Information Bulletin of the BRICS Trade Union Forum
Issue 48.2019
2019.11.25 — 2019.12.01
International relations
Foreign policy in the context of BRICS
Is It Time for a Stronger India-Brazil Relationship? (Настало ли время для более тесных отношений между Индией и Бразилией?) / India, November, 2019
Keywords: cooperation, expert_opinion

On the sidelines of the 11th BRICS summit in Brazil, the enthusiasm of Indian Prime Minister, Narendra Modi to engage Brazilian President, Jair Bolsonaro was evident as he extended an invitation to the Brazilian leader to be the chief guest at India's January 2020 Republic Day celebrations, signaling New Delhi's desire to probe a meaningful relationship with Brazil. The possibility of stronger India-Brazil ties could have an underlying effect on the future of world order, especially given the potential of resource-rich Brazil and the demands of a "rising" India, two countries that have for long shared similar worldviews.

Considering the rise of right-wing leadership in Brazil and "nationalist" Modi's tightening grip on India's foreign policy has led some to speculate that the time for a robust India-Brazil partnership might have arrived. More importantly, could the likelihood of Modi-Bolsonaro association translate into a stronger India-Brazil relationship?

Since the institutionalization of the BRICS grouping in 2009, India's interest to redefine its relations with Brazil, regional power in South America that has global aspirations, has been gaining momentum. Though little attention has been paid to the dynamics of India-Brazil ties, the various complementarities shared by India and Brazil in their foreign policy histories make the relationship interesting.

India and Brazil: Shared Worldviews

In recent years, Brazil and India have demonstrated an interest in having a more decisive role in international institutions, one that is proportional to their geographic size and share in world population. Both have campaigned for a UN Security Council permanent seat. Like India, Brazil has intended to preserve autonomy in its foreign policy against the whims and fancies of Washington. For a considerable period, both also saw themselves as leaders of the third world by raising issues that concern developing countries and demanding a reform of the international institutions such as the United Nations (UN) and the International Monetary Fund (IMF). Their cooperation is also reflected in their shared opposition to the violation of Libya's sovereignty by the West in 2011.

Moreover, they sought pragmatic relations with Iran even in times of growing U.S. pressure against the Islamic government based in Tehran. Despite calls from the U.S. to degrade ties with Iran that Washington considers a threat to its regional allies, India has been hesitant to fully severe its energy and infrastructure ties with Tehran. Brazil, too, instead of aligning with views of the West, has imparted importance to its relations with Iran and has further made efforts to mediatedifferences between the West and Iran.

This shared interest in having autonomy and diversity in their foreign engagements also provides some context to the bilateral relationship. Earlier during the Cold War, India was viewed with suspicion in the West due to the nature of its relationship with the Soviet Union. However, India's interest in the diversification of its political relations with other regions significantly increased after this period. On the other hand, Brazil under the Lula administration, showed interest in engaging new regions such as Asia and Africa, keeping in line with its interests in preserving autonomy in its foreign policy.

Owing to their geographical significance and relative advantages, Brazil in South America and India in South Asia are also considered as "regional" powers that wield influence in their respective neighborhoods. Recently found economic growth alongside their foreign policy activism that offers alternative narratives to those of the West is institutionalized in the BRICS and IBSA multilateral groupings that provide a reference to their "soft balancing" strategy that resents the dominant views of the West. Ultimately both are considered as emerging powers with great power aspirations. That said, India under Modi and Brazil under Bolsonaro would have to think beyond these complementarities to give a direction to the bilateral relationship, that as of now, remains underdeveloped.

India-Brazil Relations: Time to Build on the Foundations

The possibility of a strategic partnership between India and Brazil is incentivized since there remains little or no disagreement in their worldviews. Also, since there exists convergence in their statuses and roles in world affairs at various intervals in history, a review of this relationship is not beyond the scope for political leadership either in Brazil or India.

Moreover, there is mutual goodwill in both countries regarding each other. India's civilizational practices such as yoga and Ayurveda are gaining popularity in Brazil, and the former's growing economic and political profile further attracts attention in the minds of Brazil's strategic community. In India, Brazil wields enough soft power for this relationship to mature. Until recently, there existed little or no skepticism regarding Brazil and its positive image in India. However, Bolsonaro's ascendency to the leadership position has cast doubts over Brazil's image in some circles in India.

Alternatively, though Bolsonaro initially sought to impart little consideration to Brazil's ties with China, Beijing's prominent place in Brazil's economy and pressure from the business lobby might inform Bolsonaro to reconsider this. Even then, there remains some understanding between India and Brazil regarding China. Brazil like India was little receptive to China's ambitious Belt and Road Initiative (BRI) and there is discussion in Brazil regarding China's growing economic influence in South America. This shared concern regarding China could be another motivation for India-Brazil relations.

However, despite Brazil's relative advantages in multiple areas such as energy, agriculture, defense, and space, India has been slow to develop a dedicated framework of cooperation with Brazil. Similarly, while the position of Asia in Brazil's international trade has transformed, there remains no evident strategic vision for the Indo-Pacific region or India.

India's economic relationship with Brazil is largely viewed as a buyer-seller relationship, though the latter is an important trade partner in the region. From an Indian viewpoint, Brazil is seen as an investment destination for Indian businesses, at best. That, however, does not wholly describe the relationship's value for India. Brazil played a crucial role in India-Mercosur Preferential Trade Agreement (PTA) that improves India's access to the large South American market. In 2017-18, trade with Mercosur member countries was of over $10 billion. India's trade with Brazil in 2018-19 stood at more than $8 billion. Top export items from India include organic chemicals, chemical-based products, and pharmaceuticals.

The Bolsonaro Factor

Focusing on themes such as counter-terrorism that have little relevance in India-Brazil relations might not be the correct route to reviewing India-Brazil relations. Both Modi and Bolsonaro are known to adopt a tough stand on a range of issues, and their recent meeting underscores their desire to increase cooperation in diverse areas such as defense and agriculture. More importantly, both face similar challenges including the daunting task of alleviating poverty, rising income inequalities, tackling corruption, and inefficiency in the government.

The rise of Bolsonaro in Brazil and Modi in India, both of whom are known as the leaders of the right-wing in their countries and have nationalistic orientations, might be useful internal shocks that could eventually transform this stagnant relationship.

Ketan Mehta is a junior fellow at the Observer Research Foundation's strategic studies program.

Russia Pledge to Build on BRICS Achievement (Россия обещает развивать достижения БРИКС) / China, November, 2019
Keywords: summit, chaimanship

Russia will use the BRICS chairship to continue to build on the work done by the institution and introduce new initiatives, said Dmitry Zudin, head of foreign policy of the Russian embassy in South Africa.

Russia will state their priority areas officially during the handover of the chair ship this month, said Zudin at a seminar to unpack Brazil's 2019 chairship and BRICS priorities and expectations.

"We are excited to be the next chair. We will continue to build on what Brazil and other BRICS countries had been working on. We will also elaborate on peace keeping, transnational organized crimes, and terrorism. We will focus on money laundering and terrorism funding," said Zudin.

He pointed out that they will keep up with the BRICS custom of inviting other non-members to attend the summit.

Bruno Carvalho Arruda, Point of Contact for Economic Affairs, Agriculture and BRICS at the Embassy of Brazil, said they are happy that they made positive contribution as the chair of the bloc.

Arruda said the achievements of BRICS during their tenure "exceeded their expectations".

He said, "BRICS worked to step up cooperation in fighting organized crimes, corruption and asset recovery. We saw memorandum of understanding in their areas, milk bank and fighting tuberculosis. This would have an impact on the deaths of the children in BRICS countries. We wish Russia the best."

He stated that they will cooperate with Russia and other countries to carry the BRICS agenda forward.

Investment and Finance
Investment and finance in BRICS
'Russia an Important Partner in India's Economic Progress' Asserts Dharmendra Pradhan («Россия - важный партнер в экономическом прогрессе Индии», - утверждает Дхармендра Прадхан) / India, November, 2019
Keywords: expert_opinion, economic_challenges

Union Minister Dharmendra Pradhan stated that New Delhi considers Russia as a significant partner in its economic progress. Further added that the Russia-India relationship has evolved into a 'special and privileged' strategic partnership. The comments were made by the Union Minister while addressing the "Days of Moscow" event in New Delhi.

"We consider Russia as an important partner in our economic progress. Our bilateral relationship has matured into a special and privileged strategic partnership. Lot has changed on the global scene but our friendship remains steadfast," he said.

The minister added that he was happy to join the "Days of Moscow" program saying the event is showcasing the rich traditions of Moscow to the Indian audience.

"I deeply admire your rich cultural heritage and diversity. Our two countries have celebrated the 70 years of diplomatic relations in 2017," he said adding that this initiative from the Russian Embassy is truly commendable. Russian Ambassador to India, Nikolay Kudashev said, "I am confident that Moscow, one of the most developed regions of Russia, should join efforts to enhance infrastructure, health care, e-governance and tourism with such a dynamic and promising partner as Delhi."

"With a full-fledged implementation of twin city agreement signed last year by Moscow and Delhi...and Delhi city governments will become a great contribution for the benefit of our countries commemorating the 10th anniversary of special and privileged strategic partnership next year blessed with the personal friendship of President Putin and Prime Minister Modi," he said.

Modi-Putin relationship

At the BRICS summit in November, PM Modi and Russian President Vladimir Putinreviewed the progress made in the bilateral relationship between Russia and India. During the bilateral meeting with the Russian President on the sidelines of the 11th BRICS summit, PM Modi decided that the first Bilateral Regional Forum at the level of Russian Provinces and the Indian States should be held next year to dismantle the barriers of trade at the regional level, the Ministry of External Affairs said in a statement. The two leaders noted with satisfaction that the USD 25 billion targets of bilateral trade by 2025 has already been achieved, it read.

During the meeting, the two leaders also discussed the stability and progress made in imports of oil and natural gas. Putin highlighted the potential of the Arctic region in natural gas and invited India to invest in the region, the statement said. The two leaders also reviewed the progress made in the field of infrastructure particularly railways in the context of raising the speed of the Nagpur-Secunderabad sector railway line.

The leaders also noted with satisfaction the cooperation in the defence sector and in the field of civil nuclear energy. According to the statement, they welcomed the prospects of cooperation in civil nuclear energy in third countries. The two leaders also noted that both sides shared common positions on international issues and agreed to continue close consultations in the future, the statement added.

The two leaders met over two months after holding extensive talks in Russia's Far East city of Vladivostok on the sidelines of the Eastern Economic Forum (EEF) wherein India had announced an "unprecedented" USD 1 billion line of credit to develop the country's resource-rich far east region.

PM Modi meeting Putin on the sidelines of the 6th Eastern Economic Forum lauded his 'great friend' Vladimir Putin and called the relationship between India and Russia "an unprecedented partnership." PM Modi and the Russian President also witnessed the exchange of 15 documents announcing new areas of cooperation including connectivity, deep-sea exploration, space, energy among others between the two countries. During the joint statement at Vladivostok on Wednesday, PM Modi also spoke on the importance of working together between India and Russia on many global forums like BRICS and SCO.

NDB Registers Rub 100 Billion Bond Programme in Russia (НБР зарегистрировал 100-миллиардную облигационную программу в России) / China, November, 2019
Keywords: ndb, concluded_agreements

On November 22, 2019, the New Development Bank successfully registered its local currency bond Programme in Russia.

The Bank's debut RUB bond Programme was registered by Moscow Exchange for the amount of RUB 100 billion (approx. USD 1.5 billion) and was assigned the following identification number: ­4-00005-L-001P-02E dated 22.11.2019. The Programme has unlimited validity and is listed on Moscow Exchange. Under the Programme, the Bank can issue bonds with the maturity of up to 20 years.

"NDB has successfully registered its local currency bond program in Russia. Following the successful launch of the China RMB Programme in early 2019 and the registration of the South African Rand Programme in April 2019, this is a further key milestone in the Bank's strategy to provide local currency financing to our member countries. The size of the program is 100 billion Rubles and it is listed on the Moscow Exchange," said Mr. Leslie Maasdorp, NDB VP & CFO.

"We would like to thank Joint Lead-Managers – Gazprombank and Rosbank – for the effective execution over the past few months," he added.

"The NDB's General Strategy prioritizes the use of national currencies of our member countries in our lending and funding activities. We view local currency financing as a key component of NDB's value proposition, as it mitigates risks faced by borrowers and supports the deepening of capital markets of the Bank's member countries," highlighted Mr. Leslie Maasdorp.

The full press release by the Moscow Exchange is available here.

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).

The economic agenda of BRICS (Экономическая повестка БРИКС) / Pakistan, November, 2019
Keywords: expert_opinion, economic_challenges

While the leaders at the recent BRICS summit agreed on the international financial institutions' reforms, they did not condemn the slow pace of such reforms strongly enough, which is not beneficial for the developing countries. BRICS had the usual reservations about the IMF not reforming the quota size and realigning quota shares of member countries in favour of developing economies

THE 11th BRICS (a grouping of five countries — Brazil, Russia, India, China and South Africa) summit was held on November 14, 2019 in Brasilia. It was a quiet affair which Prime Minister Modi attended, but there were no earth-shaking pronouncements and, on the whole, it went largely unnoticed. The western media specially did not take much notice of it, yet the BRICS meeting confirmed that the group, thought to be a challenger of G7 group of advanced countries, was still together and building consensus for future collaborations.

BRICS remains a powerful bloc, though it may not be hyperactive during the present times. Its total output was 23.2 per cent of the world's GDP in 2018. Its population was 41 per cent of the global population in 2015. It came up with a lot of fanfare in 2009. The subdued tone of its 11th Summit Declaration is surprising. Are the BRICS under the current global situation of disorder and threat of recession no longer wanting to play a significant role in the global economy?

Each member is indeed undergoing serious problems. India is undergoing a severe economic slowdown, Brazil is growing at only 1.1 per cent and there are no signs of recovery. It has high inflation and unemployment. South Africa is also experiencing 0.8 per cent growth, soaring youth unemployment and high debt, China is suffering low economic growth due to trade war with the US and Russia is dealing with US and EU sanctions and its growth rate has been 1.1 per cent for 2019. Not surprisingly, President Xi Jinping pointed out in his speech that there is a growing wave of protectionism and bullying by advanced countries (mainly the US) in their bid to reduce trade deficits with the Emerging Market and Developing Economies (EMDEs) which include the BRICS. It is doing immense harm to global trade and is leading to shrinkage in investment flows which is bringing hardships to millions of people in the developing countries. BRICS has to cooperate in many areas to keep the growth of trade and investment from declining further and a beginning was made at the Summit.

BRICS member countries will nearly account for 50 per cent of world's economic growth in 2020. China is supposed to be the main protagonist of the Fourth Industrial Revolution. The importance of innovations, digital economy and AI are going to be felt by BRICS members in the next few years and they can cooperate to promote re-skilling so that new jobs are created while old jobs are being lost. Cooperation in technology is going to be very important for the BRICS in the future.
Modi emphasised the need for more FDI flows from BRICS members, claiming that "India is the world's most open and investment-friendly country." He emphasised on simplifying intra-BRICS business which will increase mutual trade and investment. He also requested that priority areas in business be identified for the next 10 years and the blueprint of the intra-BRICS collaboration should be drawn and pointed to the complementarities between members and urged the forum to map such complementarities. BRICS members have diverse endowments-from having huge amounts of raw materials and natural resources, high technology, and a big market — hence, it is possible to draw a map for collaborations in the future, through joint ventures for mutual benefit. Xi said that China will open its market further, expand imports and improve business environment to create better conditions for multinational companies' development. It is a promise which has to be met if China really wants to grow again at a fast pace. Its industrial growth has to pick up so that neighbouring countries can contribute.

While the leaders agreed on the international financial institutions' reforms, they did not condemn the slow pace of such reforms strongly enough which is not beneficial for the developing countries. On the IMF, BRICS had the usual reservations about the IMF not reforming the quota size and realigning quota shares of member countries in favour of EMDEs which remain under-represented at the Fund. (A member country's quota determines its maximum financial commitment to the IMF, its voting power and access to IMF-financing. It is based on a member's relative position in the world economy).The Declaration said, "We call upon the IMF to start work on quota and governance reform on the basis of the principles agreed in 2010 under the 16th General Review of Quotas in right earnest and within tight timeframe."

A new feature was the announcement of opening of New Development Bank regional offices in member countries and one will be opened in New Delhi in 2020. The Regional Offices shall contribute to expanding its operations and striving for a more robust portfolio for all member countries. It reiterated its support for the ongoing collaboration to develop BRICS' own local bond markets. But there was no mention of developing BRICS' own credit rating agency.

The BRICS declaration addressed the demand deficit in the global economy and suggested additional sources of growth, infrastructure, skill development, particularly for young people, sustainable investment, investment in local basic services and outward investment to areas of high potential growth, including on the African continent.

BRICS also underscored the importance of cooperation among members in agriculture: "We recognise the importance of science-based agriculture and deploying ICT to that end." During the Summit, Russia and India noted $25 billion bilateral target for trade for 2025 has already been achieved and marked the progress in oil and natural gas imports. Russia invited India to invest in the Arctic region for natural gas.

BRICS also voted for cooperation in fight against transnational crime, drug trafficking, money laundering and organised crime.

On the whole, the group of five important countries in the world seem to be getting on with their agenda of cooperation and exchange in various economic fields. Whether a free trade agreement will ever emerge from it is not clear due to China's presence. India has withdrawn from RCEP due to pressure from domestic producers against signing the Treaty as it would open the floodgates for Chinese goods into India. China and India have condemned protectionism even though both have resorted to it when pushed to the wall. All five members have to be economically stronger in the future to be able to call the shots for significant changes in the global economy.
Turkey got through economic crisis 'reasonably' well, says economist (Турция пережила «разумный» экономический кризис, считает экономист) / Turkey, November, 2019
Keywords: expert_opinion, economic_challenges

Contrary to simplistic economic observations, Turkey got through the economic crisis reasonably well, according to a leading British economist.

"On one level, contrary to what I think it would be a simplistic, general economic observation. Turkey seems to have got through what could have been a very bad economic crisis [in the] past two years. So far, reasonably well," Jim O'Neill, a prominent British economist and the chair of the London-based think tank Chatham House, said.

"Particularly with the current account balance having adjusted and the economy is not as weak as many would have thought. So, Turkey remains as interesting, as complex as always, " said Jim O'Neill, who coined the acronym BRICS -- which stands for Brazil, Russia, India, China and South Africa -- all emerging economies.

Speaking to Anadolu Agency, O'Neill said Turkey's entry to the European Union would be "enormously positive" for the bloc.

"On top of that Turkey has staggeringly complex neighbors in South, Iran and Iraq and Syria. What the western world finds quite tricky with Russia, your current leadership seems to find a way of navigating all these complex neighbors," said O'Neill.

Noting that this year BRICS marked its 18th year, he elaborated what it represented in today's world.

"I think that general view kind of misses the point. [...] BRICS countries are now 25% of the global GDP. When I created the acronym, it was 7%. Their share of global GDP nearly quadrupled," he said.

"I never thought Brazil would be the same size of Italy until the next decade. People need to get these things into perspective.

"By 2035, 16 years from now, it's quite possible that BRICS countries will be bigger than G7, which is kind of which made it so famous.

"In the next decade, unless India has a huge crisis, India is going to be significantly bigger than France or the U.K. and will be challenging to Germany before the end of the next decade to be the third largest economy of the world and of course China will get close and close to the U.S."

O'Neill said that Turkey is among the MINT countries (Mexico, Indonesia, Nigeria, and Turkey) and those are the next four economic powers to follow BRICS nations.

When asked if Turkey could achieve its target of ranking among the top 10 economies of the world, he said it could be possible in the next decade.

"But in the next decade, as long as Turkey does the right thing, whatever that is, it has a chance."

He warned that a no-deal between the U.S. and China might lead the economy to a recession in the future.

"I worry if we carry on with the trade sanctions, and Trump does not do some kind of a deal, this could get worse and we can get close to another recession. What gives me some hope; China is as worried as I am, so they are going to do something [..] Because U.S. has an election next year, Trump will try to make a deal with China."

World of work
Social policy, trade unions, actions
Value and Regulation of Personal Data in the BRICS (Значение и регулирование персональных данных в БРИКС) / Switzerland, November, 2019
Keywords: social_issues, digital, research
Source: link

[Read more session reports and updates from the 14th Internet Governance Forum]

Mr Luca Belli (Civil Society, Latin American and Caribbean Group) began by discussing the cyberBRICS project aiming to map existing regulations, identify best practices, and develop digital policies regarding personal data protection. It also deals with cybersecurity governance within the BRICS (Brazil, Russia, India, China, and South Africa). Belli noted that a book will soon be available on how cybersecurity is mapped within the BRICS .

Belli explained that for BRICS, data protection regulation has been a focus area over the past few years and with greater mobilisation around the regulatory framework post the 2017 Xiamen declaration. Brazil adopted a new regulation on personal data protection in August 2018 (General Data Protection Law (LGPD) going into force in 2020). Russia has updated their regulation, and India declared the fundamental right to privacy in 2017. China adopted a cybersecurity legislation covering data protection and data security, while South Africa established a data protection regulator with the requirement to implement the Privacy of Personal Information Act.

Considering that this group of five countries represents 3.2 billion people, with 4 out of the 5 countries being among the top five countries with mobile Internet users, data protection is a key issue. Mr Achilles Zaular (Science and Technology Dept. Ministry of Foreign Affairs) said that with the passing of the LGPD in Brazil, companies and organisations have another ten months to assess the requirements and comply with the guidelines.

The LGPD stipulates that all data processing related to Brazilian nationals must comply with the LGPD, regardless of where the data processing company is based or operates from. Organisations are also responsible for appointing a data protection officer who will interface with the national authority. It is clear that when the law goes into effect in 2020, local and foreign companies, government agencies, the data regulator, and the judiciary will engage in a learning experience around the issues that will arise around data management and compliance.

Mr Andrey Shcherbovich (HSE Moscow) said that in Russia, the individual must specifically consent to the use of personal data stating the purpose for which the data may be processed. Databases holding the data cannot be further processed if there would be a change in the purpose for which the data was originally collected without notification of data subject. There are certain categories of sensitive personal data that cannot be collected related to race, nationality, health, religious, and political beliefs, with few exceptions. Shcherbovich raised a concern about data localisation and data related to Russian citizens only being on servers within the Russian Federation, which creates a challenge for cross-border data transfer for social networks like LinkedIn, as well as in cases where countries have a similar localisation approach.

Ms Anja Kovacs (Internet Democracy Project India) shared concerns around India's proposed data protection implementation, namely: 1) Right of data subject to hold data fiduciaries accountable, like in case of automated decisions, and 2) Consent is framed lacking transparency, in a way allowing data fiduciaries and the state side step the consent of the individual. Kovacs echoed Zaular's point on data being a resource and expressed that a country with India's population has both the opportunity to benefit from the size of the available data for profit and the balance of protecting the privacy rights of the citizens. This is also true in China with 850 million Internet users with a state driven artificial intelligence (AI) programme that is now viewed as a security threat by the United States.

Questions arise around how tech companies that benefit from, and are impacted by, privacy regulation view and treat the GDPR, as well as how involved these companies should be.

With regards to the independence of the data protection agencies in different countries, Russia was not recognised by the European Commission as providing adequate data protection due to the lack of independence of the data protection agency. This should be of note in Brazil and China, where the policy making unit is headed by the Chinese president. China's data protection policies do not reduce the government's control over user data to ensure the ability to cater for national security interests. Whereas with South Africa, the data protection authority is the first on the continent and there is work to establish a network of authorities for the African continent.

It was agreed that the market and cultural differences between the BRICS territories lead to challenges in alignment of the policies, but there was still room for greater co-operation in the treatment of data that affects the citizens.

By Andre Edwards

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