BRICS 6 PADEMIC- A TURNING POINT OPPORTUNITY

6°RISE OF ASIA CONFERENCE International and Multidisciplinary Conference Le Havre, Université Le Havre Normandie, February 10/12- 2022 "BRICS & PANDEMIC - A TURNING POINT OPPORTUNITY?" Overall Scenario The persistence of the pandemic, still without clear indications on the end of the emergency, is causing radical changes at all levels, and together with other factors also in the global geopolitical scenario. In this evolving framework, it does not seem to have occurred within the BRICS countries the expected changes. In fact, there is no modification in the structure of the BRICS, there is hardly any mention of the BRICS-PLUS initiative foreshadowed a few years ago, as a result of the various requests for membership that took place in recent years (Turkey, Egypt, Argentina, etc. .) and during this period some of the BRICS member countries joined new geo-politic alliances differently positioned. This closure, as I have previously written in the reports of the previous conferences, represents more and more a limit for the role that it was believed the team could play, as well as from the strong constitutive declarations, for a change and alternative to the global geopolitical framework, with a greater representativeness of more populous countries and emerging economies, reducing the weight of western industrialized countries in the various institutions. The premises and general strategies expressed by the constitution, dating back more than a decade, have not been followed in recent years by relevant concrete facts and indeed, in my opinion, in recent years the initial thrust has progressively weakened hand in hand with the weight of the BRICS on the world stage. The concerns about the performance of the group, expressed in the previous editions of this conference, have been growing over the years and what was written in last year's report BRICS IN 2021 - DECLINE OR REBIRTH? unfortunately it is confirmed and the renewed wait has not happened, so now, with the pandemic has and is changing the entire world order, there is a unique opportunity for a turnaround and re-launch of the group which otherwise will continue in a progressive smaller role on the world stage. This note therefore aims to analyze the actual state of the team, its residual attractiveness and the desired re-launch actions, in this phase of global post-pandemic review. In recent years, on the one hand, there has in fact been an entrenchment between only the five member countries, which has led to a desire for homogenization in various sectors, for closer scientific and cultural collaboration, for permanent exchanges of information through a large number of events, now almost all virtual, every year that produce willing and repetitive declarations, little happens on the concrete. For example, direct commercial exchanges between the five are not very significant and without particular increases. 1 For some time, every year a signal is expected for a renovation or re-launch of the BRICS group that has been more than ten years now but the expectations so far have gone disappointed, although the world scenario is deeply changed, to which in the last period has to be added the Covid 19 pandemic impact, which particularly affected the most industrialized countries. The initial statements in the Constitution of the Group for a profound change in the entire global structure, starting from the will to progressively replace the hegemony of the dollar with a basket of other currencies for trade in their internal and south-south relationships, progressively Faired and criticisms moved to the institutions in force in fact silenced. The open and latent conflicts between the two largest members, India and China, who are weaving new alliances and positioning differently, the consistent worsening of the economies of Brazil and South Africa, which seemed to emerge rapidly in 2006 -2010 and a growing isolation of Russia in the world scenario, can explain this lower propulsive force by the five BRICS members. Almost seems to be less motivated themselves to strengthen the group, while over these years more attention has come from the outside, not only from emerging countries eager to participate, but also from developed countries that see in the BRICS anyway an element of Renewal and representative of a new reality more adequate to time. At the same time, albeit in this framework of slowdown and stasis, the different institutions and organizations of the member countries, have continued in an intense activity of exchange and homogenization of standards, legislation, regulations, regulations as well as rising exchanges in the educational, cultural sectors , Sanitary and many others. Therefore, there is a dichotomy between the general strategies and many field activities, as two different approaches to be adopted. In this context it should also be considered the strand of the BRICS PLUS initiative launched in the .... hoped by Russia and welcomed very welcomed by various emerging countries and that would have enlarged the base of the team in both demographic, territorial and economic terms, and one Representativeness of the "South" much wider. But after the initial hints gradually speaks almost more and the expectations expressed by many sources have cooled down. It is also significant that after an initial growth, intra BRICS exchanges, doubled from 6% in 2006 to 12% in 2011, since then these have been progressively falling and more consistently from 2016, and of these as many as 80% They are represented by China, and only 20% those among other four members. With a very strong commercial imbalance. With regard to the outside the main exchanges of the team takes place with large industrialized countries, and minimal with those of the south. Instead, it is to be highlighted as in recent years the BRICS have entered and participate in many multilateral institutions of financial and commercial sectors, which initially had criticized for their eminently neo-liberal character. At the same time there is an expansion of the great companies and BRICS corporations, as an issue of the respective governments, and in the respective regions, implementing with the neo-colonial logic of Western countries. With regard to the main reforms of the United Nations, in 2015 the BRICS signed the Climate Agreement of Paris, also because not too binding and unobstructed, as a 2 manifestation of participation in a global scale. In this regard it is instructive as in 2016 stated by the then director of the OECD cooperation sector, Richard Carey:"...the fact that the BRICS are such strong supporters of the G20 and of the 2015 United Nations agreements is no small matter. It is a highly significant evolution, reflecting the emergence of a multi-polar international system which has made possible the striking shift from an era of ubiquitous North-South conflict to the current universal agreements…", therefore in fact abandoning the initial declared vocation for SouthSouth cooperation. Another signal of the progressive international alignment took place in the G20 summit of July 2017 in Hamburg, in which the various leaders of the BRICS, where the BriS leaders were insensitive compared to the economic damages that the policies adopted, in line with those of the G7, were provoking in the poorest countries. The new institutions of the BRICS seem to remain then linked to the IMF and to the dollar, not having pushed as a new order for new platform for trade and development as an alternative to the current order of Western countries. It is in my opinion shareable that actually the BRICS centripetal vision is now fading as stated in the essay - Amplifying The Contradictions, The Centrifugal BRICS-:"….under these circumstances of extreme intra-BRICS unevenness, xi's centripetal strategy has become a centrifugal force spiraling out of control .The centrifugal forces ripping apart not just the BRICS but in fact all of contemporary world capitalism first globalizing, now de-globalizing" …". BRICS in fact are reproducing in the "South-South" relations a neo-colonial logic on competition, natural resources, workforce and market access. Although they seek to present themselves as a cohesive group in the various multilateral forums of Africa and Latin America, then individual members and their respective multinational companies apply their own strategy and competitive approach, creating new balances and hierarchies in the emerging economies of the south. BRICS investment agreements resemble those established long-time by the industrialized Western Powers, as the WB and IMF, with whom are now signed cooperation agreements. The BRICS in recent years, with the advent of the right governments in India and Brazil and the same dominant elites within them, does not perform the ideological alternative expected to the current dominant model. The various policies from BRICS states can be considered as neo-liberals ones, with the specific characteristic oriented to the "south -south" and today mainly focused on trade, therefore they do not therefore represent, as currently configured, that global renewal of the scenario that the negative impacts of climate change and pandemic require. BRICS Investment Framework BRICS investment agreements resemble those established by Western powers, and a shift toward capitalist development of BRICS took place in the last decade, by creating and facilitating conditions for accumulation of foreign capital within their territories, supported by the framework of investment protection agreements for foreign capital to come and stay as well as drawing profits inwards to the BRICS from their respective 3 hinterlands and each member signing bilateral investment treaty (BIT) /trade pacts .and Financial Direct Investments(FDI) with other countries. Brazil Brazil is a major investor in its own region and the main recipient of FDI in Latin America. Brazil‟s South-South relations lost the original „solidarity‟ label and focuses on commercial purposes, while lately Brazilian foreign policy prioritize relations primarily the US, European Union and China. Brazil‟s FDI goes mainly to extractive sectors, equipment, food and beverage, textiles, and construction. They go prior toNorth and South America, while in Africa the general rate is small but very concentrated in construction and mining. The Brazilian National Social-Economic Development Bank (BNDES) is the main source of funding for international projects and the export of construction services by Brazilian multinationals. Russia The Russians are increasingly active in Africa, as well. As an external investor, Russia promotes firms mainly in natural resources and infrastructure related to extractive projects. Russia has 79 BITs and six investment agreements around the world, 11 of which are in Africa and six in Latin America and the Caribbean. In Latin America, besides its historical relations to Cuba, it renewed its engagement with the ALBA members Venezuela, Ecuador, Bolivia, and Nicaragua, and extended its interests in Brazil, Argentina, and Peru. Russia is today especially strong in military cooperation with African and Latin American countries. India India is actually the fifth largest land investor in Africa, which is the source of numerous conflicts between local populations and private investors. Indian FDI has grown through mergers and acquisitions in oil and gas, sugar, pharmaceuticals, and mining. Indian trade with Africa and Latin America is dominated by raw materials and energy commodities sent to India, while India supplies pharmaceuticals and low- and medium-technology products.44 India has entered Africa‟s agricultural sector, buying land through its public and private companies. China Starting with the most important, China is Africa‟s main trading partner and the biggest investor in the continent, surpassing the US and overtaking the European Union. In Latin America, the Chinese presence rapidly increased from the mid- Between 2005-16, nearly 80 per cent of loans to Latin America and the Caribbean came from China‟s development bank, far surpassing credits from the Inter-American Development Bank especially for infrastructure and energy projects. In terms of FDI, however, Latin America has only 4 per cent of the total Chinese FDI, which still goes mainly to the US and Europe. China has largely protected its multinational corporations through 128 Bilateral Investment Agreements. Since the 1990s, it has signed 34 BITs in Africa and 15 BITs in Latin America and the Caribbean, in addition to other Free Trade Agreements with Costa Rica, Chile and Peru. South Africa South Africa is a regional „economic powerhouse‟, and the second BRICS country after China in terms of economic presence on Africa. South African investments are concentrated in telecommunications, retail, manufacturing, mining, banking and 4 construction. Currently South Africa is party to 39 BITs and 10 other agreements around the world, 18 of which are with African countries and 3 in Latin America and the Caribbean. The national interest is between those of the Western and BRICS powers and numerous poor, yet resource wealthy countries. More recently South African and Chinese capital often act together to exploit natural resources and dominate African markets. Updated NDB Performance NDB was established by in the 2014 summit by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging market economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development. Sustainable infrastructure development is the primary emphasis of NDB operations in the 2017-2021 years. The Bank dedicates around two-thirds of all financing commitments in this period to sustainable infrastructure development, i.e., infrastructure projects that incorporate economic, environmental and social criteria in their design and implementation. NDB is a public bank focused on development, and will not interfere in the political affairs of member countries. .."Only economic and financial considerations are relevant to the Bank’s decisions, and these considerations will be weighed impartially in order to achieve the institution’s purposes and functions". Thus, NDB is not only an important means by which to strengthen all the abovementioned areas of cooperation, but also a key institution which will play an important role in shaping GG through BRICS financial cooperation. Other aspects in which to develop financial cooperation through active participation and support by the NDB is in the establishment of “Digital Economy Working Group within the framework of BRICS Business Council”. Finally, sustainable development projects were directed towards tourism because this sector has “great potential to contribute to sustainable economic and social development”. Though NDB loans are free from conditions, an unintended side effect of this could be to entrench dictators, elitism, and corruption, preventing reform and harming citizens of underdeveloped nations. Finally, numerous critics have questioned whether BRICS‟ infrastructure investment in Africa is motivated by desire to access resources, and whether it perpetuates impoverishment, thus labeling this behavior “sub-imperialist.” Despite the statements of the prestigious consultants of the NDB Joseph Stiglitz and Nick Stern on the opportunity to provide sustainable loans, non-consultative strategies have led to credits for conflicting projects, environmentally harmful (as an example a controversial irrigation scheme in India and The expansion of the Petrochemical port of Durban in South Africa). The socio-environmental reference scheme adopted till some time by the NDB, was to separate its responsibilities, entrusting them to a greater role to the national systems of individual beneficiary countries on aspects of socioenvironmental safeguard and Risk Management Systems (The So-Called 'Country System) . 5 But in the last period, to respond to rising critics concerning the lack of adequate control on the environmental and social impact of the financed project NDB has been adopting stricter safeguard criteria in the evaluation and implementation, deeply reviewing the previous more flexible rules, as is now stated:" the inclusion of these criteria into infrastructure projects derives from the recognition that traditional evaluation methods fail to account for numerous factors that have a major influence on a project’s viability and developmental impact in the medium and long term……Traditional infrastructure projects will still need to be designed and implemented in a way that avoids, mitigates or compensates for any adverse impacts on the environment and social groups, in line with the Bank’s policies. ….NDB will focus on projects that incorporate sustainability from their inception. This implies supporting projects with an inherent sustainability focus as well as paying systematic attention to the expected environmental and social results of all the Bank’s operations. Concerns with sustainability are not perceived as constraints, but as opportunities for development and economic growth. In line with this operational focus, the Bank will seek to become an important player in helping BRICS and other EMDCs achieve the UN’s 2030 Sustainable Development Goals, as well as those of the 2015 Paris Agreement on Climate Change". This new approach represents the necessary response to the objections raised also by the civil society and NGO's on several of the infrastructural project financed. Since its establishment six years ago, NDB has approved about 80 projects in all of its member countries, totaling a portfolio of US$ 30 billion. Projects in areas such as transport, water and sanitation, clean energy, digital infrastructure, social infrastructure and urban development are within the scope of the Bank, most of them during the last five years, with 70 infrastructure and sustainable development projects amounting to US$ 25.07 billion, that also comprises loans given under an Emergency Assistance Facility Response Program among the member countries of USD 10 billion. Thanks to the establishment of this facility, the BRICS countries adopted a fast-track tool in order to obtain financial aid targeted at crisis- related assistance, including financing healthcare and social safety-related expenditures, as well as supporting economic recovery efforts. The funding was first invested to contribute to the ongoing efforts of these countries in addressing the health and economic consequences of the Covid-19 pandemic. It confirmed the unity amongst the BRICS in order to consolidate their cooperation and their joint efforts in combating the virus outbreak. In the last two years NDB introduced new financial tools, In December 2019, registered its inaugural USD 50 billion Euro Medium Term Note Programme in the international capital markets.(rated “AA+” by Fitch and has been assigned “AA+” long-term and “A-1+” short-term issue ratings by S&P) and on December 1, 2021, priced its 3-year USD 500 million Pandemic Support and Sustainable Bond. This transaction has become the first floating rate benchmark of the Bank and its fifth USD benchmark bond offering in the international markets.The net proceeds from this Bond will be used for financing sustainable development activities and providing COVID-19 emergency support loans to the member countries of the Bank. The NDB Board approved already nine emergency support loans totaling approx. USD 9 billion in response to the adverse health, social and economic impact of the COVID-19 pandemic. 6 NDB Opening Signal NDB‟s membership expansion is in line with the Bank‟s strategy to become the premier development institution for emerging economies and developing countries. The Board of Governors authorized the Bank to conduct formal negotiations with prospective members in late 2020. After a round of successful negotiations, NDB started expanding its membership in September 2021 with the admission of Bangladesh, United Arab Emirates (UAE) and Uruguay. Egypt is the fourth new member admitted into NDB, further expanding the Bank‟s global outreach. However the bank potential, such as the ability to attract new members, as well as to act in a faster way, may soon give it a more positive and accountable image, giving the NDB the possibility of competing with IMF in the future. Seems in any case that the orientation of the NDB will increasingly be that of giving space to new approaches based above all on greater accountability, faster bureaucracy and less dependence in terms of debt. Conclusions Still there are no great steps forward in the geo-political BRICS renewal strategy in the current post-pandemic evolution scenario, as the initial constitutive statements announced. For example, concerning their aim in having a greater voice in the Global South, it remains to be demonstrated if they are willing to represent the Global South or if they are trying to develop new forms of colonialism or sub-imperialism. Despite the repeated will to work together to create a new global order, it seems that progressively they are assimilating in the existing and the independent behaviors are growing among the five member States for its national interest, as already reported in the previous notes. Open or latent rivalries between China in India, due not only to contingent factors such as different positions and alliances, but determined by deeply different and ancient cultures, values and social structures, do not suggest substantial changes at strategic level. While in the latter period cooperation is strengthened in economic and financial fields, of which the most important expression is represented by the NDB which, also following the pandemic, as in detail, after an initial setting phase that seemed to be a stopover is starting the expected enlargement process. A most important signal is that In September 2021 three new members joined: Bangladesh, UAE, Uruguay to which Egypt was added last December, representing the opening, so far only declared, for a participation in the bank of other emerging and developing countries, therefore strengthening its objective to become the financial body representing new economies. NDB potential to attract new members, as well as to act in a faster way, may soon give it a more positive and accountable image, giving the NDB the possibility of competing with IMF in the future. Seems that recent bank's orientation will increasingly be that of giving space to new approaches based above all on greater accountability, faster bureaucracy and less dependence in terms of debt. Therefore, in general, it could emerge that these new and more advantageous conditions could play a decisive role in the BRICS future and their capability to attract other partners most from the Global South and increase their influence in redesigning global financial governance. 7 Another positive element is represented by the fast common response to the Covid-19 emergency, not only in health and vaccine terms, but through the creation of the previously mentioned Emergency Assistance Facility through which the BRICS adopted a fast-track tool in order to obtain financial aid targeted at crisis- related assistance, including financing for healthcare and social safety-related expenditure, as well as supporting economic recovery efforts. These developments of the NDB and the forecast of further enlargements and greater presence on the markets provide the clear indication that the BRICS is perhaps at a turning point and inlets however play an important financial role in the world scenario, even if in concert with the other institutions International and no alternative ù. Hence the hope that has arrived at a turning point and that this growing economic cooperation leads to agreements widened to other strategic fields, such as the fight against climate change and pandemic and to an effective re-launch of BRICS of a new vision of the Global sustainable development, reference for emerging and developing countries. Africa and Latin America. This recent advances make hope that a turning point opportunity can be developed. ----oooo----- Arch. Paolo Motta EURISPES -BRICS Laboratory Expert IASQ- Key Advisor CIVVIH-ICOMOS Member ICTC-ICOMOS Member SDGWG-ICOMOS Member mottapa2gmail.com 8