Information Bulletin of the BRICS Trade Union Forum
Issue 13.2017
2017.03.20 — 2017.03.24
International relations
Foreign policy in the context of BRICS
BRICS: A new trend in multilateralism? (БРИКС: Новая тенденция в многосторонности?) / China, March, 2017
Keywords: International relations, China, politics, opinion
Author: Priyanka Pandit

One of the most significant contemporary developments in international politics involves the growing importance of emerging powers within global governance. The emerging powers such as China, India, Brazil and Russia, already wield considerable influence in their own regions and have expanded their roles in various multilateral institutions such as the G20, the India-Brazil-South Africa (IBSA) Dialogue Forum, the Brazil, South Africa, India, China (BASIC) group of countries, and the BRICS.

The emerging powers thus, presuppose a number of characteristics which raise important questions about their nature of rise, factors shaping their behavior and the extent to which they will challenge existing institutions and practices, constituting the international economic order.

While some scholars view the rise of emerging powers from a 'power shift' narrative, the others understand it as a shift from Western predominance to a more diverse international system, in which there is a deepening interdependence among the established and new actors.

While analyzing the nuances of BRICS formation and its agenda, some analysts apply centre-periphery formulations in which the BRICS as a 'semi-peripheral states' are gradually replacing the 'centre powers'.

For instance, the decline of the US dollar and its ability to provide exchange rate stability to countries that peg their currencies to it suggest the failure of the US to safeguard international monetary and fiscal stability and the emerging market economies like that of BRICS countries, especially China with its current account surplus, have a growing manufacturing capacity which increasingly supply to developed countries with manufactured goods.

The BRICS have been involved in an accelerated integration into these globalised production and financial structures and the policies that the bloc has been pursuing, seek to further this integration. Also, the interests of the leading capitalists and elites in the BRICS countries lie in advancing the interests of transnational corporations and global financial institutions rather than pursuing local accumulation.

However, the extant interpretation of BRICS formation and its implications for the global order have been centered on multi-polarity in global political economy. One set of scholars arguing within this framework believe that multi-polarity generates a higher premium on policy cooperation between sovereign states than a uni-polar system does and therefore, the BRICS countries would seek for greater multilateral cooperation with the established powers to collectively bring about a transformation in the global economic governance.

The other category of political economists argue that although the rise of BRICS signify multi-polarity in economic and financial affairs, but the significant differences in terms of preferences, beliefs and interests between the BRICS nations and the developed countries make cooperation both difficult to achieve and sustain.

In their opinion, the newly empowered states would not prefer to compromise their interests in order to reach cooperative agreements with the developed countries. The examples include negotiation in the Doha rounds, exchange rate issues, climate change etc. which indicate that the multilateral cooperation between the inter-states have either stalled or failed to produce any significant outcomes.

Thus, it cannot be denied that the increase in relative capabilities of the BRICS nations have been a noticeable development in international circles and many analysts argue it as developments transforming the multilateral system. The slow recovery of the west from the global financial crisis have the major powers realized that the world economy and its institutional structures require a more coordinated response and this cannot be achieved alone by the G-7 countries.

Although the extant scholarship on BRICS suggest that the emerging economies desire a larger share in global governance in terms of greater voice, representation, leadership positions within the intergovernmental institutions, they so far have worked towards greater multilateral cooperation, while creating global influence for themselves.

The developmental multipolar discourse, since the mid-2000s, created the conditions for the emergence of BRICS. It is China and India who initiated the discourse through actively promoting South-south cooperation. They have also become the major proponents, emphasizing the need to transform the existing structures of economic governance.

In this context, China has identified itself as 'the major developing country' that would promote the interest of other developing countries in an international system marked by the transition to multipolarity.

For any institutional grouping, inter-regional coalitions are the order of the day. However, these coalitions are never without leadership, who represent the concerns of the coalition, take initiatives and negotiate its interests in the larger forum. In BRICS, China remains the undeclared leader, despite the group's opposition to unipolarity.

Additionally, there are issues related to both intra-regional and inter-regional differences which challenge the cohesiveness of the grouping.

First, the BRICS are geographically, politically and economically a diverse group with little commonality in terms of values and interests. These political differences often form the basis of their differing positions on various other forums of global governance, thus, revealing the inherent fractures within the BRICS community.

Second, with regard to economy, China and India are commodities importers, China specialises in manufactures and India in services. By comparison, Russia and Brazil are commodities exporters, Russia is rich in natural resources and Brazil in agriculture. Since the drivers of economic growth differ in these countries, they take different approach with respect to key issues in the WTO.

Also, these institutional arrangements are rife with insecurities. The factors, discussed above, act as major barriers to the emerging market powers as they seek adjustments in their course of reforming the global order. Therefore, BRICS responses to the tensions of continuity and discontinuity, contested neoliberal norms, and regional differences will bear greatly on the evolution of global order in the coming decades.

The transition also suggests a hybrid system of global governance, where the provision of collective goods is no longer confined to the hands of the superpower but has become a matter of collective goodwill.

Priyanka Pandit is a Visiting Fellow at the Chongyang Institute for Financial Studies, Renmin University of China (RDCY).
China pledges Rs 3b support to Nepal Army ( Китай объявляет о поддержке армии Непала в размере 3 млрд рупий ) / Nepal, March, 2017
Keywords: China, Nepal, international relations, military, defence
Author: Binod Ghimire

Mar 24, 2017- Chinese Defence Minister General Chang Wanquan has pledged a grant assistance of Rs 3.04 billion (Chinese Yuan 200 million) to strengthen the Nepal Army in disaster management and equip it for the United Nations peacekeeping mission.

During his meeting with Prime Minister Pushpa Kamal Dahal on Thursday, Chang said the Chinese government was ready to support the NA with the equipment equal to the pledged amount.

The commitment from Chang is part of the pledge made by Chinese President Xi Jinping to PM Dahal during their meeting in September last year during the BRICS Outreach Summit in Goa.

Chang arrived in Kathmandu for a three-day visit on Thursday, the first by a Chinese defence minister in 15 years. Defence Minister Bal Krishna Khand said the Chinese side would provide the equipment support based on the demand from NA.

"The two sides will finalise the support after the NA provides the list of military support it needs," Khand told the Post. The NA which wants to double its presence in the UN peacekeeping mission from around 5,000 at present is struggling to manage equipment. The doubling effort is expected to cost around Rs 7 billion as the NA has to prepare the troops to deploy them in war-hit countries.

The Rs 3.04 billion military assistance from the northern neighbour on Thursday comes weeks after China's pledge during an investment summit early this month to plough $8.3 billion (approximately Rs 860 billion), equivalent to nearly 40 percent of Nepal's GDP, into Nepal for infrastructure development.

Khand and Chang, who is leading a 19-member delegation to Nepal, also held discussions on holding military exercises, the first ever by the armies of Nepal and China.

The dates are yet to be announced, but the first of the joint exercises is likely to take place in the third week of April, NA officials said, adding that the drills to be held for two weeks would focus on disaster management.

Chang is scheduled to hold a meeting with Chief of Army Staff Rajendra Chhetri on Friday.
O'Neill sees China boosting economy (О'Нилл предвидит улучшение китайской экономики ) / China, March, 2017
Keywords: Economics, International relations, China, Jim O'Neill

Says global trade is changing fast and dramatically

SYDNEY - World renowned economist and coiner of the term "BRIC (Brazil, Russia, India and China)" Jim O'Neill has said China's Belt and Road Initiative could "completely transform" the global economic outlook for the better.

O'Neill, who visited Sydney last week for an economic forum, spoke to Xinhua via telephone from his office in London, praising the work of the Chinese government in implementing the Belt and Road Initiative.

The initiative, proposed by China in 2013, aims to build a trade and infrastructure network connecting Asia with Europe and Africa along the ancient Silk Road trade routes.

The initiative demonstrates China's rapid progress in becoming the centre of the global economic sphere, the economist said.

"It's one of a number of potential additional trade developments which simply add to my view that the nature of global trade is changing dramatically, and the United States does not dominate in the same way it once did," O'Neill said.

"I think the Belt and Road Initiative has the potential to completely transform the economic outlook for those countries that lie between China and Europe, and result in all sorts of exciting things with respect to trade developments for China and many other countries."

China "dominates" global trade, O'Neill said, highlighting recent statistics out of Europe that show that China has become the trading partner of choice for many European nations.

"The most interesting statistic I've seen so far in 2017 was the release of the final German trade data for the whole of last year," O'Neill said.

"It shows that China has become Germany's number one trade partner, if you combine imports and exports, overtaking the United States and France."

One of the "realities" of this "new era" of trade is that China is not only becoming the number one partner of choice for commodity-driven nations, but for nations that specialize in premium goods, and a wide range of services, O'Neill said, envisioning close cooperation with China by the US in terms of continued and robust trade relations.

"As China goes further up the income stream, it's a really good market for the United States to export some of its best products and best businesses to," O'Neill said.

Free trade is crucial to the development of the global economy and O'Neill spoke of his own experiences in the British Parliament, highlighting the need for his native Britain to engage with trading partners around the world, and in particular, China.

"I certainly think for post-Brexit Britain, it's absolutely crucial to be trying to improve its trade relationships with the likes of China and Asia," O'Neill said.

"I was in the government until last September, and I was in the middle of what seemed to be quite strong, successful efforts to develop the so-called 'golden relationship' with China, and the reason why we did it was because of the potential for British trade and investment relationships with China."

But it is not just trade partnerships that the BRICS (Brazil, Russia, India, China and South Africa) nations are focused on developing, with global governance and policy consensus crucial to ensuring the social development not only of the member nations but those that are able to influence for the better.

O'Neill is hopeful that the nations will make even further strides towards becoming bigger influencers on the global scale, despite the understandable challenges they face when bridging cultural and political differences among them.

"The very fact they have emerged as a political group is a huge development, and I think in some ways they are still in their infancy," O'Neill said.

The world-renowned economist firmly believes, however, that despite the relatively young stage of their partnership, the BRICS nations more than hold their own with the likes of the US and the European Union in the geopolitical arena.

"The way they have emerged, and the whole advent of the G20 was done to bring the BRICS countries into global governance," O'Neil said.

"So they already are (at that level). I think it's pretty clear."

Looking ahead to the BRICS Summit set to be held in the city of Xiamen in China in September, O'Neill said he would engage with representatives to push for the nations to play a more active role in the global health agenda.

"I think they can play a really powerful leadership role there, as well as more conventional things like the state of the world, financial markets, and so on."
A place of BRICS in the foreign policy of Russia was discussed at the roundtable at the Gorchakov Fund (Место БРИКС во внешней политике России обсуждалось на круглом столе в Фонде Горчакова) / Russia, March, 2017
Keywords: International relations, Russia, politics, diplomacy, foreign affairs

The Alexander Gorchakov Public Diplomacy Fund and the Kennan Institute held a roundtable on the topic of "BRICS in the Foreign Policy of Russia Today".

Head of the of Russian Strategy in Asia Center at Institute of Economics of the Russian Academy of Sciences, Executive Director of Russian National Committee on BRICS research, Professor of the Department of Oriental Studies at MGIMO (U) under MFA of Russian Georgy Toloraya was a moderator of the discussion.

Researcher from Georgetown University (USA), doctoral candidate in Russian and Eurasian Studies at the Johns Hopkins School of Advanced International Studies (SAIS) Rachel Salzman was a main presenter.

Representatives of the of Russian Strategy in Asia Center of Institute of Economics RAS, the Moscow School of Management SKOLKOVO, MIA Russia Today, Institute of African Studies RAS, and Center for Comprehensive European and International Studies of the Faculty of World Economy and International Affairs of the National Research University Higher School of Economics gathered together in the conference hall. They discussed conflicts of interests among members of the association (the discussion included, in particular, border disputes between India and China), problems and opportunities related to trade and financial relations, issues of security, global management, and education within the framework of BRICS.

Experts assessed prospects of development of the organization and also mentioned importance of the international dialogue.
BRICS Plus: 'the Bloc That Will Dominate the World' (БРИКС Плюс: «Блок, который будет доминировать в мире») / Russia, March, 2017
Keywords: International relations, BRICS Plus, TPP

The proposed enlargement of BRICS (BRICS Plus) with the inclusion of powerful emerging economies would help fill the void created by US trade protectionism, international analyst Adrian Zelaia told Sputnik.

Having analyzed Beijing's idea to bring Pakistan, Bangladesh, Iran, Nigeria, South Korea, Mexico, Turkey, Indonesia, the Philippines and Vietnam into the BRICS group, consisting of Brazil, Russia, India, China and South Africa, Zelaia, the president of Ekai Center consulting company, concluded that this could come as a response to Washington's decision to pull out from the Trans-Pacific Partnership agreement.

"The dissolution of the TPP, established to maintain US domination in Asia, created a void BRICS can now move in to fill and play a bigger role among the emerging economies," Zelaia said in an interview with Sputnik Mundo.

He added that BRICS, which until now served as "a symbolical counterbalance to the West," could now become "a leader of the global economic order" and could eventually dominate the global economy.

"The BRICS countries use a development model that, apart from trade, also prioritizes strategic investments into future progress. Most of the new inclusions are part of the New Silk Road project of Eurasian investments in infrastructure and communications," Adrian Zelaia noted.

"This infrastructure would kick-start a Chinese model of development where money lost by one country does not necessarily make the other country richer. Instead, it encourages everyone to come up with new ideas and generate projects that benefit all," he added.

It looks like the proposed enlargement of the five-nation BRICS will not be an easy ride though. India, for one, is wary of the inclusion of new countries, some of which share common borders with India and have strained relations with New Delhi.

"This could prove a serious hurdle now that China's economic might makes generating new partnerships easy, while India is virtually unable to look for potential candidates among its allies. Which means that an ideal option will be hard to find," Adrian Zelaia said in conclusion.

The concept of BRICS Plus within BRICS, the brainchild of Chinese Foreign Minister Wang Yi, has put India on the back foot, primarily since the Plus grouping could mean an invite for rival Pakistan into the five-nation group.
Modi befriends Trump as Putin and Xi move closer together (Моди сдружился с Трампом пока Путин и Си еще больше сближаются) / USA, March, 2017
Keywords: International relations, India, USA, Russia, China, opinion, One Belt One Road

Are we witnessing seismic shifts in the Russia-India-China triangle? It would seem so—but the shifts are long in the making.

Historically, Indo-Russian relations have been far stronger than Sino-Russian relations. In recent years, however, and especially since the onset of the crisis in Ukraine in 2014, the dynamics of this "strategic triangle," as former Russian prime minister Yevgeny Primakov called it, have changed.

Despite a shared history of strong bilateral relations and overlapping multilateral memberships, India and Russia are drifting apart. The flurry of agreements signed in October 2016 notwithstanding, defense ties are weakening and economic relations have failed to meet targets.

More important, each country now worries about the other's relationship with its main strategic competitor—India is anxious about tight Russo-China relations, and Russia is concerned about the recent uptick in Indo-U.S. relations.

Indeed, despite a good working relationship between Russian president Vladimir Putin and Indian prime minister Narendra Modi, relations between Russia and India have been deprioritized in both capitals. While this deprioritization has significance on multiple levels, the concern here is the implications of weaker bilateral ties for Indo-Russian cooperation toward reforming the global order.

Since 2006, the main locus of Russo-Indian cooperation toward reforming global order has been the BRICS countries—Brazil, Russia, India, China and (since 2011) South Africa. The BRICS group of nations has been most active in the area of global economic governance, but it boasts a sprawling set of working groups and a stated aim of entirely reforming the global order. For Russia, India and China are the most important partners in the group, and their importance grows directly out of Primakov's strategic triangle.

Cooperation in the BRICS has always been circumscribed by profound differences among its members. These include not only different positions in discrete international institutions that dictate different approaches but also variance in larger strategic goals.

Related: Putin and Xi Combine to Outsmart Trump

For Russia, BRICS has always been about politics, and has in many ways been a prime tool in Russian efforts—both rhetorical and otherwise—to balance against U.S. hegemony in the global system.

India, while certainly in possession of a strong strain of anti-Westernism in its own foreign policy, has nevertheless viewed BRICS primarily in terms of geoeconomics and India's ongoing efforts to increase its voice in prime organs of global governance. Countering U.S. supremacy as such is, for India, a useful side benefit of BRICS rather than the group's main purpose.

But these differences and misalignments did not prevent India and Russia from cooperating within BRICS to act as a forceful lobbying subgroup of the G20 during the acute phase of the 2008 global financial crisis. They also did not block BRICS's agreement to open its own development bank and a currency pool in 2014.

Indeed, the crosscutting and conflicting interests among all the members of the BRICS group are one reason its effective cooperation on some issues (narrow though that may be) is notable. Members' differing views on the global governance endgame should be understood as nothing new in considering the future of the BRICS project, or in considering the value Russia and India each see in the group.

What has changed is the calculus Russia and India each bring to their interactions within the BRICS. The issue on both counts is China, and more specifically how Sino-Russian and Sino-Indian relations have an impact on coordination among the BRICS group of countries.

The major turning point was 2014, the year that marked the Russian annexation of Crimea and invasion of eastern Ukraine, and Modi's election in India. These watershed moments led to dramatic changes in U.S.-Russian and U.S.-Indian relations and changed priorities within the Russia-India-China trilateral grouping.

The crisis in Ukraine and its effect on relations with the Euro-Atlantic community (especially U.S.-Russian relations) left Russia with few strategic options beyond turning to China. While the Kremlin had been attempting to build political and economic ties with China for over a decade, it was only after 2014 that these efforts began to translate into not only somewhat stronger economic links but a strategic reorientation as well.

The Sino-Russian relationship is neither uncomplicated nor unlimited in possibility, but it serves both countries' strategic interests to deepen cooperation and coordinate positions on some global issues. While Russia's longstanding concerns about Chinese dominance in their shared neighborhood, Chinese influence in the Russian Far East, and the imbalances in the makeup of bilateral trade have not disappeared, they have eased or been overtaken by more pressing concerns. [1] Further, close relations with India would in no way address any of those problems.

Indian foreign policy has also made notable shifts since 2014, but in the opposite direction. Since the Modi government came to power, relations between India and China have been on a downward trend, while relations with the United States have reached almost unprecedented levels of cooperation.

In a recent article in International Affairs, Harsh Pant and Yogesh Joshi attribute the uptick to Modi's emphasis on economic development and the concordant need for advanced technology and foreign investment, Modi's strong domestic support and changes to India's structural environment, particularly reflecting concerns about a more aggressive China.

Strong relations with Russia have historically been a hedge against the third concern, and steady defense ties—including the import of some of Russia's most advanced weapons—have somewhat addressed the first issue. In a world where Russia is increasingly close to China (including selling China advanced weapons systems), however, India can no longer be sure that Russia is solidly in its corner.

These issues have implications for how both Russia and India approach their membership in BRICS.

For Russia, BRICS continues to be a useful vehicle for challenging American dominance in the global system. It also provides valuable optics of partnership in the face of Western efforts to isolate the country during the ongoing crisis in Ukraine.

China is the most important piece of that challenge, however, and with strong Sino-Russian relations assured for the near term, Russia may find it less useful to invest in BRICS. Russia is also shifting focus to its project to build a "Greater Eurasia," (also known as the Eurasian Comprehensive Partnership ).

For India, BRICS continues to be a useful lobbying group for making global governance more representative, but strong Sino-Russian relations make it less certain that India's voice will be heard as clearly during intra-group discussions. Further, to the extent that one motivation for Indian participation in BRICS is embedding China into a multilateral grouping in hopes that this exerts some influence on Chinese behavior, that bet seems much less sure without Russia pushing for the same objective.

This compounds Indian frustration that, with proposals such as the Asian Infrastructure and Investment Bank and One Belt One Road, China is already acting outside the BRICS framework and violating core BRICS principles. (Some in China, however, feel the opposite, and worry that Indo-Russian synchrony complicates Chinese objectives in BRICS.)

During his opening address to the Raisina Dialogue in Delhi in January 2017, Prime Minister Modi called Russia "an abiding friend." This is true: Russia remains one of two countries with which India holds an annual, institutionalized summit, and both countries rhetorically endorse the importance of the relationship.

Below the surface, however, changes in priorities in both countries have upended the balance in the Russia-India-China triangle and put Russia's growing partnership with China at odds with the increasingly close Indo-American relations.

Indeed, the fundamental problem plaguing Russo-Indian relations is that each country has more to gain from close relations with the other's strategic adversary than with its own longstanding partner.

Rachel S. Saltzman is a postdoctoral Fellow at the Center for Eurasian, Russian and East European Studies at Georgetown University and Visiting Scholar in the department of European and Eurasian Studies at the Johns Hopkins School of Advanced International Studies.

[1] Russia exports primarily raw materials to China and imported primarily finished manufactured goods. The main exception is arms sales.
Investment and finance in BRICS
New Development Bank and European Investment Bank discuss potential areas of cooperation in Shanghai (Новый Банк Развития и Европейский Инвестиционный Банк обсудят возможные области сотрудничества в Шанхае) / China, March, 2017
Keywords: Economy, China, New Development Bank, European Investment Bank, investments and finance


The President of the New Development Bank Mr. K.V.Kamath and the Vice President of European Investment Bank Mr. Jonathan Taylor had a meeting today at the NDB Transitional Office in Shanghai, China and discussed issues of mutual interest, including potential areas of cooperation at operational and institutional levels. NDB Vice Presidents Mr. Paulo Nogueira Batista Jr., Mr. Vladimir Kazbekov, Mr. Xian Zhu and Mr. Leslie Maasdorp also took part in the meeting.

The European Investment Bank is owned by the 28 European Union member states. The European Investment Bank I world's largest international public bank and one of the largest financiers of climate related investment worldwide.

"It is a matter of great pleasure to meet Mr. Jonathan Taylor in Shanghai. The potential for cooperation between our institutions is great and we are interested in exploring the areas, in which we could work together," said Mr. K.V.Kamath. "The NDB aims to make a positive difference by complementing the efforts of other multilateral development banks, including the EIB," he added.

Speaking after discussions with President Kamath and his colleagues EIB Vice President Jonathan Taylor highlighted that "The European Investment Bank and New Development Bank share common the goals of supporting long-term investment in renewable energy and climate related investment. Our institutions have worked closely during the formation stage of the NDB and we look forward to strengthening this cooperation to jointly support transformational infrastructure around the world."

Indian economy: Some amazing numbers (Индийская экономика: несколько удивительных цифр) / India, March, 2017
Keywords: India, China, economics, GDP, CII-KPMG, statistics

India is the world's fastest-growing large economy having outpaced China in 2016. While China's economy grew at an annual pace of 7.4 percent in the first quarter of this year, India's gross domestic product grew 4.7 percent in the last quarter, according to latest reports. India's growth is expected to be the strongest among BRICS nations: Brazil, Russia, India, China and South Africa.

Here's a quick look at the some of the facts and figures about Indian economy:

  • Despite Prime Minister Narendra Modi's cash crackdown, India's economy performed better than expected at 7 percent in the third quarter (Q3) of this financial year. Gross domestic product growth slowed to an annual 7.0 percent in October-December from 7.4 percent the previous quarter, which was ever higher than China's 6.8 percent for the last three months of 2016. With 7.3 percent year-over-year growth in 2016 Q3 GDP, India remains the fastest major growing economy in the world.
  • As a result of Modi government's improved monetary policies, fiscal policies and recent economic reforms as well as lower oil prices, India has jumped 16 places in the Global Competitiveness Index to 39th spot as per a report by the World Economic Forum. The report also highlighted that India happens to be the second-most competitive economy among the BRICS (Brazil, Russia, India, China and South Africa) countries.
  • The services sector is driving the country's economy. As per a CII-KPMG joint report, India is the second fastest growing services economy in the world. Moreover, India's share in global services exports was 3.2 percent in 2014-15, double that of its merchandise exports in global merchandise exports at 1.7 percent, placing India in the eighth place currently amongst the top ten exporters of service in the world.
  • Indian Railways and Indian armed forces have been ranked at numbers 8 and 9, respectively, on the list of the world's 10 top employers. Indian Railways has a 1.4-million strong workforce, while the Indian armed forces have 1.3 million personnel.
  • Agriculture is the backbone of India's economy. Over 70% of Indians live in rural areas, 58% of whom are employed by the agriculture sector, as in completely depend on agriculture as their primary source of income.
  • India is the 2nd largest reservoir of scientific and technical manpower, the 3rd largest army, the 6th member of the nuclear club, the 6th member in the race for space, and the 10th largest industrial power.
  • As per an Oxfam India report, 1 taxpayer owes 11% of India's individual income tax in 2014-15. The richest 1 per cent Indians own 58 per cent of India's wealth, and 57 billionaires have the same wealth as the bottom 70 percent of India. In 2014-15, over 36 million Indians declared a salary income of nearly Rs 9.8 trillion, the equivalent of 7 percent of the gross national income of Rs 134.2 trillion in 2015-16.
Market Conditions Affect Wilh. Wilhelmsen Holding's Earnings (Рыночные условия влияют на прибыль Wilh. Wilhelmsen Holding) / USA, March, 2017
Keywords: Global trade, economics, market

A slowdown in global trade, weak commodity prices and a strong USD continued to negatively affect Norwegian rolling cargo shipping specialist Wilh. Wilhelmsen Holding group's (WWH) total income.

Although the company's operating profit for the full year 2016 increased to USD 327 million from USD 122 million seen in 2015, Wilh. Wilhelmsen Holding's operating revenue for the period stood at USD 1.12 billion, lower than USD 1.3 billion reported a year earlier.

WWH's total income was up by 7% to USD 1.37 billion in 2016 from USD 1.28 billion seen in the previous year, mainly due to ongoing antitrust accruals effecting share of profit in joint ventures.

The group's Wilhelmsen Maritime Services (WMS) experienced an 8% reduction in total income on the back of weak shipping and offshore markets. Sale of activities further reduced operating income in the fourth quarter, while a corresponding net sales gain had a positive impact.

Additionally, in 2016 Wilh. Wilhelmsen ASA group (WWASA) delivered a total income of USD 1.83 billion compared with USD 2.12 billion in the previous year, a reduction of 14%. Operating profit was USD 191 million for the year, compared with USD 67 million in 2015.

However, WWASA's shipping segment, which includes shipping activities within Wallenius Wilhelmsen Logistics, EUKOR Car Carriers and American Roll-on-Roll-off Carrier, delivered a total income of USD 1.43 billion, down from USD 1.8 billion in the previous year.

"Global light vehicle car sales increased 5% in 2016 and totalled 92 million units. In key markets (North America, Europe, Oceania and the BRIC countries), sales were up 6% to 74 million units," WWH said.

The fleet transported 64 million cubic metres cargo, a decrease of 14% compared with 2015. Both auto and high and heavy cargo volumes declined. A continued unfavourable cargo mix, with lower bunker compensation and a general rate pressure, had a negative effect on profitability.

While ARC saw a positive development in volumes transported in 2016, both WWL and EUKOR saw declines, according to the group.

Furthermore, the WWASA group fleet was reduced from 137 to 127 vessels in 2016, down by 52,000 CEU during the year. WWASA group companies redelivered five vessels, sold seven for recycling and received two newbuildings.

The WWASA group companies' newbuilding programme include six Post-Panamax vessels with a combined capacity of 47,000 CEU. This equals 13% of the world car
carrier orderbook. The vessels will be delivered in 2017-18.

In the fourth quarter of 2016, WWH entered an agreement with Norwegian/Swedish shipping company Wallenius leading to a new ownership structure for their jointly owned investments in Wallenius Wilhelmsen Logistics, EUKOR Car Carriers and American Roll on Roll off Carrier.

The extraordinary general meetings of the respective owning companies have approved the proposed merger and WWH informed that the completion of the merger is pending approval from competition authorities, which is expected during April 2017.

BRICS Plus: New Technology, new vision for economic integration (БРИКС Плюс: новые технологии, новое видение экономической интеграции) / Russia, March, 2017
Keywords: BRICS Plus, Economics, One Belt One Road, WTO, opinion
Author: Yaroslav Lissovolik

Against the backdrop of waning integration impulses in the developed world, the largest developing economies are forging ahead with new initiatives directed at revitalizing regional integration. China in particular appears to exhibit activism in building new development institutions (AIIB), mega-regional projects (One Belt One Road) as well as new economic alliances across the globe. The latest element in this sequence is China's initiative to create a BRICS+ circle that according to China's foreign minister Wang Yi will represent a new platform for south-south cooperation via holding dialogues with other major developing countries or groups of developing countries to establish a more extensive partnership.

"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," declared Wang Yi.

The new BRICS+ initiative is coming not just at the right time as the BRICS is seeking to find new gateways to development, but it would also perhaps be one of the first truly global undertakings of the developing world in shaping a new, more balanced economic order. In an article written for the Valdai club last month (Re-thinking the BRICS: on the concepts of BRICS+ and BRICS++, February 7, 2017) I advanced the idea of creating the BRICS+ and a BRICS++ frameworks along the following lines: the BRICS+ circle would encompass the BRICS economies and the main regional blocks in which the BRICS play a leading role (for example Brazil in Mercosur or Russia in the Eurasian economic union); the BRICS++ would cover economic alliances of other regional blocks and countries with the BRICS+ circle.

In such a setting the essence of the BRICS+ initiative is not the enlargement of the BRICS core to include the largest developing countries, but rather to create a network of alliances that would be comprehensive and representative of all of the major regions/continents across the developing world. In this respect, the BRICS+ paradigm is more about inclusiveness and diversity rather than about selecting the largest heavyweights. By its very nature of being present in all of the key regions and continents of the developing world the BRICS could perform the unique role of a comprehensive platform for economic cooperation across the globe. Accordingly, the BRICS+ concept is first and foremost about a different approach to economic integration and a different technology of how alliances are structured globally.

In this respect the principle of BRICS+ is in some ways a technological step forward compared to the principle of territorial and exclusive regionalism. A BRICS+ integration framework that is spread throughout the world is much like the "E-Bay" marketplace, which grants all potential members of the network the possibility to exchange preferences and concession regardless of their location. This is different from the regionalism of TTP or TTIP (which may be likened to a giant supermarket) that is circumscribed to a certain location or neighbourhood, however large. Rather than being a drawback in terms of integration, the dispersed and de-centralized nature of BRICS is an advantage in promoting a more open and inclusive integration framework. BRICS+ in that regard is not a territorial, unipolar, civilizational concept – it is a global, multipolar and a cross-cultural paradigm.

In a way BRICS+ could perhaps be termed as semi-globalism, similarly to the combination of TPP and TTIP, which like the BRICS includes five key pillars (also representatively spread across continents), namely the US, Japan, Canada, Australia and the EU. In terms of the relationship with multilateral global institutions, the BRICS+ framework would represent an intermediary layer of coordination and integration between the global level institutions (WTO) and the amalgam of countries and regional blocks. Rather than debilitating or replacing the WTO, it would serve to uphold its principles of open regionalism and strengthen its capability to deal with the challenges posed by the propagation of regionalism. The BRICS+ countries could form a block within the WTO to promote these principles and to assist dozens of other developing nations to become members of the global organization.

The emergence of BRICS+ creates possibilities for varying forms and scales of openness among its economies via multilateralizing existing deals and creating brand new ones. Inside the BRICS+ and BRICS++ frameworks the combinatorics or the various forms of matching of countries and blocks through economic alliances may take a multitude of trajectories. In terms of such alliances a cooperative framework between the BRICS and the ASEAN countries would render the coverage of the BRICS+ and the BRICS++ framework more comprehensive and representative of the main regions of the developing world. In terms of the trajectories of economic integration, trade openness via import tariff reductions is far from being the sole instrument in the exchange of economic preferences and benefits within BRICS+ as these may include reductions in non-tariff barriers, investment agreements, cooperation in building regional and global value chains, and many other possible options.

What about the rest of the world that is not immediately part of the BRICS+ and BRICS++ frameworks? Firstly, there does need to be a framework of cooperation between the BRICS+ circle and the developed world, which is something that can be based on the existing FTAs or comprehensive economic agreements with developed countries formed by the BRICS+ economies (FTA between SACU and EFTA or Japan-India comprehensive economic partnership agreement). Another dimension is the investment sphere and mega-projects connecting the West and the East such as China's One Belt One Road project. The agenda of investment liberalization with the countries of the developed world could be pursued in the context of such joint projects as well as within the WTO and other global organizations where the BRICS+ economies could form a unified group.

With respect to the developing world the BRICS+ system could focus on filling the gaps in global integration – via addressing insufficient integration in some of the regions of the developing world (most notably in Asia and Africa) the pattern of economic integration could become akin to what may be termed as "balanced regionalism" or "sustainable regionalism" rather than the regionalism that seeks to benefit solely the front-runners of the world economy. Sustainable regionalism could involve assistance to developing economies in reaching the UN 2030 sustainable development goals via obtaining greater access to markets and technology as well as the development of infrastructure.

Given the above, the concept of sustainable regionalism is wider than the APEC's principle of "open regionalism" and apart from openness should include investment and technological cooperation (to balance the costs of trade liberalization), measures to minimize trade diversion as well as to direct economic integration into areas and regions that have been underrepresented in RTAs around the globe.

Incidentally, the one gaping hole in the entire UN construct of sustainable development is precisely the issue of trade and integration – just as sustainability and diversity are lacking in global economic integration. The key question to ask today is: "What kind of integration and globalization framework do we need for sustainable development?" The answer is to move away from the core-periphery model of globalization that is characterized by extreme global imbalances and high inequality towards a decentralized "no core – no periphery" framework of BRICS+. The BRICS+ framework also needs to recognize that globalization will be inherently incomplete (see Mario Nuti's work on the concept of incomplete globalization) and thus should seek to emphasize the possibility of varying standards and modes of integration as opposed to the proselytizing approach of enforcing universal standards that is fraught with disruptions and reversals.

In the end, perhaps the new technological platform as well as the new vision of integration in the form of BRICS+ could drag the world economy out of its misery of persistently low growth rates. It appears that new principles and new approaches in advancing openness and integration are needed – to surmount the "new normal" we need to think about integration, growth and globalization in new and in hitherto "abnormal" ways. We need to shift gears from the old "core-periphery" paradigm to veritable sustainable development, which in the integration sphere needs to be based on greater diversity, equality of opportunity and due care with regard to spillover and trade diversion effects.
China vows to boost BRICS financial cooperation: ministers (Китай обещает стимулировать финансовое сотрудничество стран БРИКС: министры) / China, March, 2017
Keywords: Economics, China, finance, Summit, cooperation, global governance

BADEN-BADEN - China will work actively with parties concerned to push forward the financial cooperation among the BRICS countries and make more achievements, China's finance minister and central bank chief have said.

They made the remarks on Friday at the BRICS summit for finance ministers and central bankers held in Germany's southwestern city of Baden-Baden.

China's Finance Minister Xiao Jie noted that the BRICS, comprising of Brazil, Russia, India, China and South Africa, have been coordinating constantly and deepening cooperation in the financial sector, and made major contributions in promoting growth for BRICS and world economy and improving global economic governance.

Xiao said the BRICS in recent years have made landmark achievements like establishing New Development Bank, Contingent Reserve Arrangement, offering vital platforms for enhancing and deepening the financial cooperation among BRICS countries.

In 2017, China will work to further promote the existing cooperation mechanisms of the BRICS, and meanwhile explore cooperation in fields of public-private partnership, boosting convergence of accounting standards on bond-issuing and related auditing, and taxation, in a bid to lift the current financial cooperation to a new level, Xiao said.

China's central bank governor Zhou Xiaochuan, on the same day, said the BRICS should further step up cooperation under the framework of the Group of Twenty (G20), especially in fields of international financial architecture, inclusive finance and green finance.

Zhou suggested the BRICS could discuss topics on improving network layout of the financial institutions and services, and promoting currency swap and settlement in local currencies, in a bid to boost pragmatic financial cooperation and prepare for the coming BRICS state leaders' summit in Xiamen, China in September.
BRICS has bright prospects (У БРИКС блестящее будущее) / China, March, 2017
Keywords: Economics, international relations, Summit, politics, opinion, finance

At the BRICS summit for finance ministers and central bankers in Germany's southwestern city of Baden-Baden on Friday, China promised to work with the other BRICS members to actively push forward their financial cooperation ahead of the group's ninth leaders' meeting, which will be held in the coastal city of Xiamen in East China's Fujian province in September.

The ever-increasing financial coordination and cooperation among the members of BRICS (Brazil, Russia, India, China and South Africa) have contributed a lot to economic growth of the BRICS members, and indeed the rest of the world, as well as the promotion of fairer global economic governance.

But rising protectionism, the growing anti-globalization trend and increasing geopolitical uncertainties have made the external economic environment for the emerging economies more difficult, some of which face relatively big downturn pressures due to their own economic structural problems. This highlights the need for the BRICS countries to strengthen their solidarity and cooperation to safeguard their common interests.

The pragmatic approach of the BRICS countries has laid a solid foundation for their financial cooperation. And a series of landmark achievements made by BRICS countries, such as the establishment of the New Development Bank for infrastructure funding and Contingent Reserve Arrangement to provide support to address actual or potential short-term balance of payments pressures, offer vital platforms for enhancing and deepening the financial cooperation among the BRICS members.

What China should do next is to further promote the existing cooperation mechanisms of BRICS, explore cooperation in public-private partnerships, and boost the convergence of accounting standards for issuing bonds, in a bid to lift current financial cooperation to a new level.

Past cooperation experiences indicate that the BRICS countries can overcome any possible difficulties, promote steady cooperation and forge a brighter future if they maintain mutual trust and consolidate their belief in the grouping.
Brazil is the largest producer of wind power in Latin America (Бразилия является крупнейшим производителем энергии ветра в Латинской Америке) / Brazil, March, 2017
Keywords: Economics, Brazil, electricity, wind power

Report by GWEC ranks Brazil 5th in the world in installed wind power capacity growth, points to cheaper rates in coming years

Greater diversification of energy sources, cheaper rates and better quality, clean energy for the Brazilian population. This is the perspective for the Brazilian electricity sector in the coming years, as wind generation capacity grows in the leading wind power producer in Latin America.

According to a ranking released by the Global Wind Energy Council (GWEC), an international organisation specialised in wind energy, Brazil expanded its wind power installed capacity by 2,014 Megawatts in 2016, placing it 5th in the world ranking of installed capacity growth for the year. The country also placed ninth in the world ranking of total wind capacity, with 10,740 MW.

"Brazil has been very proactive in renewable sources, both wind and solar, and has an ambitious programme to increase the share of wind in its energy grid", pointed out the Secretary of Energy of the Ministry of Mines and Energy, Fábio Lopes Alves.

Brazil's leadership in production from this renewable source has also been confirmed by Brazilian agencies. The National Electric Energy Agency (Aneel) estimates an even greater expansion for the period, at 2,491 MW, while the National Energy Trade Chamber (CCEE) saw an increase of 53.4% in wind last year compared to 2015.

For the secretary, the trend is for the source to become more prominent in the coming years, which might also make Brazilian electricity bills cheaper. "Today, over 7% of all power produced in Brazil is from wind sources. It has a very high growth trend," he said, noting that wind has already reached a point in which it has become a cheaper source to produce compared to power generated from hydroelectric plants.

Northeast leads the ranking

Benefitting from strong wind seasons, the Brazilian Northeast region remains Brazil's largest producer of wind power. According to the CCEE, the state of Rio Grande do Norte was the leading producer of wind in Brazil last year. The state's plants produced 1,206 MW in the period, or a 50% increase compared to 2015.

"Today, 50% of the energy generated in the Northeast comes from wind, and the trend is for that number to grow," Alves noted. "The region has very favourable wind conditions, which is why it has the country's largest installed capacity for solar and wind farms today". He also pointed out that more wind farms are likely to be accompanied by more solar projects, thus complementing the supply of renewable power sources.

The Brazilian energy grid

Despite the increases, Brazil's main source of energy continues to be large and small hydroelectric plants. In times of low river flows, those need to be aided by thermal power plants, which generate more expensive energy. The good news is that, with the entry into operation of new wind farms, thermal now accounts for only 6% of the energy supply in the National Interconnected System (SIN).

Renewable energy

In 2015, Brazil signed an international commitment during COP 21 to expand the share of non-hydropower renewables in the total energy grid to between 28% and 33%, and to expand the domestic use of non-fossil energy sources to at least 23% by 2030, including through increasing the share of wind, biomass and solar.
World Water Forum will bring government officials, experts and civil society to Brasilia (Всемирный Водный Форум привлечет в Бразилиа правительственных чиновников, экспертов и гражданское общество) / Brazil, March, 2017
Keywords: Economics, Brazil, National Water Agency

Citizens can now participate in the online public consultation platform and enrich discussions for the event

The 8th World Water Forum, to be held from 18 to 23 March 2018 in Brasilia, has been encouraging citizen engagement as a way of enriching the discussions of the event. The Your Voiceplatform is a unique online tool that will be used to draw attention to the event, expected to gather about 30,000 representatives from over 100 countries at the Brazilian capital.

Participants may choose six themes to debate: climate, development, ecosystems, financing, people and urban. No title or specific subject matter expertise is required for participation. The questions and solutions, which can be offered in up to 90 of the world's most common languages, will be moderated, and the most important and recurring ones will be integrated into the discussions of the World Water Forum.

The superintendent of the National Water Agency (ANA) and CEO of the Forum, Ricardo Andrade, points out that the event is an opportunity for the population to discuss the use and management of water with politicians, companies and specialists.

"The forum has the importance of discussing issues critical to our everyday lives, such as the contrast experienced by Brazil, with excess [water] in some places and shortages in others. It will be an opportunity to bring these discussions to the table," says Andrade. "And that is the important hallmark: it is not a scientific event. It will not feature only scientists, researchers and academics".


The discussions in the online platform were divided into three rounds of discussion lasting eight weeks each. The first stage of the public consultation began on February 13, and ends in April. Then, on 26 and 27 April, there will be a global poll to identify the issues most relevant to users.

"We had almost 8,000 visits by 500 members in the first month, and over 15,000 discussion sessions lasting 15 minutes on average. This is important, because public consultations before were exclusively face-to-face events. Now, since 13 February we have been receiving contributions from around the world," explains Andrade.

The event

The World Water Forum takes place every three years. Its goals are to emphasise the importance of water on the political agenda of governments, promote deeper discussions, foster the exchange of experiences and formulate concrete proposals for challenges related to water resources.

Traditionally, the Forum is attended by leading experts, managers and organisations involved with the issue of water on the planet. The 8th edition of the Forum is being organised by the Brazilian Federal Government, the Federal District government and the World Water Council.

Previous editions of the World Water Forum took place in Marrakech, Morocco (1997); Hague, Netherlands (2000); Kyoto, Shiga and Osaka, Japan (2003); Mexico City, Mexico (2006); Istanbul, Turkey (2009); Marseilles, France (2012); and Daegu and Gyeongbuk, South Korea (2015).
Foreign investment hits record high for first bimester (Иностранные инвестиции достигли рекордного уровня за первые два месяца) / Brazil, March, 2017
Keywords: Economics, Brazil, investments, productive sector

In the two first months of 2017, foreign investors put US$ 16.8 billion in the Brazilian productive sector. Resources went to all segments of the economy

In the wake of the economic reforms implemented by the federal government, Brazil has managed to regain confidence from economic agents and once again arouse the interest of foreign investors. In the first two months of the year, US$ 16.8 billion entered the Brazilian economy from abroad, a record for the first two months of the year.

In practice, these figures mean more resources to expand businesses, develop projects and generate more wealth and economic growth. Compared to the first bimester of 2016, this represents a 57% increase in foreign capital inflows. In February alone, Brazil received US$ 5.3 billion in foreign direct investment.

The money reached almost all branches of the Brazilian economy. The industry sector was the recipient of the most inflows: US$ 7.3 billion. The list then follows with coke and oil products (US$ 2.8 billion), chemicals (US$ 1.5 billion) and metallurgy (US$ 820 million).

Services and agribusiness

The services segment also achieved significant inflows, of US$ 6.9 billion, in the first bimester of 2017. The three largest items in the services heading were electricity and gas (US$ 5 billion), trade (US$ 832 million) and financial services (US$ 201 million).

Agribusiness and mining received US$ 1.6 billion in foreign investment in the same period. The result was positively influenced by the extraction of metallic minerals (US$ 1 billion), oil and natural gas extraction (US$ 362 million) and mining support activities (US$ 162 billion).
Brazilian meat is internationally recognised (Бразильское мясо получает всемирное признание) / Brazil, March, 2017
Keywords: Economics, Brazil, agriculture

Brazilian production chain is widely renowned for the high technical standards and quality that ensure access to key global markets

With output numbers that place the country among the largest exporters in the world, Brazil's meat chain is regarded as modern, efficient and safe by the most demanding markets. The country's animal protein is classified as noble, and in some countries Brazilian meat is seen as a luxury good.

The United States and European Union, for instance, would not buy Brazilian products unless the entire production chain were not in accordance with the strictest international standards. Selling to the US is also a symbol of quality. Many countries that do not have robust health protection systems of their own choose to only import meat from nations that sell to the US.

To ensure the highest standard for its products, Brazil follows a series of international standards. Specific requirements on hygiene, sanitary slaughter and transportation are all an integral part of the agreements strictly complied with by our producers.

Meat exports

Brazil sends an average 262,000 containers of meat to 160 importing countries every year, generating revenue equivalent to 15% of all Brazilian exports. These figures place Brazil as a global leader in exports of chicken, beef and pork.

Brazil can only export this incredible volume of products because it ensures its quality. In addition to federal and municipal government inspections in slaughterhouses, the markets with which Brazil has agreements also conduct their own periodic visits and directly inspect their suppliers.

The Brazilian production chain is so efficient that, according to information by the Ministry of Agriculture, national meat production is likely to supply 44.5% of the global demand for beef, 48.1% for poultry and 14.2% for pork by 2020.

Transparency in production

Data related to contaminations or any other issues is public, and shows the efficiency of the Brazilian system. In 2016, out of 852,000 shipments of animal products, only 0.02% presented any violation.

With this performance, the Brazilian Federal Inspection System (SIF) seal has become widely recognisable in the international market as a guarantee of safety and quality. The system operates in over 5,000 establishments across the country, and products must meet a series of determinations and rules in order to receive a SIF seal.
S&P revises outlook on 13 Russian companies to positive (S&P улучшило прогнозы по рейтингам 13 российских компаний) / Russia, March, 2017
Keywords: S&P, ratings, economics, Russia

The positive outlook indicates that S&P may raise its ratings if Russia's economy continues to adapt to the relatively low oil price environment

MOSCOW, March 22. /TASS/. International rating agency Standard & Poor's (S&P) revised its outlooks on 13 Russian companies and their subsidiaries to positive following a similar move on Russia, the agency said in a statement.

The list includes Russian rail monopoly RZD (BB+), state-run civil nuclear industry company Atomenergoprom (BB+), Russia's largest electricity transmission company Federal Grid of the Unified Energy System (BB+), Moscow's power transmission and distribution company Moscow United Electric Grid (MOESK) (BB-), major electric distribution grid company Interregional Distribution Grid Company of Centre (BB-), energy grid operator Rosseti (BB+), Russia's second-largest oil producer Lukoil (BBB-), gas giant Gazprom (BB+/BBB-) and its oil subsidiary Gazprom Neft (BB+), state oil company Rosneft (BB+), state-run oil pipeline company Transneft (BB+/BBB-). It also includes telecoms companies, Megafon (BB+) and MTS (BB+).

On March 17, S&P revised its outlook on Russia to positive from stable and affirmed the sovereign credit ratings.

The positive outlook indicates that S&P may raise its ratings if the Russian economy continues to adapt to the relatively low oil price environment while maintaining its strong net external asset position and comparatively low net general government debt burden.
NDB announced programme for Second Annual Meeting in New Delhi on 31 March - 2 April 2017 (НБР объявил программу второго ежегодного совещания в Нью Дели 31 марта - 2 апреля 2017) / China, March, 2017
Keywords: New Development Bank, Economics, investments, sustainable development

23 MARCH 2017

The New Development Bank has announced today the Programme of the NDB Second Annual Meeting that will be held on 31 March - 2 April 2017 in New Delhi, Republic of India. PDF version of the Programme can be downloaded here.

Main Events

The Opening Ceremony of the NDB Second Annual Meeting will be held at Taj Palace Hotel on 1 April 2017. It will be followed by the Singing Ceremony, the Second Annual Meeting of the NDB Board of Governors and Press Conference.


Invited guests and representatives of civil society organisations are kindly invited to attend two Seminars on the sidelines of the NDB Second Annual Meeting that will be held on 2 April 2017.

The first seminar will be held under the theme of "Financing Sustainable Development." It will address the role of governments in financing development and, in particular, sustainable infrastructure, challenges to the banking sector in some of the NDB's member countries as they face demands to finance sustainable infrastructure, and creativity and innovation that could be brought by banks to the table.

The second seminar will be held under the theme of "Urban Planning and Sustainable Infrastructure Development." During the seminar, the participants will look into how the urban development could improve the lives of people, taking into account an ever growing importance of long-term urban planning and investment in sustainable city infrastructure in mega-cities of BRICS countries.


Media representatives are invited to attend:

  • Opening Ceremony of the Second Annual Meeting (1 April 2017)
  • Signing Ceremony (1 April 2017)
  • Press Conference (1 April 2017)
  • Financing Sustainable Development Seminar (2 April 2017)
  • Urban Planning and Sustainable Development Seminar (2 April 2017)

The accreditation of the media for the Meeting is carried out by the Ministry of Finance of the Republic of India.

Members of the media are kindly requested to contact Mr. D.S.Malik, Addl. Director General, Press Relations & Information Division, Ministry of Finance, Government of India. Tel.: Off.: 23092200 (NB), Fax: 23093210, E-mail:

NDB contact point for the members of the media: Mr. Alexey Kosarev. Tel.: +86-185-2105-0330 or +86-21-8021-1848, E-mail:

Additional information

For additional information, please contact us at
S&P sees 'better' growth in BRICS in 2017 (S&P прогнозирует 'лучший' рост в БРИКС в 2017) / South Africa, March, 2017
Keywords: S&P, ratings, economics

Ratings agency S&P Global Ratings (S&P) expects better economic growth in BRICS countries this year as Brazil and Russia recover from recessions, India and South Africa improve on their 2016 performance and China only slips slightly from high growth in 2016.

Jean-Michel Six, Global Head of Developing Markets at S&P, said in his presentation at the "What's in store for South Africa in 2017?" seminar last week that he expected a gradual improvement in the next two years after a poor two years in 2015 and 2016. Brazil's economy, for instance, is now 8 per cent worse off than in December 2014, while all BRICS currencies have depreciated against the US dollar since 2014.

"We have seen a recovery in world trade in recent months and emerging markets, including the BRICS, have seen increased capital inflows with the Institute of International estimating net inflows at $17.1 billion in February alone," Six said.

S&P forecasts that South Africa's real economic growth will rise to 1.4 per cent in 2017 from 0.5 per cent in 2016 and then increase further to 1.8 per cent in 2018.

Gardner Rusike, S&P's associate director for sovereign ratings, said S&P still had a negative outlook on South Africa as the government talk of 2016 had to be turned into implementation.

It was worried about weak economic growth as the fourth quarter 2016 had seen another quarterly contraction, while political tensions between the Treasury and other arms of government dominated the headlines and policy reform in South Africa, such as the instruction by President Jacob Zuma to Eskom to sign Power Purchase Agreements with Independent Power Producers given in the February 9 State of the Nation Address still had to be implemented.

"If we see an increase in political tensions, continued infighting in state institutions which could derail the government's plans in boosting economic growth, then that can impact on our forecasts on growth," Rusike said.

He added that if improved policy implementation resulted in better business confidence and a consequent rise in business fixed investment, then South Africa's outlook could be changed to stable. S&P undertakes semi-annual assessments of South Africa in June and December of each year.

South Africa's private businesses have cut their spending on fixed investment due to policy uncertainty and subdued domestic and foreign demand even though corporate balance sheets have more than R700 billion in cash or near-cash equivalents.

The Rand Merchant Bank (RMB)/ Bureau for Economic Research (BER) Business Confidence Index rose marginally to 40 in the first quarter 2017 from 38 in the fourth quarter.

This means only four out of every ten respondents were satisfied with business conditions. Since 2008 the BCI has only been above the neutral 50 mark on four occasions, which reflected poor follow through in terms of policy implementation and subdued domestic and foreign demand.

Grant Thornton's International Business Report showed that 58% of executives surveyed in South Africa said they are delaying expansion plans because of uncertainty about South Africa's future.

Nearly half are putting off investment decisions, a third are considering investing offshore and 23% were considering selling and moving elsewhere.

Already companies invested in green energy technology manufacturing plants have decided to close shop and move to other BRICS countries such as India and China after Eskom stopped signing Power Purchase Agreements with Independent Power Producers in July 2016. Despite instructions to sign them from the President in early February 2017, Eskom have still not signed any new ones in mid-March 2017.
Return of the Brics: how investors are embracing the term again (Возвращение БРИКС: как инвесторы снова используют термин) / China, March, 2017
Keywords: Economics, finance, cooperation, emerging market

The Brics countries have been grabbing investor attention recently from a macro view as well as earnings growth perspective after falling out of favour two years ago.

BNP Paribas Investment Partners' Guillermo Felices outlines three reasons for being positive on Brics countries; while Prashant Khemka from Goldman Sachs Asset Management talks about the most promising country among Brics.

Brett Diment from Aberdeen Asset Management has also pointed out why he has scaled back Russian local currency positions despite being positive on Russia in general.

Here's a look at what the experts told Citywire Asia.

Brett Diment, Aberdeen Asset Management

Head, global emerging market debt

We see a number of emerging markets countries where economic situations are picking up. For instance, Brazil needs to be moving out of recession and it has been a pretty tough four years for the country.

Russia is moving out of recession this year; while in India, there is still a pretty good growth, though the short-term growth will be slowing down. We are positive on Indian domestic bonds and it is a high-yielding market with pretty good fundamentals. In terms of China, we are critically pessimistic about China.

Chinese growth is a key driver, where we see such growth being underpinned by rising domestic consumption, so fairly we have some concerns about capital flight from China but firmly constructive on macro outlook.

We have scaled back Russian local currency positions very recently, despite we still find the country attractive, because our sense is that the Russian ruble is going to appreciate much further than what it is now. In order to build up its capital reserves, the central bank is buying dollars and selling Ruble for rebuilding its reserves. That's why we have cut back our positions on Russia very recently.

Prashant Khemka, Goldman Sachs Asset Management

Managing director, CIO of global emerging markets equity

Among the four countries of Brics, India at this time has the most promising outlook, particularly because of the nine years of fairly sluggish single digit earnings growth, we do expect earnings growth to accelerate going forward. All the efforts that the government is making or has made over the last three years and continuous to make towards improving the business climate is slowly but certainly improving the sentiment in both consumer as well as business in India.

China has faced a more challenging macro environment as the growth has been slowing down. There is no apparent change in its debt level as well. Investors are mostly preoccupied with the gloomy debt, if they are thinking about investing in China .

Brazil will benefit from the revival of the commodity prices and its business confidence has certainly improved in the last 12 to 15 months. Brazilian business confidence turned around late last year, partly because of the political developments, but coincidently the revival in commodity markets.

From Russia's economic perspective, I think we have seen the worst behind, also partly tightening the Russia economy, certainly impacted by commodity prices as well, particularly oil, as well as geopolitical element.

Guillermo Felices, BNP Paribas Investment Partners

Senior market strategist, multi-asset solutions

Brics markets are grabbing attention this year for three main reasons.

First, the global macro environment is more supportive for the Brics. The economic recovery in the developed world has surprised to the upside so far this year, especially in the US and Europe.

These recoveries are also being supported by central bank stimulus in the developed world and by monetary and fiscal policy stimulus in China. Even in the US, where the Fed is starting to normalise monetary policy, interest rates remain historically very low. Finally, commodity prices are starting to rise after a sharp retracement in 2014-15.

Second, growth prospects are improving for the Brics. Brazil and Russia, for instance, are starting to bounce from deep recessions. In India, some activity indicators are firming following the slowdown created by the bank note ban. In China, markets have taken comfort from the fact that policy stimulus has supported growth so far.

Finally, valuations and carry considerations are brightening up the Brics again. The recessions in Brazil and Russia led to a deep discounting of asset prices and the resulting build-up of risk premia (e.g. higher interest rates or carry) that investors are now keen to exploit.

High interest rates are also attractive in India. These considerations are less evident in China where investors are following closely the risks associated with the ongoing economic slowdown and the prospect of US trade protectionism.

BRICS Economic Tracker—Insights and Trends Quarter 4 2016 (БРИКС: Экономический отчет и анализ тенденций за 4 квартал 2016 года) / USA, March, 2017
Keywords: Economics, Research, Analytics, GDP,

The BRIC nations are under a turbulent economic and political environment fueled primarily by the slack in commodity prices. While Brazil and Russia are likely to emerge out of the recession marginally in 2017, the anticipations of new restricting US policies create short term mayhem. Draught stricken South African economy fears a credit rating cut to junk by the end of 2016 due to meager expansion of output. China's focus on reforms and domestic demand generation will limit the GDP growth around 6.5%. India's growth path is expected to remain at the driver seat in the coming two years.

Country Coverage – BRICS
• Brazil
• Russia
• India
• China
• South Africa

Year, Quarter and Month Coverage
• Yearly Data: 2012 – 2020
• Quarterly Data: Q1 2012 – Q4 2018
• Monthly Data: January 2012 – December 2016
Political events in the public life of BRICS
Russia creates alternative to SWIFT Banking payment system (Россия создает альтернативу платежной системе SWIFT) / Macedonia, March, 2017
Keywords: Domestic policy, Russia, SWIFT, banking, finance

The grand order of things could be undergoing some major overhauls.

To put it more bluntly, a war to reset the global financial order is about to be unleashed.

Preparations inside Russia are being made in case the ultimate banking sanctions are placed on them, cutting off commerce inside the all-encompassing Worldwide Interbank Financial Telecomm SWIFT system – which runs credit, debt, and banking card transactions across a real time global network.
As it would be doled out by the banking elites, the price for misbehavior at the Kremlin could be ostracization from this global commerce vehicle.

But that isn't the end of the story… Putin is readying his people to divorce from the international banking system altogether, and start over with a nationalistic platform, backed by thousands of tons of gold, and growing alliances with Europe, China and the BRICS nations, the Middle East and several emerging powers.

A major attempt to bring Russia under heel could result in the greatest schism the global system of finance has ever seen. Then what?

via Russia Insider:

Russia has successfully developed and implemented an alternative should it be excluded from international banking systems, according to a recent report.

As far as western sanctions go, by far Russia's largest vulnerability is in its banking sector, which for better or for worse is tied to the hip with international banking.

If Russia wishes to maintain the status quo, there's not much that can be done about this dependency. But shortly after sanctions were announced in 2014, Moscow set out to prepare for the worst-case scenario: being cut off from the Worldwide Interbank Financial Telecommunication (SWIFT) system.
In layman's terms, SWIFT allows for fast and (allegedly) secure international financial transfers. In fifty years when you are able to use your Bank of America debit card on the Moon (for a low fee of 2,000 moon rubles), it will be because of SWIFT or a system similar to it.

There are two issues surrounding SWIFT "cut-off" for Russia: 1. Is it likely to happen? and 2. Is Russia prepared for it?

…cutting Russia from SWIFT would be a disaster.

According to Nowotny:

Such a move "we would see as very problematic because it could perhaps undermine confidence in this system," the governor of Austria's central bank told reporters… Of course, this hasn't stopped Europe and Washington from threatening to pull the SWIFT plug.

While it isn't clear if this is going to happen, threats have been made since the beginning of the issues with Crimea and Ukraine.

And as a result, Putin has overseen the creation of a survival plan from which it could grow stronger. As RT reports:

"There were threats that we can be disconnected from SWIFT. We have finished working on our own payment system, and if something happens, all operations in SWIFT format will work inside the country. We have created an alternative," Nabiullina said at a meeting with President Vladimir Putin on Wednesday.
She also added that 90 percent of ATMs in Russia are ready to accept the Mir payment system, a domestic version of Visa and MasterCard.
Izvestia daily reported that as of January 2016, 330 Russian banks had been connected to the SWIFT alternative, the system for transfer of financial messages (SPFS).
The central bank's website says the system was established "as an alternative channel for interbank cooperation with the aim of ensuring the guaranteed and uninterrupted provision of services for the transmission of electronic messages on financial transactions."
Will there be economic wars, or outright World War III? Nobody knows for sure, but things could get very tense very quickly. Already, loose allegations are flying at an unprecedented rate. Somebody wants to egg this thing on.
Russia under Putin has seen a significant challenge to a world order that has, for some time, been ultimately controlled by the central banking elite.

The Rothschild presence in Russia has been challenged; Soros-front NGOs have been kicked out, and it seems that only all out war will ever settle these power plays for the dominance or death of the U.S. petrodollar, which is ultimately controlled by the same few hands that steer and control the central banks of nearly all the world's nations. Only by stealth and monotony have these activities remained in the shadows.

Indeed, the only countries left on the map which have not yielded to yoke of the central bank are the countries that are most at threat of being drawn into war:

– Iran
– North Korea
– Cuba

With that list so close to complete, a reversal could be a real blow to global order, and to maintaining orderly deposits.

If Russia moves to drop their central bank, or if they are locked out of the global SWIFT system, it will mean a thudding silence, an unprecedented reversal in the concentration of power.

Russia has prepared to create its own SWIFT-style system as a back up system, that while it is not yet up and running, could one day rival the primary system, and which could provide a meaningful alternative for dissenters and tax evaders alike.

But be aware that behind the scenes, even with this massive and explosive changes in the works, those who control the finances are well aware of the shifts that are taking place, and are in position to reassert their leverage over humanity through new systems, and new centers of power.

Curiously, it cannot be denied that Russia has been a player in the international framework that has been erected. They have been equal partners in covert research and experimentation, and for all the animosity with the U.S., it has also played a willing dance partner for much of what has been going on during the past century.

Vladimir Putin has delicately and masterfully navigated these boundaries, yet he too is woven into the larger fabric. Like George H.W. Bush and the CIA, Putin is a product of the KGB, and remains permanently tied to it.

A monetary power this total does not lose power overnight – and they are not above jumping ship. Only a truly decentralized, private currencies based on mutually beneficial terms for individuals and communities could dissipate that power, and that will not come as easily.
Is the tide turning?
World of work
Social policy, trade unions, actions
China organises first five-nation joint BRICS film production (Китай организует первое совместное кинопроизводство со странами БРИКС) / India, March, 2017
Keywords: Culture, China, Summit, India

NEW DELHI: BRICS can now act as a bridge between Bollywood and China. Beijing, which will host the next BRICS Summit this September, has taken the initiative to organise the first ever five-nation joint BRICS film production involving one director from each of the five member state countries.

The film will be screened at the opening ceremony of the second BRICS film festival in Chengdu, China, during June 21-25, persons familiar with the development told ET. The film will be titled Where Has The Time Gone, involving one director from each BRICS country, persons cited above said.

It is understood that Bollywood director Anurag Kashyap would be the director from India for the joint production at China's behest. The film will be screened again in the BRICS cultural festival in Xiamen starting September 4 ahead of the Summit which will be attended by Prime Minister Narendra Modi.

Beijing has taken a cue from Delhi which hosted the BRICS Summit last year to carry forward India's initiatives in films, people and cultural domains among the five-member states of BRICS, said officials. India hosted a record number of BRICS related events in the run-up to the Summit last October and thereafter and this included several initiatives such as youth soccer event and film festival to promote people-to-people ties among the BRICS states.

"The idea was to popularise the concept of BRICS, taking it beyond the national capital Delhi," recalled an official.

The BRICS film festival will also be an occasion to showcase Bollywood to the Chinese market and audience. In the last few years, Bollywood ventures like Lagaanand Three Idiotshave stuck a chord among the Chinese youth and the two countries have recently undertaken joint film production which acted as a confidence building measure. "Tastes among the youth in China are changing, moving away from the ideologically driven movies, even as new Bollywood movies which showcase aspirational India are becoming popular," said an expert who follows the sector closely.
2017 BRICS Think Tank Symposium held in Beijing to mark the BRICS China moment (Симпозиум ученых БРИКС 2017 года был проведен в Пекине и отметил начало китайского влияния) / China, March, 2017
Keywords: World of Work, Think Tank Symposium, New Development Bank, Summit, Financial Cooperation, China

2017 BRICS Think Tank Symposium on the theme of "Strengthening Financial Cooperation and Promoting BRICS Development" was held at Renmin University of China on March 22th, 2017. The symposium was hosted by China Council for BRICS Think-Tank Cooperation (CCBTC) and Renmin University of China (RUC), and organized by Chongyang Institute for Financial Studies, Renmin University of China (RDCY).

This is the first think tank symposium among BRICS countries following the 9th BRICS Summit's first Sherpas Meeting held in Nanjing in 2017. More than 300 participants, including foreign diplomats to China from BRICS countries, and representatives from business, academy, and media, gathered at The symposium to mark the beginning of the China moment of the BRICS think tanks.

Liu Yuanchun, Vice President of RUC, Wang Xiaolong, Special Envoy for BRICS Affairs, Luan Jianzhang, Secretary General of CCBTC and Director General of Research Office at International Department of the Central Committee Communist Party of China, and Chen Xin, Vice President of CCBTC and President of Guangdong University of Technology, attended the symposium and delivered the opening remarks.

Dolana Msimang, Ambassador of South African Embassy in Beijing, George Zinoviev, Minister Counselor of Russian Embassy in China, Amit Narang, Deputy Chief of Mission at Indian Embassy in Beijing, Carlos Henrique Angrisani Santana, a representative of Brazilian ambassador to China, Zhao Jinping, Research fellow and Director-General of the Research Department of Foreign Economic Relations at Development Research Center of the State Council (DRC), and Zhou Qiangwu, Director of International Economics and Finance Institute of the Ministry of Finance, delivered keynote speeches at the opening ceremony.

Liu Yuanchun pointed out that BRICS mechanism set a good example for the cooperation of emerging and developing countries. As the globalization faces great challenges, BRICS has the responsibility to provide new impetus for the development of the world, shoulder the mission of building the community of human destiny, and find new idea and mechanism for the cooperation among countries.

Wang Xiaolong said that facing a situation that both uncertainty and instability increase in the world, the BRICS has become an important stabilizing force in the international structure by focusing on the economic and social development within the mechanism and win-win cooperation with other countries. As the chair of the BRICS in 2017, China will make effort to build a more extensive partnership and open the second "golden decade" of the BRICS cooperation by deepening cooperation, promoting common development, strengthening global governance, jointly coping with the challenges, enhancing the culture exchanges, consolidating the basis of public opinion, and pushing forward the construction of BRICS.
Luan Jianzhang noted that in order to support the Ninth BRICS leaders summit this year, China had established the BRICS Think-Tank Cooperation Council to strengthen the research of the BRICS. He hoped that the Symposium can help BRICS think tanks deepen the cooperation and form a research community so as to offer advice and suggestions for the development of the BRICS.

Chen Xin said that globalization remains the main direction of future economic development. China is committed to pushing forward the development of the economic globalization. For that reason, during the research on BRICS cooperation and the "Belt and Road Initiative", China not only strived to make breakthrough on trade, finance, and infrastructure policy, but also promoted the integration of the industry and the culture so as to realize the comprehensive economic integration, Chen noted.

Dolana Msimang mentioned that BRICS cooperation mechanism is an important platform which pursues an effective and equitable world order while bringing the economic interests to the member countries. She emphasized that BRICS countries need to further strengthen their cooperation and made a common voice on the international stage.

Amit Narang believed that the second decade of the BRICS will open a new path of development and build a new global cooperation mode. He emphasized that India supports China's effort in deepening the cooperation among the BRICS countries as the chair of the BRICS this year.

George Zinoviev said that over the past few years the BRICS New Development Bank has identified seven investment projects, and the cooperation within the framework of BRICS Contingent Reserve Arrangement has also been initiated. He believed that these two mechanisms can play an important role in the international monetary and financial system.

Carlos Henrique Angrisani Santana said that Brazil will pay more attention on the discussion to the financial issues on the upcoming 9th BRICS Leaders Summit held in China. He pointed out that the World Band needs to improve the cooperation of the member countries, share more knowledge-sharing and provide more loan concessions for the developing countries.

Zhao Jinping hoped that this year`s BRICS leaders summit can strongly boost the cooperation among the countries. He pointed out that the BRICS countries should grasp the cooperation opportunities provided by China-proposed "Belt and Road" initiative to promote the economic growth together.
Zhou Qiangwu gave several piece of suggestions on the future development and cooperation of the BRICS, including strengthening the development confidence, deepening the financial cooperation, and promoting the think tanks cooperation of BRICS countries.

Wang Wen briefed the elaborate arrangement of the symposium to the media. He said that after the opening ceremony, the symposium set up three close-door panels on the theme of "Global Economic Governance and Role of BRICS", "BRICS' Financial Cooperation: Process Assessment and Future Prospective", and "BRICS' Financial Cooperation and China", aiming to reach the consensus on the BRICS cooperation against the backdrop of the "Belt and Road".

The symposium was considered as the warm-up event of the 9th BRICS Summit, which will be held in Xiamen in southeast China's Fujian Province from September 3rd to 5th.
This is the unhappiest BRICS nation and we know why (Это самая несчастная нация в БРИКС, и мы знаем, почему) / India, March, 2017
Keywords: World of Work, Statitics, Research, GDP, India

India is getting unhappier by the year.

It now ranks lowest in BRICS (Brazil, Russia, India, China and South Africa) emerging economies and second-lowest among SAARC (South Asian Association for Regional Cooperation) nations in the happiness index as revealed by the United Nations' World Happiness Report 2017.

The 1.3-billion-strong country ranked 122 out of 155 countries, dropping four spots from a year ago. It is now ranked lower than even war-torn Iraq and terror-stricken Pakistan.

Despite being one of the largest economies in the world, a parameter of the index, India has slipped in the ranking for the third successive year. It was at 117th in 2015 and 118th in 2016.

According to last year's report, India witnessed the steepest declines in happiness levels between 2005-07 and 2013-15. And this, despite its gross domestic product (GDP) growing faster than most developed countries of the world. (The World Happiness Report bases its data on six parameters: GDP per capita, life expectancy, social support, trust, freedom to make life decisions, and generosity.)

But why is India so unhappy?

WHR had outlined last year that India's GDP numbers and other positives are offset by drops in social support, thus causing it to rank very low in the list.

Here are some possible reasons for India's growing unhappiness.

One in five international cases of honor killing every year comes from India, according to the United Nations. In fact, India reported an inglorious 800 percent rise in honor killings last year.

The rate of malnutrition cases among children in India is almost five times more than in China and twice than in Sub-Saharan Africa, according to World Bank. Malnutrition is often dubbed as India's 'silent emergency'.

Over 35 million children in India are deprived of education and have to work as laborers, according to the 2011 Census. And there's more.

Despite being one of the hottest investment destinations and among the fastest-growing markets for many global companies, especially in tech (Facebook, Uber, WhatsApp, etc.), India is unable to climb the 'ease of doing business' list.

Add to that, most Indians are tired and overworked in their jobs. India is also the fourth-most vacation-deprived country in the world.

Need we say more?
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