Information Bulletin of the BRICS Trade Union Forum
Issue 3.2020
2020.01.13 — 2020.01.19
International relations
Foreign policy in the context of BRICS
Joint Communiqué of the 10th Session of the Joint Ministerial Commission between the Republic of India and the Republic of South Africa, New Delhi, 17 January 2020 (Совместное коммюнике 10-й сессии Совместной министерской комиссии между Республикой Индией и Южно-Африканской Республикой, Нью-Дели, 17 января 2020 года) / South Africa, January, 2020
Keywords: concluded_agreements, cooperation
South Africa


1. His Excellency, Dr. Subrahmanyam Jaishankar, the Honourable Minister of External Affairs of the Republic of India (EAM) and Her Excellency Dr. Naledi Pandor, the Honourable Minister of International Relations and Cooperation of the Republic of South Africa (SAFM), co-chaired the 10th Session of the Joint Ministerial Commission on 17 January 2020 in New Delhi.

2. SAFM thanked her host for the hospitality extended to her and the delegation. She paid a courtesy call on Prime Minister of India and conveyed good wishes of President Ramaphosa to the people of the Republic of India.

3. In their opening remarks, both Ministers expressed their satisfaction at the strong bilateral relations and stressed the important role played by regular consultations across various mechanisms at the Ministerial and Senior Officials level in enhancing ties. Both Ministers acknowledged that the regular holding of Foreign Office Consultations (FOCs), with the recent FOC being held in Pretoria on 3 October 2019, contributed significantly to enhancing the warm and cordial relations between the two countries.

4. Both Ministers expressed satisfaction with the ongoing implementation of the Three Year Strategic Programme of Cooperation, which was signed during President Ramaphosa's visit to India in January 2019.

5. Senior Officials of both sides met on 13th January 2020 and reviewed the decisions taken during the 9th JMC in Pretoria in 2015 and also the 'Three Year Strategic Programme of Cooperation'. Both Ministers were briefed on the outcomes in different sectors between two countries.

6. During the JMC, the following issues were discussed:

A. Bilateral:

Political relations

7. Both sides welcomed increased bilateral visits in recent years and agreed to maintain frequent and regular contacts between political leaders through bilateral visits and meetings on the sidelines of multilateral events. Both sides agreed to further enhance communication and coordination between both the countries on major issues of mutual concern.

8. The Ministers agreed to continue to work closely together to implement the Strategic Programme of Cooperation with particular emphasis in the focus areas of, Deep Mining technology and equipment, Information technology, Science and technology, Agro-processing, Energy, Pharmaceuticals and Healthcare, Tourism, Financial Services, SME and Water Resources Management & Sanitation.

9. EAM noted that South Africa is a valuable partner and a friend of India in the African continent. He extended invitations to concerned South African Ministers to participate in Africa Ministerial meets in the run-up to India Africa Forum Summit – IV (IAFS-IV), the India-Africa Defence Ministers Meet to be held in February 2020 and the India-Africa Agriculture Meet to be held in March 2020.

10. EAM congratulated South Africa on forthcoming assumption of the position of African Union Chair in 2020 and expressed hope that the IAFS IV would be organized successfully with the support from South Africa as the Chair.

11. SAFM's assured to consider favorably, India's candidature to a non-permanent seat of the UNSC for term 2021-22 and India's bid to join the Nuclear Suppliers Group.


12. South Africa acknowledged the invitations extended by India to South Africa to participate in India-Africa Defense Minister's Meet, DEFEXPO 2020 and MILAN 2020 and informed that 20 South African companies are participating in the DEFEXPO-2020.

13. Both sides expressed satisfaction with the regular holding of India-Brazil-South Africa Maritime Exercise (IBSAMAR). The IBSAMAR VII is scheduled at Simon's Town in South Africa in September-October 2020. The Ministers agreed that both sides should finalize the agreements that are currently under discussion. They also agreed to identify new areas of cooperation especially in the realm of Air Force and to the visit of an Air Force scoping delegation to South Africa.

Trade and Investment

14. The Ministers, while acknowledging the growth in bilateral trade volume noted the considerable scope for growth in commercial and investment relations through facilitation of cooperation between business entities in India and South Africa.

15. Both sides encouraged the exchange of trade missions and participation in trade fairs and exhibitions.

16. Both sides agreed on the need to expedite the consultations to finalise the India-SACU PTA at the earliest.


17. The Ministers noted the progress made in Agriculture sector at the recent FoC meeting, where both the countries agreed to identify two agricultural products for mutual market access and tasked their officials to quickly facilitate market access to these products.

18. EAM expressed hope that the barriers to trade in agro-processed sectors (seafood and bovine meat) would be removed soon and tasked their officials to address and resolve the issues related to phytosanitary regulations and others on priority.

19. The Work plan that has been under discussion between South African Agricultural Research Council (ARC) and Indian Council of Agricultural Research (ICAR) has been finalized and is ready for signature.

Minerals and Energy

20. EAM reiterated India's invite to South Africa to join the International Solar Alliance (ISA) as it would further boost South Africa's aim to reduce dependency on fossil fuels and encourage more collaboration in renewable energy specially in solar energy.

21. Both sides welcomed the finalization of the MoU on Cooperation in the field of Geology and Mineral Resources which would provide a framework for cooperation in joint investigations and scientific exchanges concerning the field of geology and mineral resources.


22. Both sides welcomed the finalization of an Action Plan on implementation of MoU on Tourism aimed at promoting bilateral tourism growth. South Africa agreed to facilitate the final winding up of the Indian Tourism Office in Johannesburg.

Consular and Immigration Matters

23. Both sides expressed satisfaction at the signing of the agreement between India and South Africa on simplification of visa for travel of certain categories of citizens signed in Pretoria on 5 December 2019 and noted that implementation would become effective from 20th January 2020. EAM also welcomed South Africa's decision to include India in the select list of countries for its Pilot Project in the year 2020. SA side expressed its appreciation that India is already offering facility to South African nationals since 2016. The Ministers agreed that sincere implementation of these measures would help in enhancing people to people relations and nurturing cultural linkages.

24. With regard to Indian nationals who are resident in Lesotho and Eswatini, South African authorities agreed that these categories of travellers will benefit from long-term multiple entry visa in terms of the Agreement on Simplification of Visa Requirements. SAFM assured to resolve the concerns of the Indian side raised over the work visa related issues for Indian investors.

25. Both sides agreed to institutionalize a regular Consular Dialogue mechanism between India and South Africa to discuss consular and visa related issues.

Arts and Culture

26. Both sides noted with satisfaction the cooperation in the fields of arts, culture and heritage and agreed to continue activities as per the existing Programme of Cooperation. The Ministers agreed to an early conclusion of pending MoUs in the field of Audio Visual Co-production and the MoU on Cooperation in the field of National Archives.

27. The Ministers welcomed series of cultural exchanges that took place during the last five years, enhanced people to people contact and strengthened close bonds of friendship and goodwill between the peoples of the two countries, especially the Festival of India in South Africa held in September 2019 as well as the continuing socio-cultural celebration of the 150th birth anniversary of Mahatma Gandhi.


28. Both sides agreed to support mutual cooperation in the field of sports through exchange of delegations. They identified the disciplines of wrestling and rugby sports for beginning this collaboration under the MoU on Cooperation in the field of Sports and Recreation.

Human Resource Development and Education

29. Both sides expressed their satisfaction on the ongoing research and academic collaboration under the 'Scheme for Promotion of Academic and Research Collaboration' (SPARC) and 'Global Initiative of Academic Networks' (GIAN) and decided to fast-track the early conclusion of Agreement on Cooperation in the field of Higher Education and Agreement on Mutual Recognition of Qualifications, which will facilitate enhanced cooperation in academic exchanges, research and mutual recognition of qualifications. India offered South African students to avail courses under its 'Study in India' programme.

30. SAFM expressed appreciation for India's contribution in the establishment of the Gandhi-Mandela Skills Centre in Tshwane. Both sides look forward to its hard launch scheduled in February- March 2020.

31. EAM while expressing hope that the South Africa would make efforts to maximize the utilization of training programmes and scholarships through greater coordination and partnership under ICCR, IAFS and ITEC programmes, etc. and conveyed that India is favourably considering the proposal by the South African side for customized training courses under ITEC scholarship programme which would assist South Africa in realizing its national development objectives.

Science and Technology

32. EAM expressed appreciation for South Africa's assistance in India's Chandrayan missions and Missions to Antarctica.

33. Both sides agreed to strengthen the role of the Joint Working Group on science and technology and to deepen the overall collaboration and exchanges.


34. Both sides welcomed the ongoing discussions on the issue of recognition of Indian Pharmacopoeia in South Africa and noted that it will contribute towards increasing provisions of affordable drugs.

B. Regional:


35. South Africa gave a briefing on the latest developments in Africa, specially the implementation of the recently concluded African Continental Free Trade Area (AfCFTA) in 2019.

South Asia

36. India briefed the meeting on the latest developments in the South Asian region.

C. Multilateral:

37. Both sides stressed the importance of working towards common interests in multilateral forums and agreed to cooperate on major international issues and towards promoting democratization and reforms of international organisations. The Chairs agreed to enhance bilateral and multilateral cooperation in accordance with the principles of equality, mutual benefit, and also focus and strengthening South-South cooperation and proposed to effectively raise the UN reforms agenda during the 75th Anniversary of the UN. They also agreed to highlight it on the platforms of IBSA and IAFS.

38. The two sides discussed a wide range of contemporary global and regional issues including UN Security Council reform, terrorism, Climate Change. The chairs agreed to further enhance cooperation in all multilateral forum including G-20, BRICS, IBSA, IORA and the Commonwealth.

39. Both sides conveyed their mutual support for permanent membership candidature of UN Security Council.

40. EAM reiterated India's invite to South Africa to join Coalition for Disaster Resilient Infrastructure (CDRI) as a founding member.


41. The South African delegation, led by Minister Pandor expressed its deep gratitude to Minister Jaishankar and the Government and the People of India for the warm hospitality extended during the visit.

42. The Chairs agreed that the next session of the Joint Ministerial Commission will be held in South Africa at a mutually agreed date.

This communiqué was signed on this 17th day of January 2020 in New Delhi, in two copies, in English.

For the Republic of IndiaH.E. Dr. Subrahmanyam Jaishankar,
Minister of External Affairs
For the Republic of South AfricaH.E. Dr. Naledi Pandor,

OR Tambo Building
460 Soutpansberg Road
Press release on Russian BRICS Sherpa and Deputy Foreign Minister Sergey Ryabkov's briefing on the start of Russia's BRICS presidency (О брифинге шерпы России в БРИКС, заместителя Министра иностранных дел С.А.Рябкова в связи с началом председательства России в объединении БРИКС) / Russia, January, 2020
Keywords: chairmanship, summit

On January 14, Russia's BRICS Sherpa and Deputy Foreign Minister Sergey Ryabkov held a briefing on the start of Russia's BRICS presidency in 2020 for diplomats accredited in Moscow.

The key priorities for Russia's presidency in three areas of the BRICS strategic partnership were presented at the event: politics and security; the economy and finance; cultural and humanitarian contacts.

The official website of Russia's BRICS presidency is launched at:
Russia to focus on growing economic partnerships in BRICS 2020 (Россия сосредоточится на расширении экономических партнерских отношений в БРИКС 2020) / India, January, 2020
Keywords: expert_opinion, economic_challenges

With Russia set to chair the five-nation grouping of BRICS (Brazil, Russia, India, China and South Asia) in 2020, the country has plans to hold events all year round in 16 of its important cities, under the overarching theme of BRICS strategic partnership for global stability, shared security and innovative growth, according to Victoria Panova, scientific supervisor of the BRICS Russia Organising Committee Expert Council.

Panova was in New Delhi to participate in the foreign policy conclave, Raisina Dialogue.

She said that priority would be given to economy, trade and investment, and this year, there would be an emphasis on renewing economic partnerships between member nations. All BRICS members are large countries in terms of geographic expanse, and Panova said that there would be sessions for exchange of best practices in rural and remote area management.

BRICS is a plurilateral grouping that was formed keeping the United Nations central to its ideology. It is also non-confrontational. It was formed as an alternative platform to old boys clubs like the United Nations Security Council and the G7, to ensure that the voice of the "rest of the world" was also heard.

Panova said it was heartening to note that while the G7—a group of countries which share same political, economic, cultural and global viewpoints—could not evolve into a dynamic grouping, apart from achieving some success in energy security (its main focus), BRICS, on the other hand, has evolved into a group that now makes decisions, instead of passively taking the decisions made by western powers.

Panova said that with 160 events of Track I and Track II diplomacy within BRICS scheduled this year, the latter encompassing events in areas of environment, cyber cooperation, academia and civil fora, the aim was to make BRICS more dynamic and comprehensive as its launched into its second decade of existence.

BRICS aside, Panova said that the India-Russia relationship was unique and had stayed stable for the last 70 years because it was mutually complementary and not directed against any other nation. Speaking about Russia's new closeness with Pakistan, which has had New Delhi in a flutter, she noted that both India and Russia were independent to make partnerships with other nations, and both have done that. These partnerships have not changed the Russia-India equation.

The reach-out to Pakistan, she said, was not against India, but to get better access to Afghanistan.
South African agriculture needs to become expert at international relations (Сельское хозяйство Южной Африки должно стать экспертом в международных отношениях) / Netherlands, January, 2020
Keywords: expert_opinion

"Now is the time to think strategically and to cast the net wider," says Stephanie van der Walt, director of the Agbiz Fruit Desk.

"For me there are a number of themes this year, notably the Brexit process that is expected to initiate on 31 January, the opportunities that can be leveraged through business' active participation in the BRICS grouping via the BRICS Business Council and the new African Continental Free Trade Area that will launch on the first of July."

She notes that during an agricultural conference hosted in London last year, attended by Agbiz CEO, John Purchase, the representatives of the UK's agribusiness, retail and government gave their assurance that South African fruit is considered a priority product, and that every effort is being made to ensure shipments will move smoothly during the transition process.

"The UK is an important market for South African fruit, particularly table grapes, stone fruit and blueberries. Any changes in the UK market is therefore of note for South African producers."

"In order to mitigate this sensitivity, market diversification is a big priority for South Africa's fruit exporters. The EU and the UK will remain key destinations for our exports, but Asia and Russia, and even India, are markets that hold a tremendous amount of potential. The message from South Africa's partners in BRICS is that free trade and open markets are fundamental to the BRICS objectives, which is highly encouraging when seeking to promote exports."

Reduction of exposure to domestic risk
South Africa is a member of the BRICS grouping which comprises Brazil, Russia, India, China and South Africa. The South African fruit industry has barely seen any benefits thus far from belonging to this grouping but, Stephanie says, the formalising of objectives in the Agricultural Working Group that began during last year's BRICS Summit in Brasilia and will continue in St Petersburg in July, is a step in the right direction.

She notes that it is important to remember the purpose and rationale of South Africa's participation in the BRICS grouping. She refers to a statement made by Dave Malcolmson, Chief Director: Regional Organizations at the Department of International Relations and Cooperation, in 2018: "South Africa's approach [is] in consideration of a matter of crucial importance to BRICS member states, namely the role of emerging economies in advancing the restructuring of the global political, economic and financial architecture into one that is more equitable, balanced and rests on the important pillar of multilateralism."

"This statement remains relevant at a time where we're seeing a long-term rise in protectionism and outright antagonism towards multilateral structures from major western powers; the World Trade Organization's Appellate Body becoming inoperational in December as a result of US efforts to block the appointment of new judges is but one glaring example."

At present, BRICS remains primarily a political alliance, but with the formation of the BRICS Business Council last year, and Chinese President Xi Jinping's open call for the private sector's active participation in BRICS, trade and business engagement is set to gain momentum.

"Within BRICS, South Africa represents the whole region of Africa. With the advent of the African Continental Free Trade Area, the landscape of South-South engagement, and economic engagement in particular, is poised for prominence in the new decade."

Strengthening ties with China
"Asia is a priority destination for South Africa's market diversification efforts and some inroads have been made, even amidst tough competition. According to the Southern Hemisphere Association of Fresh Fruit Exporters, of all their members, South Africa was the largest fruit exporter to Asia, shipping a total of 650,486 tonnes of fruit, to the value of US$773 million, surpassing even major competitors like Chile and Australia. China and Hong Kong received the bulk of this, accounting for 45% of South Africa's total fruit exports into Asia."

Effective engagement through BRICS is one avenue through which trade ties with particularly China may be strengthened so that South Africa's fruit exporters are able to maintain this momentum.

It is also worth noting that China is the largest foreign investor in agriculture on the African continent. Other commodities, such as oil seeds and grain, have identified partnership opportunities across the African continent that may also pave the way for exports to China through investment partnerships. Whether this is a viable avenue for South African fruit producers remains to be seen, but with the tectonic plates of the trade landscape shifting, some out-of-the-box thinking might well be in order.

She doesn't for a moment negate the high risk of doing business in Africa, pointing to investors in the Democratic Republic of the Congo who lost everything. "But I also know of South Africans who are doing exceedingly well there. As with any business venture, what is crucial, is to be aware of what the risks are and have a clear strategy to mitigate them."

"At present," she continues, "we still have more questions than answers regarding the mechanisms that will drive the African Continental Free Trade Area, but as business, it is important that we remain proactive and strategic in our engagement with government. That requires a clear vision of what the African Continental Free Trade Area can mean for us and how it can be used as a tool to help us achieve our goals."
Lavrov: G20 development showed that G7 no longer plays such an important role (Лавров: развитие G20 показало, что G7 больше не играет столь важной роли) / Russia, January, 2020
Keywords: sergey_lavrov, quotation

NEW DELHI, January 15. /TASS/. The creation of G20 confirmed that G7 can no longer solve important issues, Russian Foreign Minister Sergey Lavrov told the Raisina dialogue 2020 conference in New Delhi on Wednesday.

"The creation of G20 was the recognition that G7 cannot anymore decide any issue of any significance," Russia's top diplomat said. "And G20 which embraces G7, BRICS and like-minded countries who support the BRICS position on many occasions. This is a workable organization, especially in a situation when developing countries have grievances regarding the lack of progress on the reform of the UN Security Council."

Lavrov stressed that the main deficiency of the UN Security Council is underrepresentation of developing countries. "We repeatedly reiterated our position that India and Brazil absolutely deserve to be on the Council together with an African candidate. And our position is that the purpose of the UN reform is to make sure that the developing countries have a better treatment in the central organ of the United Nations," he said.

Russia's top diplomat highlighted that the UN Charter is the anchor of any discussions on global issues. "The principles such as sovereign equality of states, non-interference in internal matters, respect for territorial integrity, peaceful resolution of disputes should be applicable to each and every situation in the world. They should be the guiding point for any discussion to develop any new ideas on the world arena," Lavrov noted.
Foreign Minister Sergey Lavrov's remarks and answers to questions at a plenary session of the Raisina Dialogue international conference, New Delhi, January 15, 2020 (Выступление и ответы на вопросы Министра иностранных дел Российской Федерации С.В.Лаврова на пленарной сессии Международной конференции «Диалог Райсина», Нью-Дели, 15 января 2020 года) / Russia, January, 2020
Keywords: sergey_lavrov, speech

Good morning and bon appetit to those who have some food on their tables.

I would like first of all to thank the organisers of this conference for the invitation. I understand this is a young forum, but it managed already in a few years to acquire importance, popularity and reputation. It is indeed very appropriate that we get together more often than in the past to discuss where we are in international relations and which way we are heading.

We are convinced that the overriding trend of global development is the objective process of the formation of a multipolar world. New centres of economic might, financial power and political influence emerge. India is obviously one of them. And it is important to make sure that no serious matter of the global dimension is considered without these new centres of influence.

As President Putin recently mentioned, we believe that the equitable and democratic world order should be based not on the balance of brutal force, but rather should be built as a concert of interests, models of development, cultures and traditions. Actually, such structures are being organised in international relations. I would mention BRICS and RIC, which was the first step towards the creation of BRICS and brought together Russia, India and China. I would also mention the Shanghai Cooperation Organisation, which India joined recently and made even more embracive, if you wish.

And I would mention the G20. The creation of the G20 was the recognition that the G7 cannot anymore decide any issue of any significance. The G20, which embraces the G7, BRICS and like-minded countries who support the BRICS' position on many occasions. This is a workable organisation, especially in a situation when the developing countries have grievances regarding the lack of progress in the reform of the Security Council. Since I mentioned the reform of the Security Council, I would say that the deficiency, the main and probably the only deficiency of the Security Council, is the underrepresentation of developing countries. And we repeatedly reiterated our position that India and Brazil absolutely deserve to be on the Council together with an African candidate, and our position is that the purpose of the reform is to make sure that the developing countries enjoy a better treatment in the central organ of the United Nations.

The UN Charter is the anchor of any discussions that we are having as well as the principles, such as the sovereign equality of states, non-interference in internal matters, respect for territorial integrity, peaceful resolution of disputes. They should be applicable to each and every situation in the world. They should be the guiding point for any discussion to develop any new ideas in the world arena.

Unfortunately, those who do not like the emergence of a multipolar, more democratic world, they try to hamper this process. If you have noticed, our Western friends use the language of international law less and less. Instead, they coined a new concept, which they call rules-based world order. And what kind of rules they offer, you can easily understand if you take a look at what is going on in the Organisation for the Prohibition of Chemical Weapons, when in gross violation of the Chemical Weapons Convention, which requires a consensus on any new ideas, they voted through by minority of the member states of this convention a decision to give the Technical Secretariat a function to attribute guilt. This is a very blunt example of how they perceive the rules which they promote, the rules designed in a very narrow circle and then presented as the final solution for any world problem. I think that this way is very dangerous. By unilateral matters, by trying to impose upon others your own egoistic ideas, we are getting farther from the situation when we must handle the global issues of transnational nature, such as terrorism, drug trafficking and other forms of organised crime, food security, water security, as well as many other things, including the dangers of bringing weapons to outer space, the danger of weaponising cyberspace and many other risks. We can handle them only together.

Speaking of this region, we have the common continent, the vast huge continent of Eurasia, and many people were trying, many great people were trying to promote the ideas of making this continent really united and competitive in the global world. You remember when Charles de Gaulle had a vision of Europe from the Atlantic Ocean to the Ural Mountains. Then the ideas were broadened from Lisbon to Vladivostok. I believe now we can indicate that what we actually have in mind when we speak about Eurasia is the entire space from Lisbon to Jakarta. And when we had a summit in 2016, the Russia-ASEAN Summit, President Putin shared his vision of the Grand Eurasian Space, which would include the Eurasian Economic Union, the ASEAN members, the Shanghai Cooperation Organisation members, and we should be open to all countries who are part of this common geopolitical space, part of this huge continent, including members of the European Union and any other countries that are not members of any organisation but that have been established on this territory.

And we have been promoting Asia-Pacific Cooperation in the context of these ideas together with our friends from ASEAN and all partners, dialogue partners of ASEAN, developing what we called cooperative structures, cooperative architecture for the Asia-Pacific Region, centred on the various formats invented by ASEAN: the ASEAN Regional Security Forum, ASEAN plus dialogue partners defence ministers, many other institutions have been respected and have been usefully promoting cooperation between ASEAN and all its partners, and of course, not least, the East Asia summits were very successful.

Speaking of the rules-based world order, unexpectedly a new concept was coined, Indo-Pacific Strategies, not Asia-Pacific but Indo-Pacific Strategies, initiated and promoted, first of all, by the United States, Australia, Japan and the Republic of Korea. When we asked the initiators about the difference between Indo-Pacific Strategies and Asia-Pacific Region cooperation, they said: "Well, Indo-Pacific is more open, more democratic." If you look at it closely, I would not go into details, it is not at all the case. It is an attempt, I think, to reconfigure the existing structures of the Asia-Pacific Region and to move from ASEAN-centred consensus-seeking forms of interaction to something that would be divisive. You know what is meant by these Indo-Pacific Strategies, and we appreciate the position of ASEAN itself and the position of India, the position which clearly says that these Indo-Pacific Strategies should not be discussed in a way which would imply that somebody should be contained by this cooperation.

And of course, when we ask those who promote this new terminology whether the Indo-Pacific region includes East Africa, for example, they say "no". Does it include the Persian Gulf as part of the Indian Ocean? No. So, it is rather tricky, you know, and we have to be careful with this terminology, which looks very benign but might mean something else.

Since I mentioned the Persian Gulf, we are very concerned about what is going on there. There are many ideas floating around. The Americans want a coalition and the Europeans want a coalition, but with a slightly different mandate. Recently we had military exercises with China and Iran, exercises meant to see how we can ensure the safety of shipping in this area, which is crucial for the global economy.

Many years ago, in a situation which was less dangerous than today, we suggested to the Persian Gulf countries to start thinking about a collective security mechanism, something like the OSCE for Europe, starting with confidence-building measures and inviting each other to military exercises. We talked to the Gulf Cooperation Council countries. Three of them supported this initiative immediately, and three other countries said they needed more time. Recently we revived that idea and had a conference in Moscow in September on the collective security system and a confidence-building system in and around the Persian Gulf. Iran has proposed a non-aggression pact for the GCC countries. Our proposal is a bit broader and more far-reaching. It is not just about not fighting with each other, but about being more transparent and cooperative with each other. We believe that, apart from the Gulf countries – the GCC plus Iran – the participation of the five permanent members of the UN Security Council, the EU, the Arab League and the Organisation of Islamic Cooperation is necessary. The idea is still on the table and we hope it will be looked at.

The last thing I wanted to say is about Eurasia. The Eurasian economic project could be very promising in harmonising various integration groups in this space, including the South Asian Association for Regional Cooperation. The interest we see in the activities of the Eurasian Economic Union, which Russia created together with its neighbours, is proof of this. We have already signed free trade area agreements with Vietnam, Singapore and Serbia. We signed agreements with Iran and China. We are negotiating with Israel and Egypt. The Eurasian Economic Commission has an agreement with ASEAN. I believe this process will certainly be moving forward.

The 21st century is the time when we must get rid of any methods of dealing in international relations which smack of colonial or neo-colonial times. Unilaterally imposed sanctions are not going to work. This is not diplomacy, so I don't believe we should discuss sanctions and other non-diplomatic means when we think about the future of the world.

I would like to conclude by recalling that 20 years ago Russia and India signed the Declaration of Strategic Partnership. Some years later "privileged" was added to the term "strategic partnership", and a few years ago our Indian friends proposed to call our relations "an especially privileged strategic partnership." We want to develop such relations with all countries of the region and we hope our Indian friends will be promoting the same ideology.

Thank you very much and I am ready to take your questions.

Question: Across the Atlantic there is a lot of talk of a deal-making. But most of the deal-making seems to have been done by Russia. You've intervened decisively in Syria. After that we've seen your actions over the last few years and in the last few months particularly in Libya, where something that was happening under the Berlin process has been taken over by Russia. You almost got a ceasefire agreement signed, but then something went wrong. How hopeful are you of things turning out the right way in Libya now, after Haftar has walked out of the agreement as it seems?

Sergey Lavrov: Commander of the Libyan National Army Marshal Khalifa Haftar and President of the Libyan House of Representatives in Tobruk Aguila Saleh said they needed more time to consult with their people. Aguila Saleh was saying that he is the head of parliament and the parliament members must be briefed, must be informed.

We are not overdramatising the situation. These things happened in the past. There were meetings on Libya held in Paris, Palermo and Abu Dhabi. When they met in France, a date of elections was even announced, which is past two years ago. Then there were Palermo and Abu Dhabi. It is a pity that the Abu Dhabi deal failed, because it was really about the key political matters, such as power sharing and sharing the wealth of the country in a way which will make everybody satisfied.

Actually, the ceasefire which President of Russia Vladimir Putin and President of Turkey Recep Tayyip Erdogan called for has been announced by both groups – the Libyan National Army and the fighters who support the Government of National Accord in Tripoli. Unfortunately, the document was not signed by everybody. But it was signed by Prime Minister of the GNA Fayez Mustafa al-Sarraj and Chairman of the High Council of State Khalid al-Mishri. As I said, Haftar and Saleh said that they needed more time for consultations. We never pretended that this would be the final meeting to resolve each and every issue. We have been promoting this meeting in Moscow as a contribution to the conference in Berlin, which will be held this coming Sunday, to which we recommended the conference organisers to invite all Libyan parties. I believe they are considering our proposal positively. It would be really crucial to make sure that whatever is decided in Berlin is acceptable to all parties.

This is a process, it is a thing in the making, and we will continue to contribute to the success of this endeavour.

Question: Let me turn to the idea of Greater Eurasia, which you spoke about. You spoke at length about the Asia-Pacific. Here I would say – forget labels, forget what they call the Indo-Pacific, forget who owns which label. But the fact remains that, by whatever name you call it, the Indian Ocean, the Pacific Ocean is the key to the idea of a united or economically integrated Afro-Eurasia, which includes the Greater Eurasia. Now where do you see Russia's role in this? You know, Russia has become a very active player, even when you talk of an Indo-Pacific strategy, even if you want to call it something else – Russia has just held major exercises, which you described.

Sergey Lavrov: You know, it's not that we are against philosophical terminology. But terminology must be understandable. We used to say "Asia-Pacific Region". There is the Indian Ocean Commission, which embraces all littoral states, as you know, and when people say, we want to develop cooperation in Asia-Pacific in the form of Indo-Pacific strategies, you immediately ask questions – do you include African countries or the countries of the Persian Gulf? No. And do you include all those who have been known as part of the Asia-Pacific Region? Yes. Why do you need to call it Indo-Pacific?

And you know the answer. The answer is to contain China. And it is not even hidden. And as I said, our Indian friends are smart enough to understand this trap and not to get into it. We prefer to promote formats which are not divisive but which unite. And I mentioned the format which was created at the initiative of the late Minister and Prime Minister Primakov, RIC – Russia-India-China. We are going to meet this year, I think in March or April. This will be our 17th meeting in this format. Subsequently, it was this format that gave rise to BRICS, which is also a unifying format, which is not against anybody.

The same is true for the Shanghai Cooperation Organisation, where under one roof we now have the former Soviet republics, India, China and Pakistan; Iran is an observer, and we are supportive of the Iranian request for full membership. Most of the countries support this request and I am sure it will be satisfied.

And these organisations, they also extend the offer of cooperation to others. BRICS, when it meets, we always have an outreach meeting. Now, at the initiative of China, we have the BRICS+ format in addition to the outreach. Outreach is normally for the neighbouring countries of the country where the conference is held, the summit is held. So BRICS + is also a new cooperative proposal.

That's why we need to understand what is behind some terminology. By the way, what is wrong with "international law"? Why do our Western friends insist at each and every conference, whenever you have a declaration, a statement or communique, that the rules-based world order must be key, not international law?

Think about it. The international law is resolutions of the Security Council on Palestine. The rules which the Americans want to apply to Palestine – the Golan Heights, the embassy in Jerusalem, then the legitimacy of the settlements – I am not challenging the sovereignty of the United States to do whatever they please. But then, if you ignore the rules embodied in international law, in the United Nations Charter, then let us discuss how we treat international law in general.

Or take the situation I mentioned already in the OPCW. In UNESCO, there are attempts, in the absence of consensus, to promote the adoption of a comprehensive anti-doping convention, giving the Secretariat the right to attribute [guilt] – as in the case of the OPCW.

Now, speaking about weapons of mass destruction. there is the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction (BWC) , which has been with us for about 20 years already, and from the day of negotiations on this convention, we, together with many others, have been promoting the need to have a verification mechanism, like the Technical Secretariat at the Organisation for the Prohibition of Chemical Weapons. Most of the participating states were in favour and still are. The Americans almost single-handedly blocked the creation of such a mechanism. Instead, we suddenly heard last year from the United Nations Secretariat a reference to the resolution of the General Assembly of 1987, and the 1988 UN Security Council resolution providing for the creation of a UN Secretary General's mechanism to investigate cases of possible use of chemical, biological and toxin weapons. The UN Secretariat proposed the idea of creating an "intermediate potential" for investigating suspected use of biological weapons. We said, wait a moment. There is the Convention. How does this initiative relate to the provisions of the Convention?

And there are many other examples.

There is another interesting point. Our good friend Ban Ki-moon, before he left the post of Secretary-General, in one of his annual reports coined a new expression: preventing violent extremism. This term was immediately supported by many speakers when this report was circulated. We asked why only violent extremism should be prevented. Why should we all not prevent extremism in any form? And then we understood what happened, because it was not the Secretary-General and the Secretariat that explained the meaning to us. It was a group of our Western friends. And in a nutshell, their vision of this prevention of violent extremism concept is as follows: extremism is born in authoritarian societies where the dictators do not give enough democracy to the people. Therefore, the concept goes, the international community must reach over the heads of these dictators to civil society and explain to civil society how to make their country democratic. As simple as that. Ignoring all principles of international law which make the states primarily responsible for fighting extremism, terrorism and any other criminal methods. So it is not just terminology. It's a very important substantive trend that we are witnessing. And we want to stick to international law, to the United Nations Charter, making the world more democratic on the basis of the principles enshrined in it. The UN Charter, for instance, endorses sovereign equality of states. But we all know that practice is different.
Investment and Finance
Investment and finance in BRICS
'Geriatric' Western Powers Don't Want to Give Up Their Influence in the World - Russian BRICS Expert («Гериатрические» западные державы не хотят отказываться от своего влияния в мире - российский эксперт БРИКС) / Russia, January, 2020
Keywords: economic_challenges, expert_opinion

New Delhi (Sputnik): Russia took over the leadership of the five-nation bloc BRICS from Brazil in early January. This is the third time that Moscow has taken over the rotational chairmanship of the five-nation bloc, comprising Brazil, Russia, India, China, and South Africa.

Briefing journalists on Russia's initiatives during its BRICS chairmanship, Dr Victoria Panova of the BRICS Russia Organising Committee Expert Council said that the fundamental objective of the grouping was a multipolar, multi-civilisational world order revolving around the United Nations' founding principles.

She said that the Western powers, or what she described as "Geriatric Powers", are attempting to maintain the status quo so that they don't lose their influence in the world.

"Geriatric Powers – they really don't want to give up what has been achieved, a status quo and the influence they have in the world. That's why BRICS started introducing new norms, not to dominate the world", said Dr Panova in New Delhi on Thursday. Dr Panova said that BRICS has started mechanisms and initiatives that would be in harmony with other groupings or blocs, adding that it would be fairer to accommodate the voices and interests of other countries, not just BRICS alone.

"Those initiatives may not be of very considerable interest, but in line with already existing systems like [the] WTO we have seen the Geriatric Powers (Western blocs) breaking this mechanism when it stopped serving their interests. BRICS wants to preserve this with its vitality," said Dr. Panova. On expansion of BRICS, the Russian expert said, it was not an exclusive bloc, but open to cooperation. "There is a consensus process and we have to make sure this would not be a thoughtless process of including more countries into its fold and compromise the efficiency of the grouping. For the moment, we want to consolidate our achievements in the short period of [the] existence of BRICS, [rather] than getting it stopped. First let those achievements be consolidated and then, it could consider deepening cooperation with other countries".

In the wake of trade sanctions by the United States, BRICS was considering a common payment system for its member-nations. Dr Panova explained that there were some initial discussions on a system to be introduced among the member-nations so that "they are not blocked for international transfers" in trade dealings.

"A common currency for BRICS is also on the agenda, but there are a lot of technical questions and it needs to be discussed at [an] expert level", she added. Russian Foreign Minister Sergei Lavrov said on Wednesday that Moscow is looking to protect its interest and those of its trade partners from unilateral American sanctions. He said that increasing trade in national currencies was one of Russia's priorities in this regard, with Moscow signing fresh agreements on currency-currency trade with China and Turkey last year, and reaching an agreement within the BRICS group of nations on the opening of accounts for such transactions.

"We consider that de-pegging from the dollar in mutual settlements is an objective response to the unpredictability of US economic policy and the outright abuse by Washington of the dollar's status as a world reserve currency", Lavrov observed during his visit to New Delhi to attend the annual multilateral Raisina Dialogue-2020. Nandan Unnikrishnan, a distinguished fellow at Observer Research Foundation, a non-government think-tank, in turn, said that Indo-Russian relations were not against any country, but a mutually beneficial partnership and their national interests guide their relations with other countries.

"India maintains good links with all great powers, and I don't think at this stage anyone in the world in their rational mind say that Russia is not a great power. It is part of India's multi-vector policy to have good relations with all great powers. India and Russia have traditional relations, which have evolved since the late 1950s without being directed [at] anyone. It is one of the very few bilateral relations anywhere in the world with this kind of longevity that is not directed against any one country or bloc. India is not opposed to the West, Russia may be but for different reasons", said Unnikrishnan.
Is BRICS Dodging US Dollar? (БРИКС уклоняется от доллара США?) / Russia, January, 2020
Keywords: economic_challenges, expert_opinion

During the last association summit, BRICS countries supported the idea of introducing a single payment system, an alternative to SWIFT, for the subsequent implementation of payments in national currencies.

In an exclusive interview with Sputnik, Director of the Department of Multilateral Economic Cooperation and Special Projects of the Russian Ministry of Economic Development Natalia Stapran said that China was looking with keen interest at settlements in national currencies with its BRICS partners.

The weight of the BRICS countries in world trade has increased significantly. In 15 years, the volume of corporate transactions in the countries of the association has increased 15 times, from $26.5 billion to $388 billion. BRICS account for more than 17% of the international trade volume and more than 20% of global foreign direct investment.

At the same time, the share of settlements between countries in dollars has been decreasing. According to RDIF CEO Kirill Dmitriev, in Russia, for instance, the dollar's share in foreign trade settlements has decreased from 92% to 50% in five years, while the rouble's has grown from 3% to 14%.

Under such circumstances, BRICS countries are thinking about introducing their own payment system, an alternative to SWIFT, which would serve settlements in national currencies. The existing procedure of foreign trade settlements via SWIFT is of concern to many: since SWIFT is controlled by the US, the system can be used as an instrument of political pressure. For example, the United States has already disconnected Iran from SWIFT, which has caused a drop in GDP and exports, higher inflation, and devaluation of the national currency.

Washington periodically threatens to disconnect Russia from SWIFT as well. China was in no hurry for some time with de-dollarisation and transitioning to alternative payment systems. However, the trade conflict with the US has shown that it is very risky to rely on the US financial infrastructure, Director of the Department for Multilateral Economic Cooperation at the Ministry of Economic Development Natalia Stapran said:

"Initiatives such as settlements in national currencies should contribute to trade facilitation. This issue is being actively discussed, but it is not always easy with China. I can see why the Chinese are in no hurry: because they did not really need it. After all, settlements in national currencies are a tool for overcoming sanctions restrictions. As soon as the Chinese felt that this could affect them, when it hinders transactions – they do not think about volumes and turnover, and have shown great interest", the Russian expert said. However, China's own national payment system appeared back in 2015. It is called the CIPS International Payment System. Currently, more than 20 local and foreign banks are connected to it. The system allows making direct cross-border payments in RMB. It is not necessary to open correspondent accounts (often called nostro or vostro accounts – ed. note Sputnik). This reduces costs and transaction time. Russia has a similar solution – System for Transfer of Financial Messages (SPFS). Recently it was reported that India is working on a similar system.

Since the BRICS countries already have experience with their own payment systems, at the last summit in Brazil it was proposed to unite efforts and create a single, alternative mechanism for mutual settlements, Director of the Department for International Financial Relations of the Ministry of Finance of Russia Andrey Bokarev told Sputnik at the Gaidar Forum.

"Our Brazilian colleagues proposed the idea last year in the form of creating a BRICS cross-border payment system. The idea was to minimise the involvement of mechanisms related to the opening of correspondent accounts of our commercial banks and to make the most of the opportunities offered by the national central banks of our countries for such transactions", Bokarev explained. "The topic deserves the utmost attention, and I can't say that we don't hear enough involved remarks from any of the participants. Another issue is that the topic is not a simple one and requires a whole range of solutions", he continued.

Assessing the capacity of each national stakeholder, Russia's International Financial Relations Department Director Andrey Bokarev continued:

"Needless to say, such an issue cannot be solved solely employing efforts or on the initiative of national regulators. There must also be movement from below and interest on the part of the participants themselves. First of all, these are banks and companies in our countries. And there must be a clear demand and interest in creating such systems. Otherwise, it will be a mechanism that will be in little demand", Bokarev said. According to the government official, now there is a search for frameworks that are mutually acceptable to all member countries of the BRICS association, which will allow for the formation of a system of settlements.

"From the perspective of the Russian side, one of the first steps could be the creation of a system for the transfer of messages on financial transactions, a SWIFT analogue. Such a system is already used in settlements in Russia and with some of our counteragents. And we are thinking about extending that scheme to all five member states. Next, we will talk about the implementation of all other components of mutual settlements", he concluded. According to the Russian Finance Ministry official, the more convenient the SWIFT-alternative settlements systems are, the greater the demand for them among market participants will be. The growth of trade volume is not enough for this; you also need a user-friendly interface. On the bilateral level, the work is progressing.

Back in autumn, it was reported that Russia and China could connect two of their national systems for mutual settlements, bypassing SWIFT. Two systems can be connected via network gateways – hardware and software complexes – for payments between Russian organisations and their counterparts in China. The network gateways would recode payment messages from one payment system format to another. In this way, both parties would operate on a platform that is convenient for them without any difficulties. However, nothing prevents the system from being aligned with other BRICS participants.
BRICS Bank chairman K V Kamath soon likely to be inducted in finance ministry (Председатель правления БРИКС К В Камат, скорее всего, будет введен в должность в министерстве финансов) / India, January, 2020
Keywords: ndb

KV Kamath, veteran banker and chairman of BRICS Bank, is soon expected to be inducted as minister of state in the finance ministry, news agency IANS reported citing unidentified sources. Before BRICS Bank, K V Kamath served as the chairman of Infosys, the second-largest Indian IT services company, and as the non-executive chairman of ICICI Bank. The other inductees may include, right-wing idealogue Swapan Dasgupta and Niti Aayog CEO Amitabh Kant, IANS also reported.

Kamath took charge as the chairman of Infosys from Narayana Murthy on August 21, 2011. He remained chairman till June 2015. Before serving in this position, he was the non-executive chairman of the company from 2 May 2011. K V Kamath also served as an independent director on the boards of the Houston-based oil services company Schlumberger since 2010, and the Indian pharmaceutical manufacturer Lupin. He is also a member of the Board of Governors of the Pandit Deendayal.

The Indian economy is currently seeing a slowdown. The economy grew at a dismal 4.5 per cent in the second quarter of the ongoing fiscal on account of both domestic and global factors. According to the first advance GDP estimates, the economy is expected to grow at 5 per cent much below what was expected earlier. Meanwhile, Finance Minister Nirmala Sitharaman is slated to present the budget for FY21 on February 1, 2020. The budget would be keenly watched as it comes amid the ongoing slowdown where industry and other quarters of the economy expect the government to announce a slew of measures for growth to rebound. In the past few months, finance minister has taken a host of measures to revive the falling growth.
Can the BRICS Be the Catalyst for a New International Monetary System Based on Global Infrastructure Development? (Может ли БРИКС стать катализатором новой международной валютной системы, основанной на развитии глобальной инфраструктуры?) / Russia, January, 2020
Keywords: economic_challenges, expert_opinion
Authors: Paul Gallagher and Richard A. Black

It is often mentioned that the Chinese term for crisis – "Weiji" – is made up of two characters: the first can mean "dangerous," and the second, "opportunity." We may hope that the currently unfolding monetary crisis – potentially far worse than that of 2008 – will be the sharp prod for major nations to take the opportunity for bold action to form a new monetary arrangement. This arrangement must dry out the global speculative bubble and focus on investment in great projects of trans-national infrastructure, especially in the developing sector.

The former chief economist at the European Central Bank (ECB), Otmar Issing, recently stated that ECB's extreme low-interest rate policy is encouraging investors to get into things whose risks they do not understand. And since this approach is moving into the most remote corners of the financial market, "that can lead to a crisis of new dimensions," Issing says, adding, that the situation is as fragile as before the outbreak of the crisis in 2008. While in the US, on December 13th, the New York Federal Reserve announced an expansion of its past 3 months of overnight "repo market" lending to the top New York trading houses -- which is already at the level of $50-100 billion each night-- to try to forestall a new, major Wall St. liquidity crisis.

Two members of the BRICS, China and Russia, are already involved in new initiatives which are breaking with the old patterns of non-investment in infrastructure: China's Belt and Road Initiative (BRI) and the Russian Federation's plan to "light up Africa" with nuclear-power vectored electricity generation. The American physical economist, Lyndon LaRouche, had shown in research papers published over many years, that major infrastructure – high-speed railroads, third and fourth generation nuclear power, major water management systems - are the central and irreplaceable producer of added value in a national economy. LaRouche had shown that "the actual role of infrastructure in a viable form of economy… amplifies the productive powers of labor, a science-driven increase of physical productivity at the point of production." Let us examine how the New Development Bank (NDB) of the BRICS could be expanded in size and in conception to become a seed-crystal for a new monetary system for development.

For Example, the New Development Bank

Although the New Development Bank of the BRICS nations comes with a top label of "$100 billion capital", it has, in its first 3.5 years, operated at an order of magnitude below that. That is to say, that while stating "The NDB intends to operate at scale", the Bank has not, as it admits, operated on the scale at which lie the urgent new infrastructure needs of the member countries. This is to say nothing of developing nations to which it could be reaching out, as in the needed and thus far neglected reconstruction needs of Syria.

For example, if one looks at the large-scale need and demand for nuclear power plants in all the member countries, and the potential of Russia and China to supply those needs given a sufficient volume of credit for new infrastructure projects, it is clear that much more capacity for hard infrastructure credit needs to be created. The New Development Bank emphasizes its preference for "green" and "renewable" energy and other projects. But it is evident from the latest available operating data of power plants around the world, that added solar or wind power capacity adds far less actual electricity generation per capita per year – and far, far less per land area used per year -- than the same added capacity in nuclear plants. Actual electricity generation per capita per year, and per hectare per year, are the factors which increase economic productivity. Those many bankers who advertise their devotion to "green" investments only, and decorate their annual reports with pictures of rows of wind turbines, are making a spectacle of themselves for the giant sovereign wealth and pension funds of Europe, not fostering power density and productivity.

Let us return to the issue of levels of credit necessary to build nuclear facilities, railroad corridors, modernize ports and land-side infrastructure in Russia; and to bring the Belt and Road into connection with the Syrian government's "Five Seas" development plan for reconstruction, as expanded by the Schiller Institute. Let us use Russia as an example of what can be done across the BRICS. What is necessary is to build the much more extensive "great projects" which the New Development Bank could undertake, more on the base of national credit institutions in the BRICS member states. Specifically that aspect of the NDB which is stated in its General Strategy 2017-2021 – "The Bank will fund its operations through regular bond issues in member countries … including in local currencies" – has not been significantly exploited.

Leave aside for the moment China's extensive investments in hard-infrastructure "great projects" in third countries, which have not gone through or involved the NDB. Let us take Russia as an example of how such a national credit institution can be built up, which can also serve as a basis for the NDB, as well as for other multilateral infrastructure lending institutions.

A Lesson From Alexander Hamilton

Any government which has been able to borrow from its own citizens at a reasonable rate of interest, is able to use that debt to issue national government credit (new currency) into its economy for purposes of raising productivity,and increasing production and living standards. The statement of the first U.S. Treasury Secretary, Alexander Hamilton, that "A national debt is a national blessing if the means of its ultimate extinguishment have been provided for," refers to this. Hamilton's handling of the new American government's problem of assuming colonial debts – many, then non-performing – while issuing new credits, and establishing the sound basis of all the country's debts, launched what came to be called "the American System of economy". Most importantly, it launched the transformation of an overwhelmingly farm-based society into a great industrial power, by providing national credit to realize technological innovations in manufacturing and infrastructure.

The means of ultimate extinguishment of newly issued national debt are, essentially, higher labor productivity and technological productivity (total factor productivity) of future generations, resulting from the use of the credit for, particularly, technological advances expressed in new basic economic infrastructure. Assigning government tax revenues to service the new debt in the short term is needed simply to maintain or increase the national currency's value while launching great infrastructure projects. The basis for this currency issuance among nations should not be the dollar as reserve currency, but a gold-reserve system as under the post-World War II Bretton Woods Agreements.

The nations which are best situated to launch a new Bretton Woods arrangement, with stable currency exchange rates on a gold-reserve basis, are China, Russia, India and the United States; they also have the scientific and technological prowess, including as spacefaring nations, to export capital goods to developing countries in development projects. Within that system the national credit institutions of these nations can cooperate in joint credits for great projects.

A Russian Bank for Infrastructure

Let the Russian parliament enact a law creating a Russian Bank for Infrastructure and Industry, with the stated purpose of concentrating investments for the national purposes of Russia focused on new economic infrastructure. Let that Bank be capitalized by issuing preferred shares, up to a maximum equity of $100 billion equivalent, with an annual dividend return of 8%, to be subscribed solely by Russian citizens, companies, banks and Russian institutions, paid in solely in rubles, the warrants to be called only at the discretion of the Bank for a period of 20 years. Let the national government issue $10 billion equivalent in 20-year general government bonds as its share of equity capital in the Bank, and be on call for an additional $10 billion. Let the national government through its account at the Central Bank, and/or through the National Welfare Fund, guarantee payment of dividends over that term, and the eventual redemption of equity shares.

To the greatest extent possible, encourage Russian holders of Russian long-term general government bonds (apparently totaling about $130 billion currently outstanding) to trade these for equity in the Bank, both for patriotic reasons and rewarded by a rate of return approximately 1.5% higher. To the extent such already outstanding government debt is traded for equity in the Bank, the government's interest expense is much less under its dividend guarantee. And alternatively, the government may from time to time purchase back some of its own bonds which have been subscribed to the Bank, by issues of rubles to the Bank, thus providing the Bank with liquid operating capital.

Let the Bank for Infrastructure and Industry, as necessary, raise borrowed capital in addition, up to a maximum total of $100 billion equivalent (leveraging itself up to 2:1), by issuing 20-year bonds on essentially the same terms and guarantees, denominated in rubles and again purchased by Russian citizens, companies, banks or other institutions. These bonds are to be callable only by the Bank during the period of 20 years.

Let the Bank issue credits for construction of nuclear power installations and development of more advanced modular nuclear designs; for the building of railroad corridors such as Moscow-Beijing and modernization of others (double tracking, electrification, communications, etc.); for urgent modernization of Russia's Pacific ports, and similar national purposes.

The Bank's commercial revenue will come from payments on these credits; from participation in loans made by private banks to contractors; from purchasing bonds issued by municipal or regional governments in order take necessary parts in these projects, and from other commercial banking activities. The national government, through one or both of the means stated above, will in this structure have a guarantee expense of up to $160 billion equivalent over 20 years' time, and will guarantee the Bank's ultimate redemption of its capital as necessary after that time. As government revenue increases from rising economic activity in building these great projects and rising economic wealth when they are in use, the government may assign a portion of these additional revenues to the Bank from time to time, even using it as a bank of deposit for these revenues.

As was noted in the 2015 case of Egypt's raising approximately $2 billion equivalent for the second channel of the Suez Canal (exclusively from Egyptians and in Egyptian pounds), successful capitalization of a Russian Bank for Infrastructure and Industry in this manner is likely to be accompanied by a rise in the ruble's value.

It is evident that such a credit institution could be created directly by the Russian government's making a special issue of government bonds for the purpose of capitalizing it, although its scale would then be limited by its having no private investors in its equity or in its debt. Such an institution was the United States' Reconstruction Finance Corporation (RFC) in operation for post-Depression revival and reconstruction from 1931 to 1957. All its funds were raised by specially earmarked bond issues of the U.S. Treasury; though it operated like a large commercial bank in some ways, it was unable to borrow or to take deposits as a bank.

Such a National Bank in Russia can cooperate with other multilateral lending institutions; for example, in organizing ruble bonds for the New Development Bank, or in backing an NDB bond issues in the currencies of other member countries. It and the NDB could make the construction loans to break the log-jam on construction of nuclear power plants in South Africa, for example.

The most powerful partnership of national credit institutions for development will be among China, Russia, India and the United States. These nations can facilitate long-term productive investments by agreeing on new, stable currency exchange rates between themselves, kept stable by exchange controls; and they can use bank separation to protect their commercial banking sectors to participate in such investments. This is the path to a new Bretton Woods credit and monetary system, again, on a gold-reserve rather than a dollar-reserve basis.

Paul Gallagher is co-editor of the international newsweekly, Executive Intelligence Review, and its Co-Director for Economic Intelligence.

Richard A. Black is The Schiller Institute's representative at the United Nations in New York.

Views expressed are of individual contributors, unless explicitly stated otherwise.
Has the World Economy Reached Peak Growth? (Достигла ли мировая экономика пикового роста?) / China, January, 2020
Keywords: economic_challenges, expert_opinion

Whether or not the 2010s were a "lost decade," one thing is clear: many countries fell short of their potential, possibly squandering their last best shot of registering strong GDP growth. In the decade ahead, demographic realities will catch up to China and the West, and the world will need a productivity miracle to offset the effects.

LONDON – At the start of a new decade, many commentators are understandably focused on the health of the global economy. GDP growth this decade most likely will be lower than during the teens, barring a notable improvement in productivity in the West and China, or a sustained acceleration in India and the largest African economies.

Until we have final fourth-quarter data for 2019, we won't be able to calculate global GDP growth for the 2010-2019 decade. Still, it is likely to be around 3.5% per year, which is similar to the growth rate for the 2000s, and higher than the 3.3% growth of the 1980s and 1990s. That slightly stronger performance over the past two decades is due almost entirely to China, with India playing a modestly expanding role.

Average annual growth of 3.5% for 2010-2019 means that many countries fell short of their potential. In principle, global GDP could have increased by more than 4%, judging by the two key drivers of growth: the size of the workforce and productivity. In fact, the 2010s could have been the strongest decade of the first half of this century. But it didn't turn out that way. The European Union endured a disappointing period of weakness, and Brazil and Russia each grew by much less than in the previous decade.

The prospects for the coming decades are not as strong. China's labor-force growth is now peaking, and the populations of Japan, Germany, Italy, and other key countries are aging and in decline. True, some countries and regions that underperformed in the teens could now catch up; but much will depend on the realization of several positive developments.

For example, given the EU's demographics, it would take a significant improvement in productivity to boost the rate of GDP growth. More expansionary fiscal policies in many countries – including, possibly, Germany – could produce a temporary acceleration this year and perhaps through 2021. But it is hard to see how a stimulus-driven expansion could be sustained much beyond that point. Europeans can talk all they want about "structural reform." But without effective productivity-enhancing measures, the EU's growth potential will remain in decline.

As for Brazil and Russia, it would be highly disappointing if both countries were to register the same weak growth of the past decade. Yet, to get from around 1% annual growth to 3.5-4% annual growth would probably require another commodity-price boom, in addition to major productivity enhancements. Given that both countries tend to eschew reform whenever commodity prices are booming – a classic symptom of the "commodities curse" – it is doubtful that either will reach its potential this decade (though, if one had to bet, Brazil has a better chance than Russia).

In China, a further deceleration in trend GDP growth is highly likely, owing to demographic realities. When I offered my earlier assessment of the BRICs (Brazil, Russia, India, and China) at the start of this century, it was already clear that by the end of the 2010s, China would be feeling the growth-constraining effects of a peaking workforce. Accordingly, I estimated that its real (inflation-adjusted) annual GDP growth in the 2020s would be around 4.5-5.5%. To achieve growth above that range would require a significant increase in productivity. In light of China's investments in technology and shift to more domestic consumption, productivity certainly could improve. But whether that will be enough to overcome China's other well-known challenges remains to be seen.

For its part, the United Kingdom could achieve stronger growth this decade, but it could also suffer a slowdown, depending on how it deals with Brexit and its aftermath. In any case, the country's influence on global GDP is likely to be modest.

Then there is the United States, where annual growth potential appears to be just over 2%. Without more fiscal stimulus and an indefinite continuation of ultra-easy monetary policies, it is difficult to see how the US could exceed this rate. Moreover, it has been more than a decade since the US experienced a recession. Were that to happen in the months or years ahead, the US would have an even smaller chance of reaching its growth potential for the 2020s.

Last but not least are the still-smaller economies with enormous growth potential. While countries such as Indonesia (and perhaps Mexico and Turkey) are becoming more relevant in an assessment of global GDP, it is India that promises to have the largest influence in the 2020s and beyond. The country's demographics will remain in an economic sweet spot for at least another decade.

Were the Indian government to adopt the right mix of growth-enhancing reforms, it could easily achieve annual growth in the range of 8-10%. And, because India is already close to being the world's fifth-largest economy, that would have a significant influence on global GDP growth. The problem, of course, is that the current government has shown no indication that it will pursue positive reforms. On the contrary, it has launched a debilitating new culture war.

That leaves Africa. As matters stand, no African economy is large enough to influence global GDP on its own. But, as a region, Africa's GDP is close to that of India, which means that if enough of its major economies can achieve strong growth, the effects will be felt more broadly. The rise of Africa seems both desirable and inevitable to me. Whether the continent can drive global GDP growth will be a key question for the coming decade.
Russia pursues policy of gradual de-dollarization, says foreign minister (Россия проводит политику постепенной дедолларизации, заявил министр иностранных дел) / Russia, January, 2020
Keywords: economic_challenges, quotation, sergey_lavrov

One of Russia's priorities is to expand settlements in national currencies, Sergey Lavrov said

MOSCOW, January 15. /TASS/. Amid the US' sanctions, Moscow pursues the policy of gradual de-dollarization of its economy and expansion of settlements in national currencies, Russian Foreign Minister Sergey Lavrov said in an interview with The Times of India newspaper.

"Against the background of the increasingly aggressive use of financial sanctions by the US Administration, Russia continues its policy aimed at gradual de-dollarization of the economy. Together with our main partners, including India, we work on developing economic and legal mechanisms to reduce the negative impact of restrictions on bilateral trade and investment ties," the minister said.

One of Russia's priorities is to expand settlements in national currencies, he added. "Relevant intergovernmental agreements on settlements and payments were concluded with China and Turkey last June and October. Within BRICS, agreements were reached on the mutual opening by the Central Banks of relevant correspondent accounts," Lavrov explained.

"We consider that de-pegging from the dollar in mutual settlements is an objective response to the unpredictability of the U.S. economic policy and the outright abuse by Washington of the dollar's status as a world reserve currency," he noted.
BRICS becomes integral part of international relations system, says senior diplomat (БРИКС становится неотъемлемой частью системы международных отношений, считает старший дипломат) / Russia, January, 2020
Keywords: expert_opinion, economic_challenges

According to Russian Deputy Foreign Minister Sergei Ryabkov, the total GDP at purchasing power parity reached $44 trillion in 2018

MOSCOW, January 15. /TASS/. It is impossible to imagine the architecture of international relations without the BRICS (Brazil, Russia, India, China, South Africa) association, Russian Deputy Foreign Minister Sergei Ryabkov said on Wednesday.

"We believe it is indisputable that BRICS as a multifaceted and multilateral association has completed its formation stage," he said at the expert discussion titled "BRICS at Ten: Challenges, Achievements and Prospects. "Today one will hardly venture to imagine the architecture of international relations without BRICS."

According to Ryabkov, the total GDP at purchasing power parity reached $44 trillion in 2018. "According to the IMF forecast for 2019, this figure should grow to reach $47.6 trillion. By contrast, a similar forecast for the G7 countries is $42.4 trillion," he said.

The senior Russian diplomat stressed that in a modern, very turbulent and an increasingly unpredictable world, BRICS is "an association that works solely and exclusively on the principles of a common approach to international affairs." "These are, first and foremost, multilateralism, protection of international law and consensus. We never impose anything on anyone," he said.

Some experts say that the BRICS countries are not too active as far as some issues are concerned, Ryabkov went on to say. "We reply to this, '[That's] because the BRICS countries respect each other's specific national features and specific approaches to various aspects of the current agenda," he said, adding that he regarded that as the association's strong point.
NDB Receives Best Panda Bond Award at the Asset Triple A Country Award 2019 Ceremony(НБР получает награду «Лучший Панда бонд» на церемонии «Asset Triple A Country Award 2019») / China, January, 2020
Keywords: ndb

On January 16, 2020, the New Development Bank was honored to receive the Best Panda Bond Award at The Asset Triple A Country Award 2019 ceremony held in Hong Kong.

The Best Panda Bond Award is a recognition of innovation and prominence of the NDB's RMB 3 billion bond issued in February 2019 as the first Panda Bond issuance under the 2018 Panda Bond Measures. Please click here to learn more about the bond.

"NDB continues to make great strides in the execution of its local currency financing strategy," said Mr. Leslie Maasdorp, NDB Vice President and CFO. "The NDB intends to become a frequent bond issuer in the Chinese domestic market as we see strong demand for RMB financing."

The Asset's annual Triple A Country Awards is a prestigious award for the banking, financial, treasury and capital market industries.

The award announcement is available on The Asset's website.

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).
Political Events
Political events in the public life of BRICS
Acting Foreign Minister Sergey Lavrov's remarks and answers to questions at an MGIMO University branch in Uzbekistan, Tashkent, January 16, 2020 (Выступление и ответы на вопросы и.о. Министра иностранных дел Российской Федерации С.В.Лаврова в филиале МГИМО в Узбекистане, Ташкент, 16 января 2020 года) / Russia, January, 2020
Keywords: sergey_lavov, speech

Mr Kamilov, Mr Islamov, friends,
To begin with, I wish a Happy New Year to you.

I'm happy to be here today at an event that is being held as part of opening an MGIMO University branch in the capital of Uzbekistan. I'm pleased to speak before the students and the faculty led by our university graduate Mr Islamov. Clearly, opening an MGIMO University branch is an important step in our foreign policy cooperation in the sphere of education and coordination of our actions. It also reflects the growing interest in the Russian language and education, which is actively supported by President Mirziyoyev. As far as I understand, you now have eight branches of Russian universities in Uzbekistan. This is not the final number. Today, during our conversation, President Mirziyoyev said there are plans to open several more branches of Russian universities. We will do our utmost to cooperate in these endeavours.

Last year, MGIMO University marked its 75th anniversary. Over the past three quarters of a century, it has come a long way and become a truly unique research and training school. I'm confident that you will carry on the glorious traditions of training highly qualified specialists in international affairs in a wide range of areas, primarily, of course, the diplomatic service, but not only it, because MGIMO University graduates are in demand in other public services and private businesses.

The efforts to train such specialists are all the more in demand, as the importance of diplomacy and the ability to negotiate has increased many times over. I would like to note that tectonic processes are underway in the modern world that are associated with the ongoing redistribution of the global balance of forces and the formation of a fundamentally new, more democratic and pluralistic, multipolar international order. New centres of economic growth, financial power and political influence are emerging in the Asia-Pacific Region, Latin America and Africa, which many refer to as the continent of the future, the potential of which remains untapped. I'm confident that this historical era will last a long time, but this is an objective process, and it can't be stopped.

Western countries – the historical West, as they say – have been dominating in the world perhaps for at least five hundred years. This era is now receding in the past. It is time to share power and influence and to make agreements with new strong players. Unfortunately, our Western colleagues are trying to torpedo these processes and hold on to their position of power, but life makes them act according to the objective trends of global development instead of based on unilateral geopolitical attitudes. Today, alongside these processes and the need to develop relevant forms of interaction and cooperation, the demand for a completely new level of trust and coordination among all these leading international players is growing in order to face the serious challenges and threats that cross borders today. There is no way to hide from them behind national borders. Terrorism, drug trafficking and other forms of organised crime, as well as cybercrime, which today requires new non-standard approaches to prevent it from causing huge damage to all the countries in the world, are among the most terrible threats. I do not even mention such a traditional issue as the proliferation of weapons of mass destruction. By the way, climate change is another one of these threats and risks. They can only be addressed together under the umbrella of the United Nations, on the firm ground of its Charter and other universally applied norms of international law.

Organisations of which Russia and Uzbekistan are members operate on the grounds of mutual respect, equality, the search for a balance of interests, compromise and consensus such as the CIS and the SCO. Russia's work at BRICS and in the Russia – India – China format, which we abbreviate as RIC, is also based on these principles. I would also like to mention the G20, the establishment of which several years ago as well as the creation of the mechanism of its summits reflect the West's growing understanding of the need to abandon its dictate in the world economy and to come to terms with the new centres of power. As you know, the G20 includes the G7, which until recently tried to govern the global economic and financial processes alone, BRICS countries and a range of rapidly growing economies of the developing world, which share the vision of the BRICS on principal issues. Without doubt, the G20 is turning into a forum for political discussions, which allows large powerful countries that are not members of the UN Security Council to get involved.

Of course, it is clear that political coordination needs to improve, given that reckless – let's call a spade a spade – actions by our American partners and their closest allies, unfortunately, led to disastrous consequences in the Middle East. Iraq was destroyed, and is now struggling to restore its integrity and ability to bring life in the country back to normal. Libya was also destroyed, and they have a long way to go before rebuilding their statehood. An attempt was made to do the same in Syria. However, this time, responding to the request from the legitimate government of the Syrian Arab Republic, the Russian Federation provided, I believe, very effective assistance to the Syrian people in warding off the threat posed by global terrorism and the Syrian people have repelled it. Some less significant challenges facing the country have yet to be addressed. We helped the Syrian people to defend the statehood of their country. I believe this should serve in the future as a good example of how to prevent this sort of aggressive and reckless attempts to decide the fate of whole regions from overseas or any other place on Earth, for that matter.

The situation around Iran is doing much harm to strategic stability as it has evolved into a crisis after the US unilateral arbitrary pullout of the Joint Comprehensive Plan of Action (JCPOA) on Iran's nuclear programme and the Intermediate-Range Nuclear Forces Treaty (the INF Treaty) – a pullout which is, essentially, responsible for dismantling this very important agreement on the non-proliferation of nuclear weapons, as well as for giving rise to tensions in the context of arms control, the non-proliferation of weapons of mass destruction and the limitation of arms, primarily, nuclear weapons.

We are also seeing ongoing attempts to use unfair methods of competition – now we move to the economy. Washington is still trying to impose American approaches outside the G20 and the World Trade Organisation formats. It is impeding the WTO activities as the WTO mechanism for settling disputes cannot function properly because of the US position. Meanwhile our American colleagues are trying to push through on a bilateral basis their decisions on how to resolve global problems, having no scruples in actively resorting to protectionism and unilateral unlawful economic sanctions, openly abusing the status of the dollar.

It seems to me that these methods of waging trade and other wars, including hot wars, have no prospects in the future. Rather these will be methods of building cooperation while abstaining from dictating others, as well as threats and zero-sum games. As I said before, we need to promote the value of dialogue, consensus and mutual respect. Only in this way can we move along the road to resolving global issues based on truly sustainable decisions, instead of short-term ones that are geared to some domestic political events or electoral cycles.

We are now introducing multilateral diplomacy formats such as the Astana process. Russia, Turkey and Iran are actively involved in resolving the Syria crisis, not only in terms of stabilising the situation on the ground but launching the political process as well. The Constitutional Committee became operational. This is an ongoing effort. It is no accident that the Astana process has drawn the attention of other countries as well, with Jordan, Iraq and Lebanon having an observer status in this multilateral format. Moreover, when we address the Syrian, Libyan or any other international issue, we never force anyone to do anything against their will and never impose anything on anyone.

We are pursuing a foreign policy that promotes pragmatism and realistic solutions rather than putting forward high-profile initiatives designed to produce an immediate propaganda effect, but which contain zero specific steps to bring a solution to a particular problem. Our initiatives aim to unite the efforts and capabilities of various states. For example, an initiative to form the Greater Eurasian Partnership, which President Vladimir Putin put forward during the Russia-ASEAN Summit in May 2016, serves this purpose. This partnership is supposed to combine the capabilities of the EAEU, the SCO and ASEAN member countries. Similarly, we propose adopting collective approaches to agreeing upon general principles for promoting non-proliferation of nuclear, chemical and biological weapons. There are many challenges in this area that are related to our Western colleagues' attempts to steamroll the verification procedures for themselves and their unwillingness to transparently consider the problems in these areas.

Of course, like any other responsible country, we want to have a friendly external environment and neighbourly relations and to maintain constructive interaction with all our foreign partners without exception in all formats around the world with the understanding that our colleagues are willing to reciprocate.

So, we note with satisfaction that Russia and the Central Asian countries are linked by alliance and strategic partnership based on the principles of international law, respect and consideration for each other's interests, as well as the search for a balance of interests when considering any issues.

This, of course, fully applies to our alliance and strategic partnership with Uzbekistan. Our trade is steadily growing, and our leaders have set the goal to reach the level of $10 billion. So far, we have reached about half this amount. Upcoming events, including a meeting of the Intergovernmental Commission on Economic Cooperation, will be used to outline concrete steps to implement the tasks set by the presidents.

We have ambitious joint projects ranging from energy, including nuclear, to engineering. The total volume of Russia's investment in the economy of Uzbekistan exceeds $9 billion, with over 1,700 enterprises with the Russian capital operating in Uzbekistan.

We work closely at various multilateral venues, including the UN and the CIS, which Uzbekistan is currently chairing, and the SCO. These links are deep and effective.

We believe the CIS fully serves its purpose as a structure in the post-Soviet space where all new states may discuss any arising questions. I think the full unifying potential of the Commonwealth has not yet been unlocked. We share the priorities of Uzbekistan's CIS presidency this year and are ready to do everything we can to help implement them.

We consider important our joint work in the SCO and support active cooperation between Uzbekistan, on the one hand, and the EAEU and CSTO, on the other. I discussed this today with President of Uzbekistan Shavkat Mirziyoyev and my counterpart, Foreign Minister Abdulaziz Kamilov.

The Eurasian Economic Union is developing fairly quickly and successfully. Common markets of goods, services, capital and workforce have been created. International contacts with third countries are growing. Free trade agreements have been signed with Vietnam, Singapore and Serbia. Contracts with Iran and China have been signed. Talks are underway with Israel, Egypt and many other countries including Latin American states, as well as with international integration associations, including ASEAN. Ties between the SCO and the EAEU are growing stronger.

We are conducting useful dialogue with our Uzbek friends on the best ways to develop practical cooperation with the EAEU.


This year we are celebrating the 75th anniversary of Victory in the Great Patriotic War. Our peoples fought against Nazism shoulder to shoulder and together with other Soviet nations made a decisive contribution to the liberation of Europe and the rest of the world from the Nazi horrors. The victory laid the foundations of the modern international security system, including the establishment of the United Nations. The principles of its Charter are immutable. For all of their novelties, any reforms of international organisations and relations, which will be numerous, must by all mean rely on these principles that have universal value and are recognised by all countries without exception.

We must cherish the memory of the exploits of our fathers and grandfathers and must not allow anyone to rewrite history, call into doubt the results of World War II, or justify the crimes of the Nazis and their accomplices. Of course, attempts to revise the decisions of the Nuremberg Trials are unacceptable. We are witnessing such fairly active attempts in several countries, and regrettably, in European Union states that are continuously presenting themselves as a model of democracy. This is a very dangerous trend and must be countered.

We are looking forward to the arrival of our dear friends for the celebrations of the 75th anniversary of Victory in the Great Patriotic War on May 9, 2020. Naturally, we are looking forward to the arrival of our friends from Uzbekistan. I am confident that this great holiday will be observed in Moscow, Tashkent and other cities of our two countries. I know that the Park of Victory is being restored in Tashkent, and I hope that we will have an opportunity to take part in its opening ceremony.

In conclusion, I would like to wish students success in their studies. You will ensure the continuity of our foreign policy cooperation, primarily the foreign policy course of your state. I hope you will take part in forming and developing the agenda for cooperation between Russia and Uzbekistan. I hope the knowledge and skills that you will receive at this MGIMO branch will help you in all your undertakings.

Thank you very much. I am ready to answer your questions.
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