Information Bulletin of the BRICS Trade Union Forum
Issue 16.2017
2017.04.10 — 2017.04.14
International relations
Foreign policy in the context of BRICS
Russia, China and 'Balance of Dependence' in Greater Eurasia (Россия, Китай и «Баланс взаимозависимости» в Большой Евразии) / Russia, April, 2017
Keywords: Russia, China, cooperation, international relations, New Development Bank
Author: Glenn Diesen

Regional integration projects capable of facilitating reciprocal economic bene?ts are only sustainable when there is a 'balance of dependence'. Realist theory is adamant that cooperation for absolute gain necessitates a balance of power to prevent one side from challenging the status-quo. In the age of increasingly destructive weapons and intensi?ed economic interdependence, political power is largely extracted from asymmetrical economic dependence. [1] Asymmetrical interdependence, or a skewed 'balance of dependence', empowers a less dependent state to set favourable economic conditions and obtain political concessions from a more dependent one. [2] States therefore compete for power by skewing the symmetry within economic interdependent partnerships to enhance both their in?uence and autonomy. Diversifying partnerships can reduce one's own reliance on a state or region, while asserting control over strategic markets diminishes the capacity of other states to lessen their dependence.

The centuries-long geoeconomic dominance of the West is the product of asymmetrical interdependence by asserting control over strategic markets, transportation corridors and financial institutions. Following the disintegration of the Mongol Empire, the land-based transportation corridors of the ancient Silk Road that had fuelled trade and growth vanished. Subsequently, Western maritime powers rose to prominence from the early 1500s by asserting control over the main maritime transportation corridors and then establishing 'Trading-Post empires'. Leading naval powers, such as Britain, have therefore historically been more inclined towards free trade as they had more to gain and risked less by controlling the trade routes. [3] The maritime strategies of Alfred Thayer Mahan in the late 1800s were founded on this strategic reasoning, which became the foundation for making the US a naval power safeguarding its security and economic power by controlling the oceans and Eurasian continent from the periphery. [4] Following the Second World War, the US became the unequalled geoeconomic power on the world scale due to its share in the global GDP, the Bretton Woods institutions and control over strategic markets/resources and transportation corridors. Ironically, the principal adversary of the US became the Soviet Union, a communist state detached from the international market place and therefore largely insulated from America's domineering economic statecraft.

Following the demise of communism, Russia returned to the dilemma of a Eurasian land-power seeking economic integration and modernisation: Economic development and prosperity required integration with the West as the economic core of the international system. Yet, integration into Western-led value-chains and economic structures was not tenable since the asymmetry in the economic balance of power could be converted into political structures to minimise both Russian in?uence and autonomy. Moscow's ambition to establish a common political, economic and security community in Europe, a 'Common European Home', is emblematic of this predicament. After the Cold War, the West supported only those European institutions that would incrementally augment collective bargaining power in order to ensure that Russia does not become the centre of economic integration.

To solve this dilemma today Russia's only solution is to become a Eurasian power and shape a Greater Eurasia to diversify away from excessive reliance on the West and concurrently acquire in?uence over competitive strategic markets, value-chains, transportation corridors and international financial institutions. And to these ends a strategic partnership with China is indispensable to construct a Greater Eurasia. Yet, Russia must learn the lessons from the failure of shaping a Greater Europe to refrain from repeating the same mistakes in building its partnership with an economically stronger China. Moscow's nascent strategic partnership with Beijing is to some extent paradoxical since the sustainability of the concerted project for a 'Greater Eurasia' requires Moscow to balance China. The asymmetrical interdependence that emerges in the framework of such a partnership creates incentives for China to obtain political concessions, which would make the it untenable for Russia in the long term. A viable Greater Eurasia requires soft-balancing of China – creating an equilibrium without replicating the zero-sum schemes that collapsed the prospects of a Greater Europe.

Lessons to Be Learned from the Failure of 'Greater Europe'

Moscow's ambitious regional integration project labelled Greater Europe failed due to the inability to create a balance of dependence within Europe. Moscow's Greater Europe initiative aimed to obtain a proportional representation of its interests at the European table, enabling Russia to bene?t from its size to ensure its in?uence and security. Greater Europe directly con?icted with the EU's 'Wider Europe' and NATO's corresponding initiative, which instead sought to maximise collective bargaining power by facilitating 28+1 formats for cooperation with Russia. The subsequent extremely asymmetrical partnerships that followed in reality veil unilateralism as multilateralism, and have become formats of interdependence that enable the West to maximise both its autonomy and in? uence. 'Cooperation' was subsequently conceptualised within a teacher-student/subject-object format, within which Russia was compelled to accept unilateral concessions. Aimed to unremittingly intensify the collective bargaining power by expanding the EU and NATO sphere of in?uence to the east, this new status quo in the West-Russian relations could not materialise. Subsequently, 'European integration' in fact became a zero-sum geostrategic project, whose concept of the shared neighbourhood in fact imposed a 'civilizational choice'.

Moscow's 'Greater Europe' project was largely paradoxical in its conception and was destined to fail. The 'leaning-to-one-side' policy by committing solely to a common Europe and neglecting other partners in the east deprived Russia of a bargaining bene?t required to negotiate a more favourable format for Europe. Brzezinski noted that the predominant cooperation with the West was 'Russia's only choice – even if tactical', and it 'provided the West with a strategic opportunity. It created the preconditions for the progressive geopolitical expansion of the Western community deeper and deeper into Eurasia'. [5] Yeltsin conceded by the end of the 1990s that the 'leaning-to-one-side' policy had been exploited rather than rewarded. Yeltsin called for diversifying Russia's partnerships by becoming a Eurasian power. However, the Eurasian ambitions harked back to a geopolitical past and experience as opposed to clearly re-conceptualising Eurasianism in terms of geoeconomics.

Putin swiftly and skilfully embraced economic statecraft as the principal tool for restoring Russian power. Re-nationalising energy resources ensured that the strategic industries of Russia worked in the interest of the state rather than oligarchs, who were courted by the West and tended to use these industries to impose their control on the state. Putin envisioned transforming Russia into an energy superpower as a way to obtain a bene?t to negotiate a de-facto Greater Europe. Energy Strategy of Russia for the period up to 2030 reiterates the objective of utilising energy resources to regain a voice and in?uence in Europe and broader international relations. [6] Yet, the existing disproportionate economic connectivity between Russia and Europe necessitated continuity and hindered abandonment of the Greater Europe concept.

At the same time, the energy dependence on Russia and subsequent in?uence of Moscow have been consistently resisted and hampered to shape a foundation for a de-facto Greater Europe. While the EU grew increasingly reliant on Russia as an energy supplier, Russia remained equally if not more dependent on the EU as an energy consumer. The symmetry within the interdependent relationship, thus, implied that Russia could only extract few political concessions. As long as the West remained Russia's only choice, the zero-sum structures in Europe have become perpetuated, as diminishing Russian in?uence over transit countries is seen as a way to scale back Russian in?uence on the continent. The EU's Eastern Partnership and Association Agreements became emblematic of the effort to unilaterally engage the 'shared neighbourhood' in exclusive arrangements. Greater Europe failed when the West supported the coup in Kiev by exploiting domestic resentments over corruption to pull Ukraine into the Euro-Atlantic orbit. At the same time, Western efforts to cripple the Russian economy with economic sanctions were insulated from forceful Russian retaliations in the energy sphere due to the Western understanding of the symmetry in energy interdependence between the consumer and the supplier.

In search of a way out of this deadlock Moscow's alternative is developing cooperation with the East. Russia was gradually improving economic connectivity with the rising eastern powers throughout the 2000s, yet the Western-centric foreign policy largely undermined the required impetus for painful reforms and willingness to make long-term commitments. China and Iran remained especially apprehensive about Russia's Greater Europe ambitions, which made them prospective bargaining chips to enhance Russia's 'market value' in the West. Ties with rising Asian powers were seen as demeaning for Russia and detrimental to its geoeconomic potential, and this perception was based on what Karaganov aptly de?nes as 'illusions about gradual integration with the West'. [7] Former Russian Foreign Minister, Igor Ivanov, previously a staunch advocate for Greater Europe, recognises that this ? awed initiative should be replaced with a more feasible and bene?cial one of Greater Eurasia. [8]

Conceptualising 'Greater Eurasia': Russia as a Successor of the Mongol Empire

The Eurasian continent is a paradox as it hosts the majority of the world's population, resources and GDP, but at the same time it is plagued by astonishingly low economic connectivity in terms of both physical infrastructure and mechanisms for cooperation. Maritime powers's geoeconomic administration of the Eurasian continent from the edges for the past 500 years has placed Russia in a vulnerable position at the dual periphery of both Europe and East Asia. Russia's geoeconomic weakness is the product of failure to exploit its advantages of its geographical expanse by developing economic connectivity by land through the heart of Eurasia. Russia could skew the symmetry of interdependence by becoming a successor of the Mongol Empire and bridging the vast Eurasian continent, thereby reducing dependence on any one state or region, while making its partners more reliant on itself due to their interest in its vast territories as transit corridors.

Historically, the British-Russian rivalry for global dominance was largely a competition to obtain competitive advantage by leading Eurasia – from the centre as a land power or the periphery as a maritime power, respectively. The rivalry became more acute by the mid­1800s when Britain defeated China in the Opium Wars and established its privileged economic and military presence along the eastern coastline of Eurasia. With the ensuing weakness of China, Russia appropriated more than 1.5 million square kilometres of Chinese territory along the Paci?c Coast in what became known as the 'unequal treaties'. Russia's rapid eastward territorial expansion fuelled concerns in Britain that Russia could become the successor of the Mongol empire and reverse the economic and military advantage of maritime powers to its advatage. Mackinder warned that the advantages from mobility upon the seas were only temporary due to the emergence of new technologies for physical connectivity:

Steam and the Suez Canal appeared to have increased the mobility of sea-power relatively to land-power. Railways acted chie?y as feeders to ocean-going commerce. But transcontinental railways are now transmuting the conditions of land-power and nowhere can they have such effect as in the closed heartland of Euro-Asia. [9]

Mackinder's predictions did not come to fruition as Russian geoeconomics was abandoned in the era of communism and the divisive Cold War. Economic statecraft was virtually absent under the Soviet authorities, while the military and ideological divide of the Cold War obstructed economic connectivity and militarised divisions in Eurasia.

The world changed profoundly since the fall of communism, which presented Russia with another opportunity to promote economic connectivity in Eurasia. Geoeconomics is no longer the prerogative of the West as the global diffusion of power and the rise of Asia creates incentives to construct alternative transportation corridors and mechanisms for cooperation. In recent years, most of the major economies across Eurasia have launched various initiatives promoting integration of Eurasia. Russia's newly proposed Eurasianism should represent a clear break from previous conceptions associated with backward militarised geopolitics and subsequent inevitable imperial overstretch. A new geoeconomic concept of Eurasianism should aim to promote selective Eurasian integration to make Russia a leading driver of modernisation and globalisation. A key distinction for a revised concept of Eurasia is the recognition that Russia has neither the capacity nor the intention to dominate the Eurasian continent. Creating viable partnerships with Eurasian powers is pivotal for a balanced and functional Greater Eurasia.

China as Russia's Indispensable Partner in Greater Eurasia

China is Russia's principal partner in shaping of a Greater Eurasia due to its capacity and the intention to rival the US-led international system. A strategic partnership between China and Russia is indispensable for any format of a Greater Eurasia as the dyad includes the world's largest energy consumer and the largest energy producer, the world's trading leader and a continental land-bridge. In recent years, China and Russia have become the key protagonists to oppose unipolarity, to accrue gold reserves and utilise regional currencies, while establishing new ?nancial and economic institutions such as BRICS, the Shanghai Cooperation Organisation (SCO) and the Eurasian Economic Union (EEU).

The economic miracle of China's revival presents Russia with an opportunity to make Greater Eurasia a viable geoeconomic initiative. The defeat of China in the mid­1800s eliminated China as the world's economic power house and ushered in the 'century of humiliation'. The Chinese initially inward-looking development strategy from the 1970s was rolled out under the veil of a 'peaceful rise', which helped to prevent attracting any negative attention. This strategy later transformed to an open challenge to the US-led world order with the launch of the Silk Road project in 2013, also known as the One Belt, One Road (OBOR) initiative. China's ambition to revive the ancient Silk Road by developing land-based infrastructure and maritime transport routes is to be funded by Chinese-led financial institutions and denominated in what is becoming an increasingly internationalised yuan. Following the Western-backed coup in Kiev and the ensuing tit-for-tat sanctions, economic integration with Russia intensi?ed. Initial physical connectivity took shape of the $400 billion Power of Siberia pipeline and joint transportation infrastructure projects, denominated in local currencies. New mechanisms for cooperation started to develop with the establishing of new and joint international institutions, financial institutions, payment systems, rating agencies and currency swaps.

However, this newly adopted Russian 'Turn to the East' strategy again came at the expense of the regional balance of dependence since Russia's disproportionate pivot to the West was replaced with yet another disproportionate pivot to China. The asymmetrical economic power of Russia and China was in the past mitigated by diversifying ties. The cancellation of the Angarsk-Daqing pipeline project in favour of the ESPO pipeline was illustrative of Moscow's effort to maintain a regional balance of dependence. Russian Foreign Minister, Sergei Lavrov similarly de?ned Russia's role in Asia as an important stabilising factor to create a 'truly stable balance of power'. [10] Becoming excessively reliant on China could undermine Russia's ability to keep a neutral stance in China's dispute with Japan, which would undermine Russia-Japan ties and further exacerbate dependence on its more powerful Chinese partner. The growing in?uence of China in Central Asia and the Russian Far East has also invigorated concerns in Moscow. In other words, merely duplicating the leaning-to-one-side policy in Europe with China may condemn Russia to another intolerable and unsustainable asymmetrical partnership. Russia may accept Chinese economic leadership as an inescapable reality, but Chinese dominance must be opposed.

A Eurasian Balance of Dependence

In order to sustain a strategic partnership with China, soft-balancing strategy with a positive-sum economic connectivity is required . For simply replicating the hard-balancing with zero-sum structures similar to those created in Europe would condemn the Greater Eurasia project to the same fate the Greater Europe concept faced. Soft-balancing should entail acceptance of Chinese geoeconomic leadership, while resisting Chinese hegemony. This can be achieved with 1) diversi?cation of partnership that produces positive-sum gain by benefitting from the economies of scale; 2) developing exclusive institutions for collective bargaining power vis-à-vis China that also provide bene?ts for the latter; and 3) constructing inclusive institutions with China that embrace other major states to ensure an internal balance of power.

First, diversi?cation in Northeast Asia is especially imperative as the modernisation of the Russian Far East will culminate the economies of scale for Russia and bene?t all the states in the region. Seoul and Tokyo have expressed an especially strong interest in becoming stakeholders in Russia's energy and transportation projects in the region, which will be cheaper in the form of extensions of the larger physical connectivity projects between Russia and China. Rather than resisting Russia's development of its Far Eastern territories, China has become a sponsor and a signi?cant contributor to developing the Russian Paci?c Coast and adjoining connectivity. Since the 'unequal treaties' in the mid-1800s China's two north-eastern provinces, Heilongjiang and Jilin, have been landlocked, and Beijing sees a way to enhance their economic competitiveness by improving connectivity with the modernising ports on Russia's Paci?c coast. Meanwhile, Russian economic connectivity with South Korea and Japan has been increasing. At the Eastern Economic Forum in Vladivostok held in September 2016, a multitude of economic agreements were signed with Seoul. It serves as a great stimulus that South Korea's own concept for Eurasian integration mirrors that of Russia, and Seoul's request for a FTA membership within the EEU is a positive sign. Additionally, December 2016 witnessed an agreement reached between Russia and Japan about joint economic development on the Southern Kuril Islands.

Second, the EEU is an important tool in Russian foreign policy to use as a collective bargaining benefit to restore symmetry both with China and the EU. Institutionalising a privileged position for Russia in Central Asia to balance the economic prowess of China is imperative to achieve a balance in the region. Obtaining support from China as a non-member is possible by mitigating the disadvantages of exclusion with the offer of material benefits. The common customs zone, standards and legislation within the EEU provides simplified access to the region and its market, and more importantly it makes the region more attractive for transit reducing the number of customs zones between China and the EU to one.

Third, shared institutions and arrangements with China should be multilateral and include other major powers to ensure an internal balance of power and thus prevent Chinese dominance. It is often neglected that regional institutions and arrangements for collective bargaining power vis-à-vis non-members require this balance of power within the Greater Eurasia. To avoid failure the mistakes of Western experience should be recognised. For instance, the EU provided collective bargaining power to skew the symmetry in relations with the US and others, while the North American Free Trade Agreement (NAFTA) was similarly a response to a more competitive EU and Japan. [11] However, the differences in economies within these institutions eventually caused their unravelling. Euro is an undervalued currency for Germany and has subsequently fed its export-based development strategy and absorbed production power from the Mediterranean. With the internal balance of power in the EU eroding, the weaker states in the EU will gradually and more fiercely contest German domination in Europe. In NAFTA, the huge differences in labour costs have resulted in the shift of manufacturing to Mexico, which caused resentment culminating in support for Trump's calls to scrap the trade agreement.

In its turn China has been the main driver to reinvigorate the SCO as a major international player by converting it into a vehicle for geoeconomics. An expanded SCO would become 'an emerging cornerstone of the multipolar world in the making, and a platform offering a Eurasian alternative to Western Europe'. [12] One of the important proposals was to construct a joint SCO Development Bank as an alternative to the IMF and the World Bank to fund common infrastructure projects to interconnect the region. Russia was cautious about this initiative since the shift from military security to economic cooperation entails handing over the mantle of leadership to China. Moscow counter-proposal was to develop the SCO Development Bank on the foundations of the Russia-Kazakhstan dominated Eurasian Development Bank (EDB). The Chinese obstruction that followed deprived Russia of a seat at the table in a powerful rules-based geoeconomic institution, and China has instead maximised an asymmetrical leverage by penetrating the region with bilateral ad-hoc agreements. Furthermore, the multilateral SCO was replaced by China's unilateral Silk Road initiative, and the idea of a SCO Development Bank was substituted with the Chinese initiated Asia Infrastructure Investment Bank (AIIB).

The only options for Russia were to either accommodate China in multilateral institutions to harmonise interests, or resist the shifting international distribution of power and face a zero-sum confrontation that it is unlikely to win. Moscow appears to have found a third path by bringing in other major powers that may obstruct Chinese hegemony without challenging Chinese economic leadership. The decision to expand the SCO by including India and Pakistan, and possibly Iran in the future, mitigates Russian concerns as China's share of power within the SCO declines and a balance is restored. This arrangement bases on a similar principle as the BRICS Development Bank, which brings together relatively strong actors with China in the lead. In 2015, the agreement to harmonise the EEU and Silk Road under the SCO became a model for geoeconomic balancing required for a viable Greater Eurasia. Russia's simultaneous hosting of the EEU, SCO and BRICS in Ufa later was also indicative of the emergence of a complex, multilateral, and balanced Greater Eurasia.

Subsequently, it is vital that Russia's eventual reset or reconciliation with the West should be consistent with the grand strategy of a balanced Greater Eurasia. Any possible grand bargain with the Trump administration should avoid what Washington will most likely seek – for Russia to de-couple from China and implement a hard balancing. Greater Eurasia should be recognised as the only viable geoeconomic project for Russia, which designates China as an indispensable partner. At the same time, Russian economic connectivity with the West should assist Russia's endeavour to diversify ties and reduce its own exclusive dependence on any region, while concurrently increasing Russian in?uence as an energy swing supplier and transportation corridor. However, any policy that entails hard balancing of China would replicate the zero-sum structures of the failed project of a Greater Europe and lead to failure.

* This paper is an extract from the forthcoming book, Glenn Diesen, Russia's Geoeconomic Strategy for a Greater Eurasia (Routledge, 2017).

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

Valdai International Discussion Club
Geopolitricks: There's Nothing Radical About President Jacob Zuma Or BRICS (Геополитические трюки: нет ничего радикального в президенте Джейкобе Зума или БРИКС) / South Africa, April, 2017
Keywords: South Africa, opinion, international relations
South Africa
Author: Mohammed Jameel Abdulla

Over the past few months President Jacob Zuma, and many of his supporters, have argued that the attacks on ANC and instability in South Africa are part of a plot by Western powers to discredit the leadership of the country. According to them, President Jacob Zuma is being targeted for challenging white monopoly capital, pushing for radical economic transformation and siding with the Brics (Brazil, Russia, India, China, South Africa) bloc of emerging economies against Western economic imperialism.

Sizwe Mpofu-Walsh @SizweMpofuWalsh
We must deal with this idea that Zuma is leading us to the the promised land via BRICS. My candidate for political lie of the decade.

6:01 PM - 7 Apr 2017

For many who identify as socially progressive, are critical of Western imperialism, and wish to see South Africa transform to serve the black working class majority, this rhetoric is proof that Zuma's "unorthodox" actions, such as the #CabinetReshuffle, are possibly a means towards a legitimate radical end.

To unpack this, the Daily Vox spoke to three political analysts – Sithembile Mbete, Aubrey Matshiqi and Steven Friedman – about whether President Jacob Zuma and BRICS truly represent a radical alternative to the prevailing, Western-centric world order.

Intro to SA geopolitics and Brics

"International relations is about two things, strategic cooperation and strategic competition. But more importantly it's about knowing where a healthy balance in your national interests lies between these things," said Professor Aubrey Matshiqi, research fellow at the Helen Suzman Foundation.

He said that, since 1994, South Africa has been trying to chart an independent course in foreign policy. Independence, Matshiqi argued, is not the same as delinking from those countries you do not share the same outlook or ideological vision with – independence means that you must be able, with each foreign country, to freely determine the nature of the relationship you would like to have with it.

According to Matshiqi, South Africa decided to prioritise relationships with countries "like us" – first priority going to the African continent and its agenda, then South-South relationships, followed by relationships outside of the Western sphere of influence.

"Relationships outside of the Western sphere of influence is about ensuring that you create a global order that is the antithesis of the current global order. Brics comes into being in that context – challenging the current global order," said Matshiqi.

University of Pretoria political sciences lecturer, Sithembile Mbete, agreed that the 21st century has seen a change in the balance of power of developing world countries, most particularly China and India, against the West. "Bric," she said, was a term that was coined by international investment firm Goldman Sachs in 2003 to identify countries (Brazil, Russia, India, China) they believed would come to challenge the economy of the USA by 2025 – Bric was fundamentally a term to guide investors in where to invest their money. Two years later, Bric countries formally met at the UN General Assembly and in 2010, after successful lobbying from President Zuma, South Africa was added as the "S" in "Brics".

This, Mbete said, was "to include South Africa not only for itself, but because you couldn't have a big developing world entity that represented Asia and Latin America, but not Africa."

Added to this dynamic, of course, was the fact that ideologically all Brics countries had either embodied, or at least flirted with the some form of leftward political orientation in the past. At the time of Brics' conception, for example, the Communist Party governed India and the Worker's Party was in power in Brazil. With China and Russia's communist histories, and the ANC's own ideological roots, Brics represented for many the rise of the new political left.

Waseem Thokan @ThokanIndianGuy
@SizweMpofuWalsh BRICS as a counterbalance to the geopolitical orthodoxy of Washington consensus economic policy prescriptions is a theoretical possibility.

6:21 PM - 7 Apr 2017

The failure of Brics as an alternative to Western powers

Professor of political studies at the University of Johannesburg, Steven Friedman, however says that though the prospect of supporting Brics over Western countries sounds appealing, in practice this support has become more about opportunistic rhetoric in South Africa.

'We've been members of Brics for some time now – I certainly haven't seen any coherent attempt to position Brics as an alternative to the traditional trading partners," he said.

Friedman argued that if South Africa was serious about Brics as an alternative you would expect more mutual development plans and common positions of economic issues – yet very little of this is in fact going on.

Mbete said that in relation to the Brics bank – known as the New Development Bank – and all other practical matters around trade, South Africa hadn't got any more concessions in the Brics environment than it has received globally.

"It seems as though in the official work of the Brics, and the official agreement, South Africa isn't benefitting all that much more than from other agencies," she said.

Sithembile Mbete @sthembete
@SizweMpofuWalsh And for those who think we'll meet our financial needs through BRICS bank, SA got next to none of the concessions we wanted in negotiations.

10:29 PM - 7 Apr 2017

Friedman said with economic blocs you'd expect strong interests in trading with each other rather than trading with anyone else – blocs tend to take common positions and allow for special advantages with each other. But this was not really the case with Brics.

"I'm not sure to what extent many of these zealots have actually met senior Chinese businessmen, for example. Anyone who has will tell you that these guys are not radical. They're very conventional businessmen – they're not here out of third-world solidarity," he said.

So what exactly is the radical alternative that President Jacob Zuma sees in Brics?

Mbete said one possibility is that, despite not receiving any more benefits from Brics, South Africa was in a better position with them in the sense of having a seat at the decision-making table – something we are not afforded to the same degree in the West.

Another possible appeal of Brics, for Friedman, was that the bloc's foreign policy does not, for example, tend towards bombing Middle Eastern countries in the manner the West does – though he felt Russia itself wasn't currently the poster-child for foreign affairs of late.

But besides that, the analysts found very little that could be considered "radical" or "leftist" about Brics.

Friedman pointed out that today India is governed by the Bharatiya Janata Party (BJP) under Narendra Modi – the party are considered right-wing Hindu-nationalists, while Brazil has just been through what "looks very suspiciously like a right-wing coup".

This means you have a Brazilian government that is to the right of Germany (and even the UK in some senses) along with an Indian government that positions itself with the international right, he said. Friedman concluded there isn't a broadly shared leftist vision between the parties. Rather, if you considered who was in power in the Brics countries, if there was a shared Brics vision, it would probably be a right-wing vision.

"Putin is not exactly a man of the left. Jacob Zuma is not a man of the left. So who's the left in Brics? There isn't a left in Brics," he said.

Sizwe Mpofu-Walsh @SizweMpofuWalsh
This 'BRICS alliance' nonsense is pushed by people who want to sound smart but have no clue what's actually happening in the world.
Sizwe Mpofu-Walsh @SizweMpofuWalsh
BRICS is, at best, a desegregation of global elites. Since when should we allow looting because they are going to 'save us'? Utter hogwash.

6:14 PM - 7 Apr 2017

Mbete found that Zuma's radical rhetoric was not only factually questionable, but also inconsistent over the twenty-something years he's been in the public eye.

"What we know for sure is that President Zuma's first overseas trip was to England, the UK. And it wasn't as if he was there speaking against British hegemony and colonialism, he went there to woo investors," she said.

Matshiqi made sense of the president's double-talk by outlining that sometimes leaders appeal to the national interest to benefit personally.

He said if it is true that the nuclear programme has nothing to do with the national interest, leaders in government may speak of the national interest in favour of the nuclear programme, when in fact what they have in mind is personal interest.

But, he said, sometimes leaders can also do both: make sure that the country benefits from something such as the nuclear programme while an individual, or group of individuals, personally benefits as well. Even if motives are not completely noble, a leader may also feed into the agenda of developing the antithesis to the current global order, he said.

"So you may be governed by values that are contrary to the values of the US, UK or France for instance – values that are noble in content. But you can at the same time hide your real interests behind these noble values," he said.

So what do Brics and President Jacob Zuma have in common when it comes to radicalism or opposing Western economic hegemony? According to these analysts, both may be radically perceived, but beyond the rhetoric, this sense of radicalism, of existing as an antithesis to the West, is insubstantial. It is nothing more than geopolitricks.

Dispelling the final myth: BRICS and imperialism (Развенчание последнего мифа: БРИКС и империализм) / South Africa, April, 2017
Keywords: International relations, global governance, politics, economics, opinion
South Africa
Author: Mbuyiseni Ndlozi

In the last piece I wrote attempting to dispel some of the myths used to defend the Zuma Cabinet reshuffle, I argued that 'it is the duty of revolutionary intellectual labour to work against the capture of popular concepts and ideas by reactionary forces'. In this piece I will deal with one final myth used by those who defend Zuma's Cabinet reshuffle. I had left it out in the previous article because of space.

This is about the idea that the BRICS (Brazil, India, China, Russia and South Africa) countries are under siege from Western powers for putting up a fight against Euro-American led global capitalism – a.k.a white monopoly capitalism. It is said that Pravin Gordhan and Mcebisi Jonas were removed from Cabinet because they are representatives of Euro-American imperialist capital seeking the destruction of the BRICS initiative. In addition, that National Treasury under their leadership is a stumbling block to "radical economic transformation".

The story of BRICS

In the narrative tropes of this myth, Brazil's popular protests that led to the impeachment and ultimate removal of President Dilma Rousseff from office were the creation of Euro-American imperialist capital seeking to destroy the emerging south-south co-operation outside traditional Bretton Woods Institutions i.e. World Bank and International Monetary Funds. Co-operation which led to the BRICS initiative. In the same way, the South African popular protests, demanding the impeachment or removal of Zuma, are also a creation of Euro-American capitalist imperialism trying to destroy the BRICS initiative.

BRICS through financial co-operation and creation of financial institutions like the BRICS Bank i.e. New Development Bank, seeks to create an alternative to Euro-American Bretton Woods Institutions. This allows the world to break the monopoly, control and domination of world debt by Euro-American powers who enforce structural adjustment programmes disguised as terms of lending money to developing countries.

With the BRICS' New Development Bank, developing countries will be able to secure alternative credit paths for currency stability, and in times of a balance of payment crisis with a favourable repayment programme and contribution towards lasting infrastructure development orientated spending.

The destabilisation of Brazil and South Africa will thus be followed by the same in India, China and Russia, maybe even war with the last two. All in an attempt, by Western powers, to destroy the rise of the alternative global power of BRICS which will compete with the World Bank.

Let us say for a moment that all this is indeed true; that Euro-American imperialist capital is working on the destabilisation of BRICS countries so that they can continue to financially depend on the West. To say the same with the South African case, you need to prove that Pravin Gordhan and Mcebisi Jonas worked against the interests of South Africa in the building and consolidation of BRICS financial institutions which they were directly responsible for. If so, this means they are agents of Western imperialism, or as the so-called "intelligence report" of Zuma suggests, that they were working to destabilise the economy of our country. Thus, Zuma was right to remove them from Cabinet.

The Brazilian Analogy

In Brazil, the demand for the impeachment of President Dilma Rousseff was in relation to the biggest corruption scandal in Brazilian history. Here, a semi-state-owned petroleum company called Petrobras was used by a number of top officials who colluded with an organised cartel of 16 companies to overcharge Petrobras for construction and service work in return for bribes and kickbacks. The cost of the entire corruption was estimated at a shocking $22-billion. The result was millions of ordinary Brazilians taking to the streets in popular protests and demanding the impeachment of Rousseff. The Brazilian Senate (the equivalent of Parliament in our case) held impeachment hearings against Rousseff, and after thorough investigations, they removed her from office.

Let us forget the Nkandla scandal, which directly involved Zuma and contractors who overcharged the government for the undue benefits of construction of his private home. This only led to limited protests by 25 MPs of the EFF without any accompanying millions of popular support on the streets.

Following this, the EFF took to the streets as it approached the Constitutional Court to force Zuma to pay back the money that was unduly spent in Nkandla. The Constitutional Court not only ruled in favour of #PayBackTheMoney, but it also ruled that Zuma violated his oath of office. Still, there were no popular protests across the country in demand of Zuma's resignation.

In addition, EFF and other political parties took to the streets and to the North Gauteng High Court to force the release of the Public Protector Report which made serious allegations that there is indeed a corrupt relationship between Zuma and the Gupta family. Here, still, these protests were limited to political parties; South Africa did not see millions or even hundreds of thousands of people take to the streets and demands Zuma's removal. So, it was only when Zuma reshuffled his Cabinet that our streets saw hundreds of thousands of people demanding the removal of Zuma from office.

Mcebisi Jonas revealed that the removal of Nene was linked to the Guptas' attempt to take over Treasury... he says they had offered him the post of finance minister first before giving it to Des van Rooyen. We know for a fact that Nene had resisted a nuclear deal costing the country over R3-trillion (twice the country's annual budget).

However, it is the recent removal of Pravin Gordhan as finance minister by Zuma (his own making) that led to the popular protests which have now come to be known as the #AntiZumaProtests. Those who defend Zuma's decision say Gordhan is an agent of the West in a broader campaign to destabilise BRICS countries.

But wait, let us share a quick history:

Pravin Gordhan was appointed Minister of Finance in 2009. In his 2010 Budget speech (February) Gordhan acknowledge that Brazil, India, China and a host of other middle-income countries are actively taking steps to improve their competitiveness, raise their skills levels, and invest in infrastructure. He emphasised that South Africa must not be left behind. In 2010, Gordhan was part of a bilateral engagement upon an invitation for South Africa to join the BRICs. In his 2011 Budget Speech Gordhan had this to say,

"Up until the turn of the century, developing countries accounted for about 20 percent of global output. This will increase to 40 percent by about 2015. Developing economies in Africa, Latin America and South Asia will play an increasingly important role in the global economy in coming years as incomes rise and poverty falls.

"South Africa's invitation to join the BRIC (Brazil, Russia, India and China ) economies reflects this broadening of the sources of economic growth. Over the next five years, these economies will account for 36 percent of world economic growth. We have to construct our own growth and development strategies to propel our economy forward, create jobs and compete on the global stage."

He was well aware of the dynamics at play when South Africa was included at the BRICS and not at any point was there a sign of undermining BRICS initiatives.

In his Minister's statement on policy and commitment of 2012 annual report, Gordhan said:

"Although times are tough, we (South Africa) have opportunities available to us. These include opportunities arising from the improved economic performance in most of the African continent and the shifting dynamics in the global economy, especially the rise of fellow BRICS nations as major contributors to global economic growth."

In 2012 under the leadership of Gordhan, National Treasury was part of a delegation that participated in the 4th BRICS Summit and provided objectives for South Africa to pursue during the summit. It was Gordhan who co-ordinated with Development Bank of South Africa to organise meetings of stakeholders to draft the BRICS economic strategy which would provide the country's economic objectives in the BRICS.

In his 2013 Budget speech, Gordhan announced that,

"Next month, we (South Africa) will host the 5th annual BRICS Summit, which brings together Brazil, Russia, India, China and South Africa. The Summit will unveil the work we have been doing with out BRICS partners on the following projects:

1. The possible establishment of a BRICS-led bank is intended to mobilise domestics savings and co-fund infrastructure in developing regions;

2. The pooling of members' foreign exchange reserves with the view of using them to support each other at times of balance of payments or currency crisis. Collectively, BRICS countries hold reserves totaling 4.5 trillion USD."

These were projects that Gordhan was working on as a minister before he was moved to CoGTA in May 2014. However, most of this BRICS work continued with Nhlanhla Nene who was his deputy and who had also fully participated in BRICS initiatives. By the time Gordhan came back to Treasury in December 2015 after the "Nene Saga", most of the BRICS work had been done, including making payment to the BRICS bank.

Let us also recall that Zuma's reason for removing Nhlanhla Nene from office was a "strategic deployment" later to be revealed as Head of BRICS Bank. Zuma was quoted by EWN to have said: "... urgency of the changes in the leadership of the National Treasury" was because nominations needed to be sent to Shanghai in terms of the head of the African Regional Centre of the New Development Bank/BRICS Bank, which will be based in Johanesburg… Mr Nene is our candidate for this position. We are fully backing his candidature, knowing full well that he will excel and make the nation proud in his next assignment."

Even in Parliament Questions for Written Reply, Zuma said:

"I have publicly stated on several occasions that South Africa nominated Mr Nhlanhla Nene for the position of head of the African Regional Centre of the New Development Bank, also known as the BRICS Bank. Processes to make an appointment to that position are under way under the aegis of the New Development Bank in Shanghai, China."

Surely you would not deploy a person to BRICS that you think is part of a ploy to undermine the very BRICS efforts. Eventually, the BRICS Bank officially opened in China on 27 February 2016. The National Treasury announced this as it marked the completion of legal procedures that will now allow the bank to begin its operation. During his 2016 (first Budget speech since his reappointment) Gordhan announced that the New Development Bank will open its Africa Regional Centre in Johannesburg in March.

What does this all mean? The processes of BRICS are actually the hard work of the ANC BEE elite which has been in the pipeline. In fact, Gordhan has been a key mind and resource in establishing South Africa's participation in BRICS. So, it is simply not comprehensible how those who defend Zuma's removal of Gordhan can say Gordhan was working on the destruction of BRICS.

What is worse is that the new under-qualified Finance Minister Malusi Gigaba goes everywhere telling international institutions, the media and the country that he is continuing with the policies that Gordhan, Nene and Manuel worked on. In fact, in his first press conference as Finance Minister, Gigaba even consciously excluded Van Rooyen in the lineage of what he calls "ANC Finance Minister", "deployed by the ANC". He says:

"I am keenly aware of the sterling leadership of this portfolio by all of the previous ANC ministers of finance. Comrades Trevor Manuel, Nhlanhla Nene and Pravin Gordhan. These comrades, deployed by the ANC and working with society at large, helped stabilise the growth of the South African economy having inherited a bankrupt treasury from the apartheid government. I hope to continue the sound leadership and stewardship of the country's finances which these comrades have displayed. I intend to implement the policies of the ANC as articulated in conference resolutions, in the 2014 election manifesto, as well as in the president's announcements especially the State of the Nation Address."

What is our equation now:

  1. There are no policy shifts intended with Gigaba's appointment,
  2. Nene and Gordhan are the ones who worked to establish South Africa's inclusion into BRICS and the consolidation of BRICS financial institutions
It cannot be that Gigaba's appointment was about stopping finance ministers who were destroying the establishment of BRICS institutions. In fact, Nene and Gordhan were key to the consolidation of BRICS institutions. Neither is Gigaba going to implement radical economic policies like "free higher education", "nationalisation of mines, banks and other monopoly industries".

Therefore, it is a MYTH that the reason why Zuma removed Gordhan has something to do with resisting Euro-American imperialism. In fact, if the West is working on the destabilisation of our country (South Africa) in the same way we saw in Brazil in that people take to the streets to remove a president, it is not Gordhan that is aiding them. The agent of the destabilisation of the country is Zuma himself. He is the one who has caused our streets to fill up in demand of his removal by removing people who were working hard to establish and consolidate BRICS and its alternative financial institutions.


The Constitutional Court ruling that Zuma violated the Constitution, including the Public Protector's State of Capture report, never saw the type of popular street presence we witnessed on Friday the 7th of April. It was Zuma's removal of Pravin Gordhan, replacing him with Malusi Gigaba, that sparked the popular protests. Why? Not because of resistance to imperialism. The real reason why Gigaba is Finance Minister is because Zuma wants access to Treasury for his personal interests and those of his business partners, the Gupta family! In this corrupt desire to use Treasury money for his benefit, Nene, Gordhan and Mcebisi were obstacles, and Gigaba is a full-on puppet who will do as the Guptas say.

The EFF has thus chosen to be on the side of the people. We will march against kleptocracy and corruption, demanding to remove Zuma from office. This removal is also underpinned by the fact that Zuma violated the Constitution to secure corruption in Nkandla; this means, as an individual, he is willing to do everything in his power to secure his personal interests, much to the detriment of the country and its people. He Must Fall! DM
Press release on the 70th anniversary of establishing diplomatic relations with the Republic of India (О 70-летии установления дипломатических отношений c Республикой Индией) / Russia, April, 2017
Keywords: international relations, India, Russia, diplomacy

April 13 marks the 70th anniversary of establishing diplomatic relations between the Russian Federation and the Republic of India. Foreign Ministers Sergey Lavrov and Sushma Swaraj exchanged congratulatory messages in noting this memorable date. They praised their bilateral cooperation and expressed their mutual interest in expanding cooperation in every area.

For centuries, the peoples of our two countries have been connected by sympathy, respect and trust for each other. Similar national interests, and coinciding or congruent positions on major international issues and a common perception of a just and equitable world order serve as a solid foundation for stable relations.

The underlying bilateral documents are the Treaty on Friendship and Cooperation between the Russian Federation and the Republic of India of January 28, 1993, and the Declaration on Strategic Partnership between the Russian Federation and the Republic of India of October 3, 2000.

Today, through common efforts, relations between our states have been elevated to the level of special and privileged strategic partnership.

Political dialogue is serious and detailed. The Joint Statement on Partnership for Global Peace and Stability, passed after the October 15, 2016 bilateral summit in Goa, confirms the common striving of Moscow and New Delhi to further the entire range of Russian-Indian ties.

Intergovernmental commissions on trade and the economy, science and technology, cultural cooperation and military-technical cooperation are functioning effectively. Consistent joint work is underway to streamline and expand the contractual-legal framework that features over 250 documents. Foreign ministries, national security council staffs, and industry-specific ministries and departments maintain regular dialogue. Interparliamentary and interregional ties, business and cultural contacts continue to be developed. Both countries also hold joint army and naval exercises.

The nuclear power industry, the basic pillar of Russian-Indian partnership, is the main driving force of economic cooperation. The first and second reactors are now operating at the Kudankulam Nuclear Power Plant, being built with Russian assistance in the state of Tamil Nadu. There are plans to build at least 12 Russian-designed reactors in various regions of India by 2020.

Both countries work together on major initiatives in the conventional power industry, engineering, the chemical and ore-mining industry, the aviation industry, pharmaceutics, healthcare, nanotechnologies and bioengineering.

Russia and India cooperate closely in the military-technical sphere.

They are also focusing on expanded cultural and humanitarian exchanges that help strengthen friendship between the peoples of our countries. Both countries take turns hosting annual cultural festivals.

Moscow and New Delhi cooperate in the UN, G20, the SCO and BRICS formats and in the Russia-India-China format. They actively coordinate their positions on resolving the situation in Afghanistan and Syria, on maintaining stability in the Middle East and North Africa and building an inclusive and open security system in the Asia Pacific Region.

Not only does the special and privileged Russian-Indian strategic partnership serve the interests of both peoples, but it helps establish a polycentric democratic system of international relations and promotes a constructive and unifying agenda in global affairs.

Trump's missiles hold a message for China and Russia, but can the US stay the distance? (Ракеты Трампа содержат сообщение для Китая и России, но могут ли США оставаться на расстоянии?) / South Africa, April, 2017
Keywords: opinion, international relations, politics, Russia, China, USA
South Africa
Author: Simon Tay

Simon Tay says US air strikes on Syria and naval muscle-flexing off North Korea are more a message for Putin and Xi than Assad and Kim, as well as a reminder that America still calls the global shots

Some had expected a confrontation over trade and other issues when US President Donald Trump hosted President Xi Jinping (習近平) in Florida late last week. But there were no missed handshakes to upset protocol – as there had been when Trump met German Chancellor Angela Merkel at the White House. There were no major breakthroughs either.

The most concrete outcome will focus on Americans getting better access to China's market for financial services and beef.

A deadline of 100 days has been set and this is doable, given that negotiations on these issues began earlier, with the administration of Barack Obama. If this is successful, Trump could claim himself a dealmaker with China.

But, consider the bigger events outside the room, set in motion even as the US and Chinese leaders sat down together at Trump's Mar-a-Lago estate: more is at stake.

Just before he sat down for dinner with the Chinese president, Trump ordered a missile strike on Syria. Then, the American navy deployed in waters off North Korea, after a series of provocative missile launches by Pyongyang. These muscular, unilateral moves have many American observers applauding.

Many see the US president's decision as an emotive reaction, his shock at seeing innocent victims, particularly "beautiful babies", being killed. "One strike doesn't make a strategy," former US defence secretary William Cohen was quoted as saying. There are questions of how effective the US strikes were, especially with no indication of any follow-up.

Similarly, dispatching a US aircraft carrier-led group of warships warns Pyongyang to curb its nuclear ambitions or potentially face a similar missile strike. But a show of military strength offers no clear resolution for a long-brewing and complex problem.

The US actions are not solutions but messages – ones intended, moreover, not just for Syria's Bashar al-Assad and North Korea's Kim Jong-un but, even more importantly, for presidents Vladimir Putin and Xi.

Even if Trump has spoken positively about working with Putin, the Americans are not ready to cede Syria and the Middle East to Russia. On North Korea, Trump earlier said that the US will act with or without China's agreement.

This will surprise those who focused on Trump's early talk about putting "America first" and believed he would be less involved overseas. His latest actions relate instead to his campaign promise to "Make America Great Again" – of ensuring the US is respected and even feared on the world stage, and is free to act unilaterally, if and when it chooses.

This has many implications for China's claim to a larger place in the world, so long dominated by America, and for Putin's reassertion of Russian geopolitical weight.

Even as some praise the decisive actions taken, those who value American engagement with the world should pause and wonder about consistency and follow-up.

Will there be thoughtful and constructive policy, or instinctive and even knee-jerk reactions under the Trump administration?

Much depends on the temperament of the US president as commander-in-chief, and who and what captures his eye and ear.

Even leaving aside personalities, events of the recent past suggest that when domestic public opinion and political support shift, the Americans withdraw.

Questions remain concerning American staying power, guts and guile to deal with challengers and complex problems.

For now, events show Washington will negotiate, or else use force – as Americans see fit. The Trump administration has also shown that America retains the capability and the will to operate on several fronts and on different issues simultaneously. Let us be reminded that Americans can still call the shots – and the air strikes – for better or for worse.

Simon Tay is chairman of the Singapore Institute of International Affairs, an independent and globally ranked think tank. He also teaches international law at the National University of Singapore
Joint Communiqué on the Meeting of BRICS Special Envoys on Middle East, Visakhapatnam, April 12, 2017 (Совместное коммюнике о встрече спецпосланников БРИКС по Ближнему Востоку, Висакхапатнам, 12 апреля 2017 года) / Russia, April, 2017
Keywords: Russia, Middle East, Communique, negotiations, politics, international relations

BRICS Special Envoys on Middle East expressed their concern about internal crises that have emerged in a number of states in the region in recent years. They firmly advocated that these crises should be resolved in accordance with the international law and UN Charter, without resorting to force or external interference and through establishing broad national dialogue with due respect for independence, territorial integrity and sovereignty of the countries of the region. The participants emphasized the legitimacy of the aspirations of the peoples of the region to enjoy full political and social freedoms and for respect to human rights.

They strongly condemned recent several attacks, against some BRICS countries, including that in the Russian Federation. BRICS members stand for consolidating international efforts to combat the global threat of terrorism. They stressed that counter-terrorism measures should be undertaken on the firm basis of international law under the aegis of the UN and its Security Council.

In the course of the meeting, the role of the UN Security Council as the international body bearing the primary responsibility for maintaining international peace and security was underlined. It was also stressed that military interventions that have not been authorized by the Security Council are incompatible with the UN Charter and unacceptable.

BRICS Special Envoys expressed their deep concern with regard to the continuing violence in Syria, deterioration of humanitarian situation and growing threat of international terrorism and extremism in that country.

The participants confirmed their strong support for the sovereignty and territorial integrity of Syria and the need for a peaceful solution, led by the Syrians, to the conflict. They supported all efforts towards a political and diplomatic solution in Syria through talks based on Resolution 2254 of the United Nations Security Council. They welcomed the three rounds of talks held in Astana and the outcome of fifth round of talks in Geneva. They acknowledged that Astana talks paved the way for resumption of Geneva talks. They expressed resolve for renewed and committed efforts to find a political and diplomatic solution in Syria. In this regard, the efforts of the Special Envoy of the UN Secretary General Staffan de Mistura aimed at resumption of Geneva process were welcomed. The efforts of BRICS countries in providing humanitarian aid to Syria were welcomed. They called for continuing humanitarian assistance to Syria by BRICS countries and collaborating in the reconstruction of Syria.

While strongly condemning terrorism in all its forms and manifestations, they called upon all Syrians to join hands in the face of this dangerous threat and urged the international community to strictly abide by all the obligations pursuant to various relevant UNSC resolutions.

While strongly condemning the use of chemical weapons by anyone under any circumstances, they called upon the international community to remain united while addressing any use or threat of use of chemical weapons and stressed the importance of continued cooperation between OPCW Technical Secretariat, OPCW-UN Joint Investigative Mechanism with the Syrian authorities.

They expressed serious concern about the political and security situation and escalation of the armed conflict in Libya, highlighting its extremely negative consequences for the Middle East (West Asia) and North Africa and the Sahel region. It was noted that the military intervention into this country in 2011 led to the collapse of integrated state institutions, which in turn resulted in the rise of activities of terrorist and extremist groups.

They stressed their commitment to the unity, sovereignty, and territorial integrity of Libya. They expressed their support for the steps undertaken by Libyan authorities in combating the terrorist threats. They reaffirmed the need to overcome the dissensions between Libyan political forces and to achieve consensus in functioning of the Government by all stakeholders in pursuance of the Libya Political Agreement (LPA), In this context, they expressed their support for the efforts by the Special Representative of the UN Secretary General for Libya Martin Kobler, neighboring countries and by the African Union. The global efforts to defeat Islamic State (IS) in Sirte, Libya were welcomed.

They expressed concern over the continuing presence of terrorist formations including ISIS in other regions of the country and they supported the UN-sponsored international efforts aimed at inter-Libyan dialogue destined to achieve creation of unified authorities based on the recognition of interests of Libyan political forces, regions and tribal groups.

BRICS Special Envoys expressed their full respect for the independence, sovereignty and territorial integrity of Iraq. They supported the efforts by the Iraqi government to combat terrorism and restore control over the territories taken by the so called Islamic State of Iraq and Levant. They stressed their concern for the humanitarian impact of the ongoing military operation for the liberation of Mosul. The participants of the meeting expressed hope that all ethnic and confessional parties in Iraq enhance national reconciliation as the only way to overcome ongoing turmoil, bring long-awaited peace and economic recovery for the Iraqi people. In this regard they called on all parties to support all-inclusive national reconciliation process in Iraq taking into account the interests of all segments of the Iraqi society. They referred to the importance of an Iraqi-led national dialogue able to strengthen the country's stability, territorial integrity and democratic institutions. They also urged the International community to provide continued assistance and humanitarian support for Iraqi refugees and internally displaced people.

They expressed their concern over the continuing armed conflict in the Yemen Republic which led to the killing of thousands of civilians, including women and children, and to the destruction of a significant part of vital civilian infrastructure, bringing the situation in Yemen to a humanitarian catastrophe. They called for urgent measures by the international community in order to ease social and economic situation in this country, unlimited access to humanitarian aid to all parts of the Yemen Republic.

In this regard the Special Envoys called for immediate ceasefire in Yemen, urging all parties to the conflict to resume the nation-wide dialogue in which representatives of Yemeni political forces and different groups of Yemeni population could participate in discussing the future of their country. The participants supported efforts taken by Mr. Ismail Ould Cheikh Ahmed in this regard.

BRICS members declared their readiness to provide relevant humanitarian aid and diplomatic assistance in resolving the situation in Yemen.

They were unanimous that the period of the fundamental transformations that is taking place in the Middle East (West Asia) and North African states should not be used as pretext to delaying resolution of long-standing conflicts, in particular the Palestinian-Israeli conflict. In this regard they confirmed their commitment to achieving a comprehensive, just and lasting settlement of the Palestinian-Israeli conflict on the basis of the universally recognized international legal framework including respective UN Security Council resolutions, the Madrid principles and the Arab Peace Initiative.

They called for an early resumption of the Palestinian-Israeli negotiations aiming at establishing an independent, viable and territorially contiguous Palestinian State within the borders based on June 4, 1967 lines and with East Jerusalem as its capital. They supported the Russian role in the Middle East Quartet aimed at achieving these ends as soon as possible. They expressed their readiness to contribute on a bigger scale towards a just and lasting resolution of the Middle East conflict.

The participants of the meeting appealed to the Palestinians and Israelis to undertake positive steps towards each other to restore mutual trust and create favorable conditions for restarting talks, avoiding unilateral steps, that endanger the two-state solution, in particular illegal Israeli settlement activity in the Occupied Palestinian Territories. They stood for overcoming the inter-Palestinian split based on the PLO political platform and the Arab Peace Initiative.

They expressed the intention to convene next consultations at the level of Deputy Foreign Ministers of BRICS countries in China in 2017.

The participants of the meeting also agreed on the advisability of holding regular consultations on the Middle East (West Asia) and North Africa topics at various venues, including the UN, and confirmed their support for holding informal meetings of their representatives.
Will the World be Divided Into 3 Parts? (Разделится ли мир на три части?) / USA, April, 2017
Keywords: international relations, politics, MOAB, ISIS, opinion
Author: Dave Hodges

I am still marveling at the brilliance of Trump on how he has done what no American President has ever done, namely, align the United States military with the Chinese.


President Trump's brilliance in the art of making deal continued with the dropping of the Mother of all bombs (MOAB) on ISIS. This too, was brilliant beyond description because he covered so many bases in one fell swoop.

First, Trump demonstrated to ISIS there is nowhere you can hide and they are encountering a President that is intent on stopping their activities.

Second, Trump's move to cooperate with the Chinese military has left Russia and Iran isolated. Did you know that Russia and China actually increased their trade by 30% last year? The new reality not only threatens Russia, militarily, but economically as well. This move further emboldens Israel and increases its status in the Middle East and Trump did not even have to spend a dime of taxpayer money.

Russia can respond militarily like a spoiled brat, but they cannot win. This will force Russia back to the negotiating table, but on America's terms.

Third, the dropping of MOAB on ISIS and other conglomerations of terrorists sent another message Russia: "We can still work together". Perhaps there is wiggle room for the future of Assad. Why would I come to that? The answer is simple, North Korea was clearly sent a message by the dropping of MOAB that they face the same fate if they do not change their dangerous behavior. However, the Russians were also sent a message. The message is, we can still work together to defeat ISIS, but it will be on our terms.

Fourth, Russia can be persuaded that there is a better way for them to economically survive, than to fall on their sword for Syria and Iran. This could drive a stake through the heart of the BRICS desire to forge a gold-based currency. With China on board with the United States, Russia may also join the new hegemony and abandon the BRICS. If Russia and China abandon BRICS, who really benefits?

Fifth, If Russia and China move away from the BRICS, the real winner is the preservation of the Petrodollar and the Federal Reserve will reassert the claim that the Federal Reserve's dollar is still the reserve currency of the world. And yes, that means that ultimately, Trump is serving the needs of the Federal Reserve. Before so many of you begin to go ballistic, please remember that if the BRICS succeed, the dollar is dead and so is the value of your money. Many Americans will face a dollar de-evaluation, loss of employment and hyper-inflation.

Sixth, Trump has silenced the noise of the corporate controlled media and the ridiculous claims that his aligned with Russia. In effect, Trump just defeated Russia the globalists are thrilled for reasons listed below.

Seventh, in the immediate future, the parents of American children may have avoided a draft and facing certain death. Armageddon may not be meant for our time. However, on this point, time will tell.

Eighth, I strongly believe we could be looking at a new evolutionary development in the New World Order. Please remember there are always two sides to every coin. Therefore, there is a downside to Trump's brilliance to make the deal of the millennium. In examining these developments, if Putin andh the Russian oligarchy capitulates and Iran goes through a regime change, it will mark a time when a three-headed beast will rule this planet. China, Russia and the United States could easily form a "corporate merger" of sorts and divide up the resources of the planet into thirds. And it's not like Russia has a choice, they have been isolated both politically and militarily. The central banks would still be in play as well. The New World Order will not be dead, it will have morphed into the proverbial three-headed monster. I do not necessarily believe that this is Trump's intention. However, under the rule of unintended consequences, this is what may arise. And if one thinks that this permanently removes the possibility of war, I think it increases the likelihood, but at a later time because, for now, the consolidation of divided resources will be the focus. Yes, Russia can and will be bought


Trump may very well have forestalled an all-out nuclear war, maybe. And that is a very big maybe. However, he has no ability to eradicate the New World Order. This will not happen until the Second Coming of Christ and we are two days away from celebrating the Resurrection of Christ and his final triumph over Satan and his New World Order minions. Happy Easter weekend to all my Christian brothers sisters. The final victory will be ours.

Russia boasts of 'unprecedented' ties with China (Россия хвастается беспрецедентными связями с Китаем) / USA, April, 2017
Keywords: International relations, China, Russia, politics
Author: Damien Sharkov

Relations between Russia and China have reached an "unprecedented" high, Moscow's Ambassador to Beijing told state news agency Itar-Tass.

"Relations between Russia and China are at an unprecedented level," Ambassador Andrei Denisov said Wednesday. "The closeness of our contact is off the charts."

Moscow has gone to great lengths to affirm its relationship with the economically prosperous China, particularly since 2014 when Russia's annexation of Crimea from Ukraine dramatically worsened its relationship with European states. Last year Russia and China launched a mass naval drill together in the South China Sea.

Over 50 Russian federal entities have "brotherly" ties to Chinese provinces, Denisov stated, adding that contact will only grow in the run-up to September 2017's BRICS summit of emerging national economies in Xiamen, Fujian Province, in eastern China, which encompasses Brazil, Russia, India, China and South Africa.

Through participation in the BRICS group and the Shanghai Cooperation Organisation, as well as political delegations to China, Russia has sought to present China as a major partner. According to state polls, the majority of Russians now consider China a strategic and economic partner.

Despite relative closeness on planned energy and trade projects, analysts remain skeptical about the level of trust between Moscow and Beijing for any long-term political commitments.
South African Deputy Foreign Minister in India for BRICS Meeting (Заместитель министра иностранных дел Южной Африки в Индии на встрече БРИКС) / South Africa, April, 2017
Keywords: South Africa, meeting, world of work, international relations, UNO
South Africa

Pretoria, Apr 11 (Prensa Latina) The South African Deputy Minister of International Relations and Cooperation, Nomaindia Mfeketo, travelled to the port city of Visakhapatnam, India, to attend the meeting of the BRICS on the Middle East and North Africa today.

The meeting of Deputy Foreign Ministers of the Brics (Brazil, Russia, India, China and South Africa), will be discussing until Wednesday morning political development in those geographical areas and the perspectives of resuming the peace process in the Middle East, according to an official note.

They will also address the need for periodic consultations on the situation in other multilateral fora, including the United Nations Organization.

South Africa will host the next similar appointment in 2018, during his tenure as President of the Brics.
BRICS should make more efforts to end terrorism: Andhra CM (БРИКС должен приложить больше усилий, чтобы положить конец терроризму: Андхра СМ) / India, April, 2017
Keywords: cooperation, international relations, politics

He was speaking after inaugurating a two-day conference being attended by special envoys of the five-nation economic bloc The meet is discussing the prevailing situation in West Asia and the impact of terrorism, among other issues

(Eds: Updating with more quotes and details)

visakhapatnam, Apr 11 Andhra Pradesh Chief Minister N Chandrababu Naidu today called upon the BRICS member-nations to "put more efforts" to end terrorism and encourage peace.

He was speaking after inaugurating a two-day conference being attended by special envoys of the five-nation economic bloc. The meet is discussing the prevailing situation in West Asia and the impact of terrorism, among other issues.

"Human beings are suffering a lot due to terrorism, which has no boundaries. Terrorists were making use of technology to carry out their activities," Naidu remarked.

"I request you all to put more efforts to end terrorism and encourage peace," the Chief Minister added.

A senior official of the India's Ministry of External Affairs (MEA), which is organising the event, said the meeting primarily focused on West Asia.

"The BRICS nations are discussing the problem areas in countries like Iraq, Yemen and Libya, how terrorism has been impacting them and other nations and the Middle-East (West Asia) peace process.

"The deliberations will continue tomorrow as well after which we will come out with our observations," the MEA official told PTI.

The Indian delegation to the meet is headed by Amar Sinha, Secretary (Economic Relations) in the MEA.

Deputy Foreign Minister and special representative of the President Mikhail Bogbanov (Russia), Ambassador and Head of Department (Middle East) Ligia Maria Scherer (Brazil), Special Envoy (Middle East) Gong Xiaosheng (China) and Deputy Foreign Minister Nomaindiya Katherine Nfebeto (South Africa) are heading their respective delegations.

BRICS is an association of five major emerging economies - Brazil, Russia, India, China and South Africa.
West Asia situation dominates BRICS meeting (Ситуация в Передней Азии доминирует на встрече БРИКС) / India, April, 2017
Keywords: International relations, meeting, cooperation, ISIS
Author: Santosh Patnaik

Envoys favour common strategy to protect the interests of member-nations

Unabated terrorism, ISIS and role of technology, and luring of innocent youth through Twitter, Facebook and other micro-blogging sites dominated the discussions on the first day of the two-day meeting of BRICS envoys here on Tuesday.

The meeting, among other things, discussed the evolving situation in the West Asia, the peace process and the current stage, conflicts in Syria, Libya, Iraq, Yemen, and Palestine.

It also discussed the latest terror activities and the status of implementation of the UN Security Council resolutions to check terrorism.

"Terrorism, terror funding, use of latest technologies by terror networks, and the current situation are being discussed at the Visakhapatnam meeting," Joint Secretary (West Asia and North Africa) B. Bala Bhaskar told The Hindu.

He said that the situation was fast deteriorating, and no one was able to know who was bombing whom due to the alarming rise in terror strikes by suicide bombers and other tactics to strike terror.

Mr. Bhaskar said that they would deliberate on the need to evolve a common strategy to safeguard their interests in such deteriorating conflict situations.

"The Syrian crisis is creating a complex and humanitarian crisis. The situation is fragile in Iraq as a state of turmoil is witnessed there," he said.

"We exchanged our views on the prevailing situation and underlined the need for an integrated effort for finding solutions," he said. In West Asia and North Africa, 50 million Indians are working.

Humanitarian help

"We are dependent on the West Asia for import of 80% of our crude. Our humanitarian effort in rescuing seven million people stranded in the civil war areas in Iraq, Yemen, North Africa, and Libya is well acclaimed," Mr. Bhaskar said.

He said that they had already launched a joint initiative by forming a working group of BRICS member-countries on counter terrorism. He said India had sent medicines worth $1 million to Somalia and South Sudan, extended aid worth $50 million to Palestine in the field of education and training and Letter of Credit to several strife-torn countries.

Alok A. Dimri, Joint Secretary (Multilateral Economic Relations), MEA, later said BRICS was regularly taking stock of the situation in various regions to take joint action to protect the interests of the member-countries.
Start of BRICS Gold-Backed Trade Pushing Deep State Desperation at All-Time High (Начало торговли золотом в БРИКС ускоряет безрассудство в силовом блоке, как никогда ранее) / Philippines, April, 2017
Keywords: International relations, gold trade, politics, global governance

It appears that the real reason why has Trump capitulated to the Deep State so quickly is the final BRICS leadership's decision to start the dumping of the fiat dollar in matters of mutual trade and economic cooperation between the BRICS member countries.

This measure puts Donald Trump's most ambitious campaign promise of "Making America Great Again" through economic recovery and military upgrade in grave danger, as the BRICS Alliance starts requiring the US government to pay for BRICS resources with real, hard currencies only.

Recently, Russia and China moved ahead with the establishment of reciprocal clearing centers in Moscow and Beijing.

China Opens Moscow Clearing Bank for Handling Transactions in Yuan
17:12 27.03.2017

The creation of the clearing center enables the two countries to further increase bilateral trade and investment while decreasing their dependence on the US dollar. It will create a pool of yuan liquidity in Russia that enables transactions for trade and financial operations to run smoothly.

In expanding the use of national currencies for transactions, it could also potentially reduce the volatility of yuan and ruble exchange rates.

The clearing center is one of a range of measures the People's Bank of China and the Russian Central Bank have been looking at to deepen their co-operation.

This highly coordinated dollar dumping was inaugurated 10 years ago in 2007, to give the West enough time to adjust to the new reality that the East could no longer sit idly by as the other side continues with its regressive foreign policies, and capped by a massive display of cultural strength meant to correct the false technological claims of the West, during the Beijing Olympics a year later.

Incidentally, what was to be a gradual move from fiat to gold-backed currencies still resulted in the 2008 Western financial crash, massive resignations of the banking CEOs in 2012 [here], Libor and other interest rigging investigations, and finally, the unprecedented Papal resignation of Benedict XVI in 2013.

Considering the sheer size of the BRICS economies, this decision to dump the dollar should put the Khazarian Mafia where they should be, i.e. dustbin of irrelevance.

Good as Gold: Why Russia and China Are Busy Buying Bullion

"Market watchers believe even that amount of gold in China's central bank vaults is being politically vastly understated so as not to cause alarm bells to ring too loud in Washington and London," Engdahl remarks.

… "The currencies of Russia, China and other Eurasian countries are moving to become as 'good as gold,' a term applied to the US dollar some six decades ago. The fact that Russia also has an extremely low debt-to-GDP ratio of some 18% compared to 103% for USA and that of the EU Eurozone countries of 94%, of Japan more than 200% of GDP, is a fact that Western rating agencies engaged in the US Treasury's financial warfare against the Russian Federation conveniently ignore," Engdahl concludes, stressing that Russia's is currently more healthy than that of the Western developed countries.


The China-Russia enviable cooperation spans from agriculture, trade and finance, to military and energy. The first $400 Billion energy project between China and Russia has rendered all control mechanisms and economic sanctions of the West irrelevant [here].

So that, it did not come as a complete surprise when Vlad himself boldly proclaimed to dump the dollar, in 2015.

Covert GeoPolitics

Russian President Vladimir Putin has drafted a bill that aims to eliminate the US dollar and the euro …

10:52 PM - 13 Apr 2017
In contrast, the Western oligarchy, with its deteriorating global influence, has to survive with their imaginary wealth that are existing only in computer bits and fancy paper formats, while maximizing the use of their military firepower, like what they are doing now in Syria, Yemen, Afghanistan, and Central Africa, to sustain itself.

In Yemen, while the House of Saud may be cooperating with the Khazarian plan to weaken Iranian influence there, King Salman is also busy diversifying his kingdom's portfolio by investing in East Asian countries, with only few takers. This it does as a desperate follow up to its failed "Samson Option" massive increase in oil production to bring down all of its competition, Russia, Iran, Venezuela and the US, more than a year ago.

What this means is that the House of Saud is ready to switch sides at any moment's notice. But Russia, like China, can only give the Saudis its calculated engagement in much the same way that it deals with Turkey. After all, Russia is already assured of its economic survival within the BRICS alliance and its enhanced engagement with its far eastern neighbors, the ASEAN community.

This long awaited move to trade exclusively in sovereign currencies is meant to put a choke hold on the rouge serpent from the other side, end all its wars of aggression, and put all the planet's resources towards its own prosperity. This goes off tangent with the Dark Side's wishes for mankind to eliminate themselves. All wars must go on, Mr. Trump.

Richard N. Haass
✔@RichardHaass For Syria, regime change should be long-term aim; near term objectives should be going after isis & building friendly Sunni rebel strength

6:42 PM - 9 Apr 2017
Recall that the move to turn away from the real economy was made by the West. It was meant to force Western economic independence from the resource rich Asia, after they have secured a sizable amount of sovereign wealth from Asia, during the time of John F. Kennedy.

Since US President Nixon unilaterally abrogated the 1944 Bretton Woods Treaty in 1971 the US dollar has been no longer backed by gold; however, gold still remains as a store of value which paper money cannot compete with.

"In times of world financial crisis as in the 1930's, gold is preferred by central banks and ordinary citizens as a store of value when paper money loses value. We are approaching another of those times when the accumulated paper debt of the dollar system is debasing the worth of paper dollars. What's highly significant in this light is to see which central banks are buying all the gold they can get," American researcher, author and strategic risk consultant F. William Engdahl writes in his article for New Eastern Outlook.


Any attempt by the US controlled economies to return to their sovereign currencies through gold repatriation from Federal Reserve, were met with economic hitmen, outright executive assassins, and color revolutions. There's a growing concern that the Federal Reserve, which has refused to be audited since 1953, actually don't have the sovereign gold bullion in its possession.

It is also the West which reneged on that solemn pact agreed upon between the two sides, more than a hundred years ago, that the latter will use its technological expertise for the collective advancement of humanity using the mineral and human resources of the East.

They have overplayed their card. Instead of using their technological advancements for the good of all, they continually engage themselves in external regional conflicts that their own agencies have cultivated years prior.

The continued use of US military firepower is also meant to destroy the American reputation around the globe, while at the same time adding to the financial muscle of the military industrial complex owned by the same bloodlines sucking everyone's blood, no exception. Protestant America must be destroyed, too, along with other renegade governments, at all cost, for the glory of the Vatican Vampire, and the Khazarian Pyramid of Cartels.

The silver lining about all of this is that the people now have enough data to evaluate for themselves which system is better, what other geoeconomic concepts need to be implemented, and which geopolitical faction will likely fulfill their wishes and aspirations.

Not that the multimedia cartel is not doing all it can to subvert the Great Awakening.
Tech giant Google has rolled out a new feature that can purportedly discern fake news from fact… Dr. Robert Epstein from the American Institute for Behavioral Research and Technology about this feature and the dangerous implications of corporations having the power to define reality.

Epstein explained that Google has long been experimenting with different ways by which it can manipulate search results, even before the concept of fake news became popular during the last election.


They can always try, but the cat is already out of the bag. But who knows they might succeed still, considering the amount of attention that the Flat Earth theory is gaining. Yes, the mainstream media have now gone 180 degrees with their silly brand of conspiracy theories, e.g.

… in much the same way as the Western fiat financial machinery has gone full reverse from their own brainchild known popularly as capitalism.

During the last Davos Summit, no less than Chinese President Xi Jinping made what amounts to a victory speech by professing the virtues of capitalism, as the West moves towards socialism with their pilot "cashless society" and universal basic income [UBI] projects, while China continues to remove its remaining protectionist policies. In short, China today is far more capitalist than the West, financial experts noted.

What this means is that the Western Oligarchy has been defeated in its own game, but it must remain in power with the use of imaginary private wealth that its own citizens know nothing about, at least the majority of them.

The move towards digitized imaginary currencies lends perfectly to the planned dictatorship with the full application of invasive technologies, which incidentally, China is helping to bring about.

All Systems Go: China Spearheads New AI with Chip That Simulates Human Brain

Chinese researchers are developing an advanced artificial intelligence processor that is expected to help China launch its foray into the global chip market; a whopping 1.4 million dollars has already been earmarked for the purpose by the Chinese Academy of Sciences, according to Xinhua.

… The new AI processor is named after the Cambrian Period of geological history, which saw life on Earth become infinitely more diversified and sophisticated.

It is due to provide tremendous assistance in simulating the functioning of human nerve cells.

Xinhua quoted the Chinese Academy of Sciences as saying that the Cambrian chip "is expected to be the world's first processor that simulates human nerve cells and synapses to conduct deep learning."


There are many ways that the Chinese could play this up. More than the financial gains that it may benefit from selling it to the West, which for far too long wanted to transhumanized its population, at a competitive price, it may also use it to actually enhance the physical and mental capability of the Chinese people to gain a considerable advantage against their Western counterparts.

Nobody should underestimate the real intentions of the real Masters of the Art of War. By extension, of course, China may also gain the ability to have a more efficient control over their behavior, 1.387 billion of them.

What is so glaring is that, while the West is purposely dumbing down its citizens, China and the rest of Asia are not. According to a PISA exam conducted worldwide in 2015, covering 540,000 students, the US saw an 11-point drop in average score for math [fell to 35th rank from 28th], while remaining relatively flat in reading and science. What country is at the top?

It's Singapore, followed by Hong Kong, Macao, Taiwan, Japan, China, Korea, Switzerland, Estonia and Canada completing the Top 10 rankings in Math proficiency [here].

In addition to the above facts on global literacy, the BRICS members have increased investments on its R&D,
The BRIC countries of China, India and Brazil account for much of the dramatic increase in science research investments and scientific publications. Since 2002, global spending on science R&D has increased by 45 percent to more than $1,000 billion (one trillion) U.S. dollars. From 2002 to 2007, China, India and Brazil more than doubled their spending on science research, raising their collective share of global R&D spending from 17 to 24 percent.

China's development planning has targeted a number of scientific fields and related industries, including clean energy, green transportation and rare earths, among others. Since 1999, China's spending on science R&D has grown 20 percent annually to more than $100 billion. By 2020, China plans to invest 2.5 percent of GDP in science research.


… and that's only from 10 years ago.

This should dispel the notion that China is part of the "problem-reaction-solution" dictum being practiced by Western rulers. In the same token, the "One Belt, One Road" economic program headed by China is not meant to implement and expand its own imperial ambitions, but to provide an alternative way for humanity to move forward, where everybody wins and benefits from our collective toil, scientific achievements and planetary resources.

In the end, it will be our collective intention and willpower which will ultimately determine where this planet is really going. And it is all up to us to decide whether to collectively play along, or assert the sovereignty of the individual.
    Why BRICS Are Bad For America: Inside The Effort To Undermine U.S. Predominance (Почему БРИКС плох для Америки: вид изнутри на попытки подорвать превосходство США) / USA, April, 2017
    Keywords: International relations, NATO, politics, global governance
    Author: Josh Kimbrell

    When most of us see the word BRICS, we simply assume that it is a misspelling of the word for building materials. Few of us think of it as an acronym for an emerging alliance of nations seeking to subvert U.S. influence, challenge NATO, and prop-up organized crime syndicates. Nevertheless, the so-called Brazil, Russia, India, China, and South African Alliance has emerged as a significant geopolitical threat to the United States and our allies. BRICS is a Chinese-Russian led coalition that is quickly seeking to serve as an authoritarian counterbalance to Western Democracy.

    Many market analysts have described the member nations of BRICS as an emerging economic block ripe with profitable opportunities. For those of us who study foreign policy, however, the actions of the BRICS alliance are alarming. Whereas member states of NATO, led by the United States, cherish the rule of law, democratic governance, and individual rights, the nations comprising BRICS are largely led by authoritarian and / or communist regimes that limit individual rights, stifle democracy, and do not adhere to free-enterprise ideals. In fact, many of the member nations of BRICS have economies in which a disturbingly high level of economic activity is derived from illegal activities ranging from money laundering to human trafficking. All the while, leaders like China's Xi Jinping and Russian President Vladimir Putin turn a blind eye to corruption and illicit activity taking place in their emerging economic block.

    The United States must continue to strengthen its global leadership and economic predominance to check the emerging economic and military threat posed by BRICS. While America has been focused, rightly so, on dealing with the threat of radical Islamic terrorism in the Middle East over the past two decades, the Russians and the Chinese have appeased them and sought to enhance their power while America has been preoccupied. It is now time for the United States to rebuild our military predominance and reaffirm our leadership of the NATO Alliance, while enhancing our bilateral relations with nations like Israel, Great Britain, and Jordan. Counterbalancing the growing authoritarian BRICS alliance is in the economic and national security interests of the United States.

    By creating a stronger pro-growth economic environment here at home, the United States can reaffirm its position as the leading world economic power. By rebuilding our military capabilities, particularly the U.S. Navy, we can continue to protect our trade routes and affirm our status as the world's sole remaining superpower. If America is not strong, then the cause of freedom will not be championed. If America is not strong, then authoritarianism and economic collectivism will continue to make gains on the global stage. While I support keeping our country from becoming bogged-down in decades-long ground wars and constant military engagements, I do oppose isolationism that will allow our enemies to undermine our influence. Only through American economic and military leadership on the world stage can we continue to protect our homeland, ensure our economic vitality, and champion human freedom.

    I pray that President Trump will "Make America Great Again," and will use our power to protect our own vital national security interests by defending our deeply held values on the global stage.
    BRICS Issues Joint Statement: Illegal Military Intervention in Syria Is Unacceptable (БРИКС опубликовал совместное заявление: незаконное военное вмешательство в Сирию является неприемлемым) / India, April, 2017
    Keywords: Joint statement, politics, Syria, international relations

    The joint BRICS statement says military action in Syria without authorization from the UN Security Council is dangerous and unacceptable

    Brazil, Russia, India, China and South Africa have issued a joint BRICS statement condemning military action in Syria that has not been authorized by the United Nations. The statement also calls for respect of international law, territorial integrity and sovereignty.

    Some highlights from the statement:

    BRICS Special Envoys on Middle East expressed their concern about internal crises that have emerged in a number of states in the region in recent years. They firmly advocated that these crises should be resolved in accordance with the international law and UN Charter, without resorting to force or external interference and through establishing broad national dialogue with due respect for independence, territorial integrity and sovereignty of the countries of the region. The participants emphasized the legitimacy of the aspirations of the peoples of the region to enjoy full political and social freedoms and for respect to human rights.

    They strongly condemned recent several attacks, against some BRICS countries, including that in the Russian Federation. BRICS members stand for consolidating international efforts to combat the global threat of terrorism. They stressed that counter-terrorism measures should be undertaken on the firm basis of international law under the aegis of the UN and its Security Council.

    In the course of the meeting, the role of the UN Security Council as the international body bearing the primary responsibility for maintaining international peace and security was underlined. It was also stressed that military interventions that have not been authorized by the Security Council are incompatible with the UN Charter and unacceptable.

    BRICS Special Envoys expressed their deep concern with regard to the continuing violence in Syria, deterioration of humanitarian situation and growing threat of international terrorism and extremism in that country.

    The participants confirmed their strong support for the sovereignty and territorial integrity of Syria and the need for a peaceful solution, led by the Syrians, to the conflict. They supported all efforts towards a political and diplomatic solution in Syria through talks based on Resolution 2254 of the United Nations Security Council. They welcomed the three rounds of talks held in Astana and the outcome of fifth round of talks in Geneva. They acknowledged that Astana talks paved the way for resumption of Geneva talks. They expressed resolve for renewed and committed efforts to find a political and diplomatic solution in Syria. In this regard, the efforts of the Special Envoy of the UN Secretary General Staffan de Mistura aimed at resumption of Geneva process were welcomed. The efforts of BRICS countries in providing humanitarian aid to Syria were welcomed. They called for continuing humanitarian assistance to Syria by BRICS countries and collaborating in the reconstruction of Syria.

    While strongly condemning terrorism in all its forms and manifestations, they called upon all Syrians to join hands in the face of this dangerous threat and urged the international community to strictly abide by all the obligations pursuant to various relevant UNSC resolutions.
    Investment and finance in BRICS
    South Africa: Despite Slipping Rand, Business Mood Upbeat (ЮАР: Несмотря на буксующий ренд, настроение бизнеса на подъеме) / South Africa, April, 2017
    Keywords: South Africa, S&P, credit ratings, economics
    South Africa

    The rand continued to slide against the US dollar a week after S&P Global Ratings downgraded South Africa to "junk" status following President Jacob Zuma's cabinet reshuffle in which five minsters were removed from cabinet and five ministers moved to new positions.

    On March 27, the rand reached a 20-month best level of R12.31 to the dollar but fell to 13.9528 on Monday morning.

    Despite the ratings downgrade and the slipping rand, the business mood remains largely upbeat.

    At a recent AHI economic conference with the theme "Creating jobs against all odds" experts acknowledged that the cost of doing business in South Africa will become more costly but that the country remains lucrative for investment.

    "South Africa is a screaming buy, as the rand is undervalued, our bond markets are liquid and efficient and offer a great return," chief economist Dawie Roodt, of the Efficient Group financial services company, said.

    Former Deputy Finance Minister Mcebsi Jonas was equally upbeat, saying that South Africa had all the policies and plans in place to grow the economy, even though he was personally outraged by the manner of his firing, which he learnt about through the media.

    "The main reason for the ratings downgrade was our poor growth record of the past few years, but I am optimistic that growth is now on an upward trend. Once we have growth then a lot of our problems are easier to deal with," he told an informal media briefing after he gave his keynote speech.

    In his speech, Jonas highlighted four constraints on small businesses in South Africa. The first was market structure as South Africa's economy suffered from a high concentration in certain sectors. That meant that it was highly unequal and concentrated resulting in South Africa being stuck in a low-growth trap.

    The second was the poor education and training outcomes. This meant that small businesses were unable to source the skills they needed, while many people who been trained were unable to get a job, as they did not meet employer expectations.

    "What needs to happen here is that businesses need to be more engaged in designing the education and training curriculum so that we can match skills provided

    to those required," he said.

    The third was government support for small businesses. In particular Jonas noted that where government support for small businesses worked around the world there was active engagement between government and business.

    The fourth constraint was the lack of network support, as small businesses lacked the resources to become part of the value chain.

    "Small businesses should not underestimate the energies and activities of business organisations. It was very powerful to be better organized, so when I worked with the jobs fund it was eye-opening to see how powerful the franchise network was. In that respect the AHI has a great advantage as it brings small and large businesses together," he said.

    AHI President Bernard Swanepoel said the mood was upbeat because entrepreneurs are born optimists.

    "We must lift our heads and get out of despondency," Swanepoel said.

    "Be vocal. Be loud. Big business and government must pay their invoices! We will name and shame late-payers," he said as small businesses struggled to get their invoices paid within 30 days which threatened their survival.

    This sentiment was echoed by entrepreneur Marnus Broodryk who said entrepreneurs looked for solutions in adversity, not handouts.

    "International entrepreneurs see opportunities here, but we don't create enough of them for ourselves," he said. He added that South African small businesses should be services exporters to the world.

    Entrepreneur Annie Malan said entrepreneurs were resilient and adaptable.

    "Entrepreneurs jump off the cliff and make their parachutes on their way down," she noted.
    Meirelles: "Brazil is on the way out of its biggest recession in history" (Мейрель: «Бразилия находится на пути выхода из своего крупнейшего спада в истории») / Brazil, April, 2017
    Keywords: Economy, Brazil, crisis, GDP

    Finance Minister explained what happened with Brazil's public accounts and how the country is now begininng to leave recession towards a scenario of economic growth

    Finance Minister Henrique Meirelles has said that Brazil is on the way out of the country's biggest recession since the country has begun keeping track of its Gross Domestic Product (GDP). According to him, the reversal from the negative scenario was brought by an improved public spending environment, without the need to create more taxes.

    "In recent years, the country faced a crisis, the economy went into a downturn, corporate profits were down, the primary balance was down," the minister reported. "The most important thing is that the deficit is now falling, and that we are coming out of the biggest recession Brazil has faced since we started measuring GDP over a century ago," he argued.

    Meirelles noted that the country has improved all economic results, and that soon public accounts are going back to equilibrium and the economy will grow again. "As the country grows, creates jobs and generates income, people begin paying more taxes, and with it we expect [public accounts] to gradually get better as a result," he said.

    Spending cuts

    He recalled that the government is making this transition from recession to growth without increasing taxes and the burden on society. The path chosen to change the country's scenario, according to the Minister, was to cut costs and make public administration more efficient.
    Central Bank makes biggest rate cut in eight years (Центробанк добился максимального снижения ставок за восемь лет) / Brazil, April, 2017
    Keywords: Brazil, economics, rate cut, finance

    Institution decided to reduce Brazil's basic interest rate from 12.25% to 11.25% p.a. Market expectation is for more cuts aiming at a rate of 8.5% p.a.

    For the fifth consecutive time, the Central Bank has decided to reduce Brazil's basic interest rate. On Wednesday (12), the institution slashed the Selic from 12.25% to 11.25% p.a. - the biggest single cut in eight years.

    The unanimous decision taken by Central Bank accelerates the pace of interest cuts: in its last meeting, the board had opted for a more conservative 0.75 p.p. decrease instead of the 1 p.p. cut announced today. With the measure, the Selic fell to its lowest level since October 2014, when it stood at 11% p.a.

    In a statement following the decision, the institution explained the reasoning by the Monetary Policy Committee, which believes that the trend in inflation, expected to recede to levels around 4.5%, is consistent with a monetary easing (rate cut) process.

    Understanding the inflation targeting system

    Brazil has instituted an inflation targeting system in order to prevent prices from uncontrolled increases. Under the system, the National Monetary Council (CMN), a body that comprises several ministers, defines an inflation target that must be pursued by the Central Bank. In 2017, the inflation target is at 4.5%.

    The target is conceived to allow for a 1.5% margin of manoeuvre in order to accommodate possible crises and price shocks. Therefore, in exceptional circumstances, the IPCA (Brazil's Consumer Price Index, the official inflation rate) may vary between a maximum of 6% and a minimum of 3%.
    AIIB and its impact on BRICS' NDB (АИИБ и его влияние на НБР БРИКС) / India, April, 2017
    Keywords: banking, AIIB, New Development Bank, World Bank, investments and finance
    Author: Vikram Nagvanshi

    The Asian Infrastructure Investment Bank (AIIB) is a multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region. The bank has 52 member states while another 18 are prospective members (as of March 2017) and was proposed as an initiative by the government of China. The initiative gained support from 37 regional and 20 non-regional Prospective Founding Members (PFM), all of which have signed the Articles of Agreement that form the legal basis for the bank. The bank started operation after the agreement entered into force on 25 December 2015, after ratifications were received from 10 member states holding a total number of 50% of the initial subscriptions of the Authorized Capital Stock. Major economies that did not become PFM include the G7/G8 members' Japan and the United States, although Canada applied for membership on 23 September 2016.

    The United Nations has addressed the launch of AIIB as having potential for "scaling up financing for sustainable development" for the concern of global economic governance. The capital of the bank is $100 billion, equivalent to 2⁄3 of the capital of the Asian Development Bank and about half that of the World Bank. The bank was proposed by China in 2013 and the initiative was launched at a ceremony in Beijing in October 2014.

    The proposal for the creation of an "Asian Infrastructure Investment Bank" was first made by the Vice Chairman of the China Center for International Economic Exchanges, a Chinese think tank, at the Bo'ao Forum in April 2009. The initial context was to make better use of Chinese foreign currency reserves in the wake of the global financial crisis.

    The initiative was officially launched by Chinese President Xi Jinping on a state visit to Indonesia in October 2013. The Chinese government has been frustrated with what it regards as the slow pace of reforms and governance, and wants greater input in global established institutions like the IMF, World Bank and Asian Development Bank which it claims are dominated by American, European and Japanese interests.

    The Asian Development Bank Institute published a report in 2010 which said that the region requires $8 trillion to be invested from 2010 to 2020 in infrastructure for the region to continue economic development. In a 2014 editorial, The Guardian newspaper wrote that the new bank could allow Chinese capital to finance these projects and allow it a greater role to play in the economic development of the region commensurate with its growing economic and political clout.[17] But until March 2015, China in the ADB has only 5.47 percent voting right, while Japan and US have a combined 26 percent voting right (13 percent each) with a share in subscribed capital of 15.7 percent and 15.6 percent, respectively. Dominance by both countries and slow reforms underlie China's wish to establish the AIIB, while both countries worry about China's increasing influence.

    In June 2014 China proposed doubling the registered capital of the bank from $50 billion to $100 billion and invited India to participate in the founding of the bank. On 24 October 2014, twenty-one countries signed a Memorandum of Understanding (MOU) regarding the AIIB in Beijing, China: Bangladesh, Brunei, Cambodia, India, Kazakhstan, Kuwait, Laos, Malaysia, Myanmar, Mongolia, Nepal, Oman, Pakistan, Philippines, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam. Indonesia's joining was slightly delayed due to their new presidential administration not being able to review the membership in time. Indonesia signed the MOU on 25 November 2014.

    For India what impact will be generated by AIIB is not much and everything lies in futures pocket. Even a battle have been seen inside country when for representing India on opening ceremony of AIIB in Beijing 21, India was represented by a joint secretary in the ministry of finance. The decision to send a joint secretary was preceded by a turf battle between the ministry of external affairs (MEA) and the ministry of finance (MOF). MEA pushed for an official from the Indian Embassy in Beijing to represent the government. MOF staked its claim as the nodal ministry for multilateral development banks and won that tussle. AIIB could provide long-term funds for India's infrastructure needs and going forward India should pay considered attention to this institution.

    Not only India even US tried to dissuade its Western friends from joining AIIB but even its closest ally the UK decided to break ranks with it. This is the first time that three out of five permanent members of the UN Security Council (China, UK and France) and four out of seven G7 members (UK, France, Germany and Italy) have defied the US in the setting up a new multilateral development bank.

    Developed Western countries never shown show much interest in becoming members of the New Development Bank (NDB) or the Contingent Reserve Arrangement (CRA) to be set up by the five BRICS nations. China appears to be more focused on getting AIIB up and running. The $50 billion AIIB will be headquartered in Shanghai like the NDB but China will be the dominant share-holder with 49 per cent equity unlike the $10 billion NDB in which the five founder countries have 20 per cent stakes each.

    India's relations with China are complicated by sensitive bilateral and wider strategic issues. And, there is not much that India can do if China goes slow in making NDB operational since it is China's economic size and hard currency reserves which could enable NDB to be a major lender. China may prefer to begin with AIIB lending to countries in central Asia and perhaps later use NDB to lend to African or Latin American nations. However, the resulting loan portfolios would raise the exposure of these two institutions to high concentrations of country creditworthiness risk. India could keep its interactions with AIIB and NDB tied closely to its obvious strength as the potentially largest creditworthy borrower.

    The World Bank and the ADB have flourished so long because they targeted their cost plus IBRD type lending initially to larger creditworthy borrowers such as India and subsequently China. The poorest countries have mostly received concessional IDA loans which are funded out of grants from developed countries. Borrowers usually baulk at defaulting to Bretton-Woods institutions as even short-term credit from Western commercial sources would not be rolled over, if they did.

    China, with a one-party totalitarian communist system, has shown remarkable flexibility and competence in becoming the world's largest economy in purchasing power parity terms (China GDP: $17.6 trillion; US GDP: $17.4 trillion in 2014. Source: IMF). Although China's economic weight continues to grow its clout in Asia is tempered by its territorial and other differences with several neighbouring nations. A counterpoint is that most Asian countries have higher volumes of trade with China than the US.

    The immediately relevant issue for the US is an erosion in the dominance of the IMF, World Bank and ADB if the CRA, AIIB and NDB grow in size over time. After former IMF managing director Dominique Strauss-Kahn left in disgrace in mid-2011, it was apparent that there were several non-G7 country candidates who were well qualified to replace him. However, yet another European (French) national was appointed. Since then, the US Congress has persistently stood in the way of IMF quota reforms. The principal shareholders of these multilateral institutions refuse to acknowledge that Asian nations are appalled by the lack of transparency in appointments at senior levels and the way these institutions are managed at times. For instance, the World Bank violated its Articles of Agreement in denying India fresh loans after India tested nuclear weapons in May 1998. As per its Articles, political issues should not influence the World Bank's lending policies.

    The US has suggested that the AIIB will not follow the high lending standards of existing multilaterals. The World Bank's lending policies were covered in full page advertisements in Washington DC based newspapers about 15 years back when the bank felt it was under unfavourable scrutiny of the US Congress. These advertisements stressed that IBRD loans are used by borrower countries for imports from the US. As for the IMF, it has announced loans to Ukraine and earlier to EU countries somewhat hurriedly. Irrespective of whether these lending decisions were justified or not the IMF should follow the same procedures as it did for Asian nations in the late 1990s.

    The World Bank has moved far away from when it used to proactively fund long gestation infrastructure projects. Consequently, AIIB would try to step into that role. The World Bank and ADB now seem to be too driven by the sensibilities of NGOs in developed countries on sustainable development issues. This is not to suggest that such considerations should be ignored. However, should multilateral development banks unilaterally refuse to fund projects in the hydroelectricity-irrigation, thermal and nuclear power sectors? To conclude, any initiative taken by AIIB or NDB to be open-minded about loans for projects in such sectors, in consultation with borrower countries, is likely to be welcomed.

    --compiled by Vikram Nagvanshi based upon various official websites of these institutions.
    The BRICS alternative to monopoly of 'BIG THREE' Rating Agencies (Альтернатива БРИКС монополии рейтинговых агентств Большой тройки) / South Africa, April, 2017
    Keywords: investment and finance, financial system, credit rating agency
    South Africa
    Author: Sello Rasethaba

    Recent events regarding the downgrade ratings verdict on the South African economy by Standard and Poor's (S&P) have brought into sharp focus the need for alternative rating structures that would provide checks and balances on the operations of 'Big Three' global credit ratings agencies.

    This, whilst watering down the monopoly of the 'Big Three' —U.S.-based S&P, Moody's, and Fitch Ratings— to assess the capacity of sovereign states to meet their credit obligations.

    The need to ensure an objective and truly credible sovereign debt assessment process could not be more pronounced than at a time when the private ratings agencies have come under intense scrutiny in the wake of the global financial crisis.

    Meant to provide investors with reliable information on the riskiness of various kinds of debt, these agencies have instead been accused of exacerbating the financial crisis and defrauding investors by offering overly favorable evaluations of insolvent financial institutions and approving extremely risky mortgage-related securities.

    Without going into the circumstances, merits or de-merits of the recent South Africa specific verdict, such a need for an alternative and improved professional credibility in the role of ratings agencies, is that it is the ordinary citizens that ultimately have to bear the brunt of the effects of a sovereign downgrade.

    Suffice it to say the the BRICS Rating Agency is one such entity that seeks to weaken the monopoly of the 'Big Three' global credit rating agencies. At BRICS, similar concerns were raised with regard to problems related to the 'Big Three' Credit Rating Agencies. Consequently, BRICS countries have come up with the concept of an alternative credit rating agency – the BRICS RA.

    The following historical background to the issues may assist the uninitiated.

    In 2009, President Obama released a proposals to reform credit rating agencies and in particular, the "other services" considered key contributors to the financial crisis of 2008. The proposal sought to limit conflicts of interest by barring rating firms from consulting with companies they rate and requiring corporations to disclose 'pre-ratings' obtained from credit rating agencies before a rating firm is selected to conduct a rating.

    As part of the approach, investors would have access to all the pre-ratings a corporation received for a particular security before a final rating firm is selected. That seeks to eliminate the problem of 'ratings shopping' in which a corporation solicits preliminary ratings from multiple agencies and only then pays for and discloses the highest rating it received. The White House also proposed to have the Securities and Exchange Commission set up a special office to watch over rating agencies.

    In Europe, the 'Big Three' garnered further controversy over their sovereign debt ratings. While the public debt of crisis-hit countries like Greece, Portugal, and Ireland was relegated to 'junk' status, the agencies also downgraded the creditworthiness of France, Austria, and other major Eurozone economies. EU officials argued that these moves accelerated the Eurozone's sovereign debt crisis, leading to calls for the creation of an independent European ratings agency.

    Meanwhile, the BRICS RA first emerged during the 2015 BRICS summit held in Ufa in Bashkortostan, Russia. Following the summit, the concept was deliberated upon by the BRICS Business Council.

    In 2016, under India's chairmanship, the EXIM Bank of India appointed CRISIL Ltd, (Infrastructure Advisory division), to develop a research paper studying the modalities of such an alternative rating agency.

    It found that emerging economies, including BRICS countries, have immense funding requirements, especially in core sectors such as infrastructure. The funding cannot be met by banks and multilateral agencies alone. Robust capital markets are critical for financing growth and bond markets are a key component of that imperative.

    The BRICS Business Council concluded that the BRICS RA will aid the BRICS nations' efforts to raise funds for such development from capital markets and develop their bond markets. The BRICS RA will offer an emerging markets-focused credit evaluation framework for investors to evaluate and compare the credit risk of projects across emerging markets. The BRICS RA will have a methodology that will not only incorporate existing methodologies employed by the other rating agencies but also be more comprehensive, and will include insights based on its analysts' experience and knowledge of BRICS and emerging markets. Global investors will therefore be able to follow the rating scale offered by BRICS rating agency to get a finer distinction of credit quality on a much wider list of companies, banks, insurance companies and government owned entities within the emerging market space. This will enhance information availability of fixed income assets from these countries, thus providing issuers, investors and regulators a better appreciation of relevant risk factors and making the asset class a more attractive investment opportunity from a global perspective.

    The need for the BRICS RA is further supported by the following factors:

    • Sharper differentiation in credits across the emerging markets space is needed to facilitate flow of funds to these markets
    • Will enable cross-border funding within the BRICS Countries
    • Will add an emerging market lens in overall credit evaluation to facilitate flow of funds to these markets
    • Will enable cross-border funding within the BRICS Countries
    The initial conclusion is that the BRICS RA will initially offer ratings on foreign currency bonds issued by BRICS entities, foreign currency loans extended by multilaterals and development banks to projects in BRICS. Gradually, it will engage with banks and financial institutions to evaluate their foreign currency loans given to cross-border projects or for expansion in emerging markets. Over time, the BRICS RA will expand its operations to emerging markets outside of the BRICS, and add ratings of securitisation instruments of financial institutions, mutual funds, municipal bonds and claims-paying ability of insurance companies.

    By facilitating inter-regional investments within the BRICS nations, the BRICS RRA will encourage the development of a common bond market for BRICS which will benefit all member countries by augmenting existing funding avenues for corporates and deepening their existing corporate bond markets.

    The ratings methodology of the BRICS RA will focus on a comprehensive evaluation of credit risk profiles of the obligors/issuers that operate in emerging markets by benchmarking the risks and creditworthiness relative to the entire universe of issuers/obligors within the emerging market economies.

    Some of its salient aspects are highlighted below:

    • It will assign ratings on a standard rating scale i.e. ranging from AAA to D (followed by credit rating agencies across the world).
    • Ratings will be assigned only at the request of the issuer so that the issuer has the desire and obligation to provide full information to the BRICS RA. The BRICS RA will allow the issuer to decide whether to use the rating or not.
    • Country risk assessment will encompass an in-depth research of social and economic state, and political risks of the emerging market countries.
    • Ratings for issuers would not be compulsorily constrained on account of the country risk but will have the flexibility to deviate from the overall country risk. This shall primarily depend upon issuer's overall sensitivity to country risks and characteristics that demonstrate its ability to survive stress factors in event of sovereign default.
    • Benchmarking of risks across emerging market economies would be comprehensive. These will be developed through comparison of historical default rates observed in similar rated issuers on local rating scale across all countries in emerging market economies. For instance: comparison of AAA default in China vs AAA defaults in Brazil or Indonesia.
    In conclusion, critics of the 'Big Three' globally and in the emerging markets in particular have long voiced concern that the monopolisation of the sector by the 'Big Three' has created an uncompetitive environment that leaves investors with few alternatives. The BRICS RA seeks to decrease the dominant positions of the 'Big Three.'

    * Rasethaba is Chairman of the Black Business Council and serves on the Financial Services Working Group of the BRICS Business Council.
    Regional disparity of per capita income in India higher than BRICS peers: IMF (Региональное неравенство в доходах на душу населения в Индии выше, чем в странах BRICS: МВФ) / USA, April, 2017
    Keywords: Economy, India, International Monetary Fund, IMF, Per Capita Income, Regional Disparity

    India fared poorly in terms of regional disparity of per capita income among the BRICS nations.

    Moneycontrol News

    India fared poorly in terms of regional disparity of per capita income among the BRICS nations, as per a report by the International Monetary Fund (IMF). In India, the real per capita income in the richest province is 10 times higher than the poorest province, reports Financial Express.

    In comparison, the income disparity in other BRICS countries is seven times in Russia, around 4 times in Brazil and China and two-and-a-half times in South Africa. This indicates that India has witnessed uneven growth across the states and region, resulting in income disparity.

    Per capita income in the richest provinces of some BRICS economies increased more than half of that in the US (and particularly in Moscow, Russia and Sao Paulo, Brazil), while the poorest provinces failed to keep pace with them, the IMF said.

    In India, per capita income in the poor agrarian states of Bihar and Uttar Pradesh stands at Rs 36,143 and Rs 40,373 respectively for 2014-15 compared to per capita income of industrially advanced states like Maharashtra and Tamil Nadu, which comes at Rs 129,235 and Rs 128,366. The disparity increases significantly when it is compared with city states like Delhi which has per capita income of Rs 240,849 for FY14-15.

    The IMF report notes that the national averages tend to overestimate the real income in rich cities and underestimate it in poor provinces, to the extent that there is substantial variation in prices across provinces at times.

    BRICS nations experienced a period of strong income growth due to favourable external tailwinds in the early 2000s and as some of them escaped from the crises.

    IMF said that the dollar adjusted purchasing-power parity of these nations' average income narrowed the gap with the US between 2002 and 2014. During this period per capita income share of China and Russia as of those in the US rose 13 percentage points and 26 percentage points. The report indicates that regional disparity still persists in these countries.
    Why A BRICS Ratings Agency Is The Need Of The Hour (Почему рейтинговое агенство БРИКС - это сиюминутная необходимость) / India, April, 2017
    Keywords: opinion, investment and finance, India, credit rating agency
    Author: Rohit Pandey and Bhargav Dhakappa


    Apart from issues relating to methodology, the politics of credit rating are also conducted in a way that scales are tipped in the favour of certain developed countries.

    Therefore, setting up of a new rating agency to "bridge the gap in the global financial architecture" is imperative to balance the unchecked power these rating agencies possess.

    At the BRICS summit in Goa last October, five nations agreed to explore the possibility of launching a credit rating agency. The following month, S&P decided to leave India's sovereign credit rating unchanged. The way events surrounding India's credit rating have been unfolding are of great importance and significance. They point to many inherent flaws in the sovereign rating architecture.

    It has been more than 13 years since India's credit rating was last changed. The Organisation for Economic Co-operation and Development secretary general came out in support of an upgrade in India's credit rating and believes that these agencies have been "ultra-cautious" since the crisis. Credit ratings are extremely important as they influence the rate at which sovereigns borrow but also influence the private sector borrowings of the country.

    In recent times, credit ratings have become a socio-technical device of control. The sovereign credit rating market is an oligopoly, controlled predominantly by three rating agencies. The pronouncements of these rating agencies have performative effects and wield the power of becoming self-fulfilling prophecies. Once a rating is given, free market actors make investment decisions as though the country belongs to that class, even if it is contrary to reality. Given the pro-cyclical and lagged nature of ratings, these ratings soon become self-fulfilling prophecies as they impact borrowing costs and capital inflows.

    This has been seen in the case of India's ratings in the last decade. By 2003, many investors across the globe (and Moody's) realised that India was investment grade. This resulted in the net investments by foreign institutional investors (FIIs) shooting up to Rs 31,327 crore in 2003 from Rs 3,733 crore the previous year. Despite strong economic growth and external balance sheet with an improving fiscal position, it wasn't until 2007 that FIIs reached Rs 75,967 crore. Towards the end of 2006, Fitch revised India's rating to investment grade followed by S&P in January of 2007.

    The methodology of these rating agencies has been a point of contention for years. Ratings are a function of quantitative (risk) and qualitative (uncertainty) factors across numerous components such as, but not limited to, political flexibility, economic prospects, fiscal flexibility, monetary stability and external flexibility. Political and economic are clubbed together to form the institutional and governance effectiveness and economic profile while fiscal, monetary and external make up the flexibility and performance profile. These two parts are given a score each. The point on intersection of these scores after being plotted on a matrix results in the credit rating.

    While these categories are available publicly, the manner in which the quantitative and qualitative blend to arrive at scores is secret. Certain academics believe that the synthesis of risk and uncertainty by the credit rating agencies depict how well a government adheres to the logics aligned with the Anglo-American version of capitalism and not a country's unique economic landscape.

    Each country has its own unique political economy and thereby coordination and control mechanisms requiring a unique approach to assess its credit worthiness. Local contexts and conditions are dynamic and keep changing over time. S&P, in one of its research papers, acknowledges the fact that these "analytical variables are interrelated and the weights are not fixed, either across sovereigns or over time".

    'Political risks' such as the government's willingness to pay, the legitimacy of the government, keep changing over time and are not cyclical. Many of these 'political risks' are in fact 'political uncertainties' and cannot be modelled using probability distributions as there is an implicit assumption that future events will be like past events as these are built on historic data. There also is the issue of the frequency and magnitude of an event.

    The major learning from the financial crisis was the underestimation of the level of interconnectedness and its consequence. This is a result of the clock work view of the economy rather than a systems approach to the economy. It is vital to recognise that disaggregation of government into components and judging them individually will not account for the synergies between these components and their emergent properties. There are network effects in an economy which are difficult to model.

    Credit rating agencies need to factor in how resilient and networked these 'systems' are, and where they lie on the fragility and antif-ragility spectrum to arrive at a better understanding. This approach is critical as forces always put stress on the system that exceed those previously observed. This kind of mathematised thinking gives false confidence about the future based on past events.

    The track record of these credit rating agencies hasn't been great. From Enron to collateralised debt obligation to the Euro crisis, credit ratings agencies are haunted by many ghosts. Given the pro-cyclicality and time lag in their analysis, only in 25 per cent of the cases have two of the big three rating agencies cut their ratings before the correction.

    Given the reactionary approach of these agencies, they tend to downgrade countries to compensate for their inability to account for it earlier and upgrade at the earliest sign of austerity. This was seen in the case of PIGS (Portugal, Italy, Greece and Spain). What they failed to take into account is the spill over of risk that is triggered in pursuit of conforming to an Anglo-American version of capitalism. Post the crisis, credit rating agencies have said to become "ultra-cautious". This has been cited as one of the possible reasons for India's rating being constant for the past 13 years despite significant progress on various fronts (also the same reason before the upgrade in 2007).

    Apart from issues relating to methodology, the politics of credit rating are also conducted in a way that scales are tipped in the favour of certain developed countries. Some countries exercise excessive influence in the decision-making process of these ratings. In 2011, a president in one of the big three rating agencies stepped down after downgrading a developed country.

    In light of the many flaws, the commitment to explore the setting up of a BRICS credit rating agency is very crucial. Setting up of such a rating agency to "bridge the gap in the global financial architecture", as stated by Prime Minister Narendra Modi, is imperative to balance the unchecked power these rating agencies possess.

    A rating agency built on tenets such as transparency and true understanding of local political economy and frameworks, developing countries can pitch their true story to investors based on these ratings. While this endeavour is not without challenges, it is the need of hour and decades to come.
    BRICS Bank may raise funds through ruble bonds (Банк БРИКС может привлекать средства через рублевые облигации) / Russia, April, 2017
    Keywords: New Development Bank, Economics, financial system, negotiations,

    The BRICS New Development Bank is focused on financing infrastructural and sustainable development projects

    SHANGHAI, April 14. /TASS/. The New Development Bank of the BRICS group of major emerging market economies (Brazil, Russia, India, China and South Africa) is considering raising funds through the issuance of ruble-denominated bonds, Bank President Kundapur Vaman Kamath said on Friday.

    "We are looking with great interest at the local Russian currency. Last year, our team held negotiations in Russia with financial regulators," the Bank president said in reply to a TASS question during a meeting with journalists in the BRICS headquarters in Shanghai.

    "We discussed the possibilities of raising funds in the local currency through the bond issue denominated in rubles. The response was positive and now our teams are studying this possibility," he said, adding that the BRICS New Development Bank still "needs to carry out additional market research."

    "We expect to work on this issue during this year but it is early yet to give the timeframe of entering the Russian market," the BRICS New Development Bank president said.

    "The consideration of two projects in Russia is planned for the next three weeks," he said without specifying the projects.

    When asked about partners of potential projects in Russia, he said those will be either directly the borrower within the projects or the state.

    The BRICS New Development Bank is focused on financing infrastructural and sustainable development projects in the grouping's member states, as well as in developing countries.

    In 2016, the BRICS New Development Bank approved the first package of projects worth $1.5 billion in the field of environmentally friendly and renewable energy. As was reported earlier, the Bank is currently considering the issue of financing 15 projects worth over $2 billion in the BRICS member states in 2017.
    Could Brics ratings agencies take a different view on SA? (Могут ли рейтинговые агентства БРИКС по-другому взглянуть на ЮАР?) / South Africa, April, 2017
    Keywords: South Africa, S&P, credit ratings, economics
    South Africa

    University of Pretoria visiting professor, Adrian Saville, says Brics (Brazil, India, China, Russia and South Africa) rating agencies could have a different outcome than that of the big three credit rating agencies, Standard & Poor's (S&P), Moody's and Fitch Group.

    S&P and Fitch downgraded South Africa's credit rating to junk status.

    President Jacob Zuma has previously said Brics countries had taken the decision that they could rate themselves to ensure a more "balanced view".

    Saville explains the pros and cons if South Africa were to be rated by Brics rating agencies.

    "The three large rating agencies do share a single perspective. They come from similar schools of thought. So you don't get an alternative perspective and challenge to the common view." — Prof Adrian Saville, Gordon Institute of Business Science, University of Pretoria

    "A different rating agency built out of a different school of thought could certainly have merit, whether its Brics." — Prof Adrian Saville, Gordon Institute of Business Science, University of Pretoria

    "There is certainly the place for different perspectives." — Prof Adrian Saville, Gordon Institute of Business Science, University of Pretoria

    "You can go to anyone you like and ask them to assess you... but what's key in this is that the rating agencies need to have statue and gravity in the eyes of investors. It would require time for these rating agencies to establish that reputation and to be regarded as equivalent or better assessors and guiders of risk." — Prof Adrian Saville, Gordon Institute of Business Science, University of Pretoria
    Why the establishment of Brics rating agency is a delusion (Почему учреждение рейтингового агентства БРИКС - введение в заблуждение) / South Africa, April, 2017
    Keywords: opinion, investment and finance, South Africa, creadit rating agency, S&P
    South Africa
    Author: Dawie Roodt

    The subdued response to the 'catastrophe' of the ratings downgrades was simple: they simply confirmed what we already know to be true of SA

    Some commentators call our recent downgrades a "catastrophe" or a "disaster". This is wrong, of course. The downgrades simply confirm the disaster that has been unfolding in SA, particularly during the Zuma years. We are not going to experience hardships now: we have been experiencing hardships for quite some time.

    This is the reason why the financial markets reacted surprisingly mildly to the downgrades — they were already suppressed. State finances were already in slow collapse, most of the parastatals were already wrecked, the economy was already at a standstill, unemployment and poverty were already at heart-breaking levels. The rating agencies simply told us what we already knew, and, yes, it will take many years to regain an investment rating.

    This is why those that argue for the establishment of another (BRICS) rating agency are delusional. It's like hoping another scale will not show that you are fat; as if it were the scale that was responsible for your weight.

    It will take a long time before we regain our investment grade — if we ever do — because we first need to understand what the route to recovery requires. First, we need to recognise what is wrong; and second, we need to introduce policies to fix it — but for that, you need honest and competent leadership. And we lack both, hopelessly so!

    The problem is that the state is too big, and there are too many civil servants and they are mostly completely overpaid. The result is a growing tax burden, and record and rising state debt levels. This stifles economic growth and discourages risk-taking and investments.

    The parastatals, which are part of the state but pretend to be "companies" with "boards", "directors" and "chairpersons", are a complete mess. Not only do they require continuous bail-outs by the overburdened tax payer, they also cause immense damage to the economy — Eskom is a shining example. And this all adds to the woes of the fiscus.

    Labour legislation, labour relations and skills shortages are all adding to our misery. Misplaced policies rub salt into the open wounds, and there are many other obstacles that hinder growth: black economic empowerment (BEE), procurement manipulation, competition, protection of all sorts — and other policies that cause confusion, undermine SA as an investment destination, and add to the cost of doing business in the country. And then, of course, there is the endemic problem of crime, and it says something about our current plight that this problem is now dwarfed by our other economic woes and has slipped off the national agenda.

    But most of all our reputation has been shattered. Our image as a stable and safe investment destination has been demolished, our dreams have been turned into nightmares. We need to recognise these things; we need to call these things by name and we need to be honest about them — for that you need a leader!

    But that is only the first step. Thereafter, we need to devise and implement policies to fix these problems. We need to cut the civil service; we need to privatise state-owned enterprises; we need to be liberated from the burden of BEE, distortive procurement, land restitution, trade and labour policies, and much more. And we need to create a world-class skills development system. All this will take a very long time — and all this requires a leader!

    Don't blame the ratings agencies and don't blame Zuma. Although there are many corrupt and incompetent leaders to choose from, there must also be many good and competent leaders to choose from. The ANC, however, chooses Zuma and those that have the power to get rid of him now elect not to do so. Should we blame Zuma or should we blame all those complicit in his continued leadership?

    Eventually we will get the chance to be the masters of our destiny again. Who knows how much damage to our lives will have been done by then, but if we want the free and prosperous nation that so many of us wish for, we will need to make sure we choose somebody that will be honest in identifying our problems, and honest in fixing them.

    But remember one thing: this will be a hard and difficult journey, but the alternative will be worse.
    BRICS bank plans to issue rupee, yuan bonds this year: KV Kamath (К.В. Камат: Банк БРИКС планирует выпустить облигации в рупиях и юанях в этом году) / India, April, 2017
    Keywords: New Development Bank, Economics, financial system

    BEIJING: The New Development Bank (NDB) set up by the BRICS countries -- Brazil, Russia, India, China and South Africa -- plans to issue bonds this year in Indian rupee and Chinese yuan, its president KV Kamath said today.

    The bank sold its first three billion yuan ($437 million) yuan-denominated bonds in China last year in July to fund clean energy projects in member-states.

    Kamath, a former executive with India's largest private lender ICICI BankBSE 0.39 %, told the state-run Xinhua news agency that after last year's issuance of bonds, the preparation for the second batch of yuan-denominated bonds, possibly in the second half of this year, is expected to be more smooth.

    The size will be around three billion yuan, similar to the last one.

    He said the issuance will come after the bank is rated by international rating agencies.

    Between $300-500 million of rupee-denominated 'masala' bonds will be issued after July, added Kamath, who is based in Shanghai. 'Masala' bonds are rupee-denominated bonds issued outside India.

    Kamath said the NDB plans to lend $2.5-3 billion to fund 15 projects to member-states this year, up from $1.5 billion for seven projects in 2016.

    Most projects last year were connected to clean energy and transportation.

    Kamath said the loans will go to more sectors this year.

    For example, in India the bank will prioritise rural drinking water networks and infrastructure projects.

    The BRICS bank was set up with an initial authorised capital of $100 billion after leaders of Brazil, Russia, India, China, and South Africa signed a treaty for its establishment during the sixth BRICS Summit in Fortaleza, Brazil, in 2014.

    It officially opened in Shanghai in 2015.
    Political events in the public life of BRICS
    Temer sanctions bill granting rights to Brazilian women (Теймер санкционировал законопроект, предоставляющий права бразильским женщинам) / Brazil, April, 2017
    Keywords: Political events, domestic policy, Brazil, laws

    President Temer sanctioned four bills and a decree into law on the morning of Wednesday (12 April) for the benefit of Brazilian women. Accompanied by ministers and members of the Congress female caucus, the president highlighted the importance of the bills and the role of female parliamentarians in Brazilian politics.

    The first bill sanctioned inscribes Zuleika Angel Jones, also known as Zuzu Angel, one of the most important and innovative Brazilian designers, in the Book of Heroes and Heroines of the Motherland. "The addition to the Book of the Pantheon of the Homeland honous the importance of women in the life of Brazilians," Temer said. PL (for Projeto de Lei, or draft bill) No. 23/2017, in turn, amends the Penal Code to prohibit the use of shackles on pregnant women during childbirth and the postpartum period.

    Temer also sanctioned PL 24/2017, which establishes August as National Breastfeeding Month, and PL 25/2017, which amends the Statute for the Protection of Children and Adolescent (ECA) to assure nursing mothers the right to follow-up and guidance regarding breastfeeding.

    For President Temer, the bill signed into law benefits women and reaffirms their role in the development of the country. "Women are agents of change in the country. They are also the driving force behind great acts by the legislative branch over time," he said.

    In his speech during the ceremony, Temer emphasised the role of women as the main beneficiaries of social programmes. "Women have a key role in the Bolsa Família [conditional cash transfer programme], since the benefit is primarily paid to them. In the Minha Casa Minha Mida [affordable housing programme], the deed is drawn up in the name of the woman of the family. One can therefore see a recognition of the role of women, both in the Executive and Legislative."

    Defense of women

    The sanction ceremony was attended by Human Rights Minister Luislinda Valois; the Federal Attorney General (AGU), the Hon. Grace Mendonça; The Special Secretary for Policies for Women, Fátima Pelaes; and Congresswoman Soraya Santos (PMDB-RJ).

    For the Attorney General, the federal government has a "unique sensibility" in the quest for gender equality. "I congratulate this government for the search for true progress in favour of women. I also thank President Temer for being a true supporter of these measures and for the effort of doing a brilliant job for women," she said.

    On Zumencism and racist protesters (О Зума-нцизме и расистских протестующих) / South Africa, April, 2017
    Keywords: Domestic policy, opinion, South Africa
    South Africa
    Author: Kay Sexwale

    There is a phenomenon in the relationship between animals and humans, where the lines of sense and species cross. I don't know whether we can give it a name, but a typical example is a dog whistle that can be heard by dogs but is too high pitched for humans.

    It also happens sometimes in politics (not to say that people are dogs, lest I be accused of being something I am not) when an idea is simply ahead of its time or when a certain truth is being ignored and those who hear it are characterised in a certain way.

    For example, someone speaks a certain fact and we hear the truth behind it, while others simply refuse and admit themselves into another species of political animal, solely to carry on like nothing is happening.

    Perhaps the truth could be that Comrade Pravin is correct or that the marchers are right for demanding that a compromised president step down or that former President Mbeki is right for calling on MPs to vote with their conscience and not their heart or mind.

    Let's give this phenomenon a name in the political sphere: Zumencism (a defence of Zuma to the point where those who differ with you are speaking a complete new species of language or are deemed other-worldly). Adherents of the Zumencic kind are those who are now favouring the argument put forward by the president that all of us who were marching on Friday are somehow racist.

    Utter nonsense!

    Apart from a plethora of likeminded people across the races gathering around a common good – getting rid of a kleptocratic bunch of the Pied Pipers and the rats who are their enablers – these are people like this disrupting speakers at the memorial service of our beloved Uncle Kathy.

    South Africans complaining through protest is not new and should never be boxed in. Is that not one of the tactics used by our very own ANC during the struggle? Not only in this country but through the anti-apartheid movement globally. I fear we will soon see an uprising unless something gives.

    For the president to insinuate that those who were gathered at various marches across South Africa on Friday 7 April are a bunch of racists is disingenuous. Yes, racists used this opportunity of an unhappy country to further their agendas, as did our political opponents. To classify the protests and marches means that our message has just flown over his head and he suffers from Zumencism himself!

    I get it that our people have been called monkeys and other horrific names by the enemies of a non-racial South Africa. Our unapologetic stance of rolling out ANC policies such as Affirmative Action and Black Economic Empowerment has left many a bitter racist in our midst. These people, like Penny Sparrow and recently Helen Zille were racist anyway, long before the rot seeped into the very soul of our country.

    Similarly, the fight around radical socio-economic transformation is fraught with many Zumencics who are total adherents of the BRICS ideology to doing things, even though the economies in the BRIC group of nations are all significantly larger than us, as South Africa.

    Despite the very real observation, drawn by young activist Sizwe Mpofu-Walsh in a series of tweets, that the BRICS way is the political lie of the decade, the Zumencics would argue that we are not open to seeing the benefits and are being stubborn because we are beholden to capital – white monopoly capital.

    What happened to the intra-Africa trade that would unleash very real possibilities for the continent and South Africa? South-South trade that made it possible for us to keep dreaming about industrialisation beyond just talk?

    The Zumencics would argue that we are headed in that direction, despite "Brazil having an all-white conservative cabinet, China-US ties, and the yellow cake nuclear deal that Russia wants to give us." Again, Sizwe summed it up very nicely for me on Twitter, but the Zumencism is deep you see.

    It is the same Zumencism that reared its ugly head when some of us were screaming at the top of our lungs and hoped that what we thought were fellow feminists to join us in calling out a rape-accused. The cohorts of this person made the accuser's life a living hell from 2005 until she had had enough and died in the arms of loved ones in October 2016. Fezeka will not be remembered as the sweet, loving and gentle human being she was.

    The Woman's League did the unthinkable then when she cried out for help – and continues to defend the indefensible Zumencism today. I won't waste my breath commenting about the "Youth" League run by people pushing 40, howling.

    It is the same Zumencism that deludes itself into thinking that the complete capture of the state will lead to the betterment of South Africa and its poor. This Zumencism keeps popping up its ugly head when those whom we are told to regard as leaders continue to disappoint us by bum-defences and dropping rands to pick them up. The Zumencism is deep, you see.

    Perhaps we will get to the place where comrades of the ANC will go to the sense doctor and allow for a fact and research injection that would show them that the true result of Zumencism is the death of our beloved ANC.

    Comrades need to know that ANC member of Parliament Dr Makhosi Khoza speaking out is not a sign of anything wrong with her, but their inability to hear her out is a classic symptom of Zumencism.

    It is my plea that the condition I have just created is one that only exists on this column but my fear is that too many comrades have drunk at the well of Zuma and suffer from this disease – with the only thing that will wake them up is when he is all well and at home in Nkandla.

    We simply cannot stand by to watch the ANC as an opposition party for the next general election. We cannot stay silent and watch it broken down irretrievably until it is no more.

    So yes, I will continue to protest outside the Gupta compound that symbolises the gluttony and pure greed that has taken hold of our beloved land. But to classify me as a racist for it? I don't think so.

    - Kay Sexwale is a communication strategist and a political advisor.

    Next up in curbing corruption: South Africa (Следующий в борьбе с коррупцией: Южная Африка) / South Africa, April, 2017
    Keywords: Domestic policy, South Africa, anti-corruption, transparent governance
    South Africa

    APRIL 13, 2017 —Just a decade ago, five of the world's largest emerging economies – Brazil, Russia, India, China, and South Africa – began to meet and flex their collective muscle on the world stage. After all, their combined economies are nearly a quarter of global gross domestic product. They even adopted a name: BRICS.

    Since then, however, each of these countries has been forced to face a common issue: popular demand for honest and transparent governance.

    In 2011, India saw mass anti-corruption protests. In Brazil, similar demonstrations began two years later. In both of those democracies, the protests helped bring about major change in leadership and reform. In China, where villagers often rise up against corrupt local officials, the ruling Communist Party began an anti-corruption campaign in 2012. And last month, Russia saw massive anti-graft protests in dozens of cities.

    Now it is South Africa's turn.

    In the past two weeks, the economic powerhouse of Africa has witnessed some of the largest protests since the country's anti-apartheid struggle and the start of pluralistic democracy in 1994. Tens of thousands of people have taken to the streets seeking the ouster of President Jacob Zuma, especially after he fired his finance minister, Pravin Gordhan, who was seen as a bulwark against mass corruption. In addition, Mr. Zuma was accused last year by prosecutors of using public money to improve his private residence.

    The demand for clean government in South Africa is so strong that a civil society group, Corruption Watch, has collected reports of more than 15,000 whistle-blowers since 2012. In a recent poll, 7 out of 10 people say Zuma should resign. The issue of corruption has also united the opposition parties for the first time despite their strong ideological differences. And it also has driven a wedge in the ruling African National Congress (ANC), the party of the late Nelson Mandela.

    Next week the Parliament will vote on a motion of no confidence in Zuma. The opposition hopes for a secret ballot so that ANC members can vote their conscience and not be punished by the party's vast patronage network.

    In all of the BRICS, corruption became an issue because ruling parties stayed in power too long. In addition, young people, now better connected through the internet, know their future depends on honest leaders who believe in rule of law and equality of opportunity.

    "Meaningful freedom," said Thuli Madonsela, South Africa's former lead public prosecutor, in a recent speech, "is freedom from all corrupt practices in state affairs and private life."
    World of work
    Social policy, trade unions, actions
    New Delhi Declaration: New Development Bank – Peoples' Perspectives (Нью-Делийская декларация: Новый банк развития - Перспективы людей) / India, April, 2017
    Keywords: The Peoples' Forum on BRICS, New Development Bank, sustainable development
    Author: John Doe

    The Peoples' Forum on BRICS, a network of peoples' movements, trade unions, national networks and civil society organisations addressing a range of economic, environmental and social injustice, gathered in Delhi on 30th March 2017 to raise deep concerns over the fact that the New development Bank promoted by BRICS is no different from other IFI's such as the World Bank or Asian Development Bank. The Forum reviewed various projects that the fledgling NDB is financing and found that it is promoting a business as usual model, rather than striking a dramatically new path for people-centered development that was promised in the formation of the Bank by the BRICS nations.

    The participants have raised very deep concern that NDB's claim to support "sustainable development" is hollow, as its current support for renewable energy projects is lacking the rigorous appraisal of environmental and social impacts assessment that such land intensive projects demand. In fact, dam building is also being promoted under the renewable sector, though it is speciously claimed that what is supported is merely small dams. As is widely evident from the brutal experience of the people of Uttarkhand due to flash flooding of Bhaghirathi river in 2013, so-called 'run of the river' 'small hydro' projects can have devastating impacts equivalent to those of large dams.

    The Participants expressed deep concerns that the NDB is becoming a bank as unaccountable as the ADB or the World Bank, or worse, like the extremely opaque International Finance Corporation. The prevailing policies to review the due-diligence of projects from their economic, ecological and social impacts viewpoints is weak. In fact, many policies and procedures of review that ought to be articulated for conducting business of the NDB are yet to be formulated. Yet financing of projects has commenced giving room to the rather disconcerting feeling that the Bank's main goal appears to be one of maximising profit at any cost.

    As the 2nd Annual Meeting of the National Development bank was being held at New Delhi during 31st of March to the 2nd of April, the participants of the Peoples' Forum on BRICS called on the leaders of the BRICS countries to revisit the reasons why they thought it fit to associate, and form the NDB as a plank of major reform. Nothing in the Bank's approach thus far provides any comfort of believing that the NDB is out to support the needs of pastoral and agrarian communities, of working classes, and the poor. Instead, it is now keen on expanding its membership and the pitch clearly is on demonstrating it is a Bank like all other – with little or no concern for adverse impacts on human rights and the environment. This is abundantly clear, the Forum held, in the fact that NDB is aggressively promoting privatisation of public services, which has been globally experienced as the most effective way to attack the poor and the working classes.

    The Peoples Forum recalled its meeting in Goa last October, alongside the official meeting of the BRICS Heads of State, when it raised serious concerns over the fact that democracy is under threat, in BRICS countries and beyond; state repression is rising in every BRICS nation; and ecological destruction is widespread in every BRICS country. In the context of a world economy teetering on the brink of a financial meltdown, and new generation of Bilateral Trade and Investment Treaties which are designed to adversely impacts on lives and livelihoods of ordinary peoples across the BRICS countries, the Forum felt that there absolutely does not seem to be the necessary deep concern in the NDB to revise its strategies. This given the fact that workers are losing rights, farmers suffering is worsening and no respite is accorded despite thousands being driven to suicide, and labour casualisation is becoming rampant in all BRICS countries. With the worst impacts of climate change already being felt across India, what with the worst heat wave sweeping across the country even as summer as only set in, the fact that NDB's 2nd Annual Meeting has absolutely no focus on the prevailing crisis, in which farming, pastoral and other natural resource dependent communities are worst impacted, is revelation of the systemic myopia that has already set into this fledgling Bank.

    The Peoples Forum on BRICS declared that the New Development Bank has to step back and reconsider why indeed it was established. In so doing, NDB must pro-actively reach out to peoples movements, trade unions, civil society organisations and peoples networks genuinely working with poor and impacted communities, rather than finding comfort in plush and polite consultations held with fellow bankers, bureaucrats, key politicians and cherry-picking "NGOs" who conform with rather than critically engage the NDB. If such a course correction is made, NDB truly has the chance to become the leading Bank that responds to peoples' real concerns, instead of toeing the line of other Financial Institutions that are only keen on financialising all transactions that produce more wealth for the top 1% and misery for the rest. Promoting finance for such a divisive and inhuman world order is a crime against humanity and nature.
    New programme will boost tourism and create jobs (Новая программа будет способствовать развитию туризма и созданию рабочих мест) / Brazil, April, 2017
    Keywords: Tourism, Brazil, world of work

    Tourism package aims to attract 12 million foreign tourists a year by 2022 and increase visitor revenue to US$ 19 billion

    Tourism Minister Marx Beltrão announced a new programme this Tuesday (11 April) called Brasil + Turismo ("Tourism+ Brazil"), a set of measures to strengthen the sector in the country. The programme comprises several actions to cut red tape in the sector, increase tourist inflows, issue electronic visas, expand the regional route network and open 100% of the capital of national airlines to foreign investors. The government expects measures to generate more jobs in the sector.

    "The Brasil + Turismo programme was created to correct a historical misconception and allow tourism to be seen as a protagonist in the creation of jobs and income. The time has come for tourism to shine," said Beltrão.

    One important measure is the change in the Brazilian Aeronautics Code that will open 100% of the capital of Brazilian airlines to foreign investment, aiming to increase their competitiveness, expand the regional flight network and increase the number of domestic flights.

    "Our goal is to increase competitiveness between companies and, consequently, reduce prices and offer more routes and destinations. This initiative has the support of the population," Beltrão added.

    President Michel Temer is expected to sign a provisional measure ending the 20% cap for foreign capital in Brazilian airlines in place today.

    More tourists

    The ministry expects the number of foreign tourists in the country to grow from the 6.5 million who came to Brazil in 2016 to12 million in 2022, and visitor revenue to expand from the current US$ 6 billion annually to US$ 19 billion by the same time.

    Another expected impact of the measure is the inclusion of 40 million Brazilians in the travel consumer market. Currently, less than half of the Brazilian population travels every year (about 60 million).

    The Brasil + Turismo also aims to create nearly 6 million jobs in the sector. Worldwide, the tourism sector accounts for one in every 11 jobs (9%), according to numbers from the World Tourism Organization (WTO). In Brazil, tourism directly and indirectly employs 7 million people.

    Electronic visas

    To help increase the number of foreign tourists, the Ministry of Tourism has proposed to the Ministry of Foreign Affairs to deploy an electronic visa system by the end of this year for tourists coming from countries such as the USA, Canada, Australia and Japan.

    Granting electronic visas allows the entire process - application, payment of fees, background checks, granting and issuance - to be completed within 48 hours. The Tourism Minister said it is also considering the inclusion of other countries, such as India and China, in the system.

    General Tourism Law

    Another measure makes changes in the legal status and name of Embratur, currently the Brazilian Tourism Board. The idea is to transition it from a self-regulated government body (autarquia) to a so-called Autonomous Social Service and rename it the Brazilian Tourism Promotion Agency. With the changes, Embratur, now a more independent government agency, can act more competitively in the international tourism market and receive private funds to develop projects. The funds to finance the new Embratur will be sourced from a percentage of revenues from the federal lottery.

    Another important action of Brasil + Turismo is the sending of a bill to Congress, for urgent voting, that would modernise the General Tourism Law by cutting red tape and strengthening public-private partnerships in the tourism sector.

    The government is also planning for initiatives to make better use of areas owned by the federal government with potential for tourism, better capacity building programmes and stronger, more autonomous tourism-related government bodies at the state level.
    Xiamen to open new freight train service to Moscow (Сямынь запустит грузовые поезда в Москву) / China, April, 2017
    Keywords: China, Russia, frieght train service, trade, One Belt One Road

    XIAMEN — China's eastern port city of Xiamen will open a freight train service to Moscow on April 21, according to a meeting Thursday.

    The train will go via the cities of Nanchang, Nanjing, Jinan and Jinzhou, and pass Manzhouli Port before entering Russia.

    It will take 13 to 14 days to finish the journey, which stretches 10,920 kilometers to Moscow.

    The freight service will be operated by Xiamen Haicang Investment Group.

    The Xiamen-Moscow freight train service will boost the opening up of Xiamen and China-Russia trade, and contribute to the Belt and Road Initiative.

    Xiamen has active trade with Russia. In 2016, exports from Xiamen to Russia reached about 5 billion yuan ($727 million), and imports from Russia were 1.9 billion yuan.

    The 2017 BRICS Summit will be held in Xiamen in September.

    Media Statement: BRICS Business Council Mid-Term Meeting (Заявление для СМИ: Промежуточное совещание Делового совета БРИКС) / South Africa, April, 2017
    Keywords: meeting, world of work, cooperation, Business Council
    South Africa

    The Mid-term meeting of the BRICS Business Council took place on March 31, 2017 in New Delhi, India. The meeting involved deliberations on the progress made by the seven working groups on the agenda set forth during the Annual Meeting of the Council on October 14-15, 2016.

    With this Mid-term meeting, the tenure of Indian Presidency of BRICS Business Council came to an end and Chinese chapter formally took over the Presidency of the BRICS Business Council.

    Following the deliberations during today's meetings, the members of the BRICS Business Council have agreed on the following points.

    There are signs of gradual recovery in the global economy, but uncertainties loom and could weaken the growth path. There are also headwinds of protectionism gaining momentum, which could disrupt the growth in global trade and investments. BRICS Business Council believes that intra-BRICS co-operation is vital to promote shared economic interests and facilitate sustained development of its economies.

    We are encouraged by the developments taking place at the level of our respective authorities towards enhanced BRICS co-operation. We welcome the conclusion of the negotiations of the bilateral Social Security Agreement and the Cooperation and Facilitation Investment Agreement between India and Brazil. We look forward to more such agreements amongst BRICS countries, as these will have positive implications on business fraternity and further enhance investment flows between BRICS countries.

    We are heartened to note the progress with respect to specific recommendations made by the BRICS Business Council in its third Annual Report presented during the 8th BRICS Summit in Goa.

    We appreciate the progress made with respect to the deliberations amongst members of the Expert Group on the BRICS Rating Agency and agree to carry forward the discussions to arrive at practical solutions for setting up a BRICS Rating Agency on market oriented principles.

    We agree to continue deliberations with respect to the New International Payment Card System for BRICS to promote settlements of international transactions in national currencies.

    We are heartened to note the proposal of New Development Bank to set up a Project Preparation Facility that will be open to all member countries. We look forward to greater interaction with the New Development Bank with respect to financing of projects in priority areas, and development of sector-specific funds in areas like skills, energy, and agri-business.

    We have noted with interest the proposal made by the Skills Development Working Group to set up a BRICS Skill Governance Body to oversee the skill development for labour force in BRICS nations, including co-ordinating with various skill development bodies and facilitating cross-sharing of learnings and challenges faced in skill development by the BRICS countries.

    We also acknowledge the suggestions of the Agri-Business Working Group to to foster agri-food and biofuels trade and investments and enhancing co-operation by sharing best practices related to sustainable agriculture production, productivity, environment protection and food security and contributing towards research activities in these areas.

    We remain committed to enhance the intra-BRICS trade and investments. We urge the government to continue their efforts towards ease of doing business and trade facilitation initiatives to promote private sector trade and investment flows in the BRICS countries.

    We agree to carry forward the agenda of the seven working groups of the Council namely Infrastructure, Financials Services, Skill Development, Manufacturing, Energy, Agri-business and De-regulation. We welcome new ideas and proposals to further enhance intra-BRICS business co-operation for higher growth and sustained development of our economies.

    The BRICS Business Council members from Brazil, Russia, China and South Africa thank Mr. Onkar S Kanwar and the Indian chapter for an exemplary execution of Council activities over last year. The Council members from India, Brazil, Russia and South Africa congratulate Capt. XU Lirong and the Chinese chapter for taking over the Presidency of BRICS Business Council and commit full support and co-operation for all the Council activities in the ensuing year. Members of the BRICS Business Council also look forward to the forthcoming meetings in Shanghai and Xiamen later this year.

    About BRICS Business Council

    The BRICS Business Council was established with the objective of pursuing common interests of BRICS nations to promote mutual trade and investments among the member countries.

    The Mid-term meeting of BRICS Business Council on March 31, 2017 was chaired by Mr. Onkar S Kanwar, Chairman of the Indian BRICS Business Council and Chairman – Apollo Tyres. Chairpersons of National Chapters of other BRICS Countries who were present in the meeting were – Mr. Vladimir Dmitriev, Nominated Chairman of Russian BRICS Business Council and Vice President – CCI of Russian Federation; Mr. José Rubens de La Rosa, Chairman of Brazil BRICS Business Council and Advisor – Marcopolo; Capt. XU Lirong, Chairman of China BRICS Business Council and Chairman – COSCO SHIPPING; and Dr. Iqbal Surve, Chairman of South African BRICS Business Council and Founder & Chairman – Sekunjalo Investments Group.

    Russia-India intellectual property agreement on the cards - Rospatent head (Соглашение об интеллектуальной собственности между Россией и Индией - глава Роспатента) / India, April, 2017
    Keywords: agreement, Russia, India, cooperation, intellectual property

    Moscow and New Delhi plan to strengthen cooperation in the protection of intellectual property rights. The sides will work together, at a bilateral level, as well within the framework of BRICS.

    Russia and India will sign an intellectual property rights protection agreement later in the year, Grigory Ivliev, head of the Russian Federal Service for Intellectual Property (Rospatent), told RIR in an interview in New Delhi on April 7.

    "Russia and India have already prepared a proposed agreement in the intellectual property which is likely to be signed in the autumn," Ivliev said. "Moreover, India wants to make an agreement on access to the digital library of the traditional knowledge, which has information about Yoga, Ayurveda and other fields of knowledge that India is looking to spread."

    Russia has worked with 62 countries in the area of intellectual property, Ivliev said, adding that this kind of cooperation has to be extended to India, given the traditionally strong ties between the countries.

    India was playing a very important role in the development of intellectual property, the Rospatent head said, adding that the country was registering over 40,000 new patents every year.

    Bilateral and multilateral tie-ups

    Cooperation in this area will be both in the bilateral and multilateral arena, the Rospatent chief said. Ivliev was in the Indian capital for the meeting of the patent-governing authorities of the BRICS countries.

    "A training programme of a group of intellectual property experts from BRICS countries took place in Nagpur in February. This programme was organized by Russian specialists with the help of Indian colleagues," Ivliev told RIR. "In our opinion, it was a very successful form of work. So, BRICS is launching systematic cooperation in the development of intellectual propert."

    Ivliev said that each of the five BRICS countries took up a particular responsibility in this systematic cooperation. Russia is responsible for the training of the staff, while India is in charge of developing programmes and strategizing, he added.

    A leadership role for BRICS

    Ivliev called on the BRICS countries to take a leadership role in intellectual property. "During the meeting in New Delhi, Russia offered online courses in English for training of a wide range of people," he said. "Our State Academy of Intellectual Property provides this service too now. We also see the interest of our Indian colleagues."

    When asked about whether Russia was concerned over Western allegations of large-scale piracy in China and India, the Rospatent chief said the situation had drastically changed over the last few years.

    "Annually 40,000 intellectual patents are registered in India. New Delhi took obligations to protect intellectual property," Ivliev said. "Of course, there are copyright violations among private companies in India, but not at the official level. India and BRICS will also fight against piracy"

    New Delhi has been concerned over the misuse of the patent process by Western and even Japanese companies. An American firm tried in vain to register a patent for basmati rice, while a Japanese company tried to patent the word curry.
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