BRICS approach of common development grabs world attention

By: Azhar Azam

Chinese President Xi Jinping, while addressing the 15th BRICS Summit on August 23, urged BRICS countries to uphold fairness and justice, and improve global governance.

Following the sequence of its acronym, BRICS – a group of five leading emerging markets and developing countries: Brazil, Russia, India, China and South Africa – is convening its 15th summit themed "BRICS and Africa: Partnership for Mutually Accelerated Growth, Sustainable Development, and Inclusive Multilateralism" in Johannesburg.

BRICS neither sets itself up as an alternative to current international political and financial forums nor seeks to substitute the Western economic model. The group is an endeavor to support international development and help build a more equitable global architecture by promoting South-South cooperation and advancing the Global South's interests in partnership with the Global North.

Several grievances such as abusive trade practices, a global desire to seek a level-playing field, political and economic ostracization of certain nations, endless undermining of other integrated frameworks in the hands of the U.S.'s "hegemonic vision" and ceaseless neglect of the development needs of poor countries have generated calls for "reconfiguration" of the international financial system. A rising discontent in the developing world is fueling the trend.

Anil Sakoolal, South African ambassador to BRICS, has singled out U.S. sanctions on Chinese entities that are aimed at marginalizing developing states and smaller countries' willingness to assert their independence.

According to South African officials, more than 40 countries have expressed interest in joining BRICS. China, for its part, has supported the progress of the group's expansion and welcomed like-minded countries to the BRICS family.

The group has developed an institutional character with the creation of economic institutions such as the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA). The two institutional frameworks were established in 2015 and sought to mobilize resources for the financing of infrastructure and sustainable development projects in developing countries and providing a safety net for member states in possible scenarios of balance of payment crisis.

The NDB is moving in that direction. It has begun lending in local currencies and aims to reach 30 percent of lending in local currencies over the next five years. More than 20 countries have formally applied to become members of the bank with Egypt, the United Arab Emirates and Bangladesh having joined in 2021. Uruguay has also been admitted and is part way through the process of joining. South Africa's Finance Minister Enoch Godongwana said earlier this month that boosting the use of local currencies would also be on the agenda to help de-risk the impact of foreign exchange fluctuations.

Citing the World Bank, the United Nations Conference on Trade and Development's BRICS Investment Report in April stated that the share of BRICS in global GDP had grown from 18 percent in 2010 to 26 percent in 2021, thanks to growth in China. It also said the annual foreign direct investment inflows quadrupled between 2011 and 2021, with the growth rate of intra-BRICS exports exceeding the global average. As such, BRICS has played an important role in the growth of partner economies and contributed significantly to "gross fixed capital formation."

In 2021, Chinese President Xi Jinping brought the idea of common development to the fore by his proposed Global Development Initiative. Under China's chairmanship last year, the BRICS countries pursued this as well as other joint development initiatives including the BRICS Initiative on Trade and Investment for Sustainable Development, the Digital Economy Partnership Framework, the space cooperation mechanism and the BRICS Vaccine Research and Development Center.

2023 is likely to be the group's "most impactful year." As South Africa takes over the BRICS presidency from China, it appears to build on China's focus and success in promoting global development. Another important aspect of BRICS is that four of its members are also part of the Group of 20 (G20). This distinctively remarkable feature has captured the attention of several G20 members, for it allows the grouping to collectively raise a voice on behalf of the developing world in addition to strengthening economic cooperation and expanding multilateral trade and development between the blocs.

Over the last 15 years, BRICS has emerged as a key player in the global economy. This collaboration between the developing and emerging countries blazes a trail for international fairness and justice as well as global peacemaking and urges other powers, trying to shove the world into instability, to mend their counterproductive approach of sanctioning and containing other economies.

My article that first appeared at CGTN:

Trilateral summit in Camp David: A peace-brokering meeting or conflict-provoking effort?

By: Azhar Azam

As South Korea commemorates the 78th anniversary of its liberation from Japan's 35-year colonial rule, U.S. President Joe Biden on August 18 is preparing to host South Korean President Yoon Suk-yeol and Japanese Prime Minister Fumio Kishida at the U.S. presidential retreat in Maryland for a trilateral summit. According to U.S. senior officials, leaders of the three countries will launch a series of joint initiatives on technology, defense and other issues.

The gathering is unlikely to produce a formal security arrangement and will revolve largely around building a mutual understanding of regional responsibilities and setting up a three-way crisis hotline. The U.S. still attempts to stoke tensions in Asia-Pacific by seeking to issue a controversial joint statement on regional peace and stability.

Washington has been trying to thaw the strained Seoul-Tokyo relationship, which dates back to disputes over Japan's 1910-45 occupation of South Korea. The Koreans accuse Japan of forcing women to work in wartime brothels for its military and using forced labor, among other abuses. In 2015, Japan issued an official apology to WW II Korean "comfort women" and offered just less than $10 million to the victims under a settlement, but then-Korean President Moon Jae-in scrapped the agreement as it didn't compensate enough for the victims.

Japan has warned of serious repercussions if South Korea tries to enforce its 2018 Supreme Court verdict to order Japanese companies to compensate some victims, and the 2019 export restrictions reveal this complex relationship. Around the Yoon-Kishida reciprocal trips earlier this year, Tokyo lifted export embargoes on Seoul and some surviving victims accepted Yoon's plan to compensate the plaintiffs but demanded an apology from Japan.

South Korea's concerns about Japan's discharge of contaminated water from Japan's Fukushima nuclear power plant and the continuing representation of Japan's "Rising Sun" as a symbol of past imperial Japan in some textbooks are a steeplechase of hurdles and major annoyances for the U.S. if it is to take advantage of the rapprochement and implement its aggressive policy in the region.

Previewing the trilateral summit, Christopher Johnstone,who served on the U.S. National Security Council twice and is now with the Center for Strategic and International Studies, explains the fragility of the three-way relationship: "I think it's fair to say that in South Korea, President Yoon's efforts are still not widely popular. And in Japan, there's this constant refrain of skepticism that the improvement will be durable and the risk that a future ROK (Republic of Korea) president could flip the table over again."

The U.S. has collective defense arrangements with Japan and South Korea separately with some 100 permanent military bases and around 80,000 troops in the two countries. The so-called internationalist U.S. president is exploiting America's massive military footprint to put pressure on both states to mend ties and form a new military bloc in the region with eyes on China.

Over the years, America has become a factory of spreading sophistry across the world. Supported by the country's military-industrial complex, think tanks in the U.S. often hurl bricks at Beijing in an attempt to besmirch the world's second-largest economy internationally. This mindset is both dangerous and shortsighted and carries risks of pushing the region into turmoil.

Experts at these groups seek to institutionalize the process of cooperation among the three governments. U.S. Secretary of State Antony Blinken is following the same notion, expecting "concrete initiatives" to address the regional security issues. The peace across the wider expanse, in fact, is threatened by these very blueprints that seek to incite tensions in order to assert America's dominance.

Washington, through AUKUS – the security alliance comprising Australia, the UK and the U.S. – has already triggered an arms race in the Asia-Pacific and poses a real threat to the security of the Association of Southeast Asian Nations. Any effort to extend such provocative alliances as well as establishment of a Nuclear Consultative Group to reinforce the U.S. "extended deterrence" – deployment of U.S. nuclear-armed submarines in the Korean peninsula as a projection of power and the fresh bid to create a mini-NATO – will indeed exacerbate economic and security challenges with an unpredictable domino effect.

Blinken is partly right when he says the region and the world are being tested by "geopolitical (and strategic) competition," climate and peace crises and nuclear threats. At the same time, the Biden administration needs to reassess its own role in aggravating these challenges and should modify its approach to deal with urgent issues the international community is facing today.

The solution to pressing global challenges doesn't lie in building military alliances, provoking other countries and sparking instability; it's rooted in accepting mutual coexistence, promoting economic and trade cooperation and strengthening joint peacemaking efforts. As long as these essential elements remain absent from U.S. foreign policy, future success of such alliances cannot be assured. With this perspective, the upcoming trilateral summit is a conflict-provoking rather than peace-brokering effort.

*My article that first appeared at CGTN:

China is well on the way to achieving its economic target

By: Azhar Azam

In the first seven months of 2023, China's foreign trade increased 0.4 percent to more than 23.5 trillion Chinese yuan (about $3.3 trillion). Trade with the Association of Southeast Asian Nations, Central Asia, Latin America, Africa and countries along the Belt and Road posted a robust growth.

The data is well in line with the expectations forecast by the Chinese government and global financial institutions amid a flagging global demand. Linking the resilience of Asia-Pacific with Beijing, the International Monetary Fund (IMF) in its most recent economic outlook in May anticipated a "fresh impetus" coming from the reopening of China and its economic expansion of 5.2 percent in 2023, seeing the surging consumption in the country boosting the world's most dynamic region's growth despite "weaker demand" from the rest of the world.

The World Bank in its June China Economic Update also stated a soft external demand with weak global growth could impact exports, yet it projected the Chinese gross domestic product (GDP) to be 5.6 percent in 2023, led by a rebound in consumer demand. All these trade numbers and projections reveal the Chinese economy has overall maintained stability and is on track to achieve its target.

In July, exports and imports fell 8.3 percent to around 3.5 trillion yuan ($490 billion). External factors such as declining consumer spending in developed countries, potential recession, inflation and falling commodity prices contributed to the sporadic fall; or else Chinese exports have diversified to other markets with areas like mechanical and electrical products, especially exports of new energy vehicles, proving a bright spot.

China's private sector – which has been reviving up since the global financial crisis, becoming one of the important factors of China's economic growth – is one of the major features of the country's progress. According to the latest statistics, private enterprises in China at the close of the first half of 2023 continue to be a key driver of the country's foreign trade, making up 52.7 percent of the Chinese value of foreign trade.

Their import and export volume soared 8.9 percent to 10.6 trillion yuan ($1.47 trillion), including the export of high and new technology goods of more than 1.2 trillion yuan ($170 billion) that saw a surge of 5.4 percent. The privately-owned firms also provided a fillip to the national economy, technological development and job creation as they accounted for 90 percent of all enterprises as well as contributing to 50 percent of the tax revenue, 60 percent of the gross domestic product (GDP), 70 percent of the tech innovation, 80 percent of the urban employment and 90 percent of new jobs.

In a nutshell, the private sector sustained its trailblazing role and for the first time in 2022 made a contribution of more than 50 percent to Beijing's total external trade. The magical combination of 50/60/70/80/90 has been frequently used internationally to describe the private sector's contribution to the national economy and remains at the core of China's innovation-driven high-quality development.

Private fixed-asset investment contracted 0.2 percent in the first half of 2023. It may signal a drop in business confidence. As fixed-asset investment in the first four months had increased 0.4 percent, China's immediate response to making the private economy "bigger, better and stronger" through measures including protection of property rights, promoting fair competition, breaking down market-entry barriers and supporting access to funding, will help to revive private business sentiment, encouraging the sector to invest and play a proactive role in stabilizing economic growth and industrial upgradation and contributing to job creation.

Private entrepreneurs have been expressing confidence to gain the momentum but need some time for a complete market recovery in the face of the COVID-19-induced economic fallout and challenges from the outside world such as sluggish global demand and growth. Beijing's new guidance is propelling them to place "greatest confidence" in the forward looking approach that sets the direction to lift their technological innovation capabilities.

Identification of areas such as transport, water, clean energy, new infrastructure, advanced manufacturing and modern agriculture and financial support from the Chinese government would further help to rationalize the proportion of private fixed-asset investment among all investments. Moreover, a sharp rise of 56.3 percent in China's passenger trips and about 2.5 billion tons of cargo in the first half of 2023, up 0.6 percent year-on-year, indicate consumer spending is bracing itself for a revival.

There're certain internal and external challenges, yet China's "quite impressive ability" to manage its economy in conjunction with fast-rising spending on eateries, hotels and travelling and booming sales of luxury goods in the country is encouraging businesses to remain optimistic about their sustained recovery. Against all odds, China is well on the way to achieving its growth target and contributing a third of global growth this year.

*My article that first appeared at CGTN: