Information Bulletin of the BRICS Trade Union Forum
Issue 50.2019
2019.12.09 — 2019.12.15
International relations
Foreign policy in the context of BRICS
What the 11th BRICS Summit Foretells of the Future of BRICS / Badar Alam Iqbal (Что 11-й Саммит БРИКС предвещает в будущем БРИКС / Бадар Алам Икбал) / Russia, December, 2019
Keywords: summit, expert_opinion

Badar Alam Iqbal, G. Fulufhelo Netswera, G. Fulufhelo Netswera

The BRICS grouping is relatively a new "should be" global economic hegemony of the Global South. Over the past few years however there has been economic and political upheavals within the grouping and within its member states that the future of BRICS comes into question. This paper reviews the position of the 10th BRICS Summit and the foundation that it lays for the future position of BRICS.

Section 1: Introduction

Since the inception of the idea of BRICS in 2001 (O'Neil, 2001) and the first BRICS summit held on 2002, the world has always seen BRICS countries as countries of opportunities with significant structural problems. The economies of BRICS countries have outperformed the global average growth rate (in GDP rate terms). New initiatives such as New Development Bank (NDB) and Multilateral Trade Facilitation agreements have bolstered the relevance of this grouping such that the economic hegemony of the Bretton Woods institutions, i.e., IMF and World Bank have started withering resulting in the recognition of the influence that BRICS has on global economy.

There has always been a general level of scepticism that BRICS could become an important global economic hegemonic power starting at least with the Global South. Now however it seems plausible considering that in the last few years in the backdrop of world geopolitical crisis and certain domestic economic uncertainty in most BRICS countries, the future of BRICS may be at stake.

Another very similar grouping (IBSA) that included only India, Brazil and South Africa though it started with a lot of momentum seem to be mooted or fading away from public consciousness. A pertinent question in this direction is at what age of such type of multilateral organizations can we be comfortable that they are sustainable? The question of typology of BRICS has not yet settled, what is settled is that it is neither a bloc nor a formal group. If this is appropriate, and it is by most researchers, then BRICS can collapse anytime because for its potential collapse you need few reasons in a situation of world economic and political crisis. We are not of the view that there is a pessimistic world order but pessimism about the current bilateral issues is certainly true as evidenced in numerous writings. We are therefore going to study the 10th BRICS summit in this light of what the future holds for BRICS and what BRICS can give to the world.

Section 2: BRICS Political Framework and Theory of Multilateral Cooperation

The political framework of BRICS is that of reformation and cooperation in the existing international economics order. The testimony of the same is the use of such political and economic tools that can promote cooperation and collaboration among BRICS nations. On the context of Multilateral Cooperation, BRICS nations have always promoted this ideal but not on the cost of BRICS nations that are developing countries. Since its inception BRICS has been focused on reforming the international political economic environment that is largely influenced by the Bretton Woods institutions and by interpretation – western and developed countries.

The assumption with the establishment of Bretton Woods institutions, IMF, World Bank and even the United Nations was that the say and perspective of all nations including the developing countries is really important. But somewhere that reality remained short-circuited and these institutions consequently are perceived to be exploitative of the third world countries and promotional of developed countries as did colonialism to large degree. BRICS has taken this task together and other developing countries see BRICS as reforming the system. The testimony of the same is the creation of New Development Bank.

Within the BRICS there are several anomalies regarding economic and political variables. In order for a group of countries like BRICS to reach to new heights, it is imperative to identify a leader in BRICS countries. Even if no leader is required, then also it is argued that a natural outcome of economic integration is emergence of a natural leader. Who that leader will be remains the question. The economic domination of China over BRICS however has become one of the most important talking points by proponents and dissenters alike. Lately BRICS itself seem to be vocal on geopolitical economic turf wards including anti-protectionism of the United States of America – something historically unheard. A more profound and plausible question can be which country's potential suggest that it can be a leader.

Section 3: The BRICS Economic Review

There are large implications of the rise of the BRICS for the world economy even if reality differs from projections conducted by the analysis at Goldman Sachs. BRIC countries are strategically connected to the world in terms of international trade, capital flows and market interdependence. The BRICS share in global Foreign Direct Investments (FDI) has substantially increased and have historically accounted for more than 10 % of their annual fixed capital formation.

Despite the rapid economic growth in BRICS in the past decade and estimated positive economic outlook the respective economies are still specialised in relatively lower value added fragments of the value chain. Thus, in the long run BRICS may not sustain its economic growth. Domestic contents of China's exports of technology intensive products are quite limited compared to the four newly industrialised economies. BRIC countries tend to become the hub of the regional economy and as a result more economic activities may agglomerate in the BRICS markets.

All BRIC countries have gradually increased their level of globalisation whereas Brazil and China have raised their globalisation in the last 40 years, Russia and India has joined this race of increase in globalisation since the 1990s, that is, less than 40 years. If the BRICS maintain their globalisation advantage over their neighbours or even increase it, obviously they will strengthen their hubness in the regions and thus showing stronger technological positions and more asymmetric trade relations with their neighbours. The BRICS clearly dominate extra-regional trade relations of their respective regions and their shares in extra-regional trade are overall still increasing. In one study, it was observed that overall centrality of the BRICS is rising over the period of observation, that is, 2000-2010.

Section 4: 10th BRICS Summit-What it holds?

Before the 10th summit, the ninth BRICS summit till date was wrapped 5thSeptember, 2017 amidst last moment probability of India not paying visit to the Xiamen City of China where the summit was decided to happen. Engulfed in a border stand-off at Dokalam tri junction which took a 2 month long time to settle, India's presence in the summit was highly doubtful. However, abiding by the BRICS goal of cooperating with each other in line with international law and rules, India cleared air by joining the summit after the border scuffle set.

The summit brought a strong commitment to broaden its cooperation framework in all its vigour. BRICS initiatives like New Development Bank, Contingent Reserve arrangement brought into reality in previous summits were hailed in driving BRICS to new avenues of development. Also, the summit reaffirmed its commitment toward industrial cooperation, research and development, innovation in ICT, 2030 agenda for sustainable development and supports the need to reform UN development system. Thus, through every consecutive summit, BRICS has stepped up its game of binding economies under its ambit to direct them into realising the set goals of cooperation. An even greater BRICS initiative is urged by China lately in the form of extending the grouping into BRICS plus.

The 10th BRICS summit was held in South Africa in July 2018. This was on the centenary of the birth of Nelson Mandela that gave a political message to the world that BRICS countries stand for freedom and values of the opperessed people and that BRICS countries will be more focused on developing countries. There were lots of agreements and cooperation issues ranging from economic to climate issues. At the outset South Africa was commended by BRICS for hosting the summit and giving a new direction to the BRICS cooperation.

The last ten years of the BRICS functioning was appreciated by all the countries and that they will works with more cooperation was extended. The issues that they agreed to focus in the coming years were related to economic cooperation, political reforms and climate change. Particularly focusing on green sources of energy was identified to be one of the most important issue. BRICS countries identified the principles of mutual respect, sovereign equality, democracy, inclusiveness and strengthened collaboration and promised to extend these issues to other countries as well. Sustainable Development Goals has been an important issue and the knowledge hub related to SDG has been at the forefront of the discussion.

So, it is a pertinent question to ask what 10th summit actually holds and the answer is in three parameters. On economic level, the 10th summit has been important because cooperation among BRICS will be extended in future on economic grounds. In terms of political issues, BRICS countries has agreed to uphold such principles that will create a stable political environment among BRICS countries.

The BRICS economies in the aftermath appear to reach its predicted point of equalling G-7 by 2032 and China becoming as great as the United States economy by 2027. In its demarcation of economies into three sets according to the order of actual outcomes, the report places China in the first group thus declaring China at the zenith of economies transcending calculations. Further, China's global position and inside BRICS is highlighted by its increased share in trade flows, elevated domestic demands, strong currency and enhanced net exports. China accounts for almost two-thirds of the BRICS trade shares. China tops among all four BRICs economies in both domestic demand and net exports in constituting the 2008-09 real GDP growth and also comes at the top in comparison with the United States and EU16. Thus, the report elaborates on the possibility of BRICS projections to materialise much earlier than they were stated to be.

In similitude with Goldman Sach's various reports regarding BRICS future success and China's expected win over other members, enormous literature exists on the belief of China garnering most from BRICS and BRICS stature building due to China's performance. Almeida suggests BRIC to be rather named as CIRB if real substance of each of the members of BRICS in the global pie is considered. Cui presents in his work the Chinese standpoint on the why and wherefore of BRICS.

Section 5: Future of BRICS and the current performance

In order to develop insight into the future of BRICS operation it is important to assess the current performance of the BRICS countries in terms of selected macroeconomic variables. We have identified three key economic variables to study the performance of BRICS. The first parameter is the Merchandise trade of BRICS countries. Merchandise trade is the backbone of BRICS countries as historically they have been manufacturing hubs, specially, India and China. There was a time before 1600, that 35% of the world trade was contributed together by China and India.

The average growth rate from 2004 to 2018 has been 7% while in the previous period it was less than 5%. This growth trend is promising and it is expected to continue keeping in mind the economic cooperation and collaboration that was targeted in the 10th BRICS summit.

The second important macroeconomic variable is Gross Domestic Product of BRICS countries. It is crystal clear that GDP of the BRICS countries has been increasing as it has been increasing for the world. However, the rate of increase in the BRICS countries is higher that the global rate of GDP growth. This increase in the growth rate is also witnessed in the years starting from 2002, which is an indication of BRICS collaboration and cooperation. The third macroeconomic variable for BRICS performance is Foreign Direct Investment Inflows. FDI Inflows is an important elements to study for BRICS, because in the third BRICS summit investment cooperation was highlighted with great vigour.

However, a separate calculation of growth rates of FDI is also very important. The growth rate shows that after 2009, there has been great improvement in the FDI Inflows, the theory suggest that FDI Inflows are attracted due to GDP, Stability of the economy, Business Confidence Index, Ease of doing business etc and all these issues has remained at he forefront of BRICS summit discussions. Therefore somewhere down the line, the reason for such increase in FDI flows in the existence of BRICS.

Section 6: Conclusion

BRICS in an important cooperation among countries that are developing and they are bound to influence in world in the future. The 10th BRICS summit was promising and all countries agreed to future cooperation having realised the power and progress achieved in the last 10 years. However, on the issue of who will lead the BRICS group, there is no clear evidence but surely China is an option. The selected macroeconomic indicators show that the performance of BRICS countries has been improved in the years of BRICS existence and cooperation. The future of BRICS is promising considering the SDGs taken up by the BRICS countries in 10th BRICS summit.

Dr. Badar Alam Iqbal - Adjunct Professor School of Economics and Finance Monarch University (Zug), Switzerland; Professor G. Fulufhelo Netswera - Director, North West University Business School, South Africa; Mohd Nayyer Rahman - Assistant Professor, Department of Commerce, Aligarh Muslim University, Aligarh.

Press release on Deputy Foreign Minister Sergey Ryabkov's participation in the meeting of BRICS Sherpas/Sous-Sherpas in Brasilia on December 12-13, 2019 (Об участии заместителя Министра иностранных дел Российской Федерации С.А.Рябкова в заседании шерп/су-шерп стран БРИКС в Бразилиа 12-13 декабря 2019 г.) / Russia, December, 2019
Keywords: mofa, top_level_meeting

On December 12-13, Deputy Foreign Minister Sergey Ryabkov, who is the Russian Sherpa in BRICS, attended this year's final meeting of BRICS Sherpas/Sous-Sherpas in Brasilia.

The participants exchanged views on the current issues of five-lateral cooperation, including ways to strengthen and raise the efficiency of the existing work mechanisms.

They summed up the results of the Brazilian presidency. The meeting participants praised Brazil's fruitful efforts to strengthen their five-lateral interaction in all three areas: politics and security, the economy and finances, and people-to-people contacts. In 2019, BRICS held more than 100 events, including two meetings of the BRICS countries' leaders and 16 ministerial meetings.

Sergey Ryabkov informed his partners of the priorities of Russia's BRICS presidency in 2020 under the motto BRICS Strategic Partnership for Global Stability, Shared Security and Innovative Growth. Dozens of various BRICS events are scheduled for the next year in 16 Russian cities. The central event will be the BRICS Summit in St Petersburg in July 2020.

Cabinet approves Agreement on Social Security between India and Brazil (Кабинет министров утвердил Соглашение о социальном обеспечении между Индией и Бразилией) / India, December, 2019
Keywords: concluded_agreements, cooperation

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has given its approval for signing the Agreement on Social Security between the Republic of India and the Federative Republic of Brazil.


India has been entering into bilateral Social Security Agreements (SSAs) with other countries in order to protect the interests of Indian professionals / skilled workers working abroad for short durations and enhance the competitiveness of Indian companies.

SSAs broadly provide the following three benefits:

  1. Avoiding making of double social security contributions by the workers (detachment);
  2. Easy remittance of benefits (Exportability);
  3. Aggregating the contribution periods (in two countries) to prevent loss of benefits (Totalization). The agreement will also provide for disability insurance benefits to the Indian nationals working abroad. As on date, India has signed SSAs with 18 countries.
The idea to ink pacts on social security programmes with BRICS nations was discussed at the meetings of the BRICS Labour& Employment Ministers held on 9 June 2016 in Geneva and on 27-28 September 2016 in New Delhi, respectively. The possibility of concluding social security agreements between BRICS countries also finds mention in the Goa Declaration of the 8th BRICS Leaders' Summit. Taking forward the spirit of the Goa Declaration, India and Brazil held the negotiations on SSA from 13-16 March 2017 in Brasilia. At the end of the negotiations, both sides initialled the finalized text of the Agreement on Social Security.

The signed agreement will be hosted on the Ministry's website and the website of Employee's Provident Fund Organisation for the information of the stakeholders so that they can secure certificates of coverage to avoid making double social security contributions.

At present, about 1,000 Brazilians are living in India, while about 4,700 Indians are living in Brazil. All posted/detached workers and self-employed persons will benefit from this proposal without any discrimination. Thus, it would promote equity and inclusiveness. Export of Social Security benefits of Indian workers after their relocation from Brazil is an innovative arrangement to ensure that there is no loss of social security benefits and also adds to the competitiveness of Indian companies by reducing their overall costs.

The SSA will cover the territories of the Republic of India and the Federative Republic of Brazil.

Investment and Finance
Investment and finance in BRICS
BRICS' NDB pledges $100 million to NIIF's Fund of Funds (НБР БРИКС обязуется выделить 100 миллионов долларов в Фонд фондов НИИФ) / India, December, 2019
Keywords: ndb, investments

  • NIIF's Fund of Funds is looking to raise about $1 bn to invest in up to 10 PE funds managed by Indians, as per the disclosure
  • Earlier in August, NIIF Fund of Funds (FoF) received a commitment of ₹667 crore (close to $100 million) from the Asian Development Bank

Mumbai: New Development Bank (NDB), earlier known as the BRICS Development Bank, has committed $100 million to India's National Investment and Infrastructure Fund's (NIIF) Fund of Funds, two people aware of the development said.

NDB is a multilateral development bank that was created by governments to leverage capital for development purposes, especially infrastructure projects. Founded by Brazil, Russia, India, China and South Africa (collectively the BRICS countries) in July 2014, the bank was launched a year later with an initial authorized capital of $100 billion.

Earlier in August, NIIF Fund of Funds (FoF) received a commitment of ₹667 crore (close to $100 million) from the Asian Development Bank (ADB), according to a disclosure on ADB's website.

NIIF's Fund of Funds, according to the disclosure, is looking to raise about $1 billion to invest in up to 10 private equity funds managed by fund managers in India. Its portfolio funds are expected to provide primarily growth capital to firms across sectors, including green infrastructure, affordable housing, manufacturing and services.

"Of the targeted corpus, the fund has so far received commitments worth $700 million, including investments from NDB and ADB," one of the people cited above said.

In June 2018, Asian Infrastructure Investment Bank (AIIB) had approved an equity investment of $100 million as part of FoF's initial closing, committing a further investment of $100 million as part of phase II for the final closing.

Emails sent to NIIF and NDB remained unanswered till press time.

Envisioned in the Union budget 2015, NIIF was launched as an alternative investment fund in December 2016 with a target corpus of ₹40,000 crore.

Its investments are diversified across its three funds— Master Fund, Fund Of Funds and Strategic Fund, across which it manages $4 billion of capital commitments.

In 2017, Abu Dhabi's sovereign wealth fund—Abu Dhabi Investment Authority—committed to invest $1 billion, becoming the first institutional investor in NIIF's Master Fund and a shareholder in NIIF Ltd, its investment management firm.

NIIF is a quasi-sovereign wealth fund, in which the government of India holds 49% equity with the rest held by foreign and domestic investors, is mandated to invest in infrastructure and related sectors that could help fuel economic growth in the country.

Its Fund of Funds is mandated to invest as an anchor investor in third party fund managers. It can also selectively form joint ventures with fund managers.

The Yuan versus the Dollar: Showdown in the Global Financial Arena (Юань против доллара: битва на мировой финансовой арене) / Russia, December, 2019
Keywords: expert_opinion, economic_challenges

At the 1944 Bretton Woods Conference, the United States laid the foundation for the U.S.-centric international monetary system, thus ensuring the dollar's status as the key reserve currency for the next 75 years. The fact that other countries accepted the dollar as the main currency of international payments, loans and investments allowed U.S. transnational corporations to dominate global markets in the post-war period quickly. However, if we are to proceed from the development patterns of the international monetary and financial system, then it follows that the dollar will eventually be replaced by the yuan, the currency of the new global economic and financial leader (China). Will Beijing manage to build its own system of global institutions, one that is capable of internationalizing the yuan and competing against the U.S. currency when it comes to servicing global flows of commodities and finance? In order to answer this question, we need to look at the trends of the global financial architecture as it stands today and identify the strengths and weaknesses of the U.S. and Chinese financial systems.

Igor Ivanov:
The Belt and Road Initiative: Towards a New World Order
The Global Financial Architecture

The global financial architecture (GFA) is the combination of institutions involved in the regulation of global finance. It consists of a model for organizing international financial relations, institutional mechanisms for managing these relations, and the principles underlying the participation of countries in decision-making processes. The GFA model is based on the competitiveness and openness of global financial markets. The institutional mechanisms include fiat (intrinsically valueless) money, the free trans-border movement of capital and a system of floating exchange rates. The influence of individual countries on the development of the GFA depends on the size of their quotas and votes within the Bretton Woods institutions of the IMF and the World Bank.

One feature of the current transformational processes as applied to the GFA is the concentration, in individual countries, of financial assets that exceed the size of their economies by tens, hundreds and even thousands of times. For example, the financial assets controlled by Luxembourg exceed its GDP by 248 times, and those of the Cayman Islands exceed its GDP by 1861 times. These imbalances are caused by the fact that the modern GFA is formed not along the lines of the formal Bretton Woods institutions, but rather informally, via the offshore financial system.

It is in offshore jurisdictions, i.e. outside the national borders of the countries that issue international currencies, that the bulk of global monetary liquidity is generated. For example, in 2007–2008, the Federal Reserve Bank of New York opened temporary dollar swap lines for the central banks of 14 countries worth over $10 trillion to refinance the dollar liabilities of lending institutions operating out of those jurisdictions. The swap lines were discontinued in February 2010, but were reinstated three months later in a different format between the Federal Reserve System (FRS) and five key central banks that are closely linked to the United States: the European Central Bank, the Swiss National Bank, the Bank of England, the Bank of Japan and the Bank of Canada. These C6 swap lines were made permanent and unlimited in October 2013. It is thanks to these currency swap operations that the U.S. FRS can create euros, pounds and yen in offshore jurisdictions. The other countries involved can participate in the creation of offshore U.S. dollars. The massive swap agreements involving the most significant central banks undermine the importance of the Bretton Woods institutions as the providers of global liquidity and make it difficult to record and control global capital flows at the intergovernmental level.

The U.S. Financial System

The main strength of the U.S. economy is that it issues the key global currency, as well as the fact that it has created the world's biggest stock market, in which more than half of all U.S. households participate. The United States has the most liquid bond market, which means that the dollar is the international benchmark for value and the main reserve asset for the rest of the world (its share in the international reserve portfolios of central banks exceeds 60 per cent). Over 50 per cent of all international deposits, loans and promissory notes are nominated in U.S. dollars. Washington is home to the headquarters of the Bretton Woods institutions, which are responsible for macroeconomic oversight and addressing structural imbalances in the 189 member nations. Three U.S. rating agencies account for 96 per cent of all credit ratings assigned in the world, U.S. investment holdings manage more than 50 per cent of global corporate assets. These and other factors explain the dominant role of the United States in the formation and development of the GFA.

The main weakness of the U.S. financial system is that the country's economy is based on debt and is extremely dependent on bank lending terms and the dynamics of stock market operations. A sharp increase in interest rates or a decline in demand as a result of economic overheating leads to a nosedive in share prices, which, in turn, leads to a depression, as was the case in 1929 and 2008. One other vulnerability of the U.S. financial system is its dependence on external financing, which is due to the status of the dollar as the key reserve currency. Should the international demand for dollars decline, U.S. funding from external sources may also decrease.

Ivan Timofeev:
Asia Under Fire of US Sanctions
China's Place in the GFA

China leads the world in terms of monetary aggregates (in the dollar equivalent), purchasing power parity GDP, production and exports, and the labour force size. However, China's economic growth continues to be largely dependent on imports of foreign investments and technologies.

China's leading positions on a number of economic indicators still has a negligible effect on the country's ability to influence international financial relations. As before, the head of the IMF is a European citizen and the head of the World Bank is an American. Unlike other international organizations within the UN system, which make decisions based on the "one vote per country" principle, the IMF and the World Bank are stock companies whose capital is owned by the member nations. Decisions on the most critical issues on the agenda of the Bretton Woods institutions are made by a qualified majority of 85 per cent. Following the reform of the IMF quota and voting system in 2010–2016, the BRICS countries failed to gain the minimum number of votes (15 per cent) to obtain veto power and assert the multipolar principle within the organization. Just like before the reform, the United States continues to be the only IMF member nation that has the power veto.

China certainly owes much of its global economic achievements to its membership of international financial and economic organizations that the United States was instrumental in founding and running. That said, in order for China to protect its economic interests in an effective manner and exert tangible influence on decision-making processes in the global economy, Beijing needs to participate in those international institutions in which its vote has a decisive role. In this sense, China has high hopes for its recent initiatives to create pan-Asian institutions for monetary policy, finance and economics, such as the BRICS Contingent Reserve Arrangement, the Chiang Mai Initiative Multilateralisation, the BRICS New Development Bank and the Asian Infrastructure Investment Bank.

The opening of the Shanghai International Energy Exchange (where transactions are carried out in Chinese yuan) on March 26, 2018, was a particularly significant event. This was China's first step towards the formation of a "petroyuan" pricing system on the global energy resources market. The Shanghai Futures Exchange has begun trading in new oil futures, known as INE, which are expected to compete against British Brent and U.S. WTI contracts. The pricing of oil in yuan is an important component of the drive to internationalize the Chinese currency and lessen the global economy's dependence on the dollar.

By late 2017, the People's Bank of China had signed 37 swap agreements with different countries worth more than 3 trillion yuan. The agreements were aimed at facilitating the use of the yuan in doing business with foreign banks and companies, so that the central banks receiving liquidity in yuan can act as lenders of last resort after the activation of currency swap lines. However, the agreements have not resulted in a significant increase in the global use of the yuan, which is what was originally expected. Since the 2008 initiation of the swap agreements, the share of the Chinese currency in the denomination of international promissory notes has stood at roughly 0.3 per cent, whereas the share of the U.S. dollar has grown from 47 per cent to 63 per cent.

In addition, currency transactions involving the yuan are mostly done via London, not Beijing. The United Kingdom accounts for 33.79 per cent of all global currency operations involving the yuan. Hong Kong remains the largest clearing centre for international transactions in yuan, serving 76.36 per cent of all such global operations (the United Kingdom is second with 6.18 per cent). Thus, most international transactions involving the yuan are performed outside continental China.

Andrey Kortunov:
What We've Learnt About Globalization
One more obstacle to the faster internationalization of the yuan is China's preoccupation with domestic problems stemming from the rapid growth of debts (especially in the property market), the growth of the shadow banking system and the disproportionate allocation of loans to large and small businesses. In its attempts to conduct a softer monetary policy, the Chinese government is facing a difficult choice between supporting short-term growth and countering unfavourable external shocks. A monetary easing could increase the vulnerability of the Chinese economy, because continued lending growth is capable of slowing down or complicating the restoration of banks' balance sheets and aggravating the existing imbalances in the allocation of loans.

University of California professor Barry Eichengreen, who is one of the most respected experts on the development of the international monetary system, says the yuan does not qualify as an international currency for three reasons: 1) the high costs of financial transactions involving the acquisition and distribution of information; 2) China's great dependence on Hong Kong as a regional offshore centre; 3) China's inability to exert political pressure on the other global economic centres, primarily the United States and the European Union. At the same time, according to Eichengreen, there are four factors indicating the growing status of the yuan as a regional currency: 1) the potential growth of incomes in Asian countries, which results in increased demand for Chinese commodities; 2) the implementation of multilateral projects as part of the Belt and Road initiative, which results in the growing use of the yuan in Central and Southeast Asia; 3) the development of the Asian bond market, which leads to the standardization of international promissory notes nominated in yuan; 4) the growing demand for yuan on the part of commercial banks and companies in swap transactions between central banks as part of the Chiang Mai Initiative.

Points of Conflict between the United States and China

Unlike the Cold War era, which was characterized by the polar confrontation between two systems, today the United States and China are members of the same international financial organizations, they both interact in the uniform global capitalist market and follow the same principles of competition, effectiveness and profit maximization. For this reason, the main point of conflict between the United States and China concerns mutual restrictions when it comes to allowing the other country's finished products and services onto their national markets.

Nobel Memorial Prize in Economic Sciences recipient Joseph Stiglitz believes that the United States stands to lose more from its trade war with China than China does, as the Chinese authorities have far greater opportunities to restrict the operations of U.S. corporations working in China than the U.S. authorities do when it comes to Chinese goods imported into the United States as part of international trade. In addition, raising the prices of Chinese commodities on the U.S. market may cause dissatisfaction among end customers.

Another point of conflict between the two countries is connected to China's limited ability to influence major international organizations. Despite the IMF reform, China did not secure a tangible increase in its influence within the organization, with its quota only growing from 4.0 per cent to 6.41% per cent. We should note here that when the IMF began operating in 1947, China's quota was bigger than it is now, at 6.56 per cent (even though the country was the world's fifth-largest economy at the time, not the second largest as it is today). The formal inclusion of the yuan in the special drawing rights (SDR) basket (the IMF's cashless reserve asset) in 2016 was largely symbolic, because the use of SDRs has no effect on the actual balance of forces in the GFA. The value of the SDRs in circulation stands at $204.1 billion, or under 4 per cent of the international currency reserves calculated in dollars. The share of the yuan in the structure of international currency reserves and international transactions stands at approximately 2 per cent, which does not reflect China's global role as the largest manufacturer and exporter.

Evsey Gurvich:
Is a New Economic Crisis Coming?
One more potential point of conflict is the development of artificial intelligence (AI) technologies. In accordance with the Made in China 2025 plan to develop strategic technologies, the country expects to have assumed global dominance in the world in the field of AI by 2030. The financial sector has high hopes for AI in terms of its potential to increase effectiveness and profitability, much like the effect that the introduction of information technologies had on financial services. China has already outstripped Europe in the number of AI-related startups and is gaining ground on the global leader in AI, the United States.


Experts view pan-Asian financial institutions as an instrument used by China to establish its status as the leading Eurasian and global power. Chinese officials repeatedly stress that the newly established institutions aim to compete with the Bretton Woods institutions, not replace them. In other words, at the current stage in the development of the GFA, China has no intention of changing the neo-liberal principles of its functioning.

Despite the significant increase in China's influence on the global economy and the addition of the yuan to the SDR basket, the dollar continues to play the key role in the global financial market and in servicing international trade in commodities and services. China's growing influence on the GFA thus depends on strengthening the global role of Sino-centric financial institutions and on the broader use of the yuan in international payment systems and in transactions on the global financial market. At the same time, the active creation of offshore dollars that are not controlled by the U.S. regulators increases the risk of the dollar-centric currency system collapsing.

It is obvious that the current GFA configuration is not likely to undergo any significant changes in the foreseeable future (unless another global financial crisis breaks out) because the United States has a significant number of institutional instruments and mechanisms for influencing the global economy at its disposal. In the long run, however, any growth in China's actual role in the international financial system will depend on the successful promotion of a conceptual alternative to the current GFA model for the purpose of overcoming global imbalances between the financial sector and real economy.

BRICS Nations Working on Framework Deal to Build Remote-Sensing Satellites (Страны БРИКС работают над созданием спутников дистанционного зондирования) / India, December, 2019
Keywords: space, innovations

Space agencies of the BRICS group of nations have been negotiating a framework agreement to formalise the cooperation on building a 'virtual constellation of remote-sensing satellites', a senior minister said.

Union Minister of State, Jitendra Singh, said that technical aspects with respect to identifying the satellites and the ground stations for the initial virtual constellation were discussed by the space agencies.

The purpose of the proposed virtual constellation is to get access to satellite remote-sensing data, which could be used by the individual BRICS nations for various purposes, including natural resources management and disaster management, said the Minister.

Isro has set up five Space Technology Cells (STCs) at the Indian Institutes of Technologies (IITs) in Mumbai, Kanpur, Kharagpur and Chennai, Indian Institute of Science (IISc), Bengaluru and the Joint Research Programme with Savitribai Phule Pune University (SPPU, Pune), to carry out research activities in space technology and applications.

The Minister said Isro plans to develop high-end technology in collaboration with the IITs in the areas of space science, space technology, and space applications.

Isro would fund the identified projects, he added.

India traded $113.47 Bn with BRICS Countries in 2017 (Индия торговала на 113,47 млрд долларов со странами БРИКС в 2017 году) / India, December, 2019
Keywords: trade_relations

The Minister of Commerce and Industry, Piyush Goyal, said that Engagement in BRICS Summits provides a platform for discussions and exchange of views on issues of mutual interest. These interactions help develop congruence on various issues and could lead to closer cooperation and strengthening of trade and investment ties between BRICS nations. Through sustained engagement, cooperation amongst BRICS partners in the areas of trade and investment over these years has strengthened.

The New Development Bank has been established with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other developing countries.

At this year's Trade Ministers Meeting, a Memorandum of Understanding among BRICS Trade and Investment Promotion Agencies/Trade Promotion Organizations was signed. This provides a framework for forging collaboration between Trade and Investment Promotion agencies for facilitating greater trade amongst the BRICS member countries.

The BRICS Joint Trade Study Review helps in fostering greater mutual knowledge, economic cooperation as well as trade and investment opportunities among BRICS countries.

Prime Minister Narendra Modi led the Indian delegation to the 11th BRICS Summit that was held on 14 November in Brasilia under the theme 'Economic Growth for an Innovative Future.'

BRICS countries in 2018 agreed upon a non-binding and voluntary Working Mechanism on Technical Regulations, Standards, Metrology and Conformity Assessment Procedures for identifying, preventing and eliminating technical barriers to trade with a view to facilitating trade and increasing mutual trade flows.

The Government, through institutional mechanisms like Joint Commission Meetings (JCMs) and Joint Trade Committees (JTCs) addresses market access and other issues like non-tariff measures on a regular basis, with a view to increasing India's trade, including with BRICS countries.

Goyal shared accounts of the total trade volumes that India holds with BRICS. According to the data, India's intra-BRICS trade value, i.e. trade with BRICS countries, stood at $113.47 billion in 2017. Out of this, the highest trade volume was with China at $84.42 billion, followed by South Africa at $10.96 billion, Russia at $10.12 billion, and Brazil at $7.97 billion.

India's total trade with the world in 2017 was $587.36 billion, and, significantly, intra-BRICS trade accounted for 19.32% of that.

This information was given by the Minister of Commerce and Industry, Piyush Goyal, in a written reply in the Lok Sabha.

PM Modi had also met Russian President Vladimir Putin on the sidelines of the BRICS Summit. The leaders reviewed Indo-Russian relations, and Modi said both nations will benefit from close ties. According to the data shared by Piyush Goyal, India's trade with Russia stood at $10.12 billion in 2017.

Sino-Russian trade turnover to exceed $110 bln record in 2019 (Китайско-российский товарооборот в 2019 году превысит рекордные 110 миллиардов долларов) / Russia, December, 2019
Keywords: trade_relations
Source: link

BEIJING, December 12. /TASS/. Trade turnover between Russia and China may set a new record and exceed $110 bln by the end of this year if the current dynamics persists, Spokesman for China's Commerce Ministry Gao Feng told a press conference on Thursday.

"Trade turnover exceeded $100 bln in January-November period as it increased by 3.1% in annual terms. If that dynamics persists it (trade turnover) will exceed $110 bln in 2019 setting a new record," he said.

In 2016, Russia-China trade turnover grew by 2.2% in annual terms to $69.52 bln. In 2017, it surged by 20.8% year-on-year to $84.07 bln, while in 2018 it gained 27.1% to over $107 bln.

Russian President Vladimir Putin said at the BRICS summit in November that the task of boosting Sino-Russian trade turnover to $200 bln is realistic. The relevant departments of the two countries have been tasked with drafting a plan to reach that goal, he added.

Is BRICS GDP Growth a Source of Shocks or an Amplifier of Global Growth Responses? What Are the Policy Implications for South Africa? (Является ли рост ВВП БРИКС источником потрясений или усилителем глобальной реакции роста? Каковы политические последствия для Южной Африки?) / South Africa, December, 2019
Keywords: research, economic_challenges
South Africa

Evidence in this chapter shows that BRICS is a big magnifier of G7 economic growth responses to positive demand shocks. In addition, the propagation effects by BRICS GDP growth exceed those from BIITS economies. The BRICS amplify the effects of adverse economic shocks such as the global financial crisis and economic policy uncertainty. Moreover, commodity price shocks raise the G7 GDP growth and the rise is amplified by DGP growth in the BRICS, EMEs (excluding China) and BIITS. Large negative BRICS GDP growth shocks lead to large declines in G7 GDP growth compared to smaller negative GDP grwoth shocks. This suggests that global business cycles impact each other in an asymmetric way, especially due to negative GDP growth shocks. These asymmetric responses suggest that economic growth in advanced economies is more likely to remain subdued, prompting monetary policy to be more accommodative for a longer period. Domestically, this means that the interest rate differentials will be driven more by adverse factors to the inflation outlook. Chinese growth is important for sustaining high South African GDP growth in response to positive US, euro area, G7 and Chinese GDP growth shocks. Robust Chinese growth amplifies the response of euro area GDP growth response to positive US GDP growth shocks. This suggests these economies will grow more when US GDP growth occurs concurrently with robust Chinese growth.
Worldwide: The BRICS Nations Are Headed For 50% Of Global GDP By 2030. This Is What It Could Mean For Developing Global Supply Chains & Emerging Consumer Markets (Во всем мире: страны БРИКС будут возглавлять 50% мирового ВВП к 2030 году. Вот что это может означать для развития глобальных цепочек поставок и развивающихся потребительских рынков) / United Kingdom, December, 2019
Keywords: expert_opinion, economic_challenges
United Kingdom
Author: Chris Devonshire-Ellis

The Presidents and Prime Ministers of Brazil, China, India, Russia and South Africa have just returned from the annual BRICS summit, held this year in Brasilia. At the close of the event, the five leaders jointly issued a declaration of intent, part of the content which I covered in the article BRICS 2019 Summit Declaration. A key point of that declaration is the shared intent by the BRICS nations to "Coordinate actions at a global level to reach maximum economic growth."

This is a significant statement. By IMF estimates, the BRICS nations will account for over 50% of global GDP by 2030. Their influence is seen in many areas. In 2016, Russia became the largest wheat exporter in the world. China has the world's largest industrial and manufacturing capacity. India is to the fore of the scientific, technological and pharmaceutical fields. Brazil is endowed with abundant mineral, water, biological and ecological resources, and South Africa abounds in natural resources.

However, although the BRICS group is important, in itself it is not a trade bloc. That said, each of the member states have significant influence over significant global Free Trade or Preferential Trade areas. These are the entities:

Brazil: Mercsosur

Mercosur is a Free Trade area including Argentina, Brazil, Paraguay and Uruguay, and accounts for almost three-fourths of the total economic activity in South America. It is the world's fourth largest trading bloc after EU, NAFTA, and ASEAN, with an annual GDP of about US$ 5 trillion. Mercosur is home to more than 250 million people. The Mercosur bloc already has preferential trade agreements with India which I discussed partially in the article Linking India With Mercosur and the Southern African Customs Union, while I explained the potential for FTA with the Eurasian Economic Union in the article Linking The Eurasian Economic Union With Mercosur, and with China in the article Linking China's Belt & Road Initiative With Mercosur. Brazil is the dominant partner.

Russia: The Eurasian Economic Union

The Eurasian Economic Union (EAEU) comprises Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia, has a population of 183 million and a GDP of US$5 trillion. It effectively sits in the geographic landmass between the European Union and China. It is also attracting FTA from other countries; Iran, Serbia, Singapore and Vietnam all have FTA with the EAEU as does China. In the case of the Chinese, the FTA is not yet preferential and tariff reductions and eliminations are still being negotiated. But when this happens, it will be a supply chain game-changer and especially between Russia and China. India is also involved in FTA discussions with the EAEU. An overview of that can be read in the article India Turns Down The RCEP Free Trade. Will It Turn To The EAEU Instead? Meanwhile, when China agrees EAEU tariffs, it will have the effect of bringing Chinese made products, duty free, to the borders of the European Union. In the EAEU, Russia is the dominant partner.

India: The South Asia Free Trade Area

The South East Asian Free Trade Area (SAFTA) includes Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka. It includes a market of 1.6 billion people and is meant to have reduced the customs duties on all goods traded between members to zero. However, vested industrial and protectionist measures imposed by various member states out of the spirit of the original charter (which was supposed to operate like ASEAN) have meant that its attractiveness has been compromised. Accordingly we will not be seeing any FTA deals signed off with the SAFTA bloc until they clear these points up, an issue I discussed in an India/SAFTA explanatory article here. We are instead more likely to see India go it alone in additional Free Trade Agreements. It already has a preferential trade deal with Mercosur which is in the process of being expanded, and is in long term negotiations with the Southern African Customs Union over a deal. Vested interests in India and a highly politicized and protectionist business class get in the way of much of India's attempted progress to embrace Free Trade, and in this case it must be considered a weak link in the trade development of BRICS. Nonetheless, when it comes to SAFTA, India is the dominant partner.

China: The Belt & Road Initiative

The BRI itself is also not a Free Trade area – however it does provide preferential trade capabilities in addition to loans, finance and other assistance to countries who have signed off on the Belt & Road MoU. Additionally, a large number of countries that have joined the BRI also have Double Tax Agreements with China. Beijing has the sovereign capability to agree FTA between China and other countries and blocs, and has had considerable success with many of these, and especially with ASEAN. Beijing remains on the hunt to secure supplies, seek investment development opportunities and look at entering new markets. The Belt & Road Initiative is one way in which, on a detailed nation-by-nation basis, tailor project financing and if required trade incentives to individual countries on a bilateral and multilateral basis around the world. Some of these will develop into full FTA with other blocs such as those mentioned here, and this is especially true of the BRICS nations. China of course is the lead partner in the Belt & Road Initiative.

South Africa: The Southern African Customs Union

The Southern African Customs Union consists of Botswana, Lesotho, Namibia, South Africa, and ESwatini (Swaziland). The SACU Secretariat is located in Windhoek, Namibia, and was established in 1910, making it the world's oldest customs union. The SACU has a combined population of about 66 million, and is strategically placed across Southern Africa, including on both east and west coasts. This makes it an important region allowing access both to European as well as Middle East and Southeast Asian markets. The SACU has a Preferential trade deal with Mercosur, and has been negotiating for several years a similar arrangement with India. Meanwhile, Russia has been making considerable investments into Africa in recent years, and I have recently discussed the potential for connecting the Eurasian Economic Union with the Southern African Customs Union. China has also been a major investor in Africa, and again, a trade deal between China and the SACU appears feasible. In the SACU, South Africa is the dominant partner.

As can be seen, there are plenty of development opportunities for the BRICS nations to explore and develop trade and increase volumes within the organisations they already wield significant influence on. We can summarize these relationships by exploring a Map of the BRICS members and their respective Initiatives, Customs Unions and Free Trade Areas as follows:

Yet even this map doesn't tell the full story. Developments not shown in the map are steaming ahead as we speak which will further enhance the BRICS influence on global trade:


Mercosur has associate members across most of South America; with several of these nations awaiting ratification from their respective Governments prior to joining. This includes Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Surname. Venezuela is also a Mercosur member yet has been suspended since 2016 for non-compliance with tariff reductions. This can be expected to be resolved over time. Mercosur in coming years can be expected to develop into a Pan-South American Free Trade Area.

Eurasian Economic Union

The EAEU has is negotiating with numerous countries, including most of the ASEAN and multiple African nations concerning Free Trade Agreements. Among these are Cambodia, Indonesia, Thailand and the Philippines, along with Bangladesh, Mongolia, and Egypt, Morocco, Tunisia and Israel.

Southern African Customs Union

Zambia and Zimbabwe have expressed interest in joining, however Africa has recently agreed – including with the SACU a pan African Continental Free Trade Agreement (AfCFTA). That will reduce, over a five year period, tariffs on 90% of all products traded across Africa and will eventually supercede the need for the SACU. I discussed AfCFTA in some detail here.

Next year, Russia takes the Chairmanship of BRICS and Russian President Vladimir Putin has already stated that he wants to use this time to further enhance and develop the growing stature of BRICS, including with the United Nations. At the same time, the BRICS nations have expressed interest in developing alternative global payment systems, a BRICS cryptocurrency and generally creating a global trade model that is less dependent upon the United States, collectively seen as an abuser of power.

Then there is the BRICS bank – the New Development Bank. That has recently upgraded its operations and is beginning to provide project financing to the private sector within the BRICS region to get things moving ahead at a faster pace.

There is a long way to go. However, the BRICS have laid out their intentions and already individually possess or influence significant trade assets that if bought into collective use would bring into being a major shift in global supply chains, how we do business, and with whom. Global manufacturers looking at where new supply chains are emerging and where new consumer markets are developing should be keeping an eye on the BRICS group and how and when they intend to stitch together their collective component trade assets.

Political Events
Political events in the public life of BRICS
Article by Deputy Foreign Minister Oleg Syromolotov, Together Against Corruption, for TASS News Agency, December 9, 2019 (Статья заместителя Министра иностранных дел Российской Федерации О.В.Сыромолотова «Вместе против коррупции» для информационного агентства «ТАСС», 9 декабря 2019 года) / Russia, December, 2019
Keywords: mofa, speech

Every year on December 9, the world marks International Anti-Corruption Day. On this day in 2003, the United Nations Convention against Corruption (UNCAC) was opened for signing. Unique in its own way, this multilateral document encapsulates the full scope of issues related to anti-corruption. The Convention has been signed by 186 states, which is declarative of the fact that the actions taken by the involved countries in line with UNCAC obligations are truly universal. No other similar document has been able to unite so many supporters behind one common goal, which is fighting corruption. Today this issue is becoming especially relevant. The links between corruption and other transnational threats, including organised crime and drug trafficking, are becoming increasingly evident.

Russia was one of the first countries to join the UNCAC and has unfailingly been one of the most active participants in international anti-corruption cooperation – which, in turn, gives a powerful impetus to the development of our domestic legislation aimed at improving the organisation and operation of authorities, and strengthening civil accord in society. Our country has been a proactive participant in all the sessions of the Conference of the States Parties to the United Nations Convention against Corruption (the main decision-making body of the Convention) and hosted this prestigious forum in 2016, when representatives of 162 countries, 21 international organisations and 88 NGOs came to St Petersburg. It was an exceptionally worthwhile experience that, to a large extent, contributed to boosting Russia's international authority in the fight against corruption. The next regular UNCAC session will take place this December in Abu Dhabi, where Russia will host several special anti-corruption events.

Residents of the Russian capital have most likely seen the preparations for one of these events. Content by participants of the Together Against Corruption! youth public service advertising contest organised by the Russian Prosecutor General's Office were displayed on information screens in the Moscow Metro. Contestants from Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and BRICS countries submitted entries for the contest. Of course, the majority of the participants represented universities and schools in Russia.

Projects of this type are a good example of practical multilateral work on preventing corruption. But, without a doubt, success would be impossible without exploring new trends and challenges and responding to them timely. These are the tasks we deal with every day.

One of these relatively new focus areas that are becoming more significant both within the UN framework and in other formats is countering corruption in sports. In June 2018, in view of the 2018 FIFA World Cup taking place in our country, Russia organised an international conference on preventing corruption in sports at the United Nations Office in Vienna. The event created much enthusiasm and, drawing on the success of the first conference, we held a second similar event in September 2019. Russia will by all means not only stay focused on this matter but will continue to play the most active role. As one of the avenues for further development of international cooperation with regard to counter-corruption measures in sports, the parties are discussing a Russia-proposed initiative for establishing a special forum under the auspices of the UN where countries could coordinate their approaches and efforts in this area in an open and practical dialogue.

At the same time, the continued attempts to politicise the multilateral dialogue on anti-corruption issues and to use it to ratchet up political pressure on "uncomfortable" states has not escaped our attention. In this regard, I would like to emphasise that our country has always supported the constructive nature of the Implementation Review Mechanism of the Convention against Corruption, based on the principles of equality and respect for the sovereignty of the participating states, transparency, impartiality and voluntariness – in a word, what the UN calls the Vienna Spirit. Russia is open to honest and mutually respectful work with all partners, including at multilateral platforms. We are confident that this is the most effective approach. Our work within BRICS is good proof of the above. Joint anti-corruption efforts are one of the association's priorities and are reflected every year in the final documents of its leaders' meetings. Less than five years ago, during the Russian presidency, Russia initiated a full-fledged specialised format – the BRICS Anti-Corruption Working Group (ACWG). In the Ufa Declaration, adopted in 2015, Brazil, Russia, India, China and South Africa reaffirmed their commitment and willingness to work together on this track. Meetings of our experts are held on a regular basis, and work is underway to strengthen the ties between the relevant authorities of our countries. Coordinating and consolidating, where possible, our positions in the run-up to major events have become a good tradition. Over the five years of work, the parties have clearly demonstrated that only an equal dialogue gives the maximum effect.

In 2020, when the rotating presidency will return to Russia, we intend to focus on coordinating our positions on fighting corruption at various multilateral forums, primarily the UN and the G20, strengthening cooperation with the BRICS partners in anti-corruption education and awareness, and furthering cooperation to prevent corruption in sports. An important part of our work will be to develop common approaches while preparing for the UN General Assembly special session against corruption in 2021.

Russia's focus on strengthening cooperation with its BRICS partners does not mean, however, that we will pay less attention to other existing formats. On the contrary, while continuously promoting the central coordinating role of the UN mechanisms, our country seeks to apply any relevant experience to build up and supplement the existing anti-corruption policies through cooperation within different multilateral instruments.

Our cooperation in the G20 is particularly interesting and promising. The scope of matters that the group members keep in focus is very wide, and covers the most diverse aspects of the fight against corruption. In 2019, the G20 High Level Principles for Effective Protection of Whistleblowers and the G20 Compendium of good practices promoting integrity and transparency in infrastructure development were developed and adopted during the Japanese presidency. A study of the relationship between corruption and economic crime was also launched. In 2020, Saudi Arabia will take over. We have developed a very fruitful and cooperative relationship with Riyadh on the anti-corruption track, and we plan to work hard on the priorities declared by our Saudi partners, including the development and implementation of anti-corruption strategies and policies, the use of modern technology to enhance integrity, public-private partnerships and increased transparency in privatisation. Russia has extensive experience in all these areas, and is ready to share.

The work within the Council of Europe is making similar headway. In 2006, Russia ratified the Council of Europe's Criminal Law Convention on Corruption. In 2007, Russia joined the Council of Europe's Group of States Against Corruption (GRECO). Since then, Russia has been rather successfully completing GRECO evaluations of national government bodies dealing with preventing corruption and exemption of certain categories of government officials from criminal prosecution, exposing, seizing and confiscating income and property received as a result of corrupt activity, illegalising criminal activity, promoting transparency of political parties' funding, and preventing corruption among parliament members, judges and prosecutors.

Russia is also a member of the Interstate Council on Combating Corruption under the Commonwealth of Independent States. Upon the council's instruction, experts from the member states are drafting an agreement on cooperation between the CIS countries in fighting corruption. The latest meeting of the expert group, scheduled for approving the draft of the agreement, took place in Minsk on December 3−4.

This problem is addressed by other regional formats, including the OSCE. We support the organisation's efforts to promote and implement advanced international legal standards and instruments with regard to anti-corruption.

Since 2005, Russia has been a member of the Anti-Corruption and Transparency Working Group of the Asia-Pacific Economic Cooperation (APEC) as well as the APEC Anti-Corruption Authorities and Law Enforcement Agencies Network established under its auspices. Currently, APEC is focusing on coordinated action to prevent corruption, to identify links between money laundering and corruption, and to protect those who report corruption-related crimes.

Another important multilateral specialised format is the Anti-Bribery Convention of the Organisation for Economic Co-operation and Development (OECD). Russia, although not an OECD member, has been a party to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions since 2012. The implementation of this document consists of such measures as establishing an institutional mechanism to ensure measures against corruption, providing legal assistance to foreign states, modernising the national legislation in line with the Convention, as well as updating legislative and regulatory compliance practices. Right now in Paris, the OECD is discussing Russia's new report on fulfilling the Convention. We hope it will be approved, which will allow our country to continue to the next level of this process.

When it comes to preventing corruption, we attach great importance to research and analytical support. In 2011, under a multilateral agreement, the International Anti-Corruption Academy (IACA) was established in Vienna. Currently, 73 states are IACA members. The Russian Federation was among this organisation's co-founders and is largely involved in its activity. Educational courses and study programmes on anti-corruption research and action, collective measures for the private sector and business ethics take place under the aegis of the IACA. Additionally, the academy offers highly-qualified young corruption prevention researchers a three-month scholarship to conduct anti-corruption research. Funded by Russia's voluntary contribution to the IACA budget, the academy organises an annual anti-corruption training course for industry experts from Russia and former Soviet republics, which is a noticeable investment in the practical development of the research aspect of multilateral anti-corruption cooperation. Recently, the academy has been going through certain difficulties caused by an overdue need to reform its management, finance and administration system. The situation is on the mend thanks to additional financial support from Russia and a number of other countries, as well as due to the passing of the academy's development programme that envisages strengthening the academy's research and analytical component, among others. Our opinion is that, remaining the leading international education centre for preventing corruption, the IACA will also be able to support its anti-corruption cooperation within the framework of the United Nations and the G20 with quality analytical material, and provide methodological assistance to the member states in developing specialised legislation.

Nevertheless, the research and educational work is not limited to the IACA format. Since 2015, Russia and the United Nations Office on Drugs and Crime have been successfully executing a collaborative project in anti-corruption training under the auspices of the UNODC Anti-Corruption Academic Initiative. The project has already produced various handbooks – for example, a standard study course on the UN Convention against Corruption that is currently being adapted to Russian education standards. Last November, the Moscow Institute of International Relations hosted the 2nd Anti-Corruption Academic Symposium as part of this project, and the event brought together over 100 teachers of related subjects, experts and students from various countries. A similar, now full-fledged, training event is scheduled for next spring.

Of course, Russia takes its main anti-corruption efforts at the national level. But at the same time, it is obvious that coordinating action, sharing experience and determining the format of international collaboration make this work more impactful. Therefore, the National Anti-Corruption Plan approved by the Russian President aims at boosting the efficiency of international cooperation in the area, on which we will, along with other competent agencies, continue to work further within the above listed frameworks. December 9 is an excellent occasion to remember once again that 16 years ago on this day, the international community agreed to join forces against corruption. We will continue this work for the benefit of the Russian people.

World of work
Social policy, trade unions, actions
Agricultural sphere of BRICS cooperation: Achievements of Russia, Brazil (Сельскохозяйственная сфера сотрудничества БРИКС: достижения России и Бразилии) / Russia, December, 2019
Keywords: cooperation, research

Scientists at the Russian Academy of National Economy and Public Administration (RANEPA), together with their colleagues from the Federal University of Rio Grande do Sul (Brazil), have conducted an interdisciplinary comparative study of the rural regions of the two countries.

According to the researchers, the study results will help to better understand the direction of agrarian evolution in the context of cooperation between the BRICS countries, the university's press service said, reported.

Today, amid a large amount of statistical information on agriculture in the BRICS countries, there is a request for a deep interdisciplinary analysis at the level of specific agrarian regions and local rural communities.

"The success of the BRICS agricultural sector not only determines the life of the rural regions of these countries but also has a significant impact on the development of the social and political situation as a whole. Moreover, the agriculture of Brazil and China has long gone beyond the national level and determines global conditions," Alexander Nikulin, head of the Center for Agricultural Research at RANEPA, said.

According to scientists, Russia is brought closer to other BRICS countries by the socio-economic polarization of agricultural producers, where about half of the production is produced by small farms and the other half [is produced] by large manufacturers, such as agricultural holdings.

All BRICS countries are characterized by a significant gap in the standard of living and social infrastructure between the city and the village. For Russia and Brazil, the share of the rural population is currently about 25 percent, and the influx of migrants from villages to cities continues unabated.

Both countries are developing primarily export-oriented industries: Soy for Brazil and wheat for Russia. The two countries are recognized world leaders in exports of these crops; according to researchers, this is also due to increased productivity when introducing new agricultural technologies.

The scientists have discovered that agriculture of both Russia and Brazil is characterized by 'green' trends: The study has recorded spontaneous economic growth in farms focused on developing recreational areas and producing organic products.

Both in Brazil and in Russia there are both prosperous and depressed rural regions, and the difference in the level of economic development between them is growing. In both countries, there has been an increase in social contradictions associated with the rapid transformation of the agricultural sector.

As part of the study, the researchers have conducted surveys among rural residents of Rio Grande do Sul, as well as residents of the Krasnodar Region and the Moscow Region. The surveys showed that farmers in both countries expect state guarantees of sales of farm products in local, national and international markets, which requires the expansion of agricultural cooperation.

Russian researchers were greatly impressed by the achievements of Brazilian agricultural science associated with the success of the EMBRAPA Corporation's research centers. They also noted the success of the latest network of local rural development universities.

In turn, Brazilian colleagues praised the availability of school education and the system of cultural centers and libraries in Russia. According to them, this experience can be extremely useful in eradicating illiteracy and spreading culture in many rural regions of Brazil.

The scientists believe that the results achieved will contribute to the development of the economic potential of Russia and Brazil, while further scientific cooperation will strengthen relations between the two countries within BRICS.

The 1508 League of Cambrai and BRICS Today: How Not to Repeat History (Лига Камбре 1508 и БРИКС сегодня: как не повторить историю) / Russia, December, 2019
Keywords: expert_opinion
Author: Matthew Ehret

"The nature of the time, most serene prince, requires this, an observance of an old proverb, which enjoins kissing the hand we are unable to cut off"

Sebastien Guistinian, Venetian Ambassador to England's Henry VIII

The Russia-China alliance has become an unstoppable powerhouse of visionary infrastructure projects across the Arctic, Eurasia, Africa and Europe exemplified beautifully by the evolving Belt and Road Initiative and BRICS. This cooperative alliance has tapped into a strategic reality of mankind's genuine common interests which is so powerful that even countries formerly at war with each other and subjects of imperial manipulation have increasingly broken free in order to participate in this new paradigm.

This coalition of nations working with a common sense of both the manipulative hand behind the scenes and common focus for future cooperation may be a new phenomenon in our modern age, but it is certainly not without historical precedent. Not only did such an international coalition form in the wake of the 1865 union victory in the Civil War which saw nations like Germany, France, Argentina, Brazil, Russia and Japan form an anti-British Empire alliance for industrial progress and public works, but it also occurred during a peak of the European Golden Renaissance with an alliance known as the League of Cambrai (1508-1512).

However, just as the 19th century coalition of progress was derailed by a wave of assassinations, revolutions and wars, so too was the earlier League of Cambrai sabotaged before its mission to cleanse the world of oligarchism could be consummated.

With the knowledge that history doesn't repeat, but rather fools repeat history- a brief analysis of the causes of the formation of the League of Cambrai and its ultimate self-destruction under the sophisticated intrigues of Venice (then the seat of an international financier oligarchy) can be best understood, and potentially foolish decisions can avoid repetition. Among the many authors I am indebted to for this research report, includes Gerald Rose, Robert Ingraham and finally Webster Tarplay whose 1981 studies published in Campaigner magazine continue to stand as some of the most thorough analyses available to modern researchers.

From Whence Sprince Today's Potential?

The Russia-China alliance has become an unstoppable powerhouse of visionary infrastructure projects across the Arctic, Eurasia, Africa and Europe exemplified beautifully by the evolving Belt and Road Initiative. This cooperative alliance has tapped into a strategic reality of mankind's genuine common interests which is so powerful that even countries formerly at war with each other and subjects of imperial manipulation have increasingly broken free in order to participate in this new paradigm.

The leadership of both Russia, China and a growing array of allied nations have taken a sober look at the geopolitical landscape which arose in the wake of the disastrous regime change wars-with-no-end in the Arab world and the inevitable nuclear war that would arise from an intended NATO confrontation with Russia or China and the decision to survive by changing the "rules of the game" was a no-brainer.

This coalition of nations working with a common sense of both the manipulative hand behind the scenes and common focus for future cooperation may be a new phenomenon in our modern age, but it is certainly not without historical precedent. Not only did such an international coalition form in the wake of the 1865 union victory in the Civil War which saw nations like Germany, France, Argentina, Brazil, Russia and Japan adopt the "American system" of protectionism and dirigism for industrial progress and public works, but it also occurred during a peak of the European Golden Renaissance with an alliance known as the League of Cambrai (1508-1512).

However, just as the 19th century coalition of progress was derailed by a wave of assassinations, revolutions and wars, so too was the earlier League of Cambrai sabotaged before its mission to cleanse the world of oligarchism could be consummated.

With the knowledge that history doesn't repeat, but rather fools repeat history- a brief analysis of the causes of the formation of the League of Cambrai and its ultimate self-destruction under the sophisticated intrigues of Venice (then the seat of an international financier oligarchy) can be best understood, and potentially foolish decisions can avoid repetition.

Why did the League Arise?

The Golden Renaissance is an incredible singularity in the human experience.

Coming out of a centuries' long Dark Age, what we today call "the Renaissance" is characterized on first approximation by a spike of human population, longevity and productive capabilities. Rather than treat this anomaly as "proof" that we are simply a cancer infesting the mother Gaia as modern radical ecologists are wont to do, it is more valuable to see it for what it was: The material EFFECT of a blossoming of creative ideas, and discoveries touching all fields of knowledge: medical, artistic, musical, architectural, scientific, and economic. The underlying cause of this was a deeper profound shift in understanding of Natural Law based upon a notion that mankind's laws were only legitimate if they cohered with the discoverable laws (moral and physical) of nature. This was expressed by early Renaissance philosopher Cardinal Nicholas of Cusa who stated in 1433:

"There is in the people a divine seed by virtue of their common equal birth and the equal natural rights of all men, so that all authority – which comes from God as does man himself – is recognized as divine when it arises from the common consent of all the subjects… This is that divinely ordained marital state of spiritual union based on a lasting harmony by which a commonwealth is guided in the fullness of peace toward eternal bliss."

This was a profound insight which rejected the popular notion of "man made in the image of mud" that had governed Europe under the feudal structures of oligarchism since the destruction of the Carolingian Empire of Charlemagne.

It took a bit of time for these concepts to become active organizing principles in the formation of the first nation state system of Louis XI of France in 1461, but when they demonstrated their effectiveness at organizing a nation and actualizing the creative powers of the citizens, it spread like wildfire. Louis XI qualified himself as a serious philosopher king which both Plato and Confucius in their times knew was the key for society's salvation when he said: "When Justice reigns in a kingdom, the common good is well guarded, and so is the particular: Because Justice is such a virtue that maintains human company and common life, providing that everyone makes a wise use of common things as common; and of particular things as particular."

After re-organizing his nations' corrupt banking system and taxation system while re-directing the treasuries towards public works and mass education, France under Louis XI grew in power and managed to avoid military enmeshments that characterized Europe for centuries. His success was soon replicated in England as Henry VII of Tudor left France to overthrow the evil Plantagenet dynasty of Richard II in 1485 and followed Louis XI's example. This "new statecraft" was simultaneously gaining steam across Italy's city-states of Florence and Milan manifesting with the rise to prominence of such figures as Cosimo de Medici, Leonardo Da Vinci, and Nicollo Machiavelli. Leading humanist Aeneas Piccolomini, a follower of Cusa, was elected Pope in 1460 becoming Pius II which influenced the Holy Roman Emperor Friedrich III to the humanist cause.

Once Machiavelli became 2nd Chancellor of Florence in 1502, he immediately appointed Da Vinci as Chief Engineer to Cesar Borgia and the two worked closely together reforming military practices in defense of Florence for years.

Machiavelli, Leonardo, Borgia (who became the leader of Milan with Machiavelli's help) understood well the nature of the evil that was trying to undo the new paradigm that they championed. It is here at this moment that it was realized that for the renaissance process to survive, a source of evil that plagued mankind for centuries had to be destroyed. As we shall later see, it was Venice that had been the primary force actively keeping the world at war and the population in the mud for centuries and those leading humanists knew that this force would not rest until the renaissance was undone and humanity was brought under total subjugation. Together they and leading co-thinkers across Italy, France and Spain organized an alliance which nearly wiped this evil from the face of the earth in 1508 called the League of Cambrai.

What Was Venice?

While Venice esteemed itself a republic (literally calling itself "the Serene republic") it was in all pretenses a total oligarchy. The City-state was founded by leading families of the Roman oligarchy who sought refuge from Visigoths and Huns as the Empire collapsed in 450. It grew as a junior partner to the Byzantine Empire for centuries and formed a unique form of government. A senate amounting to nearly 1500 members of the nobility was formed which itself was headed by a Council of 10. Atop this pyramid was a council of three which utilized the figure of an elected doge to justify itself. The system was so effective that in its 1000+ years, only one attempt was made by a doge to go renegade- a crime for which he was publicly beheaded in 1355.

From below, the population was one of pure cattle living under a continuity of carnivals, prostitution, plague and poverty.

From 1201-1204, Venice had managed to run a coup on the Byzantine Empire with the pillage of Constantinople during the 4th Crusade. This was a masterstroke of evil genius that utilized fanatical European forces from France and the Holy Roman Empire who foolishly thought they were embarking on a Crusade to fight the Turks in the Holy Land. These fools were convinced to first pay debts they owed to Venice (for use of the latter's transportation ships) by laying siege and looting the Christian City of Constantinople. This duplicitous scheme allowed Venice to not only destroy their older sister, but also took control of all her sea-based trade routes to boot. Venice also received a huge bribe from the Ottoman Empire for having kept Crusaders out of their way- thus freeing the Turks to destroy the remnants of the renaissance-Humanist culture of Baghdad in 1258.

By 1350, Venice had control over world finance through its monopoly of gold and silver bullion, maritime trade and the most sophisticated intelligence network on earth. Venice's mastery of manipulating wars among potential allies while financing all sides was not limited to Europe. This "new Rome" had even spread its tentacles through Asia gaining a monopoly of trade in Mongol-controlled territories in exchange of offering political intelligence to the Khans whose success penetrating Russia, Kiev, Bulgaria, Hungary and beyond was made possible through such Venetian agents as Marco Polo and his father (Polo even became the Advisor to Kublai Khan).

Venetian Evil Called Out

Cosimo de Medici (sponsor of Cusa and the 1438 Council of Florence) said of the Venetians: "Association with the Venetians brings two things which have always been rejected by men of wisdom: perdition and disgrace" and Ludovico Sforza, an ally of Machiavelli said: "Venetians are obstinate and hardened, always keeping their mouths open to be able to bite off power and usurp the state of all their neighbors to fulfill the appetite of their souls to conquer Italy and then beyond as did the Romans, thinking to compare themselves to the Romans when their power was at its apex."

Another ally of the League, Louis XII of France said the venetians "were traders in human blood, traitors to the Christian faith who have tacitly divided up the world with the Turks and who are already planning to throw bridgeheads across the Danube, the Rhine, the Seine, the Tagu and the Ebro, attempting to reduce Europe to a province and to keep it subjugated to their armies".

Most eviscerating in his attack was Pope Pius II who said "As among brute beasts, aquatic creatures have the least intelligence, so among the human beings the Venetians are the least just and the least capable of humanity… They are hypocrites. They wish to appear as Christians before the world but in reality they never think of God and except for the state, which they regard as a deity, they hold nothing sacred, nothing holy… All law and right may be violated for the sake of power."

The Success of the League

The League of Cambrai was established on December 10, 1508 uniting the highly corruptible Pope Julius II, the Holy Roman Empire Maximilian, France of Louis XII and Ferdinand I of Spain under the common cause of crushing this "new Rome" out of existence. Machiavelli was the driving force behind the league putting the project into motion in 1507 when he arranged for Maximilian to get on board with the agreement that Florence and Milan would finance the cause and provided strategic intelligence throughout.

Utilizing hired mercenary armies, the Venetians were unable to defend themselves against the onslaught that fell upon them. Venetian-controlled territories like Padua and Pisa were won by Florentine Citizen-soldiers organized by Machiavelli, Da Vinci and Borgia and with the decisive victory of France at Agnadello, the Venetian armies were obliterated on May 14, 1509. The Doge messaged the Pope begging for mercy and Machiavelli celebrated the victory writing that in one day, the Venetians "lost what it had taken them 800 years' exertion to conquer."

The Venetians were as good as finished… with no army left to defend themselves and the most powerful coalition of powers united together with all the capabilities to finish them off… so what happened?

The Failure of the League

Utilizing the weakest link in the coalition, Pope Julius II, the Venetians pulled off a secret bribe offering all of Rome's lost territories and more to the Pope as well as a promise to buy alum from Papal territories at inflated values rather than with the Turks. This bribe turned the pope, and accordingly Maximilian against France and Florence as the League was left to disintegrate and a new Venetian-controlled alliance was created in 1512 called the Holy League which soon included England's Henry VIII and Ferdinand I of Spain. Louis XII's armies were decimated at the Battle of Ravenna in 1512 forcing a retreat to France and leaving Florence to be soon defeated. Machiavelli's citizen army was promptly slaughtered, and the great leader tortured and exiled while Da Vinci evaded death by fleeing to Rome and later France.

The moment of great potential had collapsed an age of turmoil and war was unleashed which wouldn't see a major respite until the establishment of the 1648 Peace of Westphalia (itself sabotaged by the same Venetian forces who by this time were in the midst of moving their center of power to the more strategic location of England and the Netherlands).

In the 2008 manuscript The Modern Anglo-Dutch Empire: It's Origins, Evolution and Anti-Human Outlook, historian Bob Ingraham recounts in sordid detail how the leading families of Venice moved their operation out of the lagoons during the 17th century in order to become the Anglo-Dutch Empire. This valuable research recounts the creation of a new system of private central banking innovated by Venice's Banco della Piazza di Rialto of 1587 which morphed into the Bank of Venice in 1619. This new banking paradigm created the model that was used in the creation of the Bank of Amsterdam in 1609 and later with the Bank of England in 1694 after the Venetian Party of England orchestrated a coup known as the "Glorious Revolution".

This financial innovation was based on the realization that it is better to control a nation's issuance of banknotes and bills of credit while masquerading a private corporation as a national institution rather than simply attempting to impose simple usury on a nation as had been previously done for centuries.

How Not to Repeat History

While the 1648 Peace of Westphalia saw a re-activation of the renaissance principle enunciated by Cusa, Europe soon fell back into organized warfare leaving the beautiful principles of the treaty mere words on parchment. While the 1776 American Revolution again saw a re-activation of this principle, its spread throughout Europe and beyond was also crushed with the perversion of the French revolution which turned into an irreparable bloodbath by 1791. While the 19th century alliance of sovereign nations adopting Lincoln's system also nearly resulted in a new age of progress and win-win cooperation, it too was destroyed by small-minded fools falling prey to short-term games and their own egos.

Today, 135 nations have been brought into solidarity with the Russia-China's alliance and this new momentum for progress and cooperation has inspired a renewed nationalism across even the Trans-Atlantic Community which had fallen so deeply under Anglo-Dutch financial control throughout the 20th Century that few had believed hope could still exist. Even America's constitutional traditions once believed lost to its post-JFK conversion into Britain's dumb giant appears to be experiencing a much-needed revival under President Trump.

With nearly 8 billion souls on the planet and the power of the atom at our fingertips, the stakes have never been higher and the liberty to act the fool in the face of Venetian evil never so intolerable.

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