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BRICS hopes to bring Bolsonaro closer

South African Minister of International Relations and Cooperation (DIRCO), Lindiwe Sisulu held a media briefing, yesterday at the DIRCO media centre in Pretoria. Sisulu holds this briefings monthly – members of the media are appraised with developments relating to the implementation of South Africa’s foreign policy.

At the November briefing, Sisulu revealed her busy schedule – she will be visiting the Democratic Republic of Congo (DRC), then attend the AU meeting in Addis Ababa, attend the 15th session of intergovernmental Committee on Trade and Economic Operation in Russia and proceed to Washington for discussions with US Secretary of State Mike Pompeo in the coming weeks.

The DIRCO Minister was asked about the election of Brazil’s new President Jair Bolsonaro, whether it will impact the BRICS coalition.

Sisulu said that the Brazil elections were free and fair. “During the campaign Bolsonaro made a lot of unfortunate utterances but he was likely engaging in a lot of populist rhetoric in order to get elected. But we hopes to bring him closer to us and that he will see it is beneficial to be on the side of progressives,” Sisulu responded.

South Africa considers, Brazil an important part of bloc and hopes that the new Brazil President will align his visions with that of the grouping.

 

By: Kgothatso Nkanyane

Addition Reporting: IOL.co.za

 

BRICS energy diplomacy

BRICS is an alliance of five countries spanning four continents, member states differ in terms of their social, political and economic situations.

According to Leonova et el (2007), each BRICS state has its own growth trajectory and resources. As a result, energy consumption as an economic bloc varies according to each country’s individual needs.

In 2009, when the bloc was known as BRIC (Brazil, Russia,India, China) – before the inclusion of South Africa in 2010 – it counted for a fifth of the world’s economy and 43% of the world’s population (Yao et el 2009). After South Africa’s inclusion, the group collectively consumed more energy than the G7 countries.

In respect two countries in BRICS – China and India – are set to change the global energy landscape because of their consumption patterns.

China remains the largest producer and consumer of coal and looks poised to overtake the United States as the largest oil consumer by 2030. It also has a larger gas market share than the European Union. Unlike China, accounts for no more than 6%of global energy users. However, India is entering a sustained period of rapid growth in energy consumption due to increased demand for coal in power generation and industry. This makes India the largest source of growth in global coal use. It is also showing an increased demand for oil.

 

 

Find full article: BRICS Journal Issue 4

The power of informal economies

There is no standard definition of the informal economy trade. However, Businessdictionary.com has defined the informal economy as a “a system of trade or economic exchange used outside state-controlled or money-based transactions. Practised by most of the world’s population, it includes barter of goods and services, mutual self-help, odd jobs, street trading and other such direct sale activities. Income generated by informal economy is usually not recorded for taxation purposes and is often unavailable for inclusion in gross domestic product computations.”

It is important to understand the informal economy dynamics within BRICS, given that it accounts for a large share of member-states GDPs. The informal  economy is usually underestimated when calculating GDP. Developing countries tend to have large sections of their populations involved in informal trade, as is the case with BRICS.

The cause of informal economies in BRICS tend to be the same, save for local peculiarities. They play a huge role in BRICS by facilitating the transition to a globalised world. In addition, the informal economy provides basis for survival for the poorest of the poor in these countries.

 

Read more on: BRICS Journal Issue 4           

Rankings suggest South Africa could be BRICS’ hidden gem

With a combined population of 2.88 billion people and a gross domestic product (GDP) of nearly $16 trillion (R237trln), BRICS is an interesting grouping.

It is clearly not a team of equals, and during the Summit, each head of state clearly drove a specific agenda, which was not necessarily aligned to the other members. These agendas are forged in part by their geographical locations, ideological attachments and their respective geopolitical contexts.

The global view of BRICS is mixed. The pessimists see no common ground, as the five members are dispersed geographically, and their economies are at different stages of development, with China surging and Russia, Brazil and South Africa slipping in recent years.

The optimists see BRICS as a beacon of hope in a turbulent world – and they are in the majority. Indeed, in the past 10 years, the members have boosted cooperation on issues such as trade and infrastructure finance, and made modest progress on understanding each other’s industry, R&D and government policies. They remain a prime example of how a diverse group of nations can continue dialogue and co-operation.

By hosting the Summit, South Africa attracted the attention of the world, and raised two major questions: What South Africa can learn and leverage from BRICS that could stimulate its growth and prosperity? And does South Africa add value to the other four countries?

To answer these questions, we turned to the ranking results of the IMD World Competitiveness Yearbook, the leading annual report published by IMD since 1989 that ranks the world’s 63 most competitive nations on more than 340 criteria under themes like economic performance, business efficiency and government performance.

We examined the comparative ranking of a number of critical criteria for the BRICS countries that could have mutual influence on the relationship among the five countries.

So, is South Africa a strong member of BRICS? For a start, GDP per capita is nearly 70 percent of that of China, and 62 percent of Brazil – but the cost of living in South Africa is only 53 percent of China and 62 percent of Brazil.

Small and medium-sized enterprises (SMEs) in South Africa outperform their peers in Russia and Brazil and come close to Indian SMEs in terms of efficiency, although they still have some way to go to reach the efficiency levels of Chinese SMEs.

South Africa outperforms Russia and Brazil, and comes close to India, in areas like retaining talent, funding availability for technological development, and agility, although they lag their Chinese counterparts in all three of these areas.

In terms of financial regulations, South Africa leads the rest of the BRICS grouping when it comes to the efficiency of its finance and banking regulations and the implementation of shareholders’ rights.

Based on these criteria, South Africa has immense hidden potential. With its affordable cost of living and availability of technology, the country should be a hub for startups from emerging markets. It currently has challenges around bureaucracy and lack of funding, but this could be addressed by following the model of Western Europe, where corporations incubate startups, which reinforce their attractiveness for investors.

With its efficient financial regulation and world-leading corporate governance, South Africa should also be promoting its position as financial hub – although, again, it needs to reduce bureaucracy and step up its fight against corruption, which has already started and is cause for optimism.

The bottom line: South Africa is facing great challenges, which should not be ignored. But the competitiveness rankings suggest a hidden potential that could shape a bright future.

 

By: Dr. Hischam El-Agamy

 

This article was first published by After 12

BRICS role in foreign aid and charity contributions

Foreign aid is one  of the many ways to show soft power in world. From transferring resource, skills, medical assistance and military training to helping countries in economic and  environmental pressures

The BRICS countries as a bloc are in the unique position to leverage their soft power collectively. This  by showing the BRICS more charitable side it may help them in achieving other international goals, as well as allowing them to have a bigger voice in global bodies like they United Nations.

Individually they each BRICS country has shown there Humanitarian side From South Africa’s assisting in Indonesia to China and Russia’s work in aid efforts throughout Africa. There is however, still a strong need for the BRICS collectively to take a leadership role in many of the problems facing the world.

Some area the BRICS humanitarian hand is need is in countries like Venezuela which borders Brazil. Venezuela is going through economic crisis at the moment with its people finding the conditions in country unbearable.  Brazil which is one of the neighboring countries is struggling in its effects of help Venezuelan refugees.

A more collective stance and policy among the BRICS bloc with regards to Humanitarian efforts will go a long way in building BRICS influence and showing the power that BRICS has through charity.  

 

By Mogethi Mtezuka

 

China has the highest credit rating among BRICS

Among BRICS (Brazil, Russia, India, China and South Africa), China banks have the strongest credit profile, according to Moody’s investor service in a report published on Monday.

As per the report, Russian banks have the weakest profile among members of the coalition.

China banks have the highest asset-weighted average Adjusted BCA (Baseline Credit Assessment) among the world’s fastest growing emerging economies, at baa2, mainly thanks to the dominance of large state-owned banks, says Moody’s.

While China’s expansion will slow moderately, the nation’s banks have the lowest ratio of problem loans among the group,” said Moody’s associate managing director Yaroslav Sovgyra. Among the BRICS, China’s banks have the highest quality of assets, with a NPL (non-performing loans) ratio of 1.5 percent, compared to 11.8 percent at Russian banks with the highest ratio.

Indian bank have the second highest NPL ratio, however this is expected to gradually decline as stressed asset recognition is largely complete and new NPL formation moderates in the next 12-18 months. Stressed asset resolution will also help reduce NPL ratios at Indian banks, Moody’s added.

In terms of capitalisation, Indian banks have the weakest capitalisation with a common equity ratio of 8.7 percent, compared to 12.4 percent at South African banks, which were the most strongly capitalised at the end of 2017.

“System wide asset quality in India is weak due to stressed public sector banks, which dominate the sector. Government capital infusions will boost weak public sector banks’ capital ratios,” the report said.

Indian banks also showed distinctively weaker profitability, due to high credit costs at state-owned banks. Returns are expected to remain under pressure for the rest of the fiscal year (until March 2019) as provisions for credit losses at state-owned banks remain large. But profitability will improve in the next fiscal year as asset quality stabilises, it added.

Meanwhile, profitability at Chinese banks is expected to remain stable as an improvement in net interest margins offsets pressure on fee income and high credit costs.

South African and Brazilian banks were cited as the most profitable among BRICS nations.

 

  • Asia Regulation

 

 

India sees growth in digital payments

India citizens are starting to use digital paying platforms more – as aided by the support of  government policies. India Supreme Court recently ruled that the Aadhaar and lack of infrastructure, such as pay point-of-sale terminals, may slow the rise of digital payments.

Digital payments have grown increasingly in the country. According to livemint.com, between 2015 and 2017, digital payment transactions grew at an average annual pace of more than 50% outpacing other major developing countries.

Despite all this growth India continues to fall behind when compared to other members of the BRICS (Brazil, Russia,India, China and South Africa) bloc. Among members of the coalition, Russia leads with the highest non-cash transactions.

An average adult in Russia make more than 200 digital payments per annum, an average Indian adult makes less than 20 digital transactions each year. India also falls behind in terms of the value in costs of the transactions.

According to statistics from the Bank for International Settlements, in 2017, the ratio for non-cash transactions to gross domestic product (GDP) stood at around 1.7 for India, the lowest among BRICS, and significantly behind China’s ratio of 45, reports livemint.com.

 

Source: livemint.com

South Africa’s National Assembly expected to host the launch of the BRICS parliamentary forum

South Africa’s national assembly is expected to host the launch BRICS parliamentary forum. The forum is aimed at expanding the Bloc’s relations to a parliamentary level.  The parliamentary relations are to address issues of common interest involving the five countries.

The parliamentarian’s forum (BRICS PF) will officially be established by March 2019. This is an initiative which was established by South Africa National Assembly Speaker, Baleka Mbete. Mbete was given a go ahead at the BRICS meeting in Geneva, Switzerland.

 Mbete is also at the moment chairing an informal BRICS parliamentary forum in Geneva, where the draft protocol on creating the BRICS PF is being discussed. South Africa is adamant that the BRICS PF is important for the formalizing of their cooperation and collaboration.

The main goal of BRICS PF is to increase inclusion and allow for a more just and better world. Also to advance the better quality of life for the citizens of BRICS by reducing poverty and inequality. There is still a lot of translation of ideals so that the PF can work closer together on common interest.

 

Source: citizen.co.za

BRICS looking into art and humanitarian cooperation

China’s President Xi Jinping, Indian Prime Minister Narendra Modi, South Africa’s President Cyril Ramaphosa, Brazil’s President Michel Temer and Russia’s President Vladimir Putin pose for a group picture at the BRICS summit meeting in Johannesburg, South Africa, July 26, 2018. REUTERS/Mike Hutchings

Russia’s President, Vladimir Putin said on Friday that members of the BRICS bloc can collaborate in many spheres. Collaboration in art and in humanitarian affairs is being investigated said Putin.

He further said “be it in the field of finance or economic partnerships, BRICS brings meaningful content to various areas. Art and humanitarian cooperation are all possible.

“We are thinking about it and we will discuss with our colleagues and look at agendas in this direction.”

The Russian President said all this in interaction with Indian and Russian young innovators. India Prime Minister, Narendra Modi and Putin were interacting with 20 talented students, 10 from India and another 10 from Russia – the students are currently part of a collaboration workshop in ITT-Delhi.

 “We can work together in many areas like artificial and intelligence and human intelligence,” he added.

 

Source: Sify finance

BRICS Skills challenge is key for the bloc’s cooperation – South Africa

The BRICS future skills challenge is key in the coalition cooperation in preparing youth for the future. This so that South African youth can take part in the country’s future development,South African Deputy Minister of Higher Education and Training, Buti Manamela said on Wednesday. 

“The skills displayed here shows how the future will look like. It is interesting to see the skills we have under one roof building robots and drones from scratch. It shows some teamwork with the youths working together learning from each other,” said Manamela.

Manamela says that the skills challenge will prepare the South African youth for industry 4.0. According to Xinhuanet, Manamela also revealed he met the Chinese delegation and they discussed how the South African youths and lecturers can have exchange programs to learn from each other.

Marcello Strehl, manager of Brazilian software company Senaj, said it’s great to work with innovators from different BRICS countries monitoring the machines, making mistakes, identifying the problem and solving it.

“This is not competition but a challenge to learn from each other in solving problems. New technology is the pillar of future development. We have to do more with less,” he concluded.

 

Source: Xinhuanet