“BRICS Strategic Partnership for Global Stability, Shared Security and Innovative Growth” is the motto the Russian presidency has chosen for the 2020 BRICS Coordination, a more and more complex political, economic, cultural and social reality. As President Putin reminded during the last’s November BRICS summit press conference in Brasilia, Russia could be considered as one of the founders of this organization. Everything started in Saint Petersburg when Russia suggested a trilateral meeting with India and China. Thus “Ric” was born, to which Brazil and South Africa were later added. Russia also organized the official meetings in 2009 (Ekaterinburg) and 2015 (Ufa).
Last November Brazil handed over to Russia the BRICS presidency. As reported by Tass, about 150 events will be organized during the year, until the main summit in Saint Petersburg in July. The five BRICS presidents will meet again on the fringes of the next G20 summit which will be held in Riyadh, Saudi Arabia.
Several Russian cities will host BRICS events, namely meetings between ministers, experts and members of the business community: Čeljabinsk, Ekaterinburg, Kazan, Novosibirsk, Samara, Saransk, Sochi, Ulyanovsk, Ufa, Khanty-Mansiysk e Yaroslavl.
To understand the evolution of this geopolitical event and the strategic significance of the 2020 Russian presidency, we had a conversation with Professor Marco Ricceri, Secretary-General of the Study and Research Institute Eurispes, as well as an expert in European social and labor policies.
Before we discuss in detail Russia’s role in 2020, I would like to analyze with you the most important results reached by BRICS in different fields: politics, security, culture, commerce and finance, just to name a few. In your opinion, which projects had the greatest impact on BRICS and at the global level?
The BRICS’s first and most significant result is their survival: after more than a decade since its establishment, BRICS continue to operate for innovative reform of the global development model. Against some respected experts’ analysis, which considered BRICS as an ephemeral reality, bound to die over time.
On the contrary, BRICS promoted and strengthened their Coordination despite the economic and financial crisis that, in recent years, hit some member states (such as Brazil, Russia and, partially, China), the existing tensions between some of the BRICS countries (for example, China and India), the lack of territorial contiguity and the different growth rates between the five countries.
The main achievement in this political process is that BRICS present themselves, on the international scene, as a structured reality that is neither accidental nor ephemeral. This result takes on additional meaning if you consider both the cultural and ideological values that inspire the Coordination and the goals, general and specific, that are being pursued with constancy.
About values, I would like to remind that the BRICS are characterized by a precise ideological identity, to promote, protect and enhance the member states’ identity, national sovereignty, territorial integrity, independence, sovereign unity and equality. The respect for specific identities has a positive effect to foster knowledge and mutual exchange between states so different from one another, intensifying their original contribution to this common experience. The BRICS cultural model can be defined as a sum of national identities, not an integration/dissolution of them.
About their goals, they share the idea for the course correction of globalization, as approved by the UN with the 2030 agenda. They would like to establish a different kind of world governance, to ensure a more fair, inclusive and sustainable development. Two important elements can be drawn from this: they are open to wider cooperation with the major international subjects, both formal and informal, such as the United Nations, the World Trade Organization (WTO), the International Monetary Fund (IMF) or the G20 summit. They are also engaged in cooperation, to include the realities most excluded from global development such as the emerging countries.
From that perspective, the most impactful projects they approved – and they are actively promoting – involve economic development. In this field, they try to restore the primary role of the real economy with respect to the financial economy. Also, they plan to create a monetary system, more coherent with inclusion policies. For example, great infrastructural projects – such as the Eurasian, African and Latin-American corridors – operate exactly in this direction since they are functional to cooperation between different regional areas and to the consolidation of emerging countries, just as the organization of a basket of currencies operates as financial support to investments.
In order to monitor and analyze this trend the Eurispes Institute created a specific laboratory. What is the rationale behind its creation and what type of governance is it characterized by?
The Eurispes BRICS Lab operates as a think tank made up of forty experts from the most different scientific disciplines and it applies a multidisciplinary and systemic approach for the analysis. Its birth is tied to a very precise moment: the participation of Eurispes in a study on the great changes in the Mediterranean reality, where we assessed the growing influence of the BRICS, in an important region for Italy. On such an occasion, it can be said that we discovered the relevance of the BRICS and invited high-level experts to further investigate. From the beginning, we observed a great degree of interest, participation and commitment by the experts, as demonstrated by the many analysis, reports, and notes that have been drawn up in these years. With regard to the Lab’s work methodology, everybody operates on a voluntary basis in discussions that want to be as free as possible. We previously agree on the topics. Our mutual commitment relies on a shared and positive interpretation of the BRICS. As a result, we try to identify any potential cooperation between Italy and other extra-BRICS countries, such as the European Union.
Concerning our methodology, it’s interesting that our policy papers have always been sent – and therefore are subjected to the evaluation – to the BRICS strategic centers, to the principal think tanks at an international level and to the representatives of the BRICS embassies in Rome that are regularly invited at our meetings.
As reported in your 2015 reports, the Lab aims to better understand whether the BRICS represented a “new growth opportunity for everyone, declined in a new, more qualified and balanced form of global development” or “a new edition of traditional types of antagonism and opposition”. Years later, what is your assessment?
We are more and more convinced – and this is the shared view of Eurispes’ BRICS Lab – that BRICS represent “a new growth opportunity for everybody and a more qualified and balanced model of world development.” In this regard, the main problem for Italy and the European Union, just like other international organizations, is to find useful opportunities to cooperate. For example, we agree with the positions outlined in Rome, during two conferences we organized, by Prof. Georgy Toloraya, director of the Russian BRICS National Research Committee, the 9th of January 2017, and by the plenipotentiary minister Pavel R. Knyazev, deputy director of the Political Planning Department of the Ministry of Foreign Affairs and BRICS Sous-Sherpa of the Russian Federation, on the 30th of October 2018. On both these occasions, it was well explained to us, by these influential Russian representatives, that the BRICS Coordination doesn’t operate “against” someone or something. On the contrary, it operates “for.” Namely to strengthen the international multipolar system. BRICS are a “union of reformers” and a “union between civilizations” which promotes a more balanced development and cooperation – not a competition – with the major international organisms.
Let’s get back to planning. In 2019 Brazil took the rotating presidency of the BRICS group. The pro-tempore presidency organized over seventy events, inaugurated a New Development Bank (NDB) branch in the country and brought to the Bank approval of four new infrastructures and development projects, with 1.4 billion dollars loans. These investments will bring the NDB’s portfolio to a total of forty-two projects for an overall value of 11.6 billion dollars. What was the outcome of the Brazilian presidency according to Eurispes?
The intensive program of events and the adoption of several strategic documents in different areas of cooperation approved during 2019 had proven the important contribution that the Brazilian presidency has given to further strengthen the BRICS cooperation. Another positive signal comes from the acknowledgment of the strategic role played by the New Development Bank, confirmed by the opening of a branch in Brazil, by the announcement of the opening of new branches in Russia and India and by its close cooperation with the BRICS Business Council, the consulting and planning organism made up by industrials and economists. The eleventh summit in Brasilia had a specific priority: an “economic growth for an innovative future.” The groundwork carried out by Brazil was mainly focused on strengthening cooperation in the fields of science, technology, innovation and digitalization that can then be applied to every sector of the economy.
The most important overall result of the Brazilian presidency is connected to the attention that was paid by the political and economic leadership of the BRICS to the concrete risks of a very probable new global crisis. Indeed, in regard to their analysis of the overall economic situation and contrary to previous meetings where they expressed appreciation for the undergoing global economic improvements and for a certain degree of acquired stability, they have, instead, highlighted, in their final declaration of the 2019 Brasilia meeting, a strong concern for the system stability. This is a very important message that the whole international community should promptly grasp. The eleventh summit headed by Brazil has, thus, marked a stalemate in the BRICS Plus strategy, launched in 2017, and centered on the expansion of coordination with other states and regional entities.
The common economic goals represent an important cohesion factor for these countries. According to Radio Free Europe Radio Liberty, after the Venezuelan crisis, we have witnessed a political divergence between BRICS countries supporting the opposition leader Juan Guaido and those supporting President Maduro. Brazil has supported Juan Guaido, whereas China and Russia supported Maduro. The Russian Foreign Minister, Sergej Lavrov, has underlined the necessity to adopt an approach based on “international law” without “external interference and respecting the countries’ constitution.” In light of the disappointment expressed by the Brazilian President Jair Bolsonaro, do you think that these disagreements might constitute a dividing factor in regard to the achievement of common goals? And, if this is the case, how do they overcome the impasse?
Contrary to what happened in Xiamen (China, 2017) and Johannesburg (South Africa, 2018) no third country was invited to the eleventh summit in Brasilia (2019). A set of reasons related to the nature of the coalition and to the international political and economic climate is at the origin of this decision and it hands over to the 2020 presidency an important open problem. In this regard I’ll shortly illustrate the main assessments made by the BRICS Lab.
Up until now BRICS have always managed to overcome the differences between member states by giving precedence to the common interests for a new model of global growth and the promotion of the internal development of states, classifying and addressing difference, as well as conflicts among them as subordinate and secondary situations. Just think at the contrasts between China and India regarding Pakistan.
Moreover they emphasized what has been defined as their pragmatic cooperation, giving BRICS the opportunity to limit the impact of international and internal constraints. In this regard, the Lab highlights both the virtues and limits of this kind of cooperation. If, on the one hand, the strategy benefits on the development of member states are clear, on the other hand, a prevailing pragmatic attitude inevitably limits the original project that drove the growth of the BRICS role since the creation of the coalition. This is particularly true in regard to emerging and developing countries. However, and this point needs to be underlined, since the option for a more pronounced pragmatism is intimately connected with the general economic and political dynamics, this resizing might be temporary.
About the future, we should remind the intention, repeatedly stated over time, to enlarge the alliance, including, for example, Turkey. Can this be considered as a concrete project to be initiated in the medium or long term?
The two BRICS summits in Xiamen and Johannesburg have opened a new decade founded on the perspective of a further enlargement of the coalition based on the BRICS Plus strategy. A process that has been envisaged both with countries such as Indonesia, Nigeria, Mexico, Turkey and throughout permanent and organic cooperation with the major international platforms in the different continents, such as the Association of SouthEast Asian Nations (Asean), the Shanghai Cooperation Organization (Sco), the Eurasian Economic Union (Eaeu), the African Union (Ua) and the Latin American Market (Mercosur). At the Brasilia summit, as mentioned before, this process has been halted, especially in regard to the relations with states. Actually two different possible options for enlargement could be considered: the first regards the accession of new states in the coordination core of the five member states. The second option, quite different, is the construction of special cooperation relations with states and the above-mentioned international platforms, aimed at achieving specific development goals.
At an international level BRICS are dealing with other organisms, of which they sometimes are part, such as the International Monetary Fund, the World Bank, the Eurasian Union, the UN, the WTO as well as the G7 and the G20. Putin reminded that, this year, BRICS have surpassed the G7 countries in terms of per capita GDP by about 12%. In your opinion, during the years have possible disputes undermined BRICS activity or caused political and economic frictions?
Up until now there has been no conflict between BRICS and the main international organisms, either formal or informal. On the contrary, BRICS have strengthened their positive and constructive approach, sharing the goals and the policies of these organisms. It’s true that BRICS have adopted and have been practicing over time a specific work methodology, based on common proposals agreed during international meetings that regularly take place on the fringes of international summits. This positively enables a better representation of their interests and aspirations. Furthermore, BRICS continue to support the need for a reform of the main international bodies, such as the United Nations, the International Monetary Fund and the World Trade Organization. This passage is considered crucial in order to achieve a real change in the current development model. About the Lab, in the widespread opinion, BRICS are limiting their pressure for reforms to the simple modification of the functioning mechanism of these organisms. BRICS propose to reform the UN Security Council, they plan a different distributions of International Monetary Fund quotas in order to give a greater representation to developing countries as well as the application of the principles enunciated in the Review of the Shares of 2010 and, regarding the World Trade Organization, they have drawn up specific proposals related to the “Dispute settlement mechanism” in order to contrast protectionism. In essence, with these proposals we still are within the governance system of the international relations based on the Bretton Woods agreements of 1944.
Let’s get back to the role of the Russian Federation. On the 14th of November 2019, President Putin declared, as mentioned before, that the Russian motto for its BRICS presidency will be “BRICS Strategic Partnership for Global Stability, Shared Security and Innovative Growth”. Considering sanctions and rising global tensions with some western countries, what is the strategic relevance of Russian presidency?
Without underestimating the above-mentioned issues, Russian presidency will be evaluated and based on the meaning given to the proposals elaborated in accordance with the adjective “Global” included in the title of the next summit. In the BRICS Lab opinion, in order to reduce the impact of these issues, Russia should, just like other BRICS states, promote its commitment by operating, mainly, throughout the platforms that they share with other states outside the Coordination. These are the contradictions of our time. Indeed, on the one hand, states create barriers, obstacles, ruptures; on the other, they approve and commit to enhance common strategies, just as in the case of the 2030 Agenda on sustainable development which is a common platform for all member states of the United Nations. A platform that applies, for example, to Russia, to Italy and to the member states of the European Union. The strategic significance of the Russian presidency will be measured on the capacity to move the emphasis and cooperate with this common platforms, promoting, in the meantime, BRICS interests. This could help a lot in clarifying an international context fraught with tension.
Previously we mentioned the New Development Bank that plays a relevant role in this growth process. According to Putin, the Bank’s investment project portfolio exceeded 12 billion dollars, with seven (out of forty-four) projects approved that are now in their implementation phase (hydroelectric plants, refiners, improvement of the water and infrastructural systems, development of the judiciary system). Moreover a new branch of the NDB will be opened in Moscow in the first half of 2020. In your opinion, what will its role be in the near future and how will it relate to other international organisms that operate in the financial sphere?
The NDB is important, first and foremost, because it’s one of the two formal structures promoted by BRICS (the other one is the Contingent Reserve Arrangement – CRA) to protect the economies and the finances of BRICS in case of instability within markets or with currencies. Moreover, its role as a development agency has been widely recognized and reinforced during the last summit in Brasilia. Founded in 2014, its primary goal is funding the infrastructure development. The NDB can now count on a base capital of 50 billion dollars to be made completely available by 2027. In our opinion, there are two relevant aspects that need to be underlined. First, in its support to investment plans the NDB lends money using the local currency. This is coherent with the BRICS commitment to support a reform of the global monetary system, in order to make it less dependent on the dollar. Secondly, NDB aims at promoting development projects consistent with the sustainability principles outlined in the 2030 Agenda of the United Nations. In that regard, it approved a precise system of criteria and guidelines in order to grant funding. The NDB’s “environment and social framework” is an original evaluation model on the economic, social, environmental, sustainability of the projects implemented in the future. Finance for sustainability is a strategic issue: on the subject it’s now beginning an important discussion between the most important development banks. In this context NDB can build important international partnerships.
Among the Putin first proposals we need to remind the update of the “Economic Partnership Strategy” adopted in the 2015 Russian summit aimed at increasing the economic growth and the competitiveness of BRICS in the international arena. Will any specific projects be enhanced?
Broadly speaking, it must be recognized that, in their first decade of activity, the BRICS have worked a lot in defining specific shared strategies of economic and production development. They signed several cooperation sectoral agreements with specific programs to be implemented. This is undoubtedly an important common asset. About commercial exchanges, for example, the BRICS Joint Trade Study has already identified the potential for investments and commerce between the countries: the results are on the tables of the different ministers who are in charge of the decisions. Furthermore, the Business Council has identified those fields considered a priority in strategic cooperation: infrastructures, industry, energy, agribusiness, regional aviation, financial services, adaptation of technical standards for production, professional qualifications and digital economy. All of this is supported by specific measures, among which, for instance, the spread of interconnections in remote areas, the adjustment of vocational training and educational programs in order to promote skills suitable for the fourth industrial revolution and, finally, the definition of a shared single resume template among the BRICS countries for the new digital professions. On infrastructure and transportation specific projects have been set out. The “working group on infrastructures” has pointed out the urgency to promote the development of transportation and logistics networks in South Africa, after the coming into effect of the African Continental Free Trade Area (ACTFA), on the 30th of December 2019. There are other projects underlined by the working group: a cooperation in the trans-African corridors, the enhancement of the cross-border networks between Russia and China, the realization of an economic corridor between Russia, Mongolia and China, the creation of a common transportation system in the Sco (Shanghai Cooperation Organization) area with the partnership of Russia, China and India. In short, the main point is that the framework of initiatives to be taken is well defined.
There’s a lot of initiatives that Putin intends to carry out in different fields, such as energy (especially nuclear power), finance, science, health, pharmaceutics, space, fiscal, customs and anti monopoly regulation, as well as the ICT sector and data exchange among small and medium business. Which one, in your opinion, is the area that will see a strong commitment from Russia and from the other involved countries?
Just as every other state, Russia has its own economic and strategic assets and it tends to promote them according to its geopolitical strategies. Russia is also a state and a continent. Its needs are profoundly different from those of, for example, a middle-sized European state. Russia is undergoing a vast process of modernization and enhancement of its production system that has seen a wide contribution from foreign companies from all over the world. As a reference for all, the Economic International Forum held in Saint Petersburg in June of 2019. It has seen the participation of 19000 people from 150 countries (the Chinese delegation comprised 1072 people, followed by the American one with 520 people). 650 deals were signed in different sectors for a total of 47.81 billion dollars (official data was provided by the organizers of the forum). This is an important signal of the development process that Russia is undergoing that can be projected outwards in the BRICS countries area.
Following the initiatives promoted by the Coordination, I think that the projects with a greater possibility of being implemented concern security, nuclear energy for civilian purposes, logistics and transportation infrastructures linked to corridors, a widespread informatics connectivity in the countries, agriculture, procedural simplifications in regard to commerce and, finally, projects of urban requalification. It will be very interesting to see how the projects for a single curriculum and those for the new professions will be implemented within the BRICS since they are useful tools that can favor labor mobility and knowledge exchange.
Among the joint proposals carried out by BRICS countries there’s the creation, endorsed by the Business Council, of an “anti-sanctions” international payment system, parallel to the one currently adopted by other states. In Russia the SFPS, the Russian equivalent of the Swift system used for financial transfers, has been active since 2017. China also implemented an alternative system called CIPS (Cross-Border Interbank Payment System) and it’s been discussed a specific system for Russia and India. How have these proposals have been received by the global financial community?
The BRICS are strongly committed to modify the global monetary system, a share purpose among traders even in other countries. More than 70 years after the birth of the Bretton Woods system (1944), the world economy has seen the rise of new economic actors such as the BRICS countries and the European Union. The dollar is still used in more than sixty percent of all commercial operations worldwide and it’s still the most important reserve currency. However the weight of the American economy has decreased, compared to the total of the world economy. The global trend towards a substitution of the dollar either with gold or with a different set of currencies is going on swiftly and this is happening in western industrialized countries as well. In international markets the overcoming of the dollar, as a reference currency, with a basket of currencies would signal a rational, pacific and fair evolution towards an international monetary system that better reflects a multipolar world. This is the Eurispes BRICS Lab position. We should also keep in mind that the role of Europe will be indispensable in order to achieve this goal.
This is an open problem for everybody: a possible European decision in this direction might give a crucial contribution in this systemic reform process in the fields of economy, finance, currencies, commerce and international relations, to define a kind of modern Bretton Woods.
Could other initiatives be in conflict with the devices adopted at an international level?
There are no initiatives in this sense because, like I said, BRICS are operating in full accordance with the principles and the directions approved by the major formal and informal international institutions. A common work within these platforms between BRICS and extra-BRICS countries would contribute to the overcoming of different obstacles and barriers put into place in the last years.
In the geopolitical context BRICS have also strengthened the relations with areas with great potential such as, for instance, the Mediterranean region and Africa, as demonstrated by the Russia-Africa summit held in Sochi last October. Has a systemic approach already been outlined?
The Mediterranean is an area with a significant potential for common initiatives between BRICS and non-BRICS countries, both in the northern and southern shores. However this area is still completely uncovered since it has not been the objective of common and harmonized initiatives. In the Lab’s view, the BRICS would have every interest to promote a common action together with extra-BRICS countries. During the conference held in Rome, in 2018, with the ambassadors of the five BRICS countries the Lab proposed the establishment of a facilitating device: a “Permanent Forum Italy-BRICS on Cooperation and Development.” This platform, based on the 5+1 model, BRICS Plus Italy, might be useful for every participant as well as a major innovation on the international scene. Among other things, it would be helpful in order to establish a bridge between the BRICS countries and the European Union of which Italy is a founding member.
The African continent could also see the establishment of similar modes of connection, even though the situation in Africa is much more complex because of the influence of multiple geopolitical and geoeconomic factors.
The BRICS initiatives have an impact on the international level as well as internally. “Carnegie Moscow Center” analysts estimate an increasing disengagement of president Putin from the relevant economic issues. Do you think that this could affect the implementation of the forthcoming projects?
No, I don’t think it will affect it. BRICS have coexisted for a long time now, despite changing views on the cooperation. For example, BRICS are split between those that value the political role of the group and those that value the economic one; between those that want and those that do not want an enlargement of the nucleus of the five-member states limiting themselves to an intensification of cooperation agreements with extra-BRICS realities. Another difference is between those that would like to have a more solid and stable institutional asset within the Coordination and those that find that the original formula, applied up until now, is more than enough. These differences are normal in an organization with so different member states. The commitment to intensifying pragmatic cooperation between BRICS has been a pretty useful solution to keep the unity of the group. We might add that there has also been a good level of historical wisdom and a vision of the problems tied to the reform of the international system that would be a mistake to underestimate.
(Translation by Eurispes / Traduzione a cura dell’Eurispes)