Information Bulletin of the BRICS Trade Union Forum
Issue 25.2020
2020.06.15 — 2020.06.21
International relations
Foreign policy in the context of BRICS
Disintegration of Global Security Governance / Georgy Toloraya, Victoria Panova (Распад управления глобальной безопасностью / Георгий Толорая, Виктория Панова) / Brazil, June, 2020
Keywords: expert_opinion, global_governance

Georgy Toloraya, Professional diplomat (rank of minister) with experience in Asian affairs. Member of the Panel of Experts of Sanctions Committee 1718 of United Nations (UN) Security Council and leader of the Russian National Committee on BRICS Research; professor from MGIMO since 2002, collaborat with a number of academic institutes (among them IMEMO and Institute of Economics), he was visiting fellow at the Brookings Institution, Washington, D.C., and has published many articles and books on East Asia and global governance issues. 2. Vice-president for International Relations of the Far Eastern Federal University

Victoria Panova, Vice-president for International Relations of the Far Eastern Federal University (FEFU) and scientific supervisor of the Russia's BRICS Expert Council. She serves as managing director of the Russian National Committee on BRICS Research and since 2003 and acts as regional director for Russia of the G8 Research Group based at the University of Toronto (Canada). Co-chair for the Civil BRICS process initiated by the Russian civil society; permanent member of the Jury for the Youth 8, 20, BRICS. Member of the governing board of the Russian International Studies Association

Since World War II, with global breakdowns and new world orders, one of the topics that have constantly worried several countries is global security. As countries have evolved and modernized over time, due to globalization, the international system has become increasingly polarized, and increasingly fragmented. However, in the current context, one of the goals of countries has been to prevent the collapse of the world's most fundamental institutions and the dismantlement of world security governance. This paper focuses on BRICS actions towards the topic of global security, on how it should contribute on the maintenance of peace and security in the world, working in joint actions. The article also highlights the security management position of each constituent member of the bloc, showing possible pathways to protect and develop the BRICS.

Knowing one's friends and allies: The politics of the BRICS amidst the pandemic (Знание своих друзей и союзников: политика БРИКС в условиях пандемии) / India, June, 2020
Keywords: expert_opinion, covid-19

For most coalitions — and especially so when they involve developing countries — there are usually doomsayers predicting its premature death. The BRICS has been subject to such scepticism for many years now.

In keeping with the old adage of "a friend in need is a friend indeed," crises can be quite revealing about who one's friends really are. In this article, I address the question: what does the current coronavirus pandemic tell us about the relevance and resilience of the BRICS (Brazil, Russia, India, China, and South Africa) as a political grouping? [i] The extent to which the BRICS platform serves as a forum for collective action in these difficult times matters, first and foremost, for the members themselves. As all five economies face some serious development challenges of their own, having reliable allies to turn to can be a valuable resource (e.g. for access to medicines, equipment, personnel, technology, learning from each other's experiences). Equally important, though, is the impact that the BRICS can have on the outside — international institutions, as well as other large and small players — depending on whether they coordinate some of their negotiating positions and present a collective front, or not. Cracks within the BRICS, on the other hand, potentially offer new allies and coalition partners for outsiders.

This article proceeds in three parts. In the first section, I highlight some steps that the BRICS have taken as a group to signal their commitment to collective action and mutual help. In the second section, I point to the limitations of these moves, and also growing polarisation within the group. The third section offers some conclusions and policy recommendations.

A solid BRICS wall against the pandemic?

The life of Brazil, Russia, India and China as an acronym began in a Goldman Sachs study by Jim O'Neill in 2001. [ii] The reactions of the original four at the time were mixed: "There was delight in Russia, bafflement in China, cynicism in Brazil and indifference in India." [iii] Within a few years though, this motley group had decided to band together. The four BRIC leaders met as guests at the G8 Summit at Hokkaido in Japan in 2008. In 2009, the first official leaders' level summit of the BRIC was held in Yekaterinburg. Since then, the group has continued to meet regularly, not only at the leaders' but also ministerial levels (covering a wide range of ministries). It has developed an official track (such as tax and revenue, anti-corruption, security), plus further tracks involving other members of their societies (academia, business, and so forth). In 2011, the "BRIC" grouping grew into "BRICS" with the entry of South Africa. A variety of initiatives, including the establishment of the New Development Bank, led several analysts to view the BRICS as a potentially serious driver for a "parallel order." [iv]

When the coronavirus epidemic emerged, the BRICS responded. At a meeting of the BRICS Sherpas/Sous-Sherpas on 11 February, a "Russian BRICS Chairmanship Statement," expressed sympathy, support, and solidarity for China. It promised, "The BRICS countries are ready to cooperate closely with China." The BRICS countries also underlined "the importance of avoiding discrimination, stigma and overreaction while responding to the outbreak." Additionally, the statement called for the strengthening of scientific cooperation on infectious diseases and public health. [v]

The BRICS' New Development Bank approved an Emergency Loan of 7 billion Renminbi to help assist China combat COVID-19 on 19 March 2020, with an eye especially to helping China's three hardest-hit provinces of Hubei, Guangdong, and Henan. This loan — from China's request to the approval of the board — was approved in a record time of one month. [vi]

As the pandemic spread, causing extreme human and economic destruction in its wake, the BRICS foreign ministers met via videoconference on 28 April. Besides reiterating the importance of multilateral cooperation and their commitment to it, the five foreign ministers are also reported to have agreed on the creation of a loan instrument of $15 billion for financing economic recovery. [vii]

All the above moves could be read as signals of the BRICS to stand together against the coronavirus. But a closer look behind this professed unity is in order.

Behind the BRICS front, divisions rising?

For most coalitions — and especially so when they involve developing countries — there are usually doomsayers predicting its premature death. The BRICS has been subject to such scepticism for many years now, driven partly by the many disparities among the members. The grouping, after all, did bring together a mix of democratic and authoritarian regimes, with very different societal structures, resource bases, developmental trajectories, and historical traditions. The current pandemic has exacerbated pre-existing differences amongst the BRICS. And while the differences are multiple across the various dyads, the most pertinent at this point are those between the most powerful member of the BRICS — China — and the others. I highlight these below.

Amidst the cooperation within the BRICS dyads, the smoothest seems to be between China and Russia. For example, at a press conference following the Foreign Ministers' meeting, Russian Foreign Minister Sergei Lavrov stated, "When we talk about cooperation with China, we cite facts. There are many of them. We are not hiding them from anyone. They include specific forms of assistance: the delivery of humanitarian supplies, medicine and testing kits, medical specialists were dispatched, there were mutual consultations and many more things." [viii] But even in this close relationship, there has been some friction during the pandemic; Russia, for instance, was among the first countries to close its borders to China. [ix]

The other dyads with China within the BRICS have run into more visible difficulties. In the case of Brazil-China, as the virus has spread, it has resulted in public finger-pointing and name-calling from both sides. [x] From South Africa, along with other African countries, China has attracted criticism for the ill-treatment that has been meted out to African residents there. [xi] Perhaps the most serious set of differences can be found between the once much-touted "Ch-India" dyad. In fact, the distrust between the two countries has deep roots; the military standoff between the two in 2017 at Doklam was indicative of this (BRICS or no BRICS). Two recent sets of reactions by India now indicate how the pandemic has impacted on this already difficult relationship. First, to combat "opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic," India recently put up new restrictions on incoming FDI from neighbouring countries. [xii] The new restriction is seen as targeting China, given that both Bangladesh and Pakistan are already subject to such measures. [xiii] This move drew strong criticism from China. [xiv] Second, India cancelled the import of Chinese test-kits for Corona on the grounds that they were faulty and had an accuracy rate of 5%. The Chinese spokesperson described India's behaviour as "unfair and irresponsible." [xv]

Taken together, these examples are more than just a series of diplomatic "spats". They come in a context of increasing suspicion about Chinese regional and global ambition. Signs of this ambition can be found in China's Belt and Road Initiative; the acquisition of the "string of pearls"; adventurism in the neighbouring seas; [xvi] sabre-rattling on its shared border with India in the last weeks; and the passage of a new security law that seems to make a mockery of the autonomy that had been promised to Hong Kong under the handover agreement. On top of this, one of the big takeaways from the pandemic for many countries has been a recognition that global value chains — and even crucial health supply chains — can be weaponised by countries for their national gain. [xvii] As a result, despite China's many efforts at coronavirus diplomacy, this heightened level of concern — and deeper rifts within the BRICS — are likely to be the new normal. [xviii]


The pandemic has had a perverse effect on the BRICS as a political grouping. It has revealed old faultlines, and exacerbated them further. Within the grouping, other alignments are also emerging. For example, Russia, among the four, seems to be moving closer to China, even as it confronts other major players outside. Brazil and India, in contrast, seem to have come closer together — witness the export of hydroxychloroquine and paracetamol by India to Brazil, and Brazil's expression of gratitude through a reference to Indian traditions. [xix] What do these rifts and realignments mean for the BRICS itself, and for the world at large?

First, it is difficult to see the BRICS serving as a negotiating platform for its members, given the clear divergence of interests that the pandemic has reinforced. No amount of lip-service to multilateralism can overcome the risks, which this pandemic has brought to the fore, of over-reliance on crucial supply chains that can be weaponised. This risk is even higher when dealing with competitors and rivals, and the Ch-India dyad is indeed one that has involved competition and rivalry for decades. Add to this the discontent expressed by Brazil and South Africa against China in recent weeks, and it is clear that the BRICS grouping is not the united front (e.g. towards the creation of a parallel world order, or even reform the existing world order) that it was envisioned to be. This does not mean that the BRICS will disappear; it does mean though that its limited impact will weaken even further.

Second, thus far, debates on decoupling have focused primarily on the US and China. But the divisions that the pandemic has exposed within the BRICS create new opportunities for actors that do not wish to become collateral damage in a new cold war. For instance, working together with India and South Africa, the EU could chart a third way for like-minded players. Some of the BRICS countries could be valuable allies for the reform of multilateralism, a renegotiation of the bargain on globalisation, and the refurbishment of a liberal world order.

Revathi Krishnan, 'Like Hanuman got medicine: Brazil's Bolsonaro invokes Ramayana in Covid-19 letter to Modi' The Print, 8 April 2020.

India's PM plans to attend BRICS, SCO summits in Russia (Премьер-министр Индии планирует принять участие в саммитах стран БРИКС и ШОС в России) / Russia, June, 2020
Keywords: narendra_modi, summit

Russia's Ambassador Nikolai Kudashev recalled that Russian President Vladimir Putin had been scheduled to visit India this year

NEW DELHI, June 17. /TASS/. Indian Prime Minister Narendra Modi plans to attend the summits of BRICS (Brazil, Russia, India, China and South Africa) and the Shanghai Cooperation Organization (SCO) due to be held in Russia in 2020, Russia's Ambassador Nikolai Kudashev told Russian reporters in New Delhi on Wednesday.

"Narendra Modi voiced readiness to take part in the summits of BRICS and SCO, which had been scheduled for July 21-23, 2020 in St. Petersburg, but were later postponed because of the coronavirus pandemic," Kudashev said.

The ambassador recalled that Russian President Vladimir Putin had been scheduled to visit India this year.

"The fall season is being worked out for President Vladimir Putin's visit to India," he said.
Russia expects Chinese leader to upcoming SCO, BRICS summits — envoy (Россия ожидает китайского лидера на предстоящих саммитах ШОС и БРИКС - посланник) / Russia, June, 2020
Keywords: summit, top_level_meeting

Russia presides over SCO and BRICS this year, whose summit dates will be determined later depending on the epidemiological situation

MOSCOW, June 19. /TASS/. Russia expects Chinese leader Xi Jinping at the upcoming summit of BRICS (Brazil, Russia, India, China and South Africa) and the Shanghai Cooperation Organization (SCO), slated to take place this fall, Russian Ambassador in China Andrei Denisov told TASS Friday.

He recalled that Russia presides over SCO and BRICS this year, and the two summits will take place this year in Russia. "I hope that they will take place this fall, and we expect heads of member states, including the Chinese leader," the envoy said.

The summits were due on July 21-23 in St. Petersburg. On May 27, the Kremlin press service announced that the events were postponed over the coronavirus pandemic. The Kremlin noted that the "new dates for the summits will be determined depending on further development of the epidemiological situation in the member states and the world in general."
Brazilian, Russian presidents discuss BRICS, fight against coronavirus (Бразильские и российские президенты обсуждают БРИКС и борьбу с коронавирусом) / Russia, June, 2020
Keywords: vladimir_putin, jair_bolsonaro, covid-19

MOSCOW, June 15. /TASS/. Brazilian President Jair Bolsonaro said he had discussed with Russian counterpart Vladimir Putin on Monday the fight against coronavirus and the upcoming BRICS summit.

"I spoke with Russian President Vladimir Putin this morning," Jair Bolsonaro said in a tweet. "We agreed about deeper cooperation between our countries, including in [the issue of] fight against COVID-19. We also discussed the results that we want to achieve at the upcoming summit of BRICS in St. Petersburg," the president wrote on Twitter.

The summits of the Shanghai Cooperation Organization (SCO) and BRICS (Brazil, Russia, India, China and South Africa) were due to take place in St. Petersburg on July 21-23. On May 27, the Kremlin press service said that both summits would be postponed due to the coronavirus pandemic. "The new dates for the summits will depend on the development of the epidemiological situation in the member countries and in general across the globe," the Kremlin said.

Deep-seated partnership remains between China, India despite recent border clash (Между Китаем и Индией сохраняется глубокое партнерство, несмотря на недавнее столкновение на границе) / China, June, 2020
Keywords: cooperation, ndb

The partnership between China and India will remain despite the recent border clash between the two largest economies of the BRICS (Brazil, Russia, India, China and South Africa), Leslie Maasdorp, vice president and chief financial officer of the New Development Bank (NDB), told the Global Times on Thursday.

"These countries [China and India] are strategic, long-term partners in every respect. They work very closely together, and there is considerable trade and cross-border investment," Maasdorp said in a video interview with the Global Times on the NDB's loan relief program, which aims to help lift BRICS countries out of the economic quagmire caused by the COVID-19 pandemic.

"It is very important to recognize the deep trade and investment links that exist between countries. Countries have political issues from time to time… but there is much more deep-seated, long-term partnership," Maasdorp said.

Since the outbreak of COVID19, the NDB has provisioned $10 billion dollars for COVID-19 relief work and post-crisis economic assistance, with $2 billion for each of the five BRICS countries, according to Maasdorp.

China was the first to receive the so-called emergency assistance program, with 7 billion yuan worth of loans received by the Chinese government, which were used to support public health systems.

India has also received $1 billion in COVID-19-related loans from the NDB while South Africa and Brazil are also set to each receive $1 billion worth of loans.

The NDB is a multilateral development bank set up by the BRICS group of major emerging economics in 2014, with a focus on financing infrastructure development in emerging markets and developing countries.

"The bank has moved swiftly in support of member countries," Maasdorp said, noting that after the initial efforts to help sustain national health systems, the focus for the next six months is on economic recovery following declines caused by lockdown measures amid COVID-19.

Russia has so far not requested such a loan, though a request from Russia is likely, Maasdorp said.

COVID-19-related loans will work in parallel with traditional loans given by the NDB, many of which are focused on infrastructure projects such as ports and railways.

The NDB is equally owned by the five countries, which means each country has an equal say in the running of the institution and its lending activity, Maasdorp said. "Each country can borrow from us on more or less the same line."

In the overall NDB lending portfolio of $17.4 billion, about 32 percent has been used for projects in China while 27 percent has gone to projects in India, data from the bank showed.
Investment and Finance
Investment and finance in BRICS
Nothing succeeds like success (Успех способствует успеху) / China, June, 2020
Keywords: economic_challenges, expert_opinion
Author: Jim O'Neill

What can other developing countries learn from China's remarkable achievement in bringing so many people out of poverty

I suspect that this year will go down as a remarkable one in the history of mankind, as a result of the COVID-19 pandemic and the associated collapse of economic activity. The United Nations has already reported that the shock has been so big that it will reverse some of the progress on the eradication of poverty. Let's hope that it is a temporary setback, because certainly one of the greatest achievements in my professional lifetime, which stretches back to 1983, has been the dramatic reduction in global poverty. And it is really important that the world recognizes this achievement during this time of crisis as it has been a truly superb consequence of world economic development.

At the center of this dramatic reduction in global poverty has been China. Its poverty reduction has been a truly astonishing achievement: Not only has China brought more than 800 million people out of poverty, but it has succeeded in realizing the living standards of a major G7 economy for around half that number. No other society in the world has achieved either.
Being the author of the report entitled The World Needs Better Economic BRICs, in which I laid out a scenario where Brazil, Russia, India and China would likely acquire bigger shares of the global economy, I would like to think I did have some awareness of this potential. And in subsequent years, together with my then colleagues at Goldman Sachs, we suggested that by the late 2030s, China's economy in nominal US dollar terms would be as big as that of the United States.

Now, as I look to the future during this COVID-19 pandemic, a question that occurs to me is: What can the other BRICS countries learn from China's remarkable success in bringing so many people out of poverty? This is something that is even more applicable perhaps for most African nations, especially those in sub-Saharan Africa where most of the world's poverty is now located.

Ultimately, economic growth is driven by two forces, the size of a country's labor force and its productivity. The biggest determinant of a country's labor force is that nation's demographic trends, so those with strong birth rates, and high life expectancy, typically enjoy the best labor force dynamics, and the only other factor that can really influence the size of a labor force significantly is immigration. Countries with large populations, especially if they are young, typically can grow more than others. In this regard, China and India have a huge advantage over the other BRICS countries, because of course, they are the only ones with populations in excess of 1 billion. In this regard, there is nothing other countries can learn from China, indeed nor may they need or want to. An exception may be India, as it has a similar large population, and in fact, given that it has a much younger population than China, over the next couple of decades, its overall population is highly likely to be bigger than that of China, and in principle, this should allow India to enjoy higher rates of economic growth than China. But this is not guaranteed.

This brings me to the second determinant of economic growth, namely productivity, and while China does not especially enjoy a natural advantage over the other BRICS countries, it has probably experienced stronger productivity growth in recent decades. This is something that the other countries can learn from.

Trying to improve productivity is, unfortunately, not only difficult, but also not a known science. Economists like myself believe that certain successful policies are likely to improve productivity, but we don't know for sure, we can only make educated guesses. But things such as education, life expectancy, healthcare, the quality and availability of infrastructure, both human and physical, and perhaps in modern times, various forms of technology would all appear to be crucial. In addition, stability or strength in the quality of governance institutions, and the stability of the macro economy, including the amount of international trade and investment a nation pursues, and its level of national debt, all seem important. On many of these indicators, China typically scores better than the other BRICS countries.

During my time as chief economist of Goldman Sachs, alongside the BRICS idea, I also presided over the creation of an index called the Growth Environment Score, which attempted to measure 18 variables, many of them mentioned above, that we believed were statistically significant for sustainable growth and positive productivity change. We used to publish annual GES index scores for around 180 countries every year, although publication ceased in 2014.

The different variables were benchmarked and measured in a score that could be no higher than 10. In the 2014 index, Singapore scored the highest of all countries with an overall index of 8.10, and Eritrea scored the lowest of the 183 countries with an overall index of 2.50. China scored the highest among the BRICS members, with a score of 6.03. interestingly, ranking above a G7 country, Italy, for the first time.

In this regard, a glance at the index components shows many things that the other BRICS countries can learn from China, notably its education achievements, its use of technology, as well as many indicators about macroeconomic stability, especially the degree to which China engages in international trade and investment. Although for China to achieve its longer term ambition of even greater shared wealth for all its own citizens, it needs to do better in aspects such as governance and the rule of law. But it is definitely the case that the other BRICS countries have more to learn from China if they wish to achieve the same kind of success.

The author is the chair of Chatham House. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

NDB Board of Directors approves USD 1 billion COVID-19 emergency program loan to South Africa (Совет директоров НБР одобрил кредит Южной Африке на чрезвычайную программу COVID-19 на 1 млрд долларов) / China, June, 2020
Keywords: ndb, covid-19

On June 19, 2020, the Board of Directors of the New Development Bank (NDB) approved a COVID-19 Emergency Program Loan of USD 1 billion to the Government of the Republic of South Africa.

"The COVID-19 Emergency Program Loan to South Africa will be provided in response to the urgent request and immediate financing needs of the South African Government. NDB's assistance will address urgent health needs in South Africa to overcome the COVID-19 pandemic and help mitigate socio-economic impacts on the most vulnerable populations," said Mr. Xian Zhu, NDB Vice President and Chief Operations Officer. "Such focus of the Bank's financing is in line with the emergency loans provided by the NDB to China and India earlier this year."

The Loan will assist the South African Government in rolling out its healthcare response to the Novel Coronavirus Disease-19 and in providing a social safety net to alleviate the economic impact of the disease containment measures on vulnerable individuals. The Program envisages preventing, detecting and responding to the health threat posed by COVID-19, and providing social grants to vulnerable groups affected by measures implemented to prevent and contain the disease.

In its Statement on Response to COVID-19 Outbreak, the NDB Board of Governors welcomed the NDB contribution to the ongoing efforts of BRICS countries to address the health and economic consequences of the outbreak and stressed that BRICS would unite to combat the COVID-19 outbreak. The NDB established an Emergency Assistance Facility to meet the emergency needs of its member countries. COVID-19 Emergency Program Loan to South Africa is the third loan approved by the NDB Board of Directors in response to the COVID-19 outbreak.

Background information

On June 16, 2020, the New Development Bank priced its inaugural benchmark USD 1.5 billion 3-year COVID Response Bond in the international capital markets. The net proceeds from the Bond issue will be used to finance sustainable development activities in the NDB's member countries, including emergency assistance loans to the Bank's member countries.

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. 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).
NDB prices inaugural USD 1.5 billion 3-year COVID response bond in international capital markets (НБР оценил свой первый трехлетний эталонный облигационный займ на борьбу с COVID-19 на 1,5 млрд долларов США на международных рынках капитала) / China, June, 2020
Keywords: ndb, covid-19, economic_challenges

On June 16, 2020, the New Development Bank (NDB) priced its inaugural benchmark USD 1.5 billion 3-year COVID Response Bond in the international capital markets.

The net proceeds from the Bond issue will be used to finance sustainable development activities in the NDB's member countries, including emergency assistance loans to the Bank's member countries. Such emergency loans could be used to finance direct expenses related to the fight against the COVID-19 outbreak or provide support to governmental measures contributing to economic recovery in the member countries of the NDB.

The transaction met exceptional high-quality investor support, with strong participation from central banks and official institutions, which represented 75% of allocations. The investor geographic distribution of the final Bond book was as follows: 56% – Asia, 29% – EMEA, 15% – Americas.

The robust investor demand allowed the NDB to tighten the pricing by 7 basis points compared to the upper bound of initial price thoughts and to achieve the coupon rate of 0.625%.

"We are pleased with the overwhelmingly positive investor feedback and the very top quality order book for our inaugural COVID Response Bond in the international markets. This bond issue is strategically important in addressing the economic and social challenges that our member states are facing in their fight against the COVID-19 outbreak," said Mr. Leslie Maasdorp, NDB Vice President and Chief Financial Officer. "I would like to thank our investors for their trust in our credit and our lead managers who contributed to the successful execution of the transaction".

Citi, Credit Agricole CIB, Goldman Sachs International, HSBC and J.P. Morgan acted as lead managers for the Bond. Bank of China, Barclays, DBS Bank Ltd., Industrial and Commercial Bank of China Limited, Mizuho Securities, Standard Chartered Bank, TD Securities acted as co-managers for the Bond.

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