Information Bulletin of the BRICS Trade Union Forum
Issue 1.2020
2019.12.30 — 2020.01.05
International relations
Foreign policy in the context of BRICS
Foreign Ministry Spokesperson Geng Shuang's Regular Press Conference on January 3, 2020 (Очередная пресс-конференция 3 января 2020 г. у официального представителя МИД КНР Гэн Шуана) / China, January, 2020
Keywords: chairmanship, cooperation, quotation

Q: Russia assumed the BRICS presidency on January 1. It reportedly made some proposals on future BIRCS cooperation. Does China have any specific expectations on Russia's presidency and the BRICS cooperation this year?

A: BRICS is a cooperation mechanism with global influence among emerging markets and developing countries. In recent years, there has been a growing cohesion within BRICS countries, as BRICS countries enjoy stronger practical cooperation and rising influence and ascend to become a significant force in international affairs.

The international landscape we are facing today is very complicated against the headwind of rampant unilateralism, protectionism, power politics and bullying practices. The international community is attentively watching how BRICS countries react to these challenges and play a constructive role in international affairs. As this year's president, Russia plans to hold the 12th BRICS summit in Saint Petersburg. Under the strategic guidance of the two heads of states, China-Russia relations are marching into a new era of mutual support, in-depth integration, innovation and mutual benefit. China fully supports Russia in its presidency and will closely collaborate with Russia and other BRICS countries to ensure the success of the Saint Petersburg summit.

As BRICS enters into the "year of Russia", China hopes that BRICS cooperation will make new progress and achieve new outcomes. BRICS countries will consolidate their strategic partnership, advance the three-pillar-driven cooperation in the areas of economy, peace and security and people-to-people exchanges, and expand "BRICS plus" cooperation. China also hopes that BRICS countries will play a positive role in safeguarding world peace and development, championing international fairness and justice, adhering to multilateralism and the multilateral trading system, and make greater contribution to the building of the community with a shared future for mankind.
Putin's New Year Greetings to BRICS Leaders (Новогоднее поздравление Путина лидерам стран БРИКС) / Ghana, December, 2019
Keywords: vladimir_putin, chairmanship

President of Russia Vladimir Putin extended his greetings on Christmas and the New Year 2020 to heads of foreign states and governments, as well as leaders of international organisations including BRICS.

In his message to President of Brazil, Jair Bolsonaro, Putin emphasised that Brazil's 2019 BRICS Presidency fully confirmed the country's constructive and interested approach to cooperation within this association.

He noted that the Russian side, taking over the leadership of the Five, intends to work effectively for the sake of enhancing the BRICS authority and promoting common approaches to pressing problems on the international agenda. Putin further expressed hope for the continuation of a substantive and productive dialogue.

In his messages of greetings addressed to Indian President, Ram Nath Kovind, and Prime Minister, Narendra Modi, the President of Russia highlighted the high level of bilateral relations. He emphasised that the agreements reached during the talks in Vladivostok would pave the way for building up mutually beneficial cooperation in many areas, and for the coordination of efforts in resolving current issues on the regional and international agenda.

Putin recalled that 2020 would mark the 20th anniversary of the signing of the Declaration on Strategic Partnership between Russia and India, expressing confidence that this important anniversary would be marked by new achievements in the development of bilateral cooperation.

In his message of greeting to President of the People's Republic of China, Xi Jinping, on the occasion of the New Year and the upcoming Spring Festival, Putin assertively noted that much has been done lately to strengthen the Russian-Chinese comprehensive partnership and strategic interaction. That the agreements reached during last year's meetings opened up new prospects for mutually beneficial cooperation in various areas.

In particular, the Russian leader pointed out that supplies of Russian gas to China via the eastern route was launched, and that the successful Region-to-Region Cooperation Years made it possible to expand mutually beneficial ties on the local level.

The President noted that Russia attaches great importance to implementing the next major bilateral project, which is the Years of Russian-Chinese Scientific, Technical and Innovative Cooperation, and expressed his belief that joint efforts will help build up relations between Russia and China and expand their constructive interaction in international affairs.

To President of the Republic of South Africa, Cyril Ramaphosa, the Russian President stated that bilateral meetings in Osaka and Sochi confirmed the high level of relations between the Russian Federation and the Republic of South Africa.

Putin expressed the conviction that implementation of the existing agreements would further enhance Russian-South African comprehensive strategic partnership and coordination within the UN, the G20, BRICS and other multilateral forums.

As stipulated by the guidelines, Russia will assume the rotating presidency of the BRICS (Brazil, Russia, India, China and South Africa) regional association on January 1, 2020. It takes over from Brazil that headed the group in 2019.

The BRICS member countries (Brazil, Russia, India, China and South Africa) collectively represent about 26% of the world's geographic area and are home to 3.6 billion people, about 42% of the world's population. The five commands a combined nominal GDP of US$16.6 trillion. *By Kester Kenn Klomegah, frequently writes on Russia, Africa and the BRICS.

Russia Assumes BRICS Presidency in 2020 (Россия принимает председательство в БРИКС в 2020 году) / Greece, December, 2019
Keywords: chairmanship, expert_opinion

As stipulated by the guidelines, Russia will assume the rotating presidency of the BRICS (Brazil, Russia, India, China and South Africa) regional association on January 1, 2020. It will take over from Brazil. The Brazilian BRICS Chairmanship managed to achieve serious progress in all the main pillars of cooperation – political, economic and humanitarian.

The group noted that much progress has been achieved in streamlining the full-scale operational activity of the New Development Bank (NDB). For example, it has already approved 35 investment projects worth a total of over US$9.2 billion. An important aspect is going forward still with plans to transit to project funding in BRICS national currencies.

Continuous appreciable efforts, made previously, towards two Russian initiatives: to establish an Energy Research Platform and the BRICS Women Business Alliance.

The BRICS countries are firmly committed to democratization of international life and its development under the principles enshrined in the UN Charter and principles of respect for cultural and civilizational diversity of the world and the right of peoples to forge their destiny themselves.

Russia with the four members are very proactive, most decisions taken on significant international issues are balanced, often taken by consensus rather than imposed. BRICS has established as a multilateral structure, and as reliable association pushing for fair, democratic and multipolar world order.

President Vladimir Putin set out presidency priorities at the 11th BRICS summit held in Brasilia on November 14, 2019. The main priority of presidency, just as of the multifaceted cooperation within BRICS, is to enhance the quality of life in the group's countries.

"We will continue to promote the main three spheres of the group countries' cooperation, that is, political, economic and humanitarian cooperation. We will need to give more effort to enhancing our coordination at the basic international platforms. We are set to deepen our dialogue on counterterrorism. We will encourage our partners to continue to promote out parliamentary, sport and educational contacts as well as youth exchanges," according to Ministry of Foreign Affairs Spokesperson, Maria Zakharova.

Notably, Russia plans to update the Strategy for BRICS Economic Partnership in order to build mutual trade and investments. Russia will also be working to reinforce the potential of the BRICS New Development Bank. Russia's theme for its BRICS presidency is "BRICS Partnership for Global Stability, Shared Security and Innovative Growth" – the chosen theme fully conforms to the group's goals.

As Russia takes the helm of BRICS, the group will be keenly interested in increasing financial and economic cooperation among the member countries, effective industrial interaction and practical cooperation in developing and implementing new joint energy, telecommunications and high-tech projects among others.

According to the official information made available, Russia plans to hold around 150 events at different levels, including two summit meetings (the official summit will be held in St Petersburg in July, 2020. An informal summit will take place on the sidelines of the G20 meeting in Saudi Arabia), as well as over 20 ministerial meetings are planned in more than 10 Russian cities.

The BRICS member countries (Brazil, Russia, India, China and South Africa) collectively represent about 26% of the world's geographic area and are home to 3.6 billion people, about 42% of the world's population and a combined nominal GDP of US$16.6 trillion.
Russia takes over the reins to chair BRICS in 2020 (Россия берет бразды правления на пост председателя БРИКС в 2020 году) / Russia, January, 2020
Keywords: chairmanship, summit

MOSCOW, January 1. /TASS/. On January 1, Moscow is taking over the one-year chairmanship of the BRICS group (Brazil, Russia, India, China and South Africa). Russia plans to carry out about 150 activities at various levels during its chairmanship, which will culminate in July, when St. Petersburg will host the next BRICS summit. The five countries' leaders will hold another meeting on the sidelines of the G20 summit in the Saudi capital of Riyadh in November.

According to procedure, each BRICS member takes over the group's chairmanship for a year. Russia last chaired BRICS in 2015, when a summit took place in Ufa. Russia also presided over the group back in 2009, before BRIC turned into BRICS following South Africa's accession.

Over 20 ministerial meetings are also expected to take place, including those involving the Russian Security Council secretary, the Supreme Court chief justice and the chairpersons of both house of Russia's parliament. Apart from St. Petersburg, BRICS events - such as meetings between Sherpas, ministers, business community members and experts - will take part in dozens of other Russian cities, including Yekaterinburg, Kazan, Novosibirsk, Samara, Saransk, Sochi, Ulyanovsk, Ufa, Khanty-Mansiysk and Yaroslavl. The theme of Russia's chairmanship is "BRICS Strategic Partnership for Global Stability, Shared Security and Innovative Growth."

Russia's priorities

President Vladimir Putin clarified Russia's priorities as BRICS chair in Brasilia in November 2019. Moscow will focus on enhancing foreign policy coordination between member countries on key international platforms, primarily, within the United Nations. According to Putin, BRICS nations need to make more proactive efforts to play a leading role in the UN. Specific goals in this regard include fighting terrorism and the dissemination of terrorist dogma, particularly on the Internet, as well as combating money laundering and the financing of terrorism, while working to take back criminally obtained assets.

As for the economy, Russia plans to suggest that the five nations renew the BRICS Strategy for Partnership in Trade and Investment that they adopted at the Ufa summit. According to the Russian Economic Development Ministry, the updated document will cover cooperation fields such as the development and integration of remote areas, the exchange of experience in regulatory impact assessment, digital trade, the use of digital solutions in the field of intellectual property and the promotion of artificial intelligence technologies. Moscow also calls for defining new strategy tasks aimed at boosting cooperation between specific industries up until 2025.

President Putin pointed out that Russia would seek to strengthen the existing BRICS structures and financial mechanisms, namely the New Development Bank, the Contingent Reserve Arrangement and its microeconomic data exchange system. Work will continue to create a BRICS local currency bond fund, and energy cooperation will carry on as well. At the same time, Moscow plans to put forward some new ideas to expand dialogue between the five countries' tax, customs and competition agencies.

Lastly, the agenda of Russia's chairmanship will include a number of festivals, theater tours, artistic competitions for children and adults, and sports tournaments. Putin earlier handed down instructions to draw up measures for the creation of a new competition concept for BRICS countries.

Boosting space cooperation is another important task. According to Russian Deputy Foreign Minister Sergei Ryabkov, who is the country's BRICS Sherpa, Moscow will "fill the emerging five-party space cooperation with specific activities." Steps will be taken to continue the implementation of the Clean Rivers program, aimed at improving the environmental situation in river basins.

Fighting the glorification of Nazism

One of Russia's key initiatives concerns the upcoming 75th anniversary celebration of the Soviet Union's Victory over Nazi Germany in the Great Patriotic War and the creation of the United Nations. At the BRICS summit in Brasilia, Putin suggested discussing a possible joint statement on those events. The Russian leader pointed out that it was important to discuss attempts to glorify the Nazis and Nazi collaborators, and to stand together to support a world order based on international law and the UN Charter. As Russian Deputy Foreign Minister Alexander Pankin said at a meeting of the Victory organizing committee, BRICS countries plan to host events dedicated to the 75th anniversary celebration of the Victory.

Russia is devoting special attention to preserving the historical truth about the victory over Nazism. In a series of statements in late December, Putin emphasized the need to step up efforts in this direction amid Western attempts to review the causes and course of the war.

Joining forces

Russia will continue work to boost the outreach program and BRICS+ mechanisms. Since 2013, expanded "outreach" meetings have been taking place on the sidelines of BRICS summits, which involve the presiding country's neighbors. In 2017, China came up with an initiative to form "a BRICS circle of friends" that would cooperate with the five nations on a regular basis, creating the BRICS+ concept.

To promote this endeavor, Russia intends to invite members of the Eurasian Economic Union (EAEU) and the Commonwealth of Independent States (CIS) to the St. Petersburg summit. Ryabkov noted that it was crucial to engage important countries in order to facilitate efforts to resolve global issues. He noted that steps in that direction would be taken at the summit.

Role of BRICS

According to Putin, BRICS has become a factor of stability in both global politics and the global economy as it seeks to protect open market principles amid some countries' attempts to increase protectionism. The five member states account for about 30% of the Earth's land mass and 42% of the world's population. In recent years, their total GDP has been amounting to about 23% of the global one, though they make up about 18% of global trade.

BRICS has neither a secretariat nor a charter. The country that chairs BRICS organizes the group's summit and coordinates its current activities. In the past several years, the member states have been chairing the organization based on the order of the first letters of their names that make up the BRICS acronym: Brazil took over BRICS chairmanship in 2014, followed by Russia in 2015, India in 2016, China in 2017 and South Africa in 2018. A new cycle began in 2018 with Brazil chairing the group. Russia is now taking over BRICS chairmanship in 2020.
China hopes Russia's leadership of BRICS will deepen strategic ties among member countries (Китай надеется, что российское руководство БРИКС углубит стратегические связи между странами БРИКС) / India, January, 2020
Keywords: cooperation, expert_opinion, chairmanship

Russian Foreign Minister Sergey Lavrov said BRICS will remain central for the member countries and will continue to protect the values of multilateralism. According to Russia's state news agency Tass, Russia plans to carry out about 150 activities at various levels during its chairmanship.

Saint Petersburg will be the site of the next BRICS summit in July. As Russia assumed the one-year chairmanship of the BRICS bloc, China on Friday hoped that Moscow's leadership would consolidate strategic partnership between the member countries by deepening the cooperation in politics, security, economy and people-to-people relations. Russia on Monday took over the one-year rotation chairmanship of the BRICS – comprising Brazil, China, India, Russia and South Africa – from Brazil.

Russian Foreign Minister Sergey Lavrov said BRICS will remain central for the member countries and will continue to protect the values of multilateralism. According to Russia's state news agency Tass, Russia plans to carry out about 150 activities at various levels during its chairmanship.

Saint Petersburg will be the site of the next BRICS summit in July. The five countries' leaders will hold another meeting on the sidelines of the G20 summit in the Saudi capital of Riyadh in November. Over 20 ministerial meetings are expected to take place, the Tass report said.

"We intend to ensure continuity and harmonious transition from the Brazil chairmanship to the Russian one. And we will continue the policy of progressive and comprehensive enhancement of the strategic partnership of the BRICS countries," Lavrov said.

Commenting on Russia assuming the leadership of the BRICS, Chinese Foreign Ministry spokesman Geng Shuang told a media briefing here on Friday that "we hope BRICS cooperation will make new progress and reach new outcomes during Russia's presidency".

"We hope it will consolidate BRICS strategic partnership, deepen the cooperation in the areas of politics, security, economy, finance and people-to-people relations. We hope it expands BRICS plus cooperation and play a greater role in upholding world peace and development, international equity justice, multilateralism, multilateral trading regime and building a community with shared future for mankind," he said.

BRICS, which is a cooperation mechanism for emerging markets and developing countries, has shown greater solidarity and deepening practical cooperation and influence, and has become an increasingly important force in international affairs, Geng said.

"Currently the internal situation is very complicated with headwinds of protectionism, unilateralism, power politics and bullying practices. How will BRICS countries navigate this changing landscape and play a constructive role in international affairs, the international community is watching closely," he said.
Russian FM to Visit India to Boost Defence, Energy Ties (Глава МИД РФ посетит Индию для укрепления обороны и энергетических связей) / India, December, 2019
Keywords: sergey_lavrov, foreign_ministers_meeting

The two foreign ministers would discuss the prospects of development of bilateral relations in the light of the goals outlined by Prime Minister Narendra Modi and President Vladimir Putin during their annual summit in Vladivostok in September, sources said

Russian Foreign Minister Sergey Lavrov will pay a working visit to India on 15 January to meet External Affairs Minister S Jaishankar and discuss furthering defence and energy cooperation between the two countries.

The two foreign ministers would discuss the prospects of development of bilateral relations in the light of the goals outlined by Prime Minister Narendra Modi and President Vladimir Putin during their annual summit in Vladivostok in September, sources said.

They will also discuss the 2020 schedule of upcoming top-level contacts. The two leaders plan to have a comprehensive exchange of opinion on regional and international developments.

Russia is going to further develop next year a military dialogue and deepen counter-terrorism cooperation bilaterally with India in the framework of SCO, BRICS and RIC-like formats, of which both countries are members.

Russian Ambassador to India Nikolay Kudashev earlier this week told the media that a constructive dialogue between India and Russia was the basis of commonly recognised principles of international behaviour, such as non-interference in each other's domestic affairs and mutual respect.

The Russian envoy also stated that Moscow was hopeful of the conclusion of a Free Trade Agreement (FTA) between India and the Eurasian Economic Union (EAEU) in 2020 with the focus on transport, agriculture and small and medium enterprises.
Russia to lead BRICS, outlines plans (Россия возглавит БРИКС и другие планы на 2020) / China, January, 2020
Keywords: chaimanship, quotation, sergey_lavrov

As Russia takes over the one-year chairmanship of BRICS, experts expect the group of five rapidly developing economies will continue to play an important role in global governance and regional stability.

BRICS, comprising Brazil, China, India, Russia and South Africa, will remain central for the member countries and will continue to protect the values of multilateralism, said Russian Foreign Minister Sergey Lavrov.

According to Russia's state news agency Tass, Russia plans to carry out about 150 activities at various levels during its chairmanship. Saint Petersburg will be the site of the next BRICS summit in July. The five countries' leaders will hold another meeting on the sidelines of the G20 summit in the Saudi capital of Riyadh in November.

Over 20 ministerial meetings are expected to take place, including those involving the Russian Security Council secretary, the Supreme Court chief justice and the chairpersons of both houses of Russia's Parliament.

"We intend to ensure continuity and harmonious transition from the Brazil chairmanship to the Russian one. And we will continue the policy of progressive and comprehensive enhancement of the strategic partnership of the BRICS countries," Lavrov said.

He noted Russia is interested in increasing financial and economic cooperation, industrial interaction and practical cooperation in developing and implementing joint projects involving energy, telecommunications and high-tech under the BRICS mechanism.

The priorities of Russia's chairmanship include enhanced foreign policy coordination within leading multilateral organizations, primarily in the United Nations, Lavrov said.

Boosting space cooperation is another important task, said Russian Deputy Foreign Minister Sergei Ryabkov, who is the Russian representative for BRICS.

He said Moscow will "fill the emerging five-party space cooperation with specific activities", while steps will be taken to continue the implementation of the Clean Rivers program, initiated by BRICS with the aim of improving the environmental conditions of river basins.

In the stormy ocean of world politics, the BRICS "ship" will steer a steady course and further contribute significantly to maintaining international stability and ensuring global economic growth, Lavrov stressed.

Georgy Toloraya, executive director of the Russian National Committee on BRICS Research, agreed with Lavrov, saying the BRICS' role in global governance is to provide a voice for non-Western countries.

Toloraya said that in the context of increasing chaos in international affairs, BRICS provides an opportunity for consolidating the views of non-Western countries on the global agenda.

"It is not aimed against the West. BRICS is for order, for determining game rules that would meet the interests of various countries and not just Western countries as has been the case so far," he said.

Each BRICS member state takes a turn as chairman of the group for a year. Russia last chaired BRICS in 2015, when a summit took place in Ufa in the Republic of Bashkortostan.
Investment and Finance
Investment and finance in BRICS
Emerging markets: China among the BRICs (Развивающиеся рынки: Китай среди стран БРИКС) / United Kingdom, December, 2019
Keywords: economic_challenges, emerging_markets
United Kingdom

China has been the dominant theme in emerging markets for 20 years. Now, along with India, it is breaking away from the BRICs group – just as India is diverging from China. Fiona Rintoul reports.

One word dominates contemporary conversations about emerging markets: China. And in some ways, that one word sums up the past two decades of emerging markets – certainly the past decade.

"The start of the gradual opening up of China's domestic equity and bond markets, and their subsequent inclusion in global emerging indices, is to be seen as a major feature of this decade," says Peter Elam Håkansson, chairman of East Capital.

Twenty years ago, when emerging markets began their journey into the mainstream, China was not the first country on everyone's lips. China B-shares entered the MSCI EM index in 1996. In 2017, China became the largest component, when it overtook South Korea with an index weight of 15.9%.

Today China accounts for a whopping one-third of the index – a higher proportion than previous index leaders – and the trajectory can only be upwards. MSCI's three-step increase in the index inclusion factor for large-cap China A-shares and its introduction of mid-cap China A-shares will almost certainly be followed by further expansion.

Does this domination create a problem? It certainly poses questions as to the best way to invest in emerging markets. They are no longer a homogenous group – if they ever were – and the days of BRIC (Brazil, Russia, India, China) are long gone.

"India and China have very much separated themselves from Brazil and Russia, and Asia has separated itself from Latin America in terms of performance," says Danny Dolan, managing director at China Post Global. "Political and economic stability are a prerequisite for economic performance."

As a result, Dolan increasingly sees investors looking for single-country or single-region exposure, rather than global emerging markets. As China continues to open and perhaps moves towards 50% of the index, emerging markets ex-China may become a designation just as Asia-Pacific ex Japan has been for some time.

In any case, the China obsession is not always about China itself. The country is such a big topic in emerging markets partly because a lot of other emerging markets are linked to what happens in China.

"Most EMs export to China," says Gergely Majoros, a member of the investment committee at Carmignac. "Some countries sell raw materials to China; others sell technological components."

The rise of China itself also illustrates the fast-moving nature of emerging markets. The past decade "belonged to China", observes Håkansson, as the country experienced "an uninterrupted transition from a quite basic industrial manufacturing and exporting nation into the leading digitalised economy of today with a strong domestic market".

Stealing China's thunder
The story of the next decade may be a different one. Majoros notes that the top ten companies in the MSCI EM equity index today have "nothing to do with the top ten positions ten years ago".

It is Chinese tech companies, such as Tencent and Alibaba, that have delivered great performance in recent years, not, say, Gazprom. Financials and information technology are the top sectors in the MSCI EM equity index, with energy at below 10%. It would be entirely wrong to suggest that the Chinese tech boom has run its course – China's aim now is to overtake the US as the largest tech market in the world – but just as China eclipsed Russia and Brazil in the 2010s, other markets may steal some of China's thunder in the 2020s.

"In the long term, India has better demographics than China," says Majoros, adding that India is one of the few emerging markets that is not much involved with China. "It's more of a closed economy dominated by a domestic dynamic."

Meanwhile, the inclusion of Saudi Arabian stocks in the MSCI EM equity index from June 2019 marks another new departure for emerging markets. At the time of writing, the IPO of Aramco, the state-owned Saudi oil company, looks like it might overtake Alibaba's IPO on the New York Stock Exchange in 2014 as the largest global IPO ever.

"A bit ironic is that it represents the old natural resource-based economy and not the new tech sector that is nowadays more characteristic of the emerging markets space," says Håkansson.

Ironic – and kind of typical for emerging markets. Fund managers need twinkle toes to keep up with these oft-times capricious markets where it is wise to expect the unexpected. This was perhaps never truer than during the difficult past decade, which James Johnstone, co-head of the emerging and frontier markets team at RWC, describes as "a fallow period for EM stock markets", when, even within the juggernaut of China, GDP growth didn't necessarily translate into returns.

"You needed good stock selection," says Johnstone. "There was a big difference between the banks and telecoms that China sold you and having the opportunity to buy Tencent."

Style, too, played a strong role in returns over the past decade, with quality, growth and momentum outperforming value. MSCI Growth was up 55% from the start of 2010 to October 2019, while the MSCI EM Index was up around 35% over the same period.

"Post the global financial crisis, where investors have stayed invested in emerging markets, they have been relatively risk-averse, seeking perceived certainty and visibility of earnings and pockets of growth," says Sam Bentley, client portfolio manager at Eastspring Investments. "They have been prepared to pay very high prices for these sorts of stocks."

It's also worth remembering that what applies to equity investments does not necessarily apply to bond investments. "From a bond perspective, we see a lot more opportunities in Latin America and Eastern Europe," says Majoros.

Even on the equity side, it's not as if there aren't good companies in Latin America. There are. In Russia and Eastern Europe, too, where a significant macro slowdown in the face of the euro crisis and disputes over Crimea and Donbass derailed the growth trajectory, Håkansson has seen higher growth levels over the past few years.

"Interestingly, this has been led by Poland and the Polish government's focus on stimulating families' purchasing power with various benefit payment schemes," he says. "Romania has also been delivering strong growth numbers, helped by their inclusion into the EU in 2007."

Very light exposure
As we move into a new decade, the question is whether emerging markets can deliver for investors – and if so, where the returns will come from. With China playing such a pivotal role in emerging markets, the resolution of the US-China trade dispute is crucial. Almost everyone agrees that this is unlikely to happen until after the 2020 US presidential election (Donald Trump said as much in London recently) but that some form of progress is then likely, regardless of who wins the election.

"It's in the US's interest and in China's," says Dolan. "iPhones and Xboxes are made in China, like many other products of US companies manufactured in China or with Chinese components."

But even then, the problem will not be solved. For the trade war is essentially a skirmish in a gigantic, ongoing tussle between two superpowers for global dominance.

"China wants to overtake the US as the largest economy in the world," says Dolan. "That's fundamentally what the trade war has been about."

Be that as it may, some of the numbers around emerging markets remain compelling. Johnstone notes that these markets have 65% of the world population and just 10% of the index. "Most investors' exposure is still very light," he says.

China certainly seems to be in investors' sights despite the trade war – and the unrest in Hong Kong. A recent survey conducted by the Economist Intelligence Unit (EIU) found that more than 80% of investors plan to either "significantly or moderately" increase their allocation to Chinese investments over the next 12 months, with only 4% planning to reduce their exposure.

Johnstone, meanwhile, highlights the attractions of "corporate Russia". He cites "impressive" companies such as Yandex, which is involved in autonomous vehicles as well as internet-related services, and Sberbank, noting the "long, deep educational backdrop" in Russia. There are risks, but they're reflected in the valuations.

"We think the bulk of bad news has been priced into EM over last couple of years," he says.

This could create opportunities, particularly for value investors. According to Bentley, global emerging market equities are trading cheaper than average at the headline level today and significantly cheaper than developed markets.

"Investor behavioural biases have driven stock dispersion between cheap and expensive stocks in EM to around two standard deviations, which offers disciplined value investors in EM a rare opportunity to capture outsized returns both in absolute and relative terms from here," he says.

There's something else too. Turmoil in developed markets has made the risks in emerging markets appear less potent. This is partly about politics, but not exclusively. It's also about corporate probity.

"VW was not a Nigerian car company," says Johnstone.
Explained: The Ambitious Plan To Revamp Mumbai's Suburban Rail Network With BRICS Funding (Как это работает: амбициозный план по реконструкции пригородной железнодорожной сети Мумбаи с финансированием БРИКС) / India, December, 2019
Keywords: ndb, expert_opinion, investments

Mumbai suburban railway - widely known as the city's lifeline, carries over a whopping 75 lakh passengers daily.

This high-dependence on suburban train network though has come at a cost. As per reports, while a single 12-coach train has an official capacity of 1,174 passengers, the actual number of commuters per train is around 6,000. This translates to local trains on an average being loaded 400 per cent above capacity.

This overcrowding - infamous on Virar, Karjat routes, also resulted in 711 deaths in 2018, as a result of passengers falling off overcrowded trains. The rail network also bore witness to the 2017 Elphinstone Road tragedy, when 23 people died in a rail foot over bridge stampede.

Over the years, many have called for an upgrade of the suburban rail infra and hope is on the horizon as Shanghai-based New Development Bank (NDB), which funds projects for BRICS nations has sanctioned $500 million for Mumbai Urban Transport Project-3A.

What Is The Mumbai Urban Transport Project-3A

The NDB part of the project seeks to ramp up the AC local train network in a big way along with setting up car sheds, laying new lines and upgrading 19 suburban rail stations. This project is being executed by Mumbai Railway Vikas Corporation (MRVC).

As per estimates, the total project is expected to cost around Rs 54,000 crore and the department of economic affairs (DEA) has set a limit of $500 million funding per financial institution for the project.

Besides the NDB, the World Bank and Asian Development Bank (ADB) too have shown interest in funding the project.

The NDB funds will be used to procure 191 AC rakes, laying of new tracks for Central and Western lines and construction of dedicated car sheds for the AC locals at Vangaon and Bhivpuri. These car sheds with maintenance facilities will come up on 30 hectares of land.

Additionally, the project will extend the current CST-Goregaon Harbour line to Borivali. This will need additional track laying for 7 KMs, costing around Rs 826 crore.

The Borivali-Virar stretch will get two additional tracks for long-distant trains, thus ensuring more room for the suburban rail network which currently has to share capacity with the express trains. This will cost around Rs 2,814 crore.

On the central line, two new tracks will be built on the Kalyan-Badlapur segment at an estimated cost of Rs 1,510 crore and one line will be constructed on the Kalyan-Asangaon route costing around Rs 1,759 crore.

Additionally, the project includes a CST-Panvel high-speed corridor and a Panvel-Virar corridor. The World Bank has expressed interest in funding these two corridors.

The project will also help usher in a new communications based train control (CBTC) signalling system at the cost of Rs 5,928 crore. This will potentially help the railway authorities increase the daily local running capacity from 3,000 to 4,500, by allowing trains to operate at a 2 minute interval.

Under this technology, signalling poles will be rendered redundant as signalling system will be installed in the motorman's cabin, supplying them information like distance between consecutive trains helping them adjust the speed accordingly.

Creating Public Transport Alternatives

With Mumbai's population expected to rise to 27 million by 2035 - from around 20 million currently, the city needs additional reinforcements to meet the rising demand for public transport.

Mumbai Metro is expected to play a key role in fulfilling this demand. The Mumbai Metropolitan Region Development Authority (MMRDA) seeks to add at least 140 km of additional, new metro lines before 2021.

Additionally, MMRDA has confirmed that the first trial run on two Metro corridors - Metro 7 that connecting Andheri East to Dahisar East, and Metro 2A that connects D N Nagar to Dahisar - will begin in the first week of September 2020.

A political spectre though looms on the Mumbai Metro Line 3 as soon after swearing in as Chief Minister, Uddhav Thackeray had put a construction embargo on the Aarey car shed - a critical component of the project.
The Economic Agenda of BRICS (Экономическая повестка БРИКС) / India, December, 2019
Keywords: economic_challenges

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.
Political Events
Political events in the public life of BRICS
Ministry of Culture: Year End Review 2019 (Министерство культуры: итоги года 2019) / India, January, 2020
Keywords: social_issues

26. Union Culture Minister Shri Prahlad Singh Patel participates in BRICS Culture Ministers' Meet at Curitiba, Brazil

Union Minister of State for Culture and Tourism (Independent charge) Shri Prahlad Singh Patel participated in BRICS Culture Ministers' meeting held in Curitiba, Brazil.On the occasion, Shri Patel said that India attaches importance to its engagement with BRICS which has emerged as a valuable forum for consultation, coordination and cooperation on contemporary global issues of mutual interest and has helped to promote mutual understanding. Joint exhibition titled Bonding Regions & Imagining Cultural Synergies is being hosted by National Gallery of Modern Arts of India under the auspices of the BRICS Alliance of Museums and Art Galleries during November-December, 2019.Shri Patel proposed to add another field of cooperation under the aegis of BRICS Alliance on Literature envisaging BRICS Literary Festival to enhance cooperation and exchanges in the field of literature and promoting translation of literary works of famous writers and poets of BRICS member states.
World of work
Social policy, trade unions, actions
BRICS project launches new website (Проект БРИКС запускает новый сайт) / Switzerland, January, 2020
Keywords: social_issues, cooperation

The BRICS Globalization and Labour Protections research project at the World Trade Institute now has its own website.

The BRICS team, led by Professor Damian Raess, have set up a dedicated website to showcase their research and highlight related publications and events.

The website can be found by following this link.

The recent incorporation of the BRICS countries (Brazil, Russia, India, China and South Africa) in the world economy, and their rapid rise as a major source of foreign investment has important and uncertain implications for labour protections in advanced and emerging economies. The BRICS project investigates under what conditions BRICS trade and foreign direct investment (FDI) enhances (or undermines) worker rights and conditions and labour market institutions, with a particular focus on European countries and the BRICS themselves.

The project, housed at the WTI, is funded by the Swiss National Science Foundation (SNSF) for the period 2017–2020.
Think tank meeting held to promote BRICS cooperation (Состоялось совещание аналитического центра по содействию сотрудничеству БРИКС) / China, January, 2020
Keywords: cooperation, think_tank

The Annual Conference of the China Council for BRICS (Brazil, Russia, India, China and South Africa) Think Tank Cooperation (CCBTC) was held at Beijing International Studies University on Jan. 3.

With the theme of "Path to Rejuvenation Amid Biggest Change in a Century", the third such meeting attracted more than 200 experts and representatives of CCBTC members to review BRICS cooperation in recent years and offer advice on future progress.

CCBTC Chair Guo Yezhou said the major responsibility of the council was to provide intellectual support in improving BRICS cooperation.

Guo, also vice minister of the International Department of the CPC Central Committee (IDCPC), encouraged CCBTC members to enhance capacity building, continue adhering to a problem-oriented approach, pursue greater exchanges and integration as well as produce better proposals for advancement.

Huang Yiyang, deputy director-general of the Department of International Economic Affairs at the Ministry of Foreign Affairs, praised the efforts of the CCBTC, saying it had proposed a large number of constructive and feasible policy recommendations.

According to Huang, BRICS cooperation had become one of the most important multilateral cooperation mechanisms, and Russia's current presidency was expected to further strengthen three-pillar-driven cooperation in the areas of economy, peace and security and people-to-people exchanges.

"I believe CCBTC members will continue to make good use of their respective strengths in 2020, and contribute their wisdom to major-country diplomacy with Chinese characteristics in the new era," he said.

The council released two research reports at the conference - Report on BRICS Cooperation and Development (2019) and the Report on BRICS Sustainable Development (2018).

The event also witnessed the inauguration of the council's official website.

The CCBTC was established in January 2017 during China's presidency through the initiative of the IDCPC.
Made on