China-Brazil entering a new stage of bilateral relations

Brazil and the People’s Republic of China are entering a new stage of bilateral relations – Brazilian President Jair Bolsonaro accepted an invitation to visit China in the second semester of 2019.

This has come as a shock as the election of the right-wing president was predicted as an end of China-Brazil trade relations. During his election campaign, Bolsonaro said that “China isn’t buying in Brazil” however “China is buying Brazil”.

Talking to the press the Brazil President said that his country wants to open up the whole world, develop trade, open border.

China is Brazil’s main trading partner and represented 27.8 percent of its exports in 2018.

Chinese President Xi Jinping will also be visiting Brazil, during the 11th BRICS (Brazil, Russia, India, China and South Africa) summit. Brazil assumed the presidency of the bloc of the fastest growing economies.

READ MORE: Brazil to host next BRICS Summit in 2019

 

By: Kgothatso Nkanyane

New Development Bank (NDB) will issue bonds in South Africa and commercial paper in U.S. dollars

 

The BRICS multilateral funding institution, New Development Bank (NDB) will issue bonds in South Africa and commercial paper in U.S. dollars in the first half of 2019. NDB’s President K.V. Kamath said in an interview with Xinhua.

According to the bank’s President, it is already done, they are only waiting for a launch. “The new bonds in South Africa will be denominated in the local currency and will be placed at the Johannesburg Stock Exchange,” said the Kamath.

The New Development Bank (NDB) put down successfully $ 448 million of RMB-denominated bonds in the China Interbank Bond Market on the 25 February. The NDB placed two positions with maturities of 3 years (2 billion yuan) and 5 years (1 billion yuan) and was priced at the lower end of the announced pricing range with coupon rates of 3 percent and 3.32 percent respectively.

READ MORE:NDB put down sucessfully $ 448 million of RMB-denominated bonds in the China Inter-bank Bond Market

Since establishment the NDB has continued to show growth, despite wide criticism from the media – many publications have prophecies on the failure of the bank.

READ MORE: Key milestones of the New development Bank (NBD)

 

Source: Xinhua

Brazilian economy grows second year in a row

Brazil’s Gross Domestic Product (GDP) grew by 1.1% in 2018 in relation to the previous year, reaching R$ 6.8 trillion in the period. This marks the second consecutive year of economic growth after two years of recession. The data was released by the Brazilian Institute of Geography and Statistics (IBGE) on Thursday (28). 

The result was impacted mainly by the good performance of the service sector, which grew by 1.3% last year. According to the IBGE, all seven main branches of economy activity saw growth, including trade (+ 2.3%) and real estate activities (+ 3.1%).

Other highlights

Last year’s GDP was also influenced by the positive results of the agriculture and livestock sectors (up 0.1%) and industry (+0.6%).

According to the survey, this was the first time the industrial sector grew after four consecutive years of contraction. Performance in the sector was driven, among others, by increased activity in electricity and gas, water, sewage, and waste management sector (+ 2.3%). In agriculture and livestock, the result is mainly explained by the former, which saw great harvests of coffee, cotton, wheat, and soy.

Expectations

The result is in line with the expectations of the financial market and confirms the recovery trajectory of the Brazilian economy after two years of GDP decline.

According to IBGE, consistently low inflation and the slight improvement in labor market numbers have contributed to the overall positive performance of the economic activity. The financial market expects the Brazilian economy to grow 2.65% this year.

 

ISSUED BY: BRAZIL GOVERNMENT NEWS 

BRICS States to create an independent payment system

The coalition of Brazil, Russia, India, China and South Africa (BRICS) are to create an independent payment system called BRICS pay.

The BRICS states want to create a distinctive online payment wallet to integrate a payment system of the five countries. Izvestia said on Friday citing the Russian Direct Investment Fund (RDIF). It is reported that Russia wealth fund with partners from China and India, who have the technological capabilities to launch the system.

According to Russia media, the online payment platform will be similar to Apple Pay and Samsung Pay. It will be made to link the countries national payment systems.

The BRICS payment system is set to decrease the dependence of the bloc on transnational payment organizations. The central banks of BRICS countries, as well as the Shanghai Cooperation Organization (SCO) and the Russia-led Eurasian Economic Union (EEU), have been working on developing a joint payment space, as reported by RT.com.

 

 

Source: RT.com

OPINION| BRICS Credit Rating Agency can change the international capital market

BRICS Credit Rating Agency can change the dynamics of the global capital market. The global capital market is dominated by the top three credit rating agencies – S&P, Moody’s and Fitch. Emerging economies have had problems with Western credit rating agencies ‘politically biased’ decisions. The rating agency will further reduce the dependency of developing countries on the verdicts of the big three.

The bloc has grown at an increased rate over the past years. The grouping has successfully established a multilateral development bank, the New Development Bank (NDB) which has since its establishment in 2014 funded 27 projects in member states and has US$ 6.7 billion in lending amount.

India’s Economic Affairs Secretary, Subhash Chandra Garg during the first BRICS Finance Ministers and Central Bank Governors, in April 2018 urged members of the bloc to set up an independent rating agency of the five-member group. The BRICS rating agency was proposed during the 7th annual diplomatic Summit in the Russian city, Ufa in Bashkortostan. The proposal was affirmed during the 8th Summit in Xiamen.

Former Indian union commerce and home secretary G K Pillai had said earlier in 2012, that the control of intelligence in the world was biased and the bloc needed to set up its credit rating.

According to India having an independent agency would remedy impediments caused current and dominant rating agencies such as S&P, Moody’s and Fitch. These three western rating agencies hold over 90% of the sovereign rating market.

The BRICS Business Council Financial Services Working Group assessed the sustainability of establishing an independent credit rating agency in December 2016. In the global investor survey undertaken by the Russian chapter across 24 countries in 2016, 73% supported the idea of a BRICS Rating Agency, as reported by IOL.

Financial services company, Standard and Poor’s (S&P) has ascribed an ‘AA+’ long-term and ‘A-1+’ short-term issuer credit ratings on the New Development Bank (NDB) in 2018.

READ MORE:S&P rates Brics New Development Bank AA+

 

 

By: Kgothatso Nkanyane

NDB and FAO co-host Workshop on Development Impact and SDGs

The New Development Bank (NDB) and the Food and Agriculture Organization of the United Nations (FAO) co-hosted a workshop on Development Impact and the Sustainable Development Goals (SDGs) focused on the sectors of Irrigation, Water Resource Management & Water, Sanitation and Hygiene (WASH) on 20-21 February 2019 in Shanghai.

In the spirit of SDG 17, the workshop sought to share technical knowledge among a range of development actors on how to better integrate the SDGs into the design and implementation of infrastructure and sustainable development projects related to water. Among the participants were government representatives from BRICS countries, specialized United Nations (UN) Agencies and programmes (FAO, UNDP, UN-Water), multilateral development banks (ADB, AIIB, NDB) and national financial institutions (BNDES, CDB, DBSA), in addition to think-tanks and sector experts (Bill & Melinda Gates Foundation, IMWI).

The workshop initiated a community of practice that will continue working on the links of investments in the water sector and their contribution to the achievement of SDG 6 and SDG 17.

 

ISSUED BY: NEW DEVELOPMENT BANK (NDB)

Minister Sisulu to host her French counterpart in Pretoria

On Thursday, 28 February 2019 The Minister of International Relations and Cooperation, Ms Lindiwe Sisulu, will co-chair the Eighth Session of the South Africa-France Forum for Political Dialogue (FPD) with the French Minister of Europe and Foreign Affairs, Mr Jean-Yves Le Drian, in Pretoria.

This is the first time that the Forum will be led at Ministerial level following the decision taken during former President Jacob Zuma’s State Visit to France in 2016 to elevate the Forum from Directors-General to Ministerial level, so as to award the growing relationship between the two nations greater political impetus.

The two Ministers will sign a number of agreements and host a joint press briefing at the conclusion of the FPD. The meeting take place at DIRCO Conference Centre, OR Tambo Building, Pretoria

ISSUED BY THE DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION

 

NDB put down sucessfully $ 448 million of RMB-denominated bonds in the China Inter-bank Bond Market

The New Development Bank (NDB) put down successfully $ 448 million of RMB-denominated bonds in the China Interbank Bond Market on Monday. The NDB is a multilateral development bank established by the BRICS (Brazil, Russia, India, China & South Africa) states.

The NDB placed two positions with maturities of 3 years (2 billion yuan) and 5 years (1 billion yuan) and was priced at the lower end of the announced pricing range with coupon rates of 3 percent and 3.32 percent respectively.

“The NDB successfully raised 3 billion yuan at very attractive price levels, which marks another formidable milestone for the bank. Pricing of the bond is a good reflection of the NDB’s high credit quality,” said Leslie Maasdorp, NDB VP & CFO, “In line with the NDB’s General Strategy, the bank intends to become a regular issuer in local currency markets of its member countries. The bank is currently awaiting regulatory approvals to issue local currency debt in a number of markets of its member countries.” – reported China.org.cn.

 

Source: China.org.cn

Three Months of the France Yellow vest movement

 

(Photo by CHARLY TRIBALLEAU / AFP) (Photo credit should read CHARLY TRIBALLEAU/AFP/Getty Images)

What started off as an economic and political grievance has morphed into a massive protest, where the yellow vest has become unsightly for French President Emmanuel Macron. The yellow vest movement began 17 November 2018 and has held steady into 2019 it is now in its 14th week and looks only to continue as President Macron has only managed to escalate tensions. 

Initially, the protestors only wanted an undoing of the new governmental tax reforms as well as the burdening increases in fuel and cost of living. However, the protestors were met with riot police, water cannons, and teargas. With Macron holding steady on tax reform and fuel increases as pressure mounted.

The yellow vest protestors by 4 December, were calling for President Macron resignation. Macron attempted to quell the fires by announcing that fuel increases would not happen and new tax reform would be put on hold.
The yellow vest movement, unfortunately, has become very violent with many French citizens have lost eyes and hands from rubber bullets and stun grenades due to the brutality of the police. The police have also suffered injuries from the continuing protest with throwing rocks.

President Macron may be losing standing as the number of injured citizens continues to increase and other rival political parties and European leaders like Italian deputy prime minister Di Maio, siding with the yellow vests.

 

By Mokgethi Mtezuka

The New Development Bank, a patron of renewable energy

The New Development Bank (NDB)focus is on sustainable development and sustainable infrastructure. Climate change consciousness and sustainability are built into the NDB’s approach. Kundapur Vaman (KV) Kamath, President of the multilateral development bank announced in 2016 that 60 percent of its lending should go to renewable projects.

The New Development Bank formerly referred to as the BRICS Development Bank, is a multilateral development bank established by the BRICS states.

The first projects of the Bank were in renewable energy – according to Kamath “this was more than a symbolic gesture; it conveyed the message of the founders that we are committed to a better and sustainable future for our member countries”. The New Development Bank is also focusing on projects that are to undo the damage done to the environment.

All members of NDB are signatories to the Paris Climate Agreement and the United Nations 2030 Agenda for Sustainable Development. NDB strongly supports each member’s commitments to address the risks of global warming, environmental challenges, and measures to achieve the United Nation’s sustainable development goals.


By: Kgothatso Nkanyane