Information Bulletin of the BRICS Trade Union Forum
Issue 51.2019
2019.12.16 — 2019.12.22
Investment and Finance
Investment and finance in BRICS
BRICS Drives Mobile Payments Growth Last Decade (БРИКС стимулирует рост мобильных платежей в последнее десятилетие) / USA, December, 2019
Keywords: digital, economic_challenges

A few decades ago, a certain acronym was a darling of Wall Street, a place where acronyms thrive.

BRIC. And, later, BRICS.

Shorthand for Brazil, Russia, India, China and then, adding the S, South Africa. Back at the dawn of the millennium, the acronym was shorthand for the developing nations that were deemed to be the biggest suppliers of the raw materials and services crucial in keeping the world, well, running.

To that end, on a grand stage, in payments it is the BRICS that may shape – at least in part – how mobile payments evolve.

BRICS, Unified?

As reported last month, the BRICS have been moving toward a unified payment system.

As CNBC noted, and per commentary from Kirill Dmitriev, head of the Russian Direct Investment Fund (RDIF), "increasing non-market risks of the global payment infrastructure" has been the tailwind behind the move toward integration.

There may a bit of geopolitics involved, as so often is the case when large-scale national and international (commerce) plans are hatched. Russia, of course, has been in the midst of developing its own payments system as a SWIFT alternative, in the wake of sanctions that were imposed by Western nations as Russia annexed Crimea.

Drilling down a bit, and as reported in March, through the Russian publication Izvestia, the joint efforts could see the creation of an online wallet that would unite the payment systems of each of those countries. The publication has noted that the wallet would work much like other digital wallets, such as Samsung or Apple Pay, and would be tied to a separate cloud platform.

The nod toward a unified cross-border mobile payments framework would go at least some way toward bringing far-flung pieces of currencies and languages – a digital commerce Tower of Babel, if you will – into harmony.

The potential is there to create a virtuous cycle, where mobile payments beget more use of mobile devices, and mobile devices beget more adoption of mobile payments.

Touring the Landscape

Consider Brazil, where, as reported in this space earlier in the week, a number of digital firms are jockeying for position to carve out at least some of the $2.2 trillion in banking assets. The jockeying has been cross-border in nature, as Tencent Holdings and SoftBank Group have joined the fray.

For these and other firms, the lure comes in the fact that the population of 200 million includes 132 million consumers with internet connections. The landscape is a fertile one, as 25 percent of consumers lack bank accounts – but the familiarity with technology may help boost comfort with tech-driven transactions.

As reported in October, Latin America Google Pay executive Joao Felix has said there are 60 million people with debit cards in Brazil and only 50 million with credit cards. Increasing and enabling debit card payments will help Google grow in mobile payments, he said.

Russia is in part spearheading the pan-mobile payments initiative – considering that eCommerce, as noted by Ingenico in recent months, is a market worth as much as 28 billion. Separately, TNS Russia has estimated that eWallets are used by as much as 78 percent of its survey respondents aged 12-55.

The South African market – where digital payments are, according to Statista, worth $8 billion USD and growing in double digits at a compound annual growth rate of more than 11 percent – is driven in part by the South African Reserve Bank's Vision 2025 program, which looks to boost financial inclusion.

And for India, of course, national initiatives are also a driving force in cashless payments. The drive in the wake of demonetization just a few years ago has spurred what Credit Suisse has said could be a $1 trillion market just three years hence.

In an interview with PYMNTS, Jeremy Wilmot, group president for on-premise and cloud P&L at ACI Worldwide, told Karen Webster that though a majority of transactions are done in cash, as much as $500 billion in transactions – or about 15 percent of the country's GDP – will be done electronically this coming year alone. Here, the National Payments Corporation of India has been helping to boost electronic payments adoption (and Google Pay and Paytm have been gaining traction as well).

That national push in India is, arguably, eclipsed only by China, where the country's central bank is busy preparing to launch a digital version of the yuan – and in doing so, would be the first central bank to throw down this gauntlet. The firm iResearch Digital has estimated the market to be worth about 55 trillion yuan, growing at roughly 23 percent year on year. The country's mobile payment landscape has been dominated by the likes of Alipay and Tenpay, with a collective market share of more than 90 percent.

The BRICS are notable, too, because they contain three of the top FinTech markets in the world as estimated by Ernst & Young. That trio would include China, India and Russia. There's cross-pollination here, too, as China's Alibaba and Tencent have been aggressively investing in Indian startups such as Paytm.

The next decade may see these countries – which are home to roughly 40 percent of the globe's population – unify around a single mobile payments service and become an epicenter for eCommerce (and other transactions) done seamlessly across borders.


Latest Insights:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that's reshaping the payments and commerce ecosystem. In the December 2019 Digital Fraud Tracker, Eric Lorenz, Priceline's VP of finance operations tells PYMNTS how the online travel agency leverages artificial intelligence (AI) to identify risky transactions without exasperating legitimate customers.

NDB Board of Directors Approves Three Projects from Brazil, Russia and South Africa (Совет директоров НБР одобрил три проекта из Бразилии, России и Южной Африки) / China, December, 2019
Keywords: ndb, investments

On December 16, 2019, the Board of Directors of the New Development Bank (NDB) approved three projects aggregating to approx. USD 1 billion.

  • Equity Investment in Patria Infrastructure Fund IV, L.P.
The NDB will make an investment of up to USD 100 million in the Patria Infrastructure Fund IV, L.P. in Brazil. The investment will catalyze investments in Brazil's key infrastructure sectors such as transportation and logistics, data infrastructure, and environmental services.

  • Locomotive Fleet Renewal Program
The NDB approved a loan of CHF 500 million (approx. USD 500 million) to Joint Stock Company Russian Railways for the Locomotive Fleet Renewal Program.

  • Battery Energy Storage Project
The NDB will provide a loan of ZAR 6 billion (approx. USD 400 million) to Eskom Holdings SOC Ltd. (Eskom) for setting up Battery Energy Storage System comprising 360 MW of distributed battery storage sites across four provinces of South Africa. The Project is primarily aimed at meeting peak electricity demand, increasingly through renewable energy, and avoiding emissions associated with utilization of fossil fuels. NDB's financial support to this project will be provided along with WB and AfDB.

Financing of the approved three projects by the Bank is aligned with its mandate of supporting infrastructure and sustainable development projects articulated in the NDB's General Strategy: 2017-2021.

Background Information

The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. To fulfill its purpose, the NDB will support public or private projects through loans, guarantees, equity participation and other financial instruments. According to the NDB's General Strategy, sustainable infrastructure development is at the core of the Bank's operational strategy for 2017-2021. The NDB received AA+ long-term issuer credit ratings from S&P and Fitch and AAA foreign currency long-term issuer rating from Japan Credit Rating Agency (JCR).

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

BRICS' NDB Pledges $100 Million to NIIF's Fund of Funds

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.


World of work
Social policy, trade unions, actions
China-Brazil satellite launched into space to monitor Amazon rainforest (Спутник Китай-Бразилия запущен в космос для мониторинга тропических лесов Амазонки) / China, December, 2019
Keywords: space, cooperation

BEIJING (Reuters) - An Earth observation satellite jointly developed by China and Brazil was launched into space on Friday under a bilateral programme seen as a template for broader cooperation among BRICS nations.

The China-Brazil Earth Resource Satellite-4A was launched on a Long March-4B rocket in the northern Chinese province of Shanxi, the official Xinhua news agency reported.

The satellite was the sixth developed under the China-Brazil Earth Resources Satellite (CBERS) programme that began in 1988. The satellites are designed for Earth observation from orbit for non-military use.

The CBERS-4A will support the Brazilian government's monitoring of the Amazon rainforest and changes in the country's environment, according to Xinhua.

Another eight satellites were put into orbit by the same rocket, including a wide-range, multi-spectral, remote-sensing microsatellite donated to Ethiopia.

Brazil, Russia, India, China and South Africa - collectively known as BRICS - have been in talks on a framework agreement to create a constellation of satellites for Earth remote-sensing and share data obtained by each others' satellites.

Each country will provide one to two satellites to the constellation, according to the China National Space Administration in 2018.

The CBERS satellites would be included in the constellation programme.

Currently, only South Africa in the BRICS bloc does not have satellites of its own.

BRICS Countries Make Strides Towards Digital Sovereignty (Страны БРИКС делают успехи на пути к цифровому суверенитету) / Russia, December, 2019
Keywords: digital, expert_opinion

BRICS is an international association made up of five countries – Brazil, Russia, India, China, and South Africa. Taken together, their population forms about 42% of the world's overall population. It's therefore little surprise that the five countries, albeit some more intensely than others, are becoming major economic and political influences. They are also becoming more focused on innovation, which was the subject of the last BRICS summit last month in Brazil: "BRICS: Economic Growth for an Innovative Future".

Indeed, the focus of the summit seemed to be strengthening the mutual co-operation in innovation, and the digital economy. The latter is particularly relevant because of the population statistic mentioned earlier – almost half of the world's population logically generates almost half of the world's data. This data is undoubtedly viewed as an asset – and it is. And like any assets, it needs protection from newly emerging threats like cybercrime. That is, at least, the point of view of some BRICS countries – we'll explore the examples below.

These governments are, of course, not alone in this approach – the adoption of the GDPR's strict rules on data protection, for example, shows that the European regulators see the value of, and the risks posed to, personal data circulating in the digital space.

To an extent, some provisions of the GDPR hint at personal data sovereignty – references to countries without adequate personal data protection in place as "third" countries, for instance. Some efforts taken by BRICS' are, however, much more significant, as we'll see in due course – in fact, the phenomenon is referred to as "digital sovereignty".

What is Digital Sovereignty?

The earliest definition of the concept was provided by the CEO of a French radio station Pierre Bellanger, who stated in 2011 that "Digital sovereignty is control of our present and destiny as manifested and guided by the use of technology and computer networks".

Whether this definition still applies today is another matter. GDPR is an example of an attempt to standardize digital sovereignty – arguably one of the first of its kind. However, it is hard to imagine the definition still being valid in the age of surveillance capitalism, data brokering and some states trying to regulate the internet to their gain rather to the gain of the people for whom it was intended in the first place.

We'll now take a look at whether the BRICS countries are doing exactly that.


The countries aren't opposed to innovation – far from it, in fact. Co-operation in the field of cybersecurity and combating threats has been discussed more than once. Brazil, for instance, is on its own cybersecurity strategy at present. It has also signed into law last year the LGPD – the country's GDPR counterpart. Its provisions related to the extra-territorial application are even wider than GDPR's – primarily aimed at protection of data of Brazilian citizens, whenever they may be located – but in other ways, the two laws are quite similar. It also imposes strict information security standard.

Set to apply from 2020 onwards, the LGPD is the only standard in the BRICS countries for data protection that could come close to the European Regulation. It remains to be seen whether it'll be the subject of discussion at the next BRICS summit in Russia.


This year, the Russian Federation has adopted a package of laws commonly referred to as the "sovereign internet" legislation. Many media outlets have been speculating about whether the country could really "create its own internet". In fact, the stated purpose of the law is to ensure the sovereignty of Russia's internet in the event of it being disconnected from the global network and counteract cyber threats. All traffic within the country must pass through checkpoints controlled by the communications watchdog, Roskomnadzor.

The law has been heavily criticized by activists for being aimed, in reality, at restrictions of civil liberties. At present, it's only a framework of federal-level laws, and secondary legislation is expected to follow. It's expected that these legal acts will follow the same top-down approach to Internet regulation so common for Russia.

For instance, in 2015, Russia has passed a law requiring personal data operators to store that data on a Russian server. Cross-border transfer is permitted, provided that the data was initially stored on a server inside Russia.

The case of LinkedIn blockage on Russian territory was probably the most famous example of the authorities exercising that law. Facebook and Twitter still haven't complied, and Roskomnadzor threatens them with blockage from time to time. Until last month, it wasn't an issue because the fines for non-compliance were only about $40. Today, they are over $200k high, so the Internet companies ought to perform a good risk assessment of working and localizing in the country.


Similarly to Russia, India has also recently been considering a data localization policy. Currently, it only affects payment systems. However, the draft Personal Data Protection Bill of 2018 requires storage of personal user data within Indian territory. It will most likely be considered by the Parliament soon.

Both the Personal Data Protection Bill and Russia's localization law have faced criticism from the tech industry players. That's to be expected, given how much a lot of them profit from surveillance capitalism. In addition, it is on the surface contradictory to the idea of the Internet as a "global" phenomenon. However, it's also a way to give the companies at home a competitive advantage – if they own the commodity that is the citizens' data on the country's territory, they can use it internally to develop their business.


Out of all BRICS countries, the People's Republic of China is arguably the biggest investor in 5G and other tech innovations. However, it currently also has the most restrictive Internet policies.

A few years ago, PRC has announced in a white paper that it will emphasize digital "sovereignty" over a global Internet. The justification for that was concern about cyber-attacks from outside. China has since become known as the pioneer of cyber sovereignty – government-controlled Internet and data streams. There's also a localization requirement for the data to be stored in China and made available at the authorities' request. So, unlike Brazil, which has implemented a data protection policy that seems to benefit the citizens, China is using the concept of sovereignty to focus more on control.

The Russian plan for the sovereign Internet and the general approach to digital sovereignty has been compared to China's more than once. At present, however, it's hard to say whether it'd work in the same way since it has only just entered into force, with no precedents to back it up.

South Africa

The South African Republic's privacy is governed by the common law and the constitutional principles and the Protection of Personal Information Act (POPIA). Unlike its BRICS counterparts, this country doesn't place an emphasis on digital sovereignty as such. Indeed, the POPIA was the first codification of the common law principles related to data privacy, and not all of its provisions are in force yet.

The ones in force aren't as strict as the GDPR or the LGPD. For example, there's no data localization requirement, although there's an article about secure cross-border transfer of personal data. South Africa is generally less enthusiastic than Russia or China about the BRICS Internet idea.

Is digital sovereignty about data protection or control?

On the one hand, the protection of an important asset like personal data of its citizens is a must to foster a digital environment that is both strong and sustainable. GDPR's influence hasn't just been prevalent in Europe – people all over the world have gained more awareness of their rights related to personal data and are demanding better protection as a result. BRICS countries are no exception.

However, governments need to maintain the balance between the protection of citizens and their data and controlling it. For that reason, policy alone isn't sufficient – relying on it alone could lead to a phenomenon known as the internet Balkanization. It can only go so far if people don't actually know what's being done to their data. Educating the citizens of BRICS countries about the digital space at a wide scale is hard to do, given that they make up almost half the planet's population, but it's a big step towards ensuring proper sovereignty of their data.

BRICS Member States Negotiating Earth Observation Satellite Sharing Framework (Государства-участники БРИКС ведут переговоры о рамках совместного использования спутников наблюдения Земли) / South Africa, December, 2019
Keywords: space, cooperation
South Africa

The member states of the BRICS economic bloc – Brazil, Russia, India, China, and South Africa – are in the midst of negotiating a mutually beneficial framework that will allow each country to access certain Earth observation satellites from each other, according to various press reports.

The aim, according to India's Minister for Space Jitendra Singh, is to establish a "virtual constellation of remote-sensing satellites," whereby all BRICS countries can access satellite data from Earth observation satellites operated by member states through ground stations built in Brazil, Russia, India, China, and South Africa.

Singh, in a response to a question from the Indian parliament, stated that the Earth observation data would be used by BRICS member countries for civil applications such as disaster response, resource and land management, environmental monitoring, and planning.

"Progress has been made in technical discussions to realise a virtual constellation of remote sensing satellites, as part of the BRICS Programme," Singh told the Indian Parliament in New Delhi on 5 December 2019. "Technical aspects with respect to identifying the satellites and the ground stations for the initial virtual constellation were discussed by the Space Agencies," Singh added, referring to the head of space agencies meeting that took place during the 11th BRICS Summit in Brazil in November 2019.

The Brazilian BRICS Summit declaration spotlighted progress on a virtual BRICS Earth observation satellite constellation, stating that, "We take note of the progress made on the negotiation of the Agreement on Cooperation on BRICS Remote Sensing Satellite Constellation and look forward to its early conclusion."

A 2017 China National Space Administration (CNSA) briefing to the UN Office of Outer Space Affairs (UNOOSA) suggested that Brazil and China will contribute their China-Brazil Earth Resources Satellite-4 (CBERS-4) system, with a reported resolution of 20 metres; Russia will contribute its fleet of Kanopus-V Earth observation satellites that boast a resolution of 2.5 metres; India will offer its ResourceSat-2 remote sensing satellite with a resolution of 5.8 metres; China its GaoFen-1 (GF-1) series of Earth observation satellites that have a resolution of two metres.

South Africa is the only BRICS country that presently does not operate its own high-resolution Earth observation satellite, although some reports suggest that it operates – or has access to – a classified S-band radar imaging satellite built by Russian satellite manufacturer NPO Mashinostroyeniya.

BRICS member states are coordinating on a number of space-related themes, with working groups on geospatial technologies, astronomy, and photonic technologies meeting regularly.

Also in the 2019 BRICS Summit declaration, member states expressed their collective concern about a potential arms race in space stating:

"We express our serious concern about the possibility of an arms race in outer space and reaffirm the need to carry on activities in the exploration and peaceful uses of outer space in accordance with international law, including the Charter of the United Nations. We emphasize the urgent need to negotiate a legally binding multilateral instrument that could fill the gap in the international legal regime applicable to outer space, including on the prevention of the placement of weapons in outer space. We stress that practical transparency and confidence-building measures may also contribute towards this goal. In this connection, we welcome the relevant work carried out by the UN Group of Governmental Experts on the Prevention of an Arms Race in Outer Space (PAROS) and regret that it was unable to reach consensus on its report. We underscore that any instrument on this matter should be non-discriminatory and contain operative provisions on the right to develop technology for peaceful purposes."

BRICS Need to Develop Talent: DG Rosatom (БРИКС нужно развивать таланты: генеральный директор "Росатома") / Russia, December, 2019
Keywords: expert_opinion, social_issues

"The member countries of BRICS – Brazil, Russia, India, China and South Africa – grouping have been net exporter of talent so far, and now the need has come to reverse the trend and build a talent development ecosystem," said the director general of Russia's Rosatom State Atomic Energy Corporation Alexey Likhachev.

According to a press release, Rosatom State Atomic Energy Corporation is technical consultant and main equipment suppliers for the Kudankulam Nuclear Power Plant.

Comparing the ever-growing chasm in the requirements of the world industry including nuclear and the skill set of the professional force, to the climate change in terms of proportion, Alexey Likhachev called for a comparable response on an international scale while addressing media. Likhachev added that the skill gap is another global problem of comparable scale (to climate change) and it continues to remain neglected by political leaders who were short-sighted to see it as an afterthought.

"Paradoxically, while graduates and mid-career professionals struggle to find an appropriate job, it takes years for employers to recruit the required staff to key positions," Likhachev said.

News Today

Gaidar Forum experts to discuss the outcome of the BRICS decade at RANEPA (Эксперты Гайдаровского форума обсудят итоги десятилетия БРИКС в РАНХиГС) / Russia, December, 2019
Keywords: expert_opinion, cooperation

A discussion of the outcomes of the BRICS decade will take place at the 11th Gaidar Forum to be held at RANEPA from January 15-16, 2020. The speakers – Executive Director of the BRICS Research Group Madeline Koch, Co-Director of the BRICS Research Group John Kirton, and Director of the BRICS Institute in New Delhi Binod Singh Ajatshatru – will discuss the challenges, achievements and development prospects for the group.

Madeline Koch is Executive Director of the BRICS Research Group and Co-Director of the G20 Research Group at the University of Toronto. She is co-editor, with John Kirton, of the series of publications on the G20, the G8 and the BRICS and published by Newsdesk Media, including G20 Germay: The 2017 Hamburg Summit and G7 Italy: The 2017 Taormina Summit. She has participated in the field teams on site starting in 1989 and attended every G20 summit since 2008 and every G7/8 one since 1999.

John Kirton is Co-Director of the BRICS Research Group and of the G20 Research Group at the University of Toronto. He is also a Non-resident Senior Fellow at the Chongyang Institute for Financial Studies at China's Renmin University. He has advised the Canadian and Russian governments, the World Health Organization and the Pan American Health Organization on G7/8 and G20 participation and summitry, international trade and sustainable development, and has written widely on G7/8 and G20 summitry. Kirton is the author of many chapters and articles on the G7, G8 and G20.

Binod Singh Ajatshatru is Director of The BRICS Institute in New Delhi and a well-known public intellectual. Before founding The BRICS Institute in New Delhi in 2015, Ajatsatru taught for several years at the various universities in China including the prestigious Peking University, where he lectured about Indian Cultural and civilization. Apart from directing research work at The BRICS Institute, he is also on the advisory board of GIIC-GMR Kakinada SEZ project.

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