On October 28, the BRICS Business Council (Brazil, Russia, India, China and South Africa) during the forum reviewed its joint work for the previous years, discussed at length current business issues and, in particular tried to choose a path for the future. The Business Council was launched at the BRICS Summit in 2013 in Durban. Since its establishment, the BRICS Business Council has made its primary task to increase or broaden trade and investment among the member countries.
While it has recorded a considerable success and positive performance, this year has been different due to the spread of coronavirus. That has not deterred them but rather the BRICS plans to turn the disease-climate into a platform to search for new drivers of trade and economic growth in the subsequent years.
In 2020, Russia holds rotating leadership of the BRICS. Consequently, the meeting was coordinated from Moscow by the head of the Russian chapter of the BRICS Business Council, President of the Chamber of Commerce and Industry of the Russian Federation Sergey Katyrin. It is worth to explain that the BRICS Business Forum held with the support of the Ministry of Foreign Affairs of the Russian Federation, the Ministry of Economic Development of the Russian Federation and the Ministry of Industry and Trade of the Russian Federation.
Ahead of the opening, Foreign Minister Sergei Lavrov sent a special message of greetings, and the Deputy Foreign Minister Sergei Ryabkov addressed the participants. In his address, Ryabkov noted that by working together, the group could add substantial momentum to the development of trade and investment among members, and in the interests of population. In assessing the consequences of the pandemic, he urged the group to come up with collective approaches for overcoming them.
“The world economy has entered a recession. Global GDP is shrinking, and so are international trade, investment and demand for key exports. The global value chains are disrupted, while financial markets are in constant state of turbulence. There are many other problems we face today, and will have to deal with in the future,” he told the participants.
“The crises in the economy and trade could make the world more prone to conflict and seriously undermine international cooperation, further exacerbating the deficit of trust. The gap between the rich and the poor is once again growing. Our common goal is to prevent the most negative scenarios from materializing. Against this unfavorable backdrop, we are witnessing attempts to make a political issue out of the COVID-19 pandemic. We believe that this is the worst thing to do at a time when we need to work together to fend off today’s threats,” Ryabkov pointed out.
According to him, overcoming the economic fallout from the crisis is a priority. In this context, there is the need to focus on restoring the global economy, driving growth and expanding trade, as well as repairing the industrial chains. He added, “We cannot forget about climate change, sustainable development and the 2030 Agenda for Sustainable Development. I think the BRICS countries will have to look past this horizon to proactively contribute to shaping the long-term global agenda.”
In an optimistic vision for the future, the business community in the five countries has a special responsibility in this regard. Businesses are uniquely equipped to swiftly adapt to a new reality, and create much needed jobs during major crises like the current one. This is a huge asset. The BRICS governments will continue to support businesses in every possible way. In this context, the BRICS Business Forum and Business Council are essential for devising effective solutions to support micro, small and medium-sized enterprises.
Besides, there were plenary sessions held under theme: “COVID-19 and the economic development of the BRICS countries: problems and actions” and “Challenges and opportunities for sustainable development: pathways to a green economy.”
The BRICS countries represent the key economies of their regions and therefore have a special responsibility to develop actions to contain the COVID19 pandemic. They bear the main burden on the development and implementation of a policy of economic recovery from the consequences of the pandemic.
The session “Challenges and Opportunities for Sustainable Development: Pathways to a Green Economy” discussed an agenda for action on climate change and finding ways to sustain economic, industrial and energy development while reducing carbon emissions. The session participants concluded that it is necessary to study carefully the directions of sustainable economic development in the current situation.
Russian Chamber President Sergey Katyrin referenced BRICS Business Forum 2020 as “business marathon” and noted that nine panel sessions discussed topical areas of cooperation, and these include industry, trade, digital technologies, agriculture, healthcare, energy, ecology and women’s entrepreneurship.
According to forum documents, the three-day forum, both online and offline, brought together about 90 speakers, representatives of government bodies, financial institutions, business and public organizations from all countries of the association. The main topic of the forum this year was “Business Partnership of the BRICS: a Common Vision of Sustainable Inclusive Development” – and that “inclusiveness” refers to the collective efforts to overcome common challenges.
One of the main tasks is updating the Strategy for Economic Partnership of BRICS until 2025, to continue identifying promising directions for developing business cooperation among BRICS countries. In addition, the plan also focuses on business-to-business engagements in the interests of creating tangible inter-trade transactions and exploring investment opportunities among the member countries.
Minister of Industry and Trade of the Russian Federation Denis Manturov highlighted, in particular, some issues of the development of industrial cooperation within the BRICS. The heads of the national parts of the BRICS Business Council – Jackson Schneider (Brazil), Onkar Kanwar (India), Xu Lirong (China), Busisiwe Mabuza (South Africa) – spoke about various issues of interaction, exchanged ideas and experiences in solving urgent problems and challenges that currently face the group.
They discussed the impact of the pandemic on industrial production, ways to restore the economies of the BRICS countries, the possibility of digitalization and automation in creating a favorable climate. They also considered the development of women’s entrepreneurship within the BRICS and the role of the Women’s Business Alliance, which began its activities in the year of Russia’s chairmanship in BRICS.
The BRICS Business Council will meet to sum up and approve the annual report on November 10. That will be ahead of the XII BRICS Leaders’ summit scheduled for November 17. The theme of the meeting of the leaders is “BRICS Partnership in the Interests of Global Stability, Common Security and Innovative Growth.”
Russia last chaired BRICS in 2015, held a summit in the provincial city of Ufa in Bashkortostan. Russia also presided over the group back in 2009, before BRIC turned into BRICS following South Africa’s accession. The five BRICS countries together represent over 3.1 billion people, or about 40 percent of the world’s population.
Iran has an integral role to play in Russian-South Asian connectivity
Iran is geostrategically positioned to play an integral role in Russian-South Asian connectivity. President Putin told the Valdai Club during its annual meeting in October 2019 that “there is one more prospective route, the Arctic – Siberia – Asia.
The idea is to connect ports along the Northern Sea Route with ports of the Pacific and Indian oceans via roads in East Siberia and central Eurasia.” This vision, which forms a crucial part of his country’s “Greater Eurasian Partnership”, can be achieved through the official North-South Transport Corridor (NSTC) and tentative W-CPEC+ projects that transit through the Islamic Republic of Iran.
The first one refers to the creation of a new trade route from Russia to India through Azerbaijan and Iran, while the second concerns the likely expansion of the China-Pakistan Economic Corridor (CPEC, the flagship project of China’s Belt & Road Initiative [BRI]) westward through Iran and largely parallel to the NSTC. W-CPEC+ can also continue towards Turkey and onward to the EU, but that branch is beyond the scope of the present analysis. The NSTC’s terminal port is the Indian-backed Chabahar, but delays in fully developing its infrastructure might lead to Bandar Abbas being used as a backup in the interim.
CPEC’s Chinese-backed terminal port of Gwadar is in close proximity to Chabahar, thus presenting the opportunity of eventually pairing the two as sister cities, especially in the event that rumored negotiations between China and Iran result in upwards of several hundred billion dollars worth of investments like some have previously reported. The combination of Russian, Indian, and Chinese infrastructure investments in Iran would greatly improve the country’s regional economic competitiveness and enable it to fulfill its geostrategic destiny of facilitating connectivity between Russia and South Asia.
What’s most intriguing about this ambitious vision is that Iran is proving to the rest of the world that it isn’t “isolated” like the U.S. and its closest allies thought that it would be as a result of their policy of so-called “maximum pressure” against it in recent years. While it’s true that India has somewhat stepped away from its previously strategic cooperation with Iran out of fear that it’ll be punished by “secondary sanctions” if it continued its pragmatic partnership with the Islamic Republic, it’s worthwhile mentioning that Chabahar curiously secured a U.S. sanctions waiver.
While the American intent behind that decision is unclear, it might have been predicated on the belief that the Iranian-facilitated expansion of Indian influence into Central Asia via Chabahar might help to “balance” Chinese influence in the region. It could also have simply been a small but symbolic “concession” to India in order not to scare it away from supporting the U.S. anti-Chinese containment strategy. It’s difficult to tell what the real motive was since American-Indian relations are currently complicated by Washington’s latest sanctions threats against New Delhi in response to its decision to purchase Russia’s S-400 air defense systems.
Nevertheless, even in the worst-case scenario that Indian investment and infrastructural support for Iran can’t be taken for granted in the coming future, that still doesn’t offset the country’s geostrategic plans. Russia could still use the NSTC to connect with W-CPEC and ultimately the over 200+ million Pakistani marketplaces. In theory, Russian companies in Pakistan could also re-export their home country’s NSTC-imported goods to neighboring India, thereby representing a pragmatic workaround to New Delhi’s potential self-interested distancing from that project which could also provide additional much-needed tax revenue for Islamabad.
Iran must therefore do its utmost to ensure Russia’s continued interest in the NSTC regardless of India’s approach to the project. Reconceptualizing the NSTC from its original Russian-Indian connectivity purpose to the much broader one of Russian-South Asian connectivity could help guarantee Moscow’s support. In parallel with that, Tehran would do well to court Beijing’s investments along W-CPEC+’s two branch corridors to Azerbaijan/Russia and Turkey/EU. Any success on any of these fronts, let alone three of them, would advance Iran’s regional interests by solidifying its integral geo-economic role in 21st-century Eurasia.
From our partner Tehran Times
The phenomenon of land grabbing by multinationals
Since 2012 the United Nations has adopted voluntary guidelines for land and forest management to combat land grabbing. But only a few people know about the guidelines, which aim to protect small farmers particularly in Third World countries.
When multinational investors buy up fields for their huge plantations, the residents lose their livelihood and means of support and will soon only be sleeping in their villages. If they are lucky, they might find work with relatives in another village. Many also try their luck in the city, but poverty and unemployment are high. What remains are depopulated villages and the huge palm oil plantations that have devoured farmland. People can no longer go there to hunt and grow plants or get firewood. The land no longer belongs to them!
Land grabbingis the process whereby mostly foreign investors deprive local farmers or fishermen of their fields, lakes and rivers. Although it has been widely used throughout history, land grabbing – as used in the 21st century – mainly refers to large-scale land acquisitions following the global food price crisis of 2007-2008.
From 2000 until 2019 one hundred million hectares of land have been sold or leased to foreign investors and the list of the most affected countries can be found here below:
Such investment may also make sense for the development of a country, but it must not deprive people of their rights: local people are starving while food is being produced and turned into biofuels for export right before their eyes.
In 2012, after three years of discussion, the UN created an instrument to prevent such land grabbing: the VGGTs (Voluntary Guidelines on the Responsible Governance of Tenure of Land, Fisheries and Forests in the Context of National Food Security:
Detailed minimum standards for investment are established, e.g. the participation of affected people or how to safeguard the rights of indigenous peoples and prevent corruption. Formally, the document provides a significant contribution to all people fighting for their rights.
The document, however, is quite cryptic. The guidelines should be simplified and explained. Only in this way can activists, but also farmers and fishermen, become aware of their rights.
Others doubt that much can be achieved through these guidelines because they are voluntary. After all, the UN has little or no say in the matter and can do no more than that. If governments implemented them, they would apply them as they will.
In Bolivia, for example, there are already laws that are supposed to prevent land grabbing. In the Amazon, however, Brazilian and Argentinian companies are buying up forests to grow soya and sugar cane, often with the approval and agreement of corrupt government officials. Further guidelines would probably be of little use.
At most, activists already use the guidelines to lobby their governments. Together with other environmental and human rights activists, they set up networks: through local radio stations and village meetings, they inform people of the fact that they right to their land.
Nevertheless, in many countries in Africa and elsewhere, there is a lack of documentation proving land ownership. Originally, tribal leaders vocally distributed rights of use. But today’s leaders are manipulated to pressure villagers to sell their land.
The biggest investors are Indians and Europeans: they are buying up the land to grow sugar cane and palm oil plantations. This phenomenon has been going on since 2008: at that time – as noted above – the world food crisis drove up food prices and foreign investors, but also governments, started to invest in food and biofuels.
Investment inland, which has been regarded as safe since the well-known financial crisis, must also be taken into account. Recently Chinese companies have also been buying up thousands of hectares of land.
In some parts of Africa, only about 6% of land is cultivated for food purposes, while on the remaining areas there are palm oil plantations. Once the plantations grow two or three metres high, they have a devastating effect on monocultures that rely on biodiversity, because of the huge areas they occupy. There is also environmental pollution due to fertilisers: in a village, near a plantation run by a Luxembourg company, many people have suffered from diarrhoea and some elderly villagers even died.
Consequently, the implementation of the VGGTs must be made binding as soon as possible. But with an organisation like the United Nations, how could this happen?
It is not only the indigenous peoples or the local groups of small farmers that are being deprived of everything. The common land used is also being lost, as well as many ecosystems that are still intact: wetlands are being drained, forests cleared and savannas turned into agricultural deserts. New landowners fence off their areas and deny access to the original owners. In practice, this is the 21st century equivalent of the containment of monastery land in Europe that began in the Middle Ages.
The vast majority of contracts are concentrated in poorer countries with weak institutions and land rights, where many people are starving. There, investors compete with local farmers. The argument to which the advocates of land grabbing hold -i.e. that it is mainly uncultivated land that needs to be reclaimed – is refuted. On the contrary, investors prefer well-developed and cultivated areas that promise high returns. However, they do not improve the supply of local population.
Foreign agricultural enterprises prefer to develop the so-called flexible crops, i.e. plants such as the aforementioned oil palm, soya and sugar cane, which, depending on the market situation, can be sold as biofuel or food.
But there is more! If company X of State Y buys food/fuel producing areas, it is the company that sells to its State Y and not the host State Z that, instead, assigns its future profits derived from international State-to-State trade to the aforementioned multinational or state-owned company of State Y.
Furthermore, there is almost no evidence of land investment creating jobs, as most projects were export-oriented. The British aid organisation Oxfam confirms that many land acquisitions took place in areas where food was being grown for the local population. Since local smallholders are generally weak and poorly educated, they can hardly defend themselves against the grabbing of the land they use. Government officials sell or lease it, often without even paying compensation.
Land grabbing is also present in ‘passive’ Europe. Russia, Ukraine, Romania, Lithuania and Bulgaria are affected, but also the territories of Eastern Germany. Funds and agricultural enterprises from “active” and democratic Europe, i.e. the West, and the Arab Gulf States are the main investors.
We might think that the governments of the affected countries would have the duty to protect their own people from such expropriations. Quite the reverse. They often support land grabbing. Obviously, corruption is often involved. In many countries, however, the agricultural sector has been criminally neglected in the past and multinationals are taking advantage of this under the pretext of remedying this situation.
No let-up in Indian farmers’ protest due to subconscious fear of “crony capitalism”
The writer has analysed why the farmers `now or never’ protest has persisted despite heavy odds. He is of the view that the farmers have the subconscious fear that the “crony capitalism” would eliminate traditional markets, abolish market support price and grab their landholdings. Already the farmers have been committing suicides owing to debt burden, poor monthly income (Rs. 1666 a month) and so on.”Crony capitalism” implies nexus between government and businesses that thrives on sweetheart deals, licences and permits eked through tweaking rules and regulations.
Stalemate between the government and the farmers’ unions is unchanged despite 11 rounds of talks. The farmers view the new farm laws as a ploy to dispossess them of their land holdings and give a free hand to tycoons to grab farmers’ holdings, though small.
Protesters allege the new laws were framed in secret understanding with tycoons. The farmers have a reason to abhor the rich businesses. According to an a January 2020 Oxfam India’s richest one per cent hold over four times the wealth of 953 million people who make up the poorest 70 per cent of the country’s population. India’s top nine billionaires’ Inc one is equivalent to wealth of the bottom 50 per cent of the population. The opposition has accused the government of “crony capitalism’.
Government has tried every tactic in its tool- kit to becloud the movement (sponsored y separatist Sikhs, desecrated Republic Day by hoisting religious flags at the Red ford, and so on). The government even shrugged off the protest by calling it miniscule and unrepresentative of 16.6 million farmers and 131,000 traders registered until May 2020. The government claims that it has planned to build 22,000 additional mandis (markets) 2021-22 in addition to already-available over 1,000 mandis.
Unruffled by government’s arguments, the opposition continues to accuse the government of being “suit-boot ki sarkar” and an ardent supporter of “crony capitalism” (Ambani and Adani). Modi did many favours to the duo. For instance they were facilitated to join hands with foreign companies to set up defence-equipment projects in India. BJP-ruled state governments facilitated the operation of mines in collaboration with the Ambani group just years after the Supreme Court had cancelled the allotment of 214 coal blocks for captive mining (MS Nileema, `Coalgate 2.0’, The Caravan March 1, 2018). Modi used Adani’s aircraft in March, April and May 2014 for election campaigning across the country.
“Crony capitalism” is well defined in the English oxford Living Dictionaries, Cambridge and Merriam –Webster. Merriam-Webster defines “crony capitalism” as “an economic system in which individuals and businesses with political connections and influence are favored (as through tax breaks, grants, and other forms of government assistance) in ways seen as suppressing open competition in a free market
If there’s one”.
Cambridge dictionary defines the term as “ an economic system in which family members and friends of government officials and business leaders are given unfair advantages in the form of jobs, loans, etc.:government-owned firms engaged in crony capitalism”.
A common point in all the definitions is undue favours (sweetheart contracts, licences, etc) to select businesses. It is worse than nepotism as the nepotism has a limited scope and life cycle. But, “crony capitalism” becomes institutionalized.
Modi earned the title “suit-boot ki sarkar” when a non-resident Indian, Rameshkumar Bhikabhai virani gifted him a Rs. 10 lac suit. To save his face, Modi later auctioned the suit on February 20, 2015. The suit fetched price of Rs, 4, 31, 31311 or nearly four hundred times the original price. Modi donated the proceeds of auction to a fund meant for cleaning the River Ganges. `It was subsequently alleged that the Surat-based trader Laljibhai Patel who bought the suit had been favoured by being allotted government land for building a private sports club (BJP returns ‘favour’, Modi suit buyer to get back land, Tribune June21, 2015).
Miffed by opposition’s vitriolic opposition, Ambani’s $174 billion conglomerate Reliance Industries Ltd. Categorically denied collusion with Modi’s government earlier this month. Reliance clarified that it had never done any contract farming or acquired farm land, and harboured no plans to do so in future. It also vowed to ensure its suppliers will pay government-mandated minimum prices to farmers. The Adani Group also had clarified last month that it did not buy food grains from farmers or influence their prices.
Like Modi, both Adani and Ambani hail from the western Indian state of Gujarat, just, who served as the state’s chief for over a decade. Both the tycoons are reputed to be Modi’s henchmen. Their industry quickly aligns its business strategies to Modi’s nation-building initiatives. For instance, Adani created a rival regional industry lobby and helped kick off a biannual global investment summit in Gujarat in 2003 that boosted Modi’s pro-business credentials. During 2020, Ambani raised record US$27 billion in equity investments for his technology and retail businesses from investors including Google and Face book Inc. He wants to convert these units into a powerful local e-commerce rival to Amazon.com Inc. and Wal-Mart Inc. The Adani group, which humbly started off as a commodities trader in 1988, has grown rapidly to become India’s top private-sector port operator and power generator.
Parallel with the USA
Ambani and Adani are like America’s Rockefellers and Vanderbilt’s in the USA’s Gilded Age in the second half of the 19th century (James Crabtree, The Billionaire Raj: a Journey through India’s New Gilded Age).
Modi government’s tutelage of Ambanis and Adanis is an open secret. Kerala challenged Adani’s bid for an airport lease is. A state minister said last year that Adani winning the bid was “an act of brazen cronyism.”
Threat of elimination of traditional markets
Farmers who could earlier sell grains and other products only at neighbouring government-regulated wholesale markets can now sell them across the country, including the big food processing companies and retailers such as WalMart.
The farmers fear the government will eventually abolish the wholesale markets, where growers were assured of a minimum support price for staples like wheat and rice, leaving small farmers at the mercy of corporate agri-businesses.
Is farmers’ fear genuine?
The farmers have a logical point. Agriculture yield less profit than industry. As such, even the USA heavily subsidies its agriculture. US farmers got more than $22 billion in government payments in 2019, the highest level of farm subsidies in the last 14 years, and the corporate sector paid for it. The Indian government is reluctant to give a permanent legal guarantee for the MSP. In contrast, the US and Western Europe buy directly from the farmers and build their butter and cheese mountains. Even the prices of farm products at the retail and wholesale levels are controlled by the capitalist government. In short, not the principles of capitalization but well-worked-out welfare measures are adopted to sustain the farm sector in the advanced West.
Threat of monopsonic exploitation
The farmers would suffer double exploitation under a monopsony (more sellers less buyers) at the hands of corporate sharks. They would pay less than the minimum support price to the producers. Likewise, consumers will have to pay more because the public distribution system is likely to be undermined as mandi (regulated wholesale market) procurement is would eventually cease to exist.
Plight of the Indian farmer
The heavily indebted Indian farmer has average income of only about Rs. 20000 a year (about Rs. 1666 a month). Thousands of farmers commit suicide by eating pesticides to get rid of their financial difficulties.
A study by India’s National Bank for Agriculture and Rural Development found that more than half of farmers in India are in debt. More than 20,000 people involved in the farming sector died by suicide from 2018-2019, with several studies suggesting that being in debt was a key factor.
More than 86 per cent of India’s cultivated farmland is owned by small farmers who own less than two hectares of land each (about two sports fields). These farmers lack acumen to bargain with bigger companies. Farmers fear the Market Support Price will disappear as corporations start buying their produce.
Modi sarkar is unwilling to yield to the farmers’ demand for fear of losing his strongman image and Domino Effect’. If he yields on say, the matter of the farm laws, he may have to give in on the Citizenship Amendment Act also. Fund collection in some foreign countries has started to sustain the movement. As such, the movement may not end anytime soon. Unless Modi yields early, he would suffer voter backlash in coming elections. The farm sector contributes only about 15 per cent of India’s $2.9 trillion economy. But, it employs around half its 1.3 billion people.
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