highlights of another diplomatic event this year - the Ninth BRICS Leaders' Meeting in September.

The annual meeting will bring together leaders of the BRICS countries - Brazil, Russia, India, China and South Africa - in Xiamen, Fujian province

Wang said the BRICS mechanism will "see a breakthrough in political and security cooperation" this year, as member nations will discuss and initiate the formal foreign ministers meeting of BRICS.

The five countries will strengthen macroeconomic policy coordination, boost links among their development strategies, hold cultural events and build a new platform for cooperation among developing countries, according to Wang.
THAAD a security threat to Russia – Duma MP (THAAD как угроза безопасности России) / United Kingdom, March, 2017
Keywords: International relations, One Belt One Road, China
United Kingdom
Source: The BRICS Post

A senior member of Russia's State Duma has accused the US of seeking a shift in the balance of power in the Asia-Pacific region.

Leonid Eduardovich Slutsky, the head of the Duma's International Affairs Committee, said that the deployment of the Terminal High Altitude Area Defense system, or THAAD is a cause of concern and could pose a security threat so close to Russia's borders.

"In effect, Washington is creating a new regional segment of the US global missile defense system in North-Eastern Asia," he said just a day after China made similar comments and demanded the US withdraw THAAD from the Korean Peninsula.

The US began to deploy its THAAD anti-missile systems in South Korea on Tuesday in what it says is
a response to Pyongyang's recent ballistic missile tests.

Parts of the weapons system arrived in Seoul just as North Korea completed another round of ballistic missile tests by firing four rockets into the Sea of Japan in violation of United Nations Security Council resolutions.

As one of the most advanced missile defense systems in the world, THAAD can intercept and destroy ballistic missiles inside or just outside the atmosphere during their final phase of flight.

Despite claims by Washington and Seoul that the missile shield would be focused solely on North Korea, Beijing says the US deployment would pose considerable threat to neighboring countries and spark an arms race.

"The deployment of the US missile defense system in the region is clearly beyond the task of deterring 'the North Korean threat'," Slutsky said in remarks carried by the Russian news agency TASS.

Both China and Russia, who endorsed UN Security Council resolutions condemning Pyongyang's missile tests, say the only way to defuse tensions on the Korean Peninsula is to return to the six-party talks which also include the two Koreas, Japan and the US.
China hopes to achieve four goals during BRICS meeting in Xiamen (Китай надеется достичь четырех целей во время встречи БРИКС в Сямыне) / China, March, 2017
Keywords: International relations, One Belt One Road, China
Author: Chen Liubing
Source: China Daily

China hopes to accomplish four things during the BRICS leaders meeting to be held in Xiamen, China, this September, according to Foreign Minister Wang Yi.

"BRICS is entering its second decade, and China, the holder of the presidency, will work with other BRICS countries to review its experience, plan the future, ushering the second golden decade of BRICS cooperation and provide BRICS' help for world peace and development," said Wang.

In terms of political and security cooperation, the country will make full use of the meeting of National Security Advisers, build consensus for holding a standalone foreign ministers' meeting, and demonstrate the strengths of BRICS cooperation to the world.

In terms of practical cooperation, China will fully implement the strategy for BRICS economic partnership, enhance policy coordination at the macro level, and complementarities of the country's development strategies. China will also announce a number of solid cooperation initiatives, and add evermore substance to BRICS cooperation.

In terms of people-to-people exchange, China will implement the agreement of leaders, and hold a BRICS cultural festival, film festival, sports meeting, and so on. To expand all areas of people-to-people exchange and build stronger public support for BRICS cooperation.

Wang stressed that in terms of South-South cooperation, the country will explore the modality of "BRICS Plus", by holding dialogues with other major developing countries or groups of developing countries. China hopes to establish a more extensive partnership, widen the BRICS circle of friends, and turn the BRICS into the most impactful platform for South-South cooperation.

The BRICS countries are representative of the emerging economies, said Wang. Over the years, the fortunes of the BRICS may have risen or fallen, and each BRICS country faces its own challenges.

"As President Xi Jinping has pointed out, the BRICS are like five fingers, each with its own strength, but when we come together, we form a fist that can punch. As long as we stay united, the BRICS will never lose its luster, rather it will shine ever more brightly," said the minister.
Abstracts: Foreign Minister Wang Yi Meets the Press (Отрывки из встречи главы МИД КНР Ван И с прессой) / China, March, 2017
Keywords: International relations, One Belt One Road, China's Foreign Minister Wang Yi, BRICS Plus
Source: Ministry of Foreign Affairs of the People's Republic of China

Xinhua News Agency: In May, China will host the Belt and Road Forum for International Cooperation. Why does China want to hold the forum at this moment in time and what does China hope to achieve?

Wang Yi: In about two months' time, we'll hold the Belt and Road Forum for International Cooperation in Beijing. We foresee that the heads of state and government from over 20 countries, the leaders of over 50 international organizations, over 100 ministerial-level officials and around 1,200 delegates from different countries and regions participating in the forum. In addition to the Leaders Roundtable, there will also be a High-Level Dialogue and six parallel panel discussions on the connectivity of policy, infrastructure, trade, finance and people. Beijing will once again be the center of global attention; the Belt and Road Initiative will continue to be a hot topic around the world.

The Belt and Road is China's initiative, but it belongs to the world. The idea came from China, but the benefits will flow to all countries. In the over three years since President Xi announced the initiative, the idea has caught on and cooperation has flourished. It has become the most popular public good and the international cooperation platform with the brightest prospects. The Belt and Road Initiative has been so successful because it meets the partner countries' urgent desire for more mutually beneficial cooperation and follows the open and inclusive principle of planning together, building together and benefiting together. With protectionism and unilateralism on the rise, the Belt and Road Initiative is a common cause where the participating countries roll up their sleeves and pitch in together. The initiative will help to rebalance economic globalization and make it more inclusive and equitable. It also represents an important attempt at building a community of shared future for all humankind.

We hope the forum will accomplish three things. First, review and build consensus, enhance the complementarity of countries' development strategies and set the goal of combining their strengths and achieving common prosperity. Second, examine key areas of cooperation and identify a number of major projects concerning physical connectivity, trade and investment, financial support and people-to-people exchange. Third, announce medium- to long-term initiatives, explore the establishment of an effective cooperation mechanism and build a closer and result-oriented network of partnerships.

CCTV & CGTN: Some people believe that the era of Western domination is coming to an end; it is China and the other emerging economies that hold the key to the future. How does China view the shifting balance of power in the world? Later this year, China will host the BRICS Leaders Meeting. What do you hope to accomplish?

Wang Yi: The BRICS countries are representative of the emerging economies. Over the years, the fortunes of the BRICS may have risen or fallen and BRICS each face their own set of challenges. However, as President Xi Jinping has put it, the BRICS are like five fingers, each with its own strength; when the BRICS come together, we form a fist that can punch. As long as we stay united, the BRICS will not lose its luster; rather, it will shine more brightly than ever.

This year, BRICS will enter into its second decade. As the Chairman this year, China will work with other BRICS countries to review experience, plan the future, usher in the second "golden decade" of BRICS cooperation and provide BRICS' input for world peace and development. We hope to accomplish four things this year.

First, in terms of political and security cooperation, we will make full use of the meeting of national security advisers, build consensus for holding a stand-alone foreign ministers' meeting and demonstrate the strength of BRICS cooperation to the world.

Second, in terms of practical cooperation, we will fully implement the Strategy for BRICS Economic Partnership, enhance policy coordination at the macro level and the complementarity of our development strategies, announce a number of solid initiatives and add more substance to BRICS cooperation.

Third, in terms of people-to-people exchange, we will implement the agreements of our leaders and hold BRICS cultural festival, film festival, sports meet and so on to expand all areas of people-to-people exchange and build stronger public support for BRICS cooperation.

Finally, in terms of South-South cooperation, we will explore the modality of "BRICS plus". By holding outreach dialogues with other major developing countries and organizations of developing countries, we hope to establish a more extensive partnership, widen the BRICS' circle of friends and turn the BRICS into the most impactful platform for South-South cooperation.
TASS: After Trump became US President, the world has made a lot of commentary on Russia-China-US relations. Do you think there will be any change in the triangular relationship?

Wang Yi: Let me tell you at the outset that China-Russia relations are in excellent shape and we have great confidence in this relationship.

We have a comprehensive strategic partnership of coordination not because it's convenient; it's a strategic decision reached by both sides on the basis of our fundamental interests. The relationship has stood the test of international vicissitudes. It is as strong as it's ever been and our mutual trust has reached a historic high. The relationship will not be affected or weakened by any external factor. We welcome any improvement in Russia-US relations, which will be an important piece of good news for the world. This year, the Presidents of China and Russia will have multiple face-to-face meetings, which will take our relationship to new heights. China and Russia will also improve strategic coordination on international and regional issues and act as a stabilizer in the otherwise turbulent world.

As for the China-US-Russia relationship in the new era, it should not be "a seesaw game". The three countries should work with rather than against each other. We should pursue win-win rather than zero-sum outcomes. The three countries can develop a positive and healthy relationship, so that we can jointly fulfill our responsibilities for world peace and development.

China bats for greater global role through BRICS, pledges to work against unilateralism (Китай пробивается к большей глобальной роли посредством БРИКС, обязуется бороться с односторонностью) / India, March, 2017
Keywords: International relations, One Belt One Road, China's Foreign Minister Wang Yi, BRICS Plus
Author: Ananth Krishnan
Source: India Today

Wang strongly endorsed a greater global role for the BRICS countries, suggesting it should become the leading platform to represent interests of emerging countries and the global south.

China's Foreign Minister Wang Yi on Wednesday strongly endorsed a greater global role for the BRICS countries and pledged to push back against anti-globalisation forces through China's massive Silk Road infrastructure plan, as Beijing eyes greater sway amid global flux.

While careful to play down notions that Beijing might aspire to global leadership as America under Donald Trump promises to turn increasingly inward, Wang told reporters at his annual press conference in Beijing that China would push back against "protectionism and unilateralism".

As the world awaits to see how President Trump may carve out a different global role for the US, Wang suggested China would push its own competing vision for global trade and governance through its massive "Belt and Road Initiative" (BRI).

A land and sea infrastructure push that is a pet project of President Xi Jinping - as well as its hosting of the BRICS Summit in September. In May, China will hold the first Belt and Road Forum in Beijing, which Wang said would place China "at the centre of the world's attention".

"With protectionism and unilateralism on the rise, the Belt and Road will find common cause where all countries roll up their sleeves and pitch in together. We will help rebalance globalisation," Wang said.


The forum, he said, would be attended by more than 20 world leaders and 100 ministerial-level representatives. China has also invited India to attend the summit, which India is still considering given its opposition to a key leg of the Belt and Road, the China Pakistan Economic Corridor, that passes through Indian territory in Pakistan-occupied Kashmir (PoK). The forum will identify major projects under the plan, Wang said.

Wang also strongly endorsed a greater global role for the BRICS (Brazil, Russia, India, China and South Africa) countries, suggesting it should become the leading platform to represent interests of emerging countries and the global south.

"BRICS countries represent emerging economies," he said. "Over the years, their fortunes may have risen or fallen, and each faces challenges."

"As President Xi put it, BRICS are like five fingers each with their own strength but when we come together we are a fist that can punch. When we stay united we won't lose lustre but will shine more brightly."

Ahead of this year's summit, he said China would work with India and the other BRICS countries to share ideas on political and security cooperation as the five National Security Advisers plan to meet in China later this year, and Beijing would also "build consensus for holding a stand-alone Foreign Minister's meeting".

Wang said China would also "explore modalities for BRICS-plus, to hold outreach dialogues with other major developing countries". "We hope to establish extensive partnerships and widen our circle of friends to turn it into the most impactful platform for South-South cooperation".

At the same time, the Chinese Foreign Minister was keen to play down suggestions that China would look to step up to fill any vacuum should Trump's America seek a reduced global role.


"China believes in the equality of all countries," he said. "We don't believe some countries should lead other countries."

At his annual press conference on the sidelines of the on-going session of Chinese Parliament or the National People's Congress (NPC), which opened on March 5, Wang fielded questions from reporters from the US, UK, Russia, Britain, Spain, Japan, South Korea, Philippines, Qatar and Tanzania, besides Chinese journalists. There were no questions on India.

Speaking on March 4 ahead of the start of parliament, the NPC spokesperson Fu Ying addressed China's relations with India and while not directly commenting on recent disputes, Fu said both "need to be move sensitive to each other's concerns, so we can better address them." "We cannot allow issues that cannot be worked out for the moment to stop us from moving forward," added Fu.

Fu also reiterated China's invitation for India to join the Belt and Road, saying it was "a connectivity programme for economic development and will also benefit India," Fu said. "So we need to bear in mind the larger picture," she added, while not addressing India's strong concerns on its sovereignty in PoK being violated by the plan.

On increasing tensions in the Korean peninsula, Wang, the Foreign Minister, on Wednesday put forward a plan that called for North Korea to stop missile tests and for South Korea and the US to cease military exercises.

He described the two sides as similar to "two accelerating trains coming at each other with neither side willing to give way" and "ready for a head-on collision".

He suggested a "dual suspension" plan to resolve this "security dilemma", with North Korea as a first step to suspend missile activities and in return, the us and South Korea ceasing what he described as "enormous military exercises" that were pressuring the north.

BRICs mechanism will shine more brightly: China (Китай сообщает: Механизм БРИКС будет сиять еще ярче) / India, March, 2017
Keywords: International relations, BRICS Plus, One Belt One Road, China's Foreign Minister Wang Yi
Source: The Economic Times

BEIJING: The BRICs mechanism will not lose its lustre but will shine more brightly if its members stay united, Chinese Foreign Minister Wang Yi said on Wednesday.

The development of the BRICs mechanism has seen ups and downs over the past years, and each member faces its own set of challenges, Xinhua news agency quoted Wang as saying.

"The BRICs countries are like five fingers, short and long if extended, but a powerful fist if clenched together," Wang said, citing remarks of President Xi Jinping.

This year opens the second decade of the emerging market bloc which groups Brazil, Russia, India, China and South Africa. China will host the ninth Brics leaders' summit in September.

As the rotating chair of BRICs this year, China will work with other members to review its experience, plan the future, usher in the second golden decade of cooperation and provide "BRICs plans" for world peace and development, he said.

The member countries will expand pragmatic cooperation. "We will fully implement the strategy for BRICs economic partnership, enhance macro policy coordination and connection of development strategies, and work out a batch of solid measures for cooperation," Wang said.

"We will widen the circle of friends of the BRICs and turn it into the most influential platform for south-south cooperation in the world," Wang said.
India and the world: Foreign policy in the age of Modi (Индия и мир: внешняя политика при Моди) / India, March, 2017
Keywords: International relations, India, Prime Minister Narendra Modi
Author: Manoj Joshi
Source: ORF

Prime Minister Narendra Modi's foreign policy has been characterized by great energy, a desire to break the mold of the past and a penchant for risk-taking. Given the vigour he has imparted, foreign relations should have yielded more significant results. They haven't. This is not only the fault of poor conception and implementation of some initiatives, but to the fact that in foreign policy there are external variables outside your control.

Even before the Modi government assumed office in May of 2014, certain trends in foreign policy had hardened. 1) The Special Representative process of resolving India's border issue with China had reached a dead-end. 2) The same had happened with the composite dialogue with Pakistan. Actually, minus a Pakistani effort to punish the perpetrators of the 2008 Mumbai terror strike of November 2008, the very basis of a bilateral dialogue to resolve issues had been undermined.

What has Modi sought in his foreign policy?

The Modi government has, through its publicized Raisina Dialogues, put forward themes it wishes to pursue in its foreign policy. In its first iteration in 2016, "Connectivity" was the overarching meme, associated with its desire to push neighbourhood ties. In January 2017, the dialogue was under the rubric of "Multipolarity and Multilateralism," signaling a larger vision of India as a regional power.

These do not, however, tell the whole story. India can have only one major goal in its grand strategy –to promote economic growth and secure its periphery. In this, integrating the South Asian economy through enhanced connectivity is logical, though pursued fitfully, primarily because of India's poor ties with Pakistan.

To secure its periphery, New Delhi must deal with its biggest foreign policy challenge—moderating, if not breaking, the China-Pakistan alliance. Short of this, it remains limited to managing its relationships with the two in a sub-optimal manner. As of today, however, the Modi government appears to be faltering even in this task.

Early momentum

Modi came in with a terrific drive. In just the seven months that he was in office in 2014, he had made nine foreign visits. In his two-and-a-half years, he has visited 36 countries, a handful of them twice, and the United States four times. A remarkable aspect of his visits was that, in many instances, he was the first PM to visit a country, even key neighbours, in years—the first in 17 to Nepal, 28 to Sri Lanka, 34 to UAE, and the first ever to Mongolia.

Modi came to power with a "neighbourhood first" agenda. He signaled his commitment by inviting all the leaders of SAARC nations for his inauguration as Prime Minister. His very first bilateral visit in June 2014 was to India's "best friend" Bhutan and the second in August was to Nepal. He returned to Kathmandu in November to attend the 18th SAARC summit, where he conducted an important outreach to Pakistan's Prime Minister Nawaz Sharif.

The neighbourhood pattern was repeated in 2015, but this time focusing on the Indian Ocean when there were visits to Seychelles, Mauritius and Sri Lanka as well as to Bangladesh and Afghanistan. A second important cluster was all the five Central Asian "stans" in July 2015.

A third set of priorities became visible through Modi's 2016 visits to Saudi Arabia, Iran, and Qatar. He had already visited the UAE in August 2016, and the Crown Prince Mohammed bin Zayed al Nahyan became the chief guest at the Republic Day parade in 2017.

Underlying all these were visits to Japan and various European countries with a view to enticing investors and aid. The visits to the US were a special category, aimed at shoring up ties with the only country that could help India offset Chinese power, and whose friendship opened the doors to many other countries and institutions.

The best laid plans…

Somehow things have not worked out as well in the neighbourhood as they could have – and we aren't even speaking about Pakistan. It was evident in the 18th SAARC summit in Kathmandu that Islamabad was not willing to go along with the connectivity projects being mooted, and Sharif had been domestically hobbled by the Army. By 2016, the India-Pakistan situation had reached a point where a New Delhi-led boycott led to the collapse of the 19th SAARC summit to be held in Islamabad.

Ties with Nepal nose-dived in 2015 following the promulgation of a new constitution that militated against the interests of the Madhesi or plains people. New Delhi woke up at the last minute and sent Foreign Secretary Jaishankar to retrieve the situation, but it was too late. Eventually a road blockade softened the Nepalese, and thereafter a New Delhi-backed constitutional coup led to a break in the CPN(UML)- CPN (Maoist) alliance in Nepal, and the replacement of K P Sharma Oli by Pushpa Kamal Dahal (Prachanda) as Prime Minister. But the damage has been deep, and Oli is now fanning the flames of Nepali nationalism with some Chinese encouragement.

The new Indian assertiveness was also visible in Sri Lanka where New Delhi helped cobble an alliance that saw the defeat of Mahinda Rajpakse in the presidential elections. The man who defeated the LTTE became anathema to New Delhi because of the burgeoning links between Sri Lanka and China. More than this, though, New Delhi was alarmed by the docking of Chinese submarines in Colombo harbour in 2014 and 2015.

There has been no visit to Maldives because New Delhi's relations with Male remain deadlocked following the removal of Mohammed Nasheed as President, and the steady consolidation of control by President Abdulla Yameen.

But the visits to the island republics of Mauritius and Seychelles have been useful in developing India's maritime domain awareness scheme, as well as its naval posture in the Indian Ocean.

The elephants in the room

The big failures in India's ties relate to Pakistan and China. After a thaw of sorts in 2014, India-Pakistan ties never really got off the ground. There were incidents on the Line of Control, and the new government sought to clearly signal its tough intent by conducting an unprecedented counter-bombardment on the LoC.

But New Delhi did not give up on Islamabad. Following the Ufa meeting between Sharif and Modi, their NSAs met in Bangkok in early December 2015. Later on Christmas Day, which happened to be Nawaz Sharif's birthday, Modi made a surprise descent on Lahore to personally wish him.

However, the attack, a week later on January 1, 2016, on the Indian airbase at Pathankot has changed the Indian narrative on Pakistan. Prime Minister Modi has since then, repeatedly called on Pakistan to be sanctioned as a state sponsor of terrorism, and to be isolated by the international community. The Uri attack of September 18, 2016 and the Indian response through the so-called surgical strikes ten days later on September 28/29 are an indication that India and Pakistan are back to the future. Modi's obsession with "terrorism" from Pakistan is puzzling considering that since 2011 we have not suffered a mass civilian casualty attack. It appears to be designed to appeal to the domestic electorate.

With China, nothing so dramatic is happening. Indeed, to go just by one metric, Chinese "transgressions" on the Line of Actual Control have actually decreased. The peculiar drama that played out in Chumur sector during the state visit of Xi Jinping in September 2014 was the last such major event. But the border talks are stalled and there has been no significant political or economic outcome from either the Xi visit of 2014 or Modi's return visit in 2015.

But a CBM regime ensures that its disputed border does not trigger conflict, while India participates in Beijing-led initiatives like the Asia Infrastructure Investment Bank (AIIB) and the Shanghai Cooperation Organisation (SCO), and BRICS, and goes through the motions of cooperation.

Our natural ally

The one area where India has had unalloyed success is in its relations with the United States. This is not because we have an identity of interests, but a congruence of needs that the other can fulfill. India needs the world's foremost military power to maintain a balance against China, while the US needs India because it is the only credible partner it has in building a coalition in East Asia to confront China. These ties were not a Modi initiative, but arose during the presidency of George W Bush. In fact, it can be argued that the given the momentum, the outcome has been sub-par.

Relations with Japan are a subset of ties with the US, and again, serve mutual needs—India wants Japanese investment and technology, while Tokyo seeks India's participation in the East Asian coalition.

What about the main agenda: seeking an economic transformation of India? According to the government, Modi's foreign visits have resulted in a sharp rise of FDI into India. In 2015, for example, India attracted $ 44 billion a 29 per cent jump over the figure for the previous year. The figure could be higher for 2016, but it needs to be recalled that the 2012 figure was $46.55 billion, and so to attribute the growth to Modi's foreign policy alone would be an error.

As part of this, Modi has also been active in multilateral forums like BRICS, East Asia Summit, and the G-20. However, the political part of the agenda often became more important than the economic. Thus, the Ufa BRICS summit became more important for the Modi-Sharif meeting than the substantive agenda. The BRICS summit in Goa in October 2026, became an occasion to corner Pakistan on account of its support of terrorism.

Looking ahead

Despite the self-inflicted wound of demonetization, India's economy will remain a growth magnet and attract foreign investment. But the India story may be affected by questions about the competence of its government and its whimsical ways. More importantly, there are concerns over its failure to deliver much-needed domestic reforms to ease the rules of doing business in India. Modi seems to be on a permanent election campaign, unable to take the tough decisions needed for the next wave of reforms.

Our worries are undiminished. Pakistan, far from being isolated for its support to terrorism, it is getting enhanced attention because of the compulsion of the great powers like the US, Russia and China to obtain peace in Afghanistan. Indeed, the Russia-Pakistan entente and the Russia-China relationship pose troubling questions for New Delhi.

China continues to swarm over us in South Asia. The latest sign of this has been the $24 billion aid, loans and investment commitments made by Xi Jinping during his visit to Bangladesh in 2016. As it is, all three of the wings of the Bangladesh military are equipped with Chinese equipment. Indian aid to Nepal has dipped, while China has now pipped India as the top aid donor. More worrisome are the internal trends suggesting growing Chinese influence in the country.

The new Srisena government had promised to review many of the allegedly pro-Chinese actions, but as time goes by it is apparent that there has been no real change. Chinese influence is now a growing reality that India must take into account in Sri Lanka.

In the mid 1990s, India thought of itself as a player in Central Asia, but today, the Chinese have swamped everyone, including the US and Russia. Chinese bilateral trade with the region is in excess of $ 50 billion, compared to India's roughly $ 1.3 billion. Chinese banks hold a significant portion of the government debt of several of the "stans". And Chinese pipelines and railroads are turning away the region from their historic ties to Russia.

A major problem in India's foreign policy is its illusion that it is somehow competing with China. We are certainly a budding rival of China, the only one with sufficient physical size and population to offset its power. But we are a long way from actualizing the potential. In the meantime, we urgently need a strategy to do so. Because of the enormous difference in economic and military power between India and China, what we need are asymmetrical means of dealing with Beijing. We have substantial soft-power assets, but those can only be effective together with the real currency of hard power— cash and exportable military goods.

The broad thrust of India's foreign policy remains is legitimate and worthwhile. But what is needed is retrenchment and focus. We cannot take on China across-the-board. Our South Asian neighbourhood is a priority, and Modi's outreach to the Persian Gulf has great value because that is the most important external region for India. It is where it gets most of its oil and where it has 7 million citizens who send back substantial remittances. Saudi Arabia, UAE and Qatar have huge sovereign wealth funds which are always looking for good investment destinations. India needs to not only access these funds, but build security linkages to secure its oil and its nationals there.

The Chah Bahar project offers us a relatively inexpensive riposte to the One Belt One Road strategy by enabling a multi-modal link to Europe through Iran, the Caucasus and Russia. If we can provide sub-continental and Indian Ocean linkages, we, too, can be in the connectivity business.

Though the first indications are that there could be opportunities in the Trump era, there is need for caution since there are too many imponderables at play at this juncture. But real success for Modi's foreign policy will necessitate an effective domestic policy focusing primarily on investment and economic growth. This requires not just vision—which Modi has in surfeit—but competence and execution, which seem to be in short supply.
US begins THAAD deployment despite China, Russia protests (США начали размещать противоракетные системы THAAD вопреки протестам России и Китая) / United Kingdom, March, 2017
Keywords: International relations, THAAD, Korean Peninsula
United Kingdom
Source: The BRICS Post

Despite repeated Chinese and Russian protests that such advanced weaponry would trigger an arms race in the Asia-Pacific region, the US began to deploy its anti-missile systems in South Korea.

The Terminal High Altitude Area Defense system, or THAAD, is a response to Pyongyang's recent ballistic missile tests, South Korea and the US – and now Japan – say.

As one of the most advanced missile defense systems in the world, THAAD can intercept and destroy ballistic missiles inside or just outside the atmosphere during their final phase of flight.

Despite claims by Washington and Seoul that the missile shield would be focused solely on North Korea, Beijing says the US deployment would pose considerable threat to neighboring countries.

The deployment comes just as North Korea completed another round of ballistic missile tests by firing four rockets into the Sea of Japan in violation of United Nations Security Council resolutions.

The missile test also comes as Seoul and Washington launched their annual military drills on the Korean Peninsula. Pyongyang has said that the drills are designed as a means to invade North Korea.

China has repeatedly called for restraint in response to North Korea's missile tests – strongly condemned by Beijing – and has called for a resumption of the six-party talks, which also include the two Koreas, Russia, Japan and the US.
Russia will fight ISIL alone if it has to – Kremlin (Кремль: Если потребуется, Россия будет бороться с ИГИЛ в одиночку) / United Kingdom, March, 2017
Keywords: International relations, ISIL, Russia, NATO
United Kingdom
Source: The BRICS Post

Russia has responded to media speculation that the probes into contact between affiliates of US President Donald Trump and Russian officials may force the White House to scale back on military cooperation with Moscow.

Kremlin spokesperson Dmitry Peskov told the Russian news agency TASS that Moscow will continue fighting the Islamic State with or without US help.

"There have been no real progress in cooperation in combating terrorism, either, which causes regret," Peskov said.

Russia has worked closely with US ally and fellow NATO member Turkey in carrying out a number of air raids against Islamic State targets in Syria in the past two months.

In January, Russian sources said that US intelligence was passed on to their military commanders to carry out a bombing raid against Islamic State targets.

During their phone call last month, Trump and Russian President Vladimir Putin had signaled closer military cooperation against the Islamic State; this had been a Trump campaign promise.

However, with the political fallout in Washington, there have been increasing calls among political pundits that US Attorney-General Jeff Sessions should resign for meeting Russian Ambassador to the US Vitaly Kislyak who US media has called a spy.

Russia has denied that Kislyak is a spy instead saying he is a veteran diplomat with a long history of contacts with diplomats from many countries.

"We see a highly emotional atmosphere. But before making any evaluations, we should wait for everyone to calm down and the situation to stabilize," Peskov said on Sunday.

In the absence of a strong US diplomatic presence in talks over Syria, Russia has formed a diplomatic alliance with Turkey and Iran to convene peace conferences and push through negotiations of all sides in the conflict.
Investments and finance in BRICS
Inventory reduction gap hits South Africa GDP growth (Сокращение запасов снижает рост ВВП ЮАР) / South Africa, March, 2017
Keywords: Economics, South Africa GDP, Statistics
South Africa
Author: Helmo Preuss
Source: The BRICS Post

South African real GDP growth was pulled down to 0.5 per cent in 2016 as inventory reduction sapped growth, while final sales jump 1.2 per cent, official figures have shown.

The United Nations System of National Accounts, the international hand book for national accountants, states that a reduction in inventories should subtract from gross domestic product (GDP) growth.

But for many economists, final sales exclude the change in inventories, as these changes are the inter-temporal balancing item between production and expenditure, give a better idea of the strength of demand.

Statistics South Africa (Stats SA) said that that due to production losses in the coal, gold and platinum mining sectors, export demand had to be met from inventories.

This normally means that production should rebound in the following period as inventories are rebuilt and to meet increased demand.

Arthur Kamp, an economist at Sanlam Investments, told The BRICS Post that the poor performance of South Africa's real GDP in the fourth quarter was clearly flagged by the weakness in manufacturing and mining production through the final quarter of last year, but prospects for 2017 were looking good.

"Ultimately, it was the collapse in inventories, which accounted for the weak total expenditure print and helps to explain the weak manufacturing production numbers," he said.

As the level of commercial and industrial inventories relative to GDP is currently low, this suggests a production response is likely if final demand continues to grow.

Indeed, the PMI manufacturing data released for the first two months of 2017 already suggests better manufacturing production conditions.

"Looking ahead it is reasonable to assume firmer real GDP growth in 2017. The prospect of lower inflation should also provide some support for households' real personal disposable income, although tax increases announced in this year's government budget will erode some of this potential support" he added.

Kamp's view is further supported by the improvement in the South African Reserve Bank's leading business cycle indicator, which has lifted significantly in the latter half of 2016, following a 5 year decline.

John Loos, an economist at First National Bank, says that the real growth in wages had supported household consumption expenditure (HCE) in 2016.

Although the total Compensation of Employees number saw its year-on-year (y/y) growth slow slightly, from 8.1 per cent y/y in the third quarter to 7.0 per cent in the fourth quarter, this rate remains faster than the 6.8 per cent nominal GDP growth rate, as it has done for most of the time since around 2008.

Loos explained that means that for 2016 as a whole, Compensation of Employees as a percentage of GDP rose further to 53 per cent, from 52.48 per cent in 2015 after a multi-year rise from 47.6 per cent in 2007.

"Real HCE growth accelerated noticeably in the second half of 2016, ending the year on a y/y growth rate of 1.3 per cent, which was well above the 0.5 per cent growth rate for expenditure GDP," Loos told The BRICS Post

A noteworthy improvement in semi-durable consumption, with Stats SA making mention of clothing and footwear expenditure as a key contributor, played a role in this.

"Durable consumption remained in the doldrums, but its rate of decline had been diminishing, and given the stability in interest rates since March 2016, this consumer category could contribute significantly more to consumer spend growth in 2017," Loos added.

Mike Schussler of said that households had been under pressure in 2016 as inflation jumped, but there should be a turnaround in 2017.

"There is no doubt that most consumers were under pressure for most of 2016 and parts of 2015. However, as 2017 salary increases will be based on higher inflation in 2016, the real declines should disappear as soon as the annual salary increases are implemented from March / April and the months that follow," Schussler said.
BRICS or MINT: The Good, the Bad and the Ugly (БРИКС или МИНТ: хороший, плохой и ужасный) / United Kingdom, March, 2017
Keywords: Economics, BRICS, MINT
United Kingdom
Author: Tom Harrison
Source: Trade Finance Global

With over 80% of the worlds population living in emerging markets, it is vitally important for international businesses to understand the benefits, as well as the risks, involved with each country. This article hopes to provide a brief introduction to each of the BRICS and MINT countries.

Who are the BRICS & MINT countries?

B – Brazil
R – Russia
I – India
C – China
S – South Africa

M – Mexico
I – Indonesia
N – Nigeria
T – Turkey

When considering exporting to an emerging market, there are two main concerns. Firstly, is there sufficient growth and growth potential in that market. The primary reason why emerging markets are desirable is because of the levels of growth that they offer. Therefore, it needs to be checked to make sure that this growth is as good as it should be, and that this growth will continue into the foreseeable future.

What are the benefits of exporting to an emerging market?

  • Cost reduction
  • Bigger markets
  • Less competitive
  • Risk reduction through diversification
Secondly, do the risks of this market outweigh the returns it promises? No matter how good the potential for growth may be, if the risks are too great, business should not be done there. These risks come in two main forms – political and legal. Politically, is the country stable, and how significant is corruption? Legally, how robust is the rule of law, and how good is the regulatory quality? These four factors can be put together to give an overall impression of each country's key institutions (as seen below – figure 1 & 2).

The Good – India

Out of all the BRICS and MINT countries, there is one that stands head and shoulders above the rest. Second only in population size to China, and with a population bigger than the remaining 7 countries combined, India is the group leader in % GDP annual growth. Not only is its % GDP annual growth the highest, but it is one of only two of the nine countries that has seen this growth rise since 2013.

In terms of political and legal risk, India has nearly the best rule of law, and some of the lowest levels of corruption. Unfortunately, no emerging economy is without fault. For India, this is in the form of its poor political stability. Many think that this will be the limiting factor to India's economic success.

Despite this drawback, India is still significantly more attractive than the remaining 8 countries on this list. A more in-depth look at the country can be found here.
The Bad – China, South Africa, Mexico & Indonesia

Whilst significantly less attractive than India, these four markets all have appealing characteristics to them. All four score relatively well on the political and legal framework.

China is appealing due to it having the largest population in the world, as well as having a GDP annual growth at 6.9%. Whilst these are both very promising, it must be recognized that the population growth is currently only at 0.5% and although the GDP growth is high, it has been on a downward trajectory from 2013. Therefore, it is crucial to consider how much longer China will remain a fast growing emerging market.

South Africa can be seen at the opposite end of the spectrum. It has the smallest population of the nine countries yet it is second highest for population growth (at 1.6%). Again its GDP annual growth is in decline from 2013, currently sitting at an unappealing 1.3%. Pundits are rightly skeptical about South Africa's future potential due to a multitude of economic and cultural factors. Any business thinking of starting a relationship with this market should be careful to fully weigh up the positives and negatives.

Mexico is in a particularly precarious position at the moment. It is a small country in terms of population with an average population growth. Whilst it's GDP annual growth is rising it is uncertain how big an impact the volatile US political scene will have on the country as a whole. Mexico could either benefit from Trump's protectionism as it turns to the rest of the world for increased business. Or, it could see many companies, pressurized by the Trump administration, returning to the US. This stripping out of much of Mexican industry could have an extremely detrimental effect on the country's economic growth and general health. In five years time it is unlikely Mexico will still be in this category. It will either be good or ugly.

Indonesia is another country that is currently sitting in the middle of the road when ranked against the other emerging markets. On the plus side, it has a high GDP annual growth percentage and the third largest population of these countries. On the down side, this GDP growth is slowing and the population growth is nothing special. Again this is a country that has potential to be a great area for business in the future. Any business that doesn't entertain the possibility of this market when considering the emerging market options would be making a mistake.

The Ugly – Brazil, Russia, Nigeria & Turkey

The four countries in this category are the least favourable of the nine considered. Whilst they all have appealing aspects to them, these are significantly outweighed by each country's pitfalls. Therefore, for businesses that are looking towards emerging markets, these should be at the bottom of the list.

Firstly, Brazil. Despite scoring relatively well on the political and legal framework, Brazil is currently in the middle of a recession. Since 2013 its GDP annual growth rate has gone from +3% to -3.8%. Figure 3 shows the decline of Brazil's economy. As can be seen, there has been a drop in the commodity prices that had previously helped drive so much of Brazil's growth. Furthermore, this drop acted to expose the country's main structural weaknesses; namely high business startup costs, infrastructural deficiencies, and an awkward tax system. These factors have helped compound the economic problems the country is currently facing. This downturn should be a big warning sign to anyone looking towards Brazil for business.

Russia has the slowest population growth, a negative GDP annual growth rate, and it is the worst of the BRICS on all 4 factors of the political and legal framework. On top of this, it's economy is heavily dependent on oil – a commodity with a very volatile and uncertain future.

Nigeria is the most challenging of all 9 countries on every political and legal factor. It has high levels of corruption and significant political instability. Despite its high population growth, Nigeria should be regarded with extreme caution by any foreign business.

Finally, Turkey. Again this is another one of the emerging markets that has worrying political stability. Turkey's 2016 attempted coup and the subsequent civil unrest are huge factors, as well as it sharing a long border with the currently war torn Syria.


Overall it can be seen that there is no emerging market that has zero risk. However, there is still a wide spectrum of markets in terms of their favourability for foreign businesses. For a closer look at how emerging markets relate to the UK in particular, click here.

BRICS Chamber of Commerce & Industry // Newsletter March 2017 (Торгово-промышленная палата БРИКС: информационный бюллетень, март 2017) / India, March, 2017
Keywords: Economics, BRICS Chamber of Commerce and Industry, BRICS business

Brazil, Russia, India, China and South Africa have emerged as 'the protagonists" in the world economy significantly and rapidly. The BRICS Chamber of Commerce and Industry is a parent organization which promotes commerce and industry in the BRICS nations. The Chamber founded in 2012, with the efforts of eminent professionals and entrepreneurs is a not-for-profit and non-governmental organization.

The objective of BRICS CCI is to create an enabling support system especially for MSME segment of business and young entrepreneurs from across all geographies. While the BRICS nations will remain at the centre of all activities, the chamber has taken in its credo to reach out to and enable young entrepreneurs from other friendly nations too. It proposes to be the 'voice' of young entrepreneurs and champion their business success.

Read: Newsletter March 2017
GDP srinks 3.6% in 2016 and closes the year at R$ 6.3 trillion (ВВП сокращается на 3,6% в 2016 году и закрывает год на 6,3 трлн. реалов) / Brazil, March, 2017
Keywords: Brazil GDP, Statistics, Economics
Source: IBGE

SAVINGS RATE (SAV/GDP) 2016 = 13.9%

In 2016, the GDP fell 3.6% in relation to the previous year, slightly lower than the 2015 result, when it had been 3.8%. There were drops in Agriculture (-6.6%), Industry (-3.8%) and Services (-2.7%). The GDP totaled R$ 6,266.9 billion in 2016.

The GPD fell 0.9% in the 4th quarter of 2016 against the 3rd quarter, considering the seasonally adjusted series. It is the eighth consecutive negative result in this kind of comparison. Agriculture grew 1.0%, whereas Industry (-0.7%) and Services (-0.8%) fell.

In the comparison with the 4th quarter of 2015, the GDP shrank 2.5% in the last quarter of 2016, the 11th negative consecutive result in this comparison. There were drops in Agriculture (-5.0%), Industry (-2.4%) and Services (-2.4%).

The complete publication of the survey can be accessed here.

GDP falls 0.9% in relation to Q3 2016

The 0.9% drop in the 4th quarter of 2016 results from the following performances: agriculture (1.0%), industry (-0.7%) and services (-0.8%). In Industry, Mining and quarrying grew 0.7%. Manufacturing industry (-1.0%) and construction (-2.3%) recorded decrease. The activity of Electricity and gas, water supply, sewerage and urban sanitation registered negative change of 0.1% in the quarter.

In services, all activities had negative results, especially information services (-2.1%) and transportation, storage and mail (-2.0%), followed by trade (-1.2%), other services (-0.9%), financial intermediation and insurance (-0.7%), public administration, health and education (-0.6%) and real estate activities (-0.2%).

From the perspective of expenses, household consumption (-0.6%) fell from the eighth quarter in a row, and the gross fixed capital formation (GFCF) kept negative (-1.6%). Government consumption expenditure (0.1%) remained virtually steady in relation to the previous quarter.

GDP declines 2.5% in relation to Q4 of 2015

With the 2.5% drop against the 4th quarter of 2015, the value added at basic prices decreased 2.3% and the product taxes less subsidies, 3.3%.

Agriculture shrank 5.0% in relation to the same period of the previous year. The industry had a 2.4% drop, with the manufacturing industry also shrinking 2.4% and construction falling 7.5%. In the mining and quarrying industries, there was expansion of 4.0% in relation to the fourth quarter of 2015, mainly pushed by the growth of oil and natural gas extraction. The activity of Electricity and gas, water supply, sewerage and urban sanitation expanded 2.4%.

The value added of services fell 2.4% over the same period last year, highlighted by the contraction of 7.5% of transportation, storage and mail and of 3.5% of trade (wholesale and retail). Negative results were also seen in the activities of financial intermediation and insurance (-3.4%), information services (-3.0%), other services (-2.6%) and Public administration, health and education (-0.7%). Real estate activities (0.1%) were practically stable in the period.

For the seventh month in a row, all the components of the domestic demand had decrease, and the household consumption (-2.9%) recorded the eighth consecutive drop. This result could be explained by the behavior of the indicators of credit, employment and income along the period.

The Gross Fixed Capital Formation declined 5.4%, the 11th consecutive drop. This decline resulted mainly from the fall of imports and of the domestic production of capital goods, as well as from the negative performance of civil construction in the period. Government consumption expenditure changed negatively by 0.1% in relation to the fourth quarter of 2015.

GDP down 3.6% in 2016

In 2016, the GDP declined 3.6% in relation to 2015. This drop resulted from the 3.1% contraction of the value added at basic prices and of the 6.4% drop in the product taxes less subsidies. The result of the value added in this type of comparison reflected the performance of the three activities within it: agriculture (-6.6%), industry (-3.8%) and services (-2.7%).

The GDP per capita had decrease of 4.4% in real terms, reaching R$30,407. The GDP per capita is defined as the division of the current value of the GDP by the resident population in the middle of the year.

The decrease of agriculture in 2016 (-6.6%) came from the performance of agriculture, mainly. In industry, the positive highlight was the activity of electricity and gas, water supply, sewerage and urban sanitation, which grew 4.7% in relation to 2015. The manufacturing industry faced a 5.2% decrease in the year. Construction shrank 5.2%, whereas mining and quarrying posted a cumulative drop of 2.9%, influenced by the decreased extraction of ferrous ores.

Among the activities in services, transportation, storage and mail decreased 7.1%, followed by trade (-6.3%), other services (-3.1%), information services (-3.0%) and financial intermediation and insurance (-2.8%). Real estate activities changed positively 0.2%, whereas public administration, health and education (-0.1%) were virtually stable in relation to the previous year.

In the expenditure approach, by the third year in a row there was contraction of the FBCF (-10,2%). This reduction resulted mainly from the fall of the domestic production and of imports of capital goods, also influenced by the negative performance of construction. Household consumption expenditure fell 4.2% in relation to the previous year (when it fell 3.9%), explained by the deterioration of the interest, credit, employment and income indicators along the whole year of 2016. Government consumption expenditure, on its turn, dropped 0.6%, over the 1.1% decrease in 2015.

In the foreign sector, the exports of goods and services increased 1.9%, whereas the imports of goods and services fell 10.3%.

GDP reaches R$6.3 trillion in 2016

The Gross Domestic Product in 2016 totaled R$ 6,266.9 billion. The investment rate of 2016 was 16.4% of the GDP, below that of the previous year (18.1%). The savings rate was 13.9% in 2016 (against 14.4% last year).
China signs production capacity agreements with over 30 countries: FM (Китай подписал соглашения о производственных мощностях с более чем 30 странами) / China, March, 2017
Keywords: China, Economics, New Development Bank
Source: China Daily

BEIJING — China has signed agreements on production capacity cooperation with more than 30 countries amid efforts to facilitate its industrial restructuring and upgrading, Foreign Minister Wang Yi said Wednesday.

Serving domestic development is the due task of China's diplomacy, Wang told a press conference on the sidelines of the annual session of the National People's Congress.

For instance, China's currency renminbi has joined the International Monetary Fund's Special Drawing Rights basket. The country has also promoted the establishment of the BRICS New Development Bank and the Asian Infrastructure Investment Bank, expanding China's institutional rights in global economic governance, he said.

The foreign ministry has launched promotional events for Chinese provinces to enhance cooperation with foreign partners and help foreign diplomats in China better understand local conditions, he said.

Since the G20 Summit was hosted last year in Hangzhou, the city has taken on a new look and made progress in its economic and social development, he said. "The local people have benefited the most."

BRICS push back against EU, US on drug patents (БРИКС выразил несогласие ЕС и США по поводу патентов на лекарства) / United Kingdom, March, 2017
Keywords: Economics, World Trade Oragnization, BRICS economics, Healthcare, BRICS Health Ministers
Source: The BRICS Post

BRICS member countries are likely to turn to the World Trade Organization in what is shaping up to be a dispute with the EU and US over pharmaceutical patents.

In the past decade, BRICS countries – in addition to emerging markets like Kenya, South Korea, Cuba, Egypt and others – have aggressively pushed their research and development in the pharmaceutical industry to offer cheap generic drugs to their populations.

This development has been covered by the 1994 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the 2001 Doha Declaration which said that TRIPS will consider the rights of developing nations "to promote access to medicines for all".

Big pharmaceutical companies, however, say they are losing billions in sales of what are proprietary medicines.

In November 2016, the United Nations discussed a September report from its High-Level Panel on Access to Medicines which was mandated "to review and assess proposals and recommend solutions for remedying the policy incoherence between the justifiable rights of inventors, international human rights law, trade rules and public health in the context of health technologies."

The report leaned in favor of developing countries in providing cheaper drugs.

In the final findings:

"The new report noted with grave concern reports of governments being subjected to undue political and economic pressure to forgo the use of TRIPS flexibilities. The Panel felt strongly that this pressure undermines the efforts of governments to meet their human rights and public health obligations and violates the integrity and legitimacy of the Doha Declaration."

The report also recommended punishments for entities which use political and trade policy pressure to restrict the flexibilities afforded to developing countries under TRIPS.

Major global pharmaceutical companies, which are mostly based in the EU and the US, have pressured their governments to use trade provisions during negotiations with developing countries to push intellectual property rights and strengthen drug patents.

But BRICS countries are in agreement about protecting the flexibility provisions in TRIPS and largely support the UN's High-Level Panel on Access to Medicines.

Last December during the 6th BRICS Health Ministers' Meeting, Union Minister of Health and Family Welfare J.P. Nadda urged fellow members to place public health goals above trade deal priorities.

"Trade regimes are important, but must be seen as being subservient to the shared international public health goals," he said.

BRICS Health Ministers concluded their meeting in Delhi in December by reiterating their commitment to make full use of the flexibilities of TRIPS to promote access to medicines.

They also pledged to insist on the inclusion of TRIPS flexibilities in bilateral and regional trade agreements in the interest of public health.
When will Brazil emerge from the worst ever recession? (Когда Бразилия оправится от самой сильной в ее истории рецессии?) / United Kingdom, March, 2017
Keywords: Economics, Brazil GDP, Statistics
Source: The BRICS Post

Try as they may, Brazil's legislators have been unable to carve a dent in what has now become the worst recession in the country's history.

Recent data from the Instituto Brasileiro de Geografia e Estatística (IBGE) – the country's official statistics agency – shows that Brazil's GDP growth contracted by 3.6 per cent in 2016.

This puts immense pressure on President Michel Temer who is already fighting on multiple fronts. He faces a number of corruption charges, has a popularity rate around 10 per cent according to pollsters, and has been struggling to push through radical, if not controversial, reform measures in congress.

Of all the BRICS members, the IMF's January World Economic Outlook for Brazil was the grimmest. In a blow to Temer's hope that the country would reopen for business, the IMF report said that it had downgraded 2017 projections down from 0.5 per cent growth to a meager 0.2 per cent.

However, there are signs that certain sectors are making progress.

Brazil's Central Bank, for example, is also hoping that Brazil's runaway inflation rate continues to fall. Last year, it hit 10.7 per cent – the highest rate in 10 years – but has lately started to decline coming close to the desired 4.5 – 6.5 per cent rate range.

Official government data released in late January showed that consumer prices in 2016 rose by just 6.29 per cent, well within the Central Bank's range.

Forecasts currently hold that the inflation rate will fall close to the 4 per cent rage by the end of 2017, likely signalling further interest rate cuts from the Central Bank.

This falls in tandem with expectations by some economic experts that Brazil could emerge from this recession by the end of Q4 this year.

Meanwhile, it may not be the best indicator of a slowly improving economy, but Brazil's jobless rate has been declining since 2015.

The jobless rate hit 40,864 in January 2017, according to national statistics, considerably less than the nearly 100,000 just a year earlier.

Overall, the number of jobs lost in 2016 was 1.28 million, a slight improvement

In the 12 months through January, 1.28 million jobs ceased to exist in the country. In 2016, the number was 1.32 million – a minor improvement from 1.54 million in 2015.
India may replace Russia as 3rd largest refiners by 2020: IEA (Индия может занять место России как 3-й среди крупнейших нефтеперерабатывающих стран к 2020 году) / United Kingdom, March, 2017
Keywords: Economics, India, Russia, Energy
United Kingdom
Source: Times Now

Houston, Texas: Moving towards the center stage of global energy market by the year 2020 India will replace Russia as the world's third largest refiner, said a top official of the International Energy Agency.

"That India is moving to the centre stage of global oil and energy markets. It is not only oil. It is coal. It is solar. It is out of the strong growth in the economy and the population growth," Dr Fatih Birol, Executive Director of IEA on Monday told reporters at a news conference on the sidelines of the international oil and gas meet CERAWeek here.

The Indian delegation is led by the Union Petroleum Minister Dharmendra Pradhan with top world leaders attending including those from the corporate sector and oil ministers of countries like Saudi Arabia, Russia, the United Emirates and Canada.

Birol, who met Pradhan on the sidelines of the CERAWeek which kicked off yesterday, told reporters that the leadership of Prime Minister Narendra Modi has provided a strong impetus to Indian economy, particularly in terms of boosting oil and gas production.

Praising the plans of the Union government for development of hydrocarbon assets in the country, Birol said there is tremendous growth potential in the country and in the coming years it will be the centre stage of global energy.

Indian oil and energy sector will continue to grow, he asserted.

In its annual report released during the conference, IEA said on the demand side, there is less uncertainty: growth will continue, driven mainly by Asia.

"India overtakes China as the main driver of demand growth, as was foreseen by the IEA some time ago," Birol said.

India, according to the report, is gradually becoming the focus of attention as Chinese demand growth slows.

Noting that Indian per capita oil consumption is just 1.2 barrels per year today, the report said the number is expected to reach 1.5 barrels per year by 2022.

This compares to China's three barrels per capita per year today, a figure expected to be 2.5 by 2022.

Although, a direct comparison between India and China does not take into account societal and economic differences, the overall point is valid; there is clearly still plenty of growth to come from India, the report said.

Indian refineries have some of the highest utilisation rates in the world, churning out products for both domestic and export markets.

In the next five years, capacity additions totalling 860 thousand barrels per day (kb/d) will be made, but as a sign of the relative maturity of its downstream industry, all of these are expansion projects at existing refineries, it noted.

Even so, the additions will lag behind refined product demand growth as export volumes will be halved.

"By the early 2020s India will replace Russia as the world's third largest refiner. This could explain the interest of Russian companies in the Indian downstream as Rosneft finalised the purchase of Essar Oil, India's second-largest private refiner.

"Indian Oil Company floated its 1.2 mb/d mega-refinery project in Maharashtra, but we do not assume it will be constructed and launched before 2022," it said.

Political events in the public life of BRICS
Russia's Demographic trajectory: dimensions and implications (Демографическая траектория России: измерения и следствия) / India, March, 2017
Keywords: Domestic Policy, Russia, Statistics
Author: Himani Pant
Source: ORF

Demographic trends in Russia since the dissolution of the Soviet Union in 1991 have largely been unfavourable. Deaths exceeded births for the first time in 1992, and a period of negative growth followed which continued unabated until 2012 when marginal growth was achieved for the first time in two decades. This paper studies the demographic patterns in Russia since 1991, which are unique for several reasons. While population decline is common among modern developed societies, unlike them and in spite of being an industrialised middle-income country, Russia has an extraordinarily high mortality rate which exacerbates the impact of falling births. At a time when the economic slump in Russia has emerged as a major concern, this paper summarises the challenges posed by Russia's demographic decline and its grave repercussions in the long run.


Early signs of a demographic decline in Russia emerged in the mid-1960s, when fertility rate for the first time plummeted below the replacement level, and the country entered a period of "latent depopulation".[1] This trend became prominent in 1991 after the dissolution of the Soviet Union, when like other post-Soviet states, Russia suffered demographic shocks in the form of fewer births, increased deaths, and increased emigration.

In 1992, as the country's population entered a phase of negative growth with the number of deaths exceeding births, "the latent depopulation became manifest, as natural population increase gave way to natural decrease, signalling the start of a new, more dangerous stage of the demographic crisis".[2] This phenomenon was a first in the peacetime history of Russia and would become known in demographic literature as the infamous "Russian cross": implying large-scale depopulation graphically represented by the falling birth rate line crossing over the growing mortality one.[3] The situation began to improve, albeit marginally, around 2012 with birth and death rates converging and moving towards positive figures in 2013 and 2014. However, as pointed out by Anatoly Vishnevsky, director of the Demography Institute at the Higher School of Economics, Russia's recent population growth is not sustainable, as the next few generations of potential mothers will be those born after 1991, when birth rate was historically low.[4] In addition, the growth is still below replacement level, meaning that the population is still shrinking.

Aggravating the situation is the current state of the Russian economy, which has been contracting since 2015. Following a turbulent political and economic transition in the 1990s, Russia experienced over a decade of economic growth, driven largely by high oil prices. Signs of a recession, however, began to appear towards the end of 2014 and the contraction of the economy gained pace in 2015. Continuously falling energy and commodity prices throughout 2015 resulted in a major revenue deficit for Russia. The commodity prices are expected to remain low in the near future, too. The head of the Department of Macroeconomic Forecasting at the Ministry of Economic Development, Kirill Tremasov, estimates the price of oil at $41 per barrel and a growth of 0.7 percent in 2017. He further expects an average growth rate of around 1.5 percent between 2017 and 2019, less than half of the required rate of 3.5 percent.[5]

The combined impact of low oil prices and sanctions, and a weak domestic market have contributed to the ongoing recession. The devaluation of the ruble has increased inflation and reduced real incomes. Unemployment has been on an increase. According to World Bank estimates, poverty rate in the country stood at 8.2 percent in 2016.[6] The country's isolation from international markets owing to sectoral financial sanctions has only worsened the impact of falling oil prices. High military spending, on the other hand, "has added a further strain on the country's economy."[7] While macroeconomic stability is already at risk, large state-owned institutions have increased their domination of the financial sector at the expense of private domestic and foreign banks.[8]

This paper examines Russia's demographic trajectory since 1991. It studies population trends including the natural growth of population, composition, fertility and mortality rate, while also taking into consideration migration trends and regional variations. The study observes that with the exception of the last couple of years, the country's demographics has been characterised by negative trends in the past two decades. The paper argues that economic uncertainty was a major factor that accelerated the process of demographic decline in Russia in the 1990s. This is manifested in a decrease in the average number of children per woman (from about 2 to 1.2) during this period. This backdrop is taken to underscore the challenges of the current scenario where a slowing Russian economy raises doubts over the country's growth in the coming years. Finally, the paper discusses the social, political, economic and security implications these trends are likely to have in the future.

Russia's Demographic Decline: Trends and Factors

In 1991, Russia's population was estimated at 148.6 million.[9] It would be the last year in the next two decades to register a natural growth of population. The year 1992 marked the shift to negative natural increase for the country, with 219,797 more deaths than births.[10] The negative trend continued throughout the 1990s and in 2000, the country's population fell by two million to reach 146.5 million. In 2006, when President Vladimir Putin declared demography to be the most acute problem of the country, Russia's negative growth had in fact already improved a little. Today, the country's population (excluding Crimea) has shrunk to about 144 million (Figure 1).

Russia's overall mortality rate of 13.6 per 1000 people is among the highest in the world; its birth rate of 11.3 per 1000 is among the lowest. While the Russian birth rate is equivalent to that of developed countries, its death rate is considerably higher, especially among working-age males due to a variety of factors discussed in a later section of this paper. Moreover, though it is an industrialised middle-income country, Russia "appears to be an emerging economy in terms of wealth with the demographics of an advanced nation."[12] This combination has resulted in a devastating combination for Russia since it is the first country to experience such a sharp decrease in births versus deaths in a peacetime period.[13]

The natural loss of population is the main depopulation factor which is stable and long-term by nature.[14] Prior to the 1990s, the main source of population growth in Russia was natural increase. After the 1990s, a period of sharp decrease in birth rates and an increase in death rates followed, as a result of which the natural population began to decline. However, the constant migratory flow from former Soviet states, especially from Central Asia, was instrumental in maintaining the population equilibrium (Figure 2).

The period between 2006 and 2012 proved an exception as the country witnessed improvement with its Total Fertility Rate (TFR) rising to 1.7. Therefore, despite the catastrophic fall in population in the early 1990s, birth and death rates in Russia saw a convergence around 2012. According to official statistics, Russia witnessed more births than deaths in 2013 and 2014, implying natural population growth for the first time since the collapse of the Soviet Union in 1991. In 2013, the number of births exceeded the number of deaths by almost 24,000. The trend continued throughout 2014 and 2015 with natural increase of about 30,200 and 32,700, respectively. [16]

This happened primarily because of the increase in the numbers of people who were born in the "bumper" years of the 1980s, in the reproductive structure of the population. In 1996–2000 the average annual growth rate of gross domestic product (GDP) was 1.6 percent, and in the following five-year period (2001– 2005) it reached 6.2 percent.[17] This was also, in part, due to the introduction of the Demographic Policy in 2006 which offered subsidies for multiple child policies (up to $10,000 in credits and subsidies for mothers who had a second or third child) which triggered a surge in births during the period. In addition, a crucial factor due to which the policy was able to yield better results in the initial years was a better economic environment. In short, the prosperity at the turn of the 21st century, the introduction of the Demographic Policy in 2006 and the maturing of population born in the 1980s, reversed the negative trend that had characterised Russia since 1991.

Composition of Population

Russia's population dynamics over the near future is closely interlinked with the composition of its population. Figure 3 classifies total population into five-year age groups represented as horizontal bars along the vertical axis. The youngest age group lies at the bottom and the oldest at the top. The right side represents females while the left denotes men.

As is evident in the figure, the composition of Russia's population is characterised by a highly irregular age sex structure and enormous gender gap in terms of life expectancy. The bulk of the male and female population (about 45 percent) lies in the age group of 25-54 years. Beyond 55, the gap between males and females begins to widen, indicating the high mortality rate among Russian men in particular.

According to official statistics,[19] ethnic Russians make up 77.7 percent of the total population. Six other ethnicities with population exceeding 1 million include Tatars (3.7 percent); Ukrainians (1.4 percent); Bashkir (1.1 percent); Chuvash (1 percent); Chechens (1 percent); Others (10.2 percent); and Unspecified (3.9 percent). Interestingly, regions where population has remained stable or showed growth include national autonomous republics with a high share of the Muslim citizens.[20] Population decline is also minimal in regions like Tyumen and Moscow, where growth is the outcome of immigration and higher living standards.

According to United Nations statistics, the fertility of Russia's Muslims stands at 2.3, much higher than the overall national fertility rate of 1.7.[21] Russia is expected to have a Muslim majority in absolute numbers by 2030, with Muslims projected to make up more than 15 percent of the total population. Its Muslim population is expected to rise from 16.7 million in 2010 to 18.3 million in 2030. A comparatively robust growth among the Muslim population could be attributed to lifestyle choices like less or no alcoholism and higher rate of reproduction. While the growth rate for the Muslim population in Russia is projected to be 0.6 percent annually over the next two decades, the non-Muslim population is expected to shrink by an average of 0.6 percent annually over the same period.[22] Continuation of TFR differentials across ethnic groups implies long-run shifts in the ethnic composition of the population.
Regional Variations

Along with the skewed gender ratio gaining pace in the country, regional variations also need to be considered while analysing Russia's demographic patterns. For example, the country's population is predominantly urban, with over 70 percent of the population centred in urban areas. Urban migration is widespread with the population concentrated in the European parts like Moscow and Saint Petersburg. Among the most sparsely regions are Russia's Far East and Siberia. According to the 2010 national census, the total number of Russians in Eastern Siberia and the Far East combined was 25.4 million. Meanwhile, "as Russia has receded, China has advanced, in both political and economic terms."[24] The region is rich in natural resources such as oil, gas and timber. Over the years, China has taken advantage of the same as it is easier to send these goods to Asia instead of shipping them across 3,000 miles to Moscow. As a result of China's increased investment, its workforce has also risen over the years. While the numbers are still modest in general terms, a constantly diminishing Russian workforce has ensured a continuous inflow of Chinese workers.[25]

Variations are also evident in life expectancy levels. In regions like the Republic of Tuva, life expectancy (61.79 years) is equivalent to that of underdeveloped countries like Zambia, Tanzania and Niger in Africa.[26] Higher expectancy of 70-plus years has been recorded for North Caucasus and federal Southern districts.[27] Birth rates remain low in the northern and eastern parts of the country, whereas southern areas have recorded growth. The only three regions recording growth rates are located in the south: Chechnya (in the Russian North Caucasus), Altai, and Tuva (both in the south of Siberia).[28]

Migration Trends

Historically, Russia has witnessed mass waves of emigration in the 20th century. The outward migration flows peaked in the post-revolution (1917) period. The combined impact of two World Wars, the 1917 revolution, the collectivisation of agriculture,[29] and the ensuing famine (1932-33) ensured that this trend continued for the next four decades, only to shift in Russia's favour during the 1970s when emigration began to decrease. The trend reversed once again when the economic uncertainty in the aftermath of the breakup of the Soviet Union forced many ethnic Russians to migrate.

However, the loss of population in Russia has often been compensated via huge immigration flows from neighbouring regions over different timeframes. Importing demography is not a problem for any country that has an income level even a few times higher than that of its neighbours; Russia has largely benefitted in this regard in terms of labour migrants. Until 1998, migration into the country compensated for over half of the natural decrease in population.[30] Over the past decades, Russia's labour market has remained lucrative for workers from the Commonwealth of Independent (CIS) member countries. These immigrants (mostly temporary) have been instrumental in compensating for the natural decline of people. With oil prices at their historic low and wages remaining unattractive, maintenance of this trend is likely to be difficult. According to official data, between 1992 and 2010, 8.4 million immigrants entered the country, mostly coming from Azerbaijan, Tajikistan, Kyrgyzstan, Uzbekistan, Kazakhstan and Turkmenistan.[31]The fall in real wages has raised serious questions on the continuity of this trend. The present economic scenario is unfavourable for labour immigrants from neighbouring Central Asian states.

Compounding the situation is the increase in the number of people emigrating from the country after 2012. In 2011, between 100,000 and 150,000 Russians were estimated to be emigrating every year. Today, the situation is significantly worse. It is estimated that almost 123,000 people officially left the country in 2012, rising to 186,000 in 2013, and further to almost 309,000 in 2014 after the annexation of Crimea, and to 350,000 in 2015.[32]

Total Fertility Rate (TFR)[33]

Simple reproduction requires a minimum average of 2.1. With the exception of the years 2006-2012, when it showed improvement (1.7 in 2012 from 1.3 in 2006), the TFR in Russia has been below replacement level. The economic conditions of the 1990s seem to have had a toll on Russian fertility rates. Frequent abortions (especially during the immediate years following the collapse of the Soviet Union), and sexually transmitted diseases (STDs) rendered a large section of the population infertile.

High Rate of Abortions

The post-1991 period was characterised by increased cases of abortions. In a report prepared in 2001 by Research and Development (RAND) Corp., about 70 percent of pregnancies were terminated by the end of 2000. The same report points that the situation in the 1990s worsened to such an extent that some Russian women had "ten or more abortions in their life time" and more than three in four Russian pregnancies ended in abortion.[34] This adversely affected almost 20 percent of the female population, who would eventually lose their ability to bear children. One major impact of the increased rate of abortions in the 1990s is that there are today fewer women of active reproductive age (20-29 years), when two-thirds of total births occur.[35]

It must be noted that countries elsewhere in Europe have fertility levels that are equally low or even lower but "the Russian demographic predicament is aggravated by mortality that is exceptionally high by modern standards."[36] Moreover, as pointed out by Anatoly Vihnevksy, the low fertility levels in Russia are attributable to economic hardships.[37]

High Mortality Rate

According to most recent World Health Organization (WHO) statistics, Russia has a life expectancy of 71.4, which is about 10 years less than in most developed countries. Moreover, male life expectancy in Russia is low at approximately 65 years, while female life expectancy averages about 76.8 years,[38] making Russia the country with the largest gap between male and female life expectancy in the world. The gap underlines the intense nature of Russia's mortality crisis. As pointed out earlier, the falling birth rate is not unique to Russia and many countries in Europe have TFRs similar to or even lower than Russia. However, what differentiates Russia's situation with other developed countries is its poor state of health, fuelling higher death rates.[39]

Total expenditure on the health sector in Russia averages seven percent, which is significantly lower than most developed countries. Figure 4 traces total expenditure on health as percent of GDP in Russia from 1995 onwards. Fluctuations in the level of expenditure are evident from the figure, with frequent steep falls in investment. There is some progress in the post-2005 period after the Russian president announced an ambitious plan to improve the health sector.[40] This has, however, led to selective progress and the gap between federal cities and far-flung areas continues to grow. This is largely due to a continued "lack of funds, medical and technical equipment and supplies, and, finally, to the ineffective organization of health care delivery services."[41]

The Russian provincial state health care, in particular, remains dire. For one, "17,500 towns and villages across Russia have no medical infrastructure at all."[43]According to the State Statistics Service, the number of health facilities in rural areas fell by 75 percent, from 8,249 to 2,085 between 2005 and 2013. This includes a 95-percent plunge in the number of district hospitals and a 65-percent decline in the number of local health clinics.[44]

As the health sector has declined, the country has reported increased instances of people suffering from cardiovascular diseases, alcohol-related mortality, and violent deaths.[45]Douglas W. Blum, in his book, Russia and Globalization: Identity, Security, and Society in an Era of Change, estimates that "alcohol alone caused the deaths of roughly 7 million people" between 1990 and 2001.[46] Apart from general causes like suicides and accidents, substance abuse[47] is also among one of the serious causes behind the high rate of mortality among the population, claiming an estimated 100,000 lives a year.[48] According to Marlene Laurelle, consumption of heroin is prevalent in Russia, influencing Russia's infection rate which is among the highest in the world. [49]

Implications of Declining Population

The demographic realities of Russia have interlinked implications in the economic, political and social spheres. As discussed earlier, although gradual, China's influence in Russia's Far East has increased over the years. As a resource-rich region with abundance of oil, gas and timber, the Russian Far East holds importance for an ever-growing China. Both Russia and China have a mutual interest in projects relating to Russian energy, trade and cross-border tourism in the former's Far East. The biggest project at present is the Power of Siberia pipeline (eastern route) which is expected to deliver about 38 billion cubic meters of Russian natural gas to China annually.[50] With the advantage of greater financing and a younger workforce, China clearly has an edge over Russia in utilising the untapped resources of Russia's Far East. According to regional development minister of Russia, Alexander Galushka, about $2.4 billion worth of investment has been made by Chinese companies in the Russian Far East.[51] Some of the most exposed regions to the Chinese border include the Amur oblast, Primorsky Krai, the Jewish Autonomous Oblast, and Khabarovsk Krai.[52] In Khabarovsk alone, over $109 million has been invested by China in a timber plant.

This trend calls into question the Russian government's ability to retain control over the country's eastern periphery where China is making gradual yet steady inroads. It also creates challenges for maintaining long-term connection of the scanty numbers of indigenous people in the region with the Russian federal centre. With an unfavourable economic environment and low demographic presence in the region, the Russian government "may soon find itself at risk of being eclipsed, both economically and in demographic terms, in its eastern territories".[53] This may have serious repercussions on Russia's relationship with China as "the Sino-Russian border dynamic in the Far East has the potential to be a hotbed for tensions" between the two in later decades.[54]

The positive demographic increase that has taken place in the past three years seems unsustainable. The variety of factors contributing to a fall in birth rate in the 1990s have already been discussed in the earlier sections. The most imminent problem is that in the coming years, Russia is likely to face the consequences of its abysmal birth rate in the 1990s. Scholars refer to it as the "consequences of the demographic dip of the 1990s."[55]The country has small populations of young people—6.5 million 5–14-year-olds and a little more than 4.5 million 15–19-year-olds. Further, young women born in the early 1990s are now entering their childbearing years. This implies that the number of women in their active childbearing years (age 20–29), who account for some 60 percent of total births nationwide, would almost halve in a decade's time.[56] At present, the number of 15-year-olds is only half the number of 25-year-olds, which means that ten years from now the female population in this age group would be significantly less than what it is today. In 2025, Russia is projected to have just 6.4 million women in their 20s, about 45 percent fewer than today, "given that all women who will be between 20 and 29 years in 2025 are already alive."[57] Moreover, the current total fertility rate (of 1.7) is not sufficient to offset the high mortality rate.

Russia also tops the list of countries with a high divorce rate. According to Nicholas Eberstadt, "marriages in today's Russia are less stable than marriages even in the Soviet era, when the country's divorce rates were already notoriously high."[58] While increasing family instability is not unique to Russia, though, Russia's single parents have to raise their children on far lower income levels than their counterparts elsewhere in the West.[59] Moreover, as Siebert notes, "single mothers contribute to the low birth rate because of the difficulties they face balancing their work and parenting duties."[60]

The ageing population makes it imperative to reorganise the healthcare system. The elderly are more vulnerable to chronic non-communicable diseases and treating such cases requires expensive apparatus which, in turn, calls for greater funding from the government. Russia's increased military expenditure amidst a climate of economic slowdown has led to budget cuts, including in the health sector. Such reduction of state involvement—and the absence of private structures to replace it, especially in investments in medical technologies and drugs—has aggravated the impact on the people.[61]

Russia also has a high death rate by global standards. With birth rate well below replacement level and low life expectancy, the size of the country's working population is shrinking. Since human factor plays a fundamental role in an energy- and labour-intensive development model that the Russian economy is currently based on, the adverse impact of a falling population is most likely to be felt in the economic sector. One major challenge is the falling working age population to support the elderly. According to Klingholz, current demographic trends have the potential to create problems for future generations, which will have to bear the burden of supporting a large retired population with a relatively small working population. He argued that the "bulge of the past is the problem of our future."[62] A related development is the evolving composition of society. As discussed earlier, the Muslim population in Russia has shown stable growth over the years. While current numbers are still modest, the continued decline of the Slavic population likely to happen in the coming years could provoke civil unrest.

The Demographic Policy issued in 2006 offered subsidies for multiple-child policies (up to $10,000 in credits and subsidies for mothers who had a second or third child) which triggered a surge in births during the period. Russian families are entitled to a certificate for 429,408 rubles ($12,500) for a second child. The money can be channelled to buying real estate or the child's education, or deposited into the mother's pension account.[63] However, in the absence of such incentive for a first child, Russia is witnessing an upward trend in the number of couples opting not to have any child at all.[64]

In terms of politics, the implications encompass both domestic policy-making and international security. In the country's National Security Strategy of 2009, the demographic situation was outlined as one of the "new security challenges" that Russia must confront in the years ahead. In the current scenario where Russia is trying to reassert itself as a global power, the domestic realties could prove to be a significant obstacle in the future. Moreover, Russia's demographic crisis also has implications for its military capabilities. The prevalence of extremely high mortality rates among males creates additional burden for a country where conscription for military service for a period of 12 months is compulsory. In addition, the falling size of the young population (and consequently, women of childbearing age), implies even fewer conscripts in the future. As Eberstadt puts it, "maintaining the country's current force structure—a military of more than a million soldiers will not be feasible in the years immediately ahead."[65]

Russia's demographic patterns also have implications for the country's neighbourhood policy. With the country's declining population, the role of the Russian Diaspora in neighbouring countries inevitably increases. A significant dimension of Russia's preoccupation with Ukraine and Crimea is the presence of ethnic Russians in the region. Though internationally unrecognised, the addition of Crimea meant a surge by over two million people—a huge number for a country which has shown minimal or no growth in population since 1991.


Studying Russia's demographic patterns is relevant as it presents a mix bag of characteristics. Like developed regions, Russia faces a population decline. Unlike those same regions, though, Russia suffers from a poor state of health, leading to high mortality which in turn exacerbates the impact of lower births. Given its high mortality rates, the improvement of Russia's healthcare system is crucial for its future demographic growth. It is thus imperative for the Russian government to advance its health and family welfare schemes in this regard. It is important to note that much of the current focus is on communicable diseases and nutrition. As this paper notes, though, the country is witnessing increased cases of cardio-vascular deaths. The need, therefore, is to make parallel investments in managing chronic diseases. At the same time, promoting healthier lifestyles (such as reduced smoking and alcohol consumption) could improve the overall state of health.

The initiatives undertaken by the government to stimulate the birth rate while reducing death rate have had limited results due to a lack of coordinated and comprehensive strategy. One outstanding aspect in this regard is the multiple-child incentive policy. While the policy per se is a good one, the demographic policy adopted by the government is for a period up to 2025. In the given scenario where a demographic dip seems inevitable, it is pertinent for the government to update the policy to meet new realities. The government also needs to adapt the demographic policy to regional variations in order to ensure balanced growth across the entire country. For instance, low income may hinder individuals from having any children altogether. In this scenario, the second or third child policy serves no purpose. Therefore, substantial attention needs to be paid towards ensuring the birth of the first child.

Currently, Russian men retire at 60 while women, as early as 55. Given the high cost of maintaining the retired population, the government must lay out a concrete bill increasing the retirement age to 65 for both females and males. (Interestingly, early in 2016, there were reports that President Putin had signed a bill that proposed gradual increase in the pension age for state officials. The new law was supposed to be effective from January 1, 2017, but with presidential elections due in 2018, the plan has been put on hold).

Given that Russia's economy collapsed after the breakup of the Soviet Union, which had a devastating effect on the birth rate as families struggled to make ends meet, an uncertain economic environment is bound to affect lifestyle choices of the population, including opting out of having children. To facilitate the recovery of its economy, Russia needs to undertake structural reforms to reduce its dependence on oil. Reforms would require privatisation of selected sectors, transparent and efficient public investment, better customs administration, and reduced trade barriers to improve the performance of the domestic market. It is important both from the point of view of attracting labour migrants as well as ensuring a natural increase of population. Further, a shift in economic policy and change of development strategy would be categorical in assisting the country to capitalise more effectively on its limited endowment of human resources.
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