Egypt on the way to BRICS membership
The issue of Egypt’s membership in the BRICS is an important and urgent matter, writes Cairo newspaper “Al-Masry Al-Youm”.
BRICS is a group created in 2009 that includes China, Russia, India, Brazil and South Africa. The BRICS countries represent 42% of the world’s population, 24% of global GDP. They account for 16% of world exports and 15% of world imports of goods and services.
The BRICS group is not an official organization, but the leaders of its five countries meet annually to deepen and strengthen cooperation between it.
South Africa plans to hold the next summit in Durban at the end of August.
Talk of Egypt’s BRICS membership is not new, and a reader of former Egyptian Foreign Minister Ahmed Abul Gheith’s book ‘My Certificates’ finds the roots of this aspiration as part of the expansion of Egypt’s advancement in the world.
However, there has always been a question about the advisability of Egypt joining this group. There are those who are skeptical and believe that the BRICS ‘has not achieved much since its inception,’ that it is ‘just a framework for coordination, and not an economic bloc’ or an international organization ‘in the full sense of the word,’ and that some of its countries are ‘going through difficult circumstances,’ or there is a ‘certain tension or heterogeneity between them.’
They point out that ‘Russia is preoccupied and exhausted by the war in Ukraine,’ that the ‘Chinese economy is still suffering from problems after the coronavirus pandemic,’ while the ‘economies of Brazil and South Africa are experiencing a recession’ and their preoccupation with domestic problems. In addition to border tensions between India and China, there is ‘India’s vision of relations with the West,’ which may differ from both China’s and Russia’s.
My point is that, despite the validity of some of the previous assumptions, the BRICS group has recently undergone a huge transformation, whether on the institutional side or the policy of cooperation.
And that the expansion of BRICS to BRICS+ will in the near future be one of the main gatherings that will contribute to laying the foundations for a new global economic order, the forerunners of which have already begun to take shape, and the consequences of new international balance sheets.
Therefore, the issue of Egypt’s membership in the BRICS is an important and urgent matter. As for the new transformations that are the catalyst for Egypt’s interest in joining the BRICS, the most important of these is that the BRICS countries, such as China and Russia, seek to create a certain degree of pluralism in the global economic system.
At the upcoming BRICS summit in South Africa, the issue of the new composition of the group will be considered. Now, as reported in the press, 19 countries to join. According to the South African delegate in the group, 13 countries have already officially applied for membership, and 6 more countries have expressed their intentions. He added: “We receive requests to join every day.”
Some of these countries belong to our Arab world, for example, Saudi Arabia and Algeria; there is Iran from the Middle East. Other most important countries are Argentina and Mexico.
The upcoming BRICS summit will consider using a common currency for their trade exchanges so that the US dollar does not remain the only monopoly in this matter. The BRICS countries also encourage transactions between themselves in local currencies and have already begun to do so.
It is worth noting that in 2014 the BRICS countries established the New Development Bank (NDB) with an initial capital of $50 billion, and some see it as an alternative to the World Bank and the International Monetary Fund. The BRICS New Development Bank, as well as the Chinese-led Asian Infrastructure Investment Bank (AIIB), represent important steps in offering new development alternatives.
Although Egypt has already joined two banks and participated in previous BRICS meetings in the so-called “BRICS+”, membership in the group will open up new horizons for it in terms of both trade and investment with the BRICS countries.
Finally, Egypt’s desire to join the BRICS does not mean that it refuses to cooperate with its Western friends or with other financial and monetary institutions.
However, the global system is rapidly moving towards pluralism, putting an end to the monopoly of one country, bloc or currency in international agreements and transactions. It is important for Egypt to be part of this trend, and as part of the expansion of its movement in the world and the alternatives available to it.
Japanese Nintendo Folds Up Games Sales in Russia
Russia’s Ministry of Industry and Trade has expanded its list of goods for parallel importation, including some foreign toy brands such as Hasbro, Logitech and Nintendo that were not previously included.
According to the official media release which says “Import stimulus is aimed at those niches in which Russian producers need more time to meet the needs of industrial enterprises and end consumers.” Going forward, the ministry plans to move from inclusion of brands in the list to inclusion of copyright holders, which will simplify the administration of this procedure.
But late April, Nintendo also said it would no longer sell games in Russia through its online store as the Japanese giant winds down operations in the increasingly isolated country. The changes, which were announced and came into effect on April 31, follow Nintendo’s suspension of product shipments to Russia in March 2022 after the invasion of Ukraine.
Russian customers can still re-download previously purchased content but no new payments can be made or new accounts created, a Nintendo statement said. Following the shipment suspension and “as a result of the economic outlook, Nintendo of Europe has decided to wind down operations of its Russian subsidiary,” it said.
“Payment information tied to Nintendo accounts, such as credit card or PayPal account details, has been deleted for security reasons,” according the to company. Nintendo’s eShop was already “under maintenance” in Russia because its payment provider had stopped ruble transactions.
A growing number of multinationals have fully or partially halted business in Russia since the Ukraine war began. Some have cited disruption to business, while others have directly linked the move to outrage over President Vladimir Putin’s decision to send troops into Ukraine in February last year.
Nintendo’s rival Sony suspended software and hardware shipments to Russia and operations of the PlayStation Store there in March 2022. “Sony Interactive Entertainment (SIE) joins the global community in calling for peace in Ukraine,” the company tweeted.
It suspends all the deliveries to Russia, operations of the official online store and the release of Gran Turismo 7 simulator for the Russian market, Sony added. The decision was made in view of disruptions of the chain of supplies and payment problems because of sanctions introduced against Russia after the start of the military operation in Ukraine.
Nintendo is a Japanese multinational video game company headquartered in Kyoto. It’s central focus is the research, development, production, and distribution of entertainment products – primarily video game software and hardware and card games.
Like many other electronics companies, Nintendo offers a recycling program for customers to mail in unused products. As of 2022, Nintendo has sold more than 5.4 billion video games and over 800 million hardware units.
During the peak of Nintendo’s success in the video game industry in the 1990s, its name was ubiquitously used to refer to any video game console, regardless of the manufacturer. It is one of the wealthiest and most valuable companies in the Japanese market, with business affiliates in the United States and Europe. It was founded in 1889 as Nintendo Karuta.
Will Egypt Join and Adapt BRICS Currency?
The BRICS nations are looking to establish their own currency, in order to decrease the influence of the US in the global trade market by means of de-dollarization writes Watcher.Guru. New countries are already showing interest in joining the organization, including Egypt.
Will Egypt Join and Adapt BRICS Currency?
Egypt’s interest in the BRICS alliance has risen over the past two years. This is in part due to the speculations of a new currency. A gradual development of a non-dollar financial system, moving away from reliance on the US dollar, is something that the African nation is looking to do. Also, Egypt’s economy will benefit from the formation of reserves to solve liquidity problems. This formation will better cope with global crises through the economy of the member countries
Additionally, Egypt hopes to establish more trade with domestic currencies. This is something that has been heavily discussed by BRICS and will be discussed especially at the upcoming BRICS summit in August. Despite a deteriorating economy and weak sovereign currency, Egypt looks to be favoring the BRICS Alliance as a way to solve its monetary issues.
In March of this year, Cairo took an equity position within the New Development Bank (NDB). The NDB was developed by the BRICS alliance. This is the first surefire step in a nation joining BRICS. The UAE, Bangladesh, and Uruguay have also already done this as well.
Egypt participated in the BRICS Summits in 2017 and 2022. It will likely be involved in the upcoming one in South Africa as well. While more nations being officially brought into BRICS during the summit isn’t a guarantee, the topic of new members and a new currency will be a hot topic.
Innovation in Europe: the secrets to entrepreneurial success and the importance of “patient capital”
As of today, the European Innovation Council (EIC) has a new President of the Board, Dr Michiel Scheffer. With a budget of €10 billion, the EIC aims to identify and scale up new technologies and scientific breakthroughs. In an interview with Horizon magazine, Scheffer looks at the task ahead, where he feels innovation in Europe is strong and where there is a need to do better.
By TOM CASSAUWERS
Michiel Scheffer is hardly new to the world of innovation. For 15 years the Dutch national ran an innovation consultancy for fashion and textile companies. And on top of that he served as regional minister in the Dutch province of Gelderland. Now, Scheffer says he’s eager to start his new job in Brussels as president of the EIC Board.
Which of your previous jobs – in academia, industry or politics – best prepared you for the job of EIC president?
Surprisingly, my political responsibilities probably best prepared me. The challenges I encountered there are similar to the ones I will face now. Of course, it’s important to know how academic research works and how startups operate. But politics is what best prepared me.
I used to be a minister for the Dutch province of Gelderland. Fifteen years ago, it sold some government companies, which caused the province to have money. I led the fund that invested this money. I invested €600 million in startups and scaleups, and I’m proud of the work we did there. That’s a smaller version of what I’m about to experience with the EIC.
What about your work as an entrepreneur?
I was born into a textile family. It’s already in my DNA for three generations. As an entrepreneur I helped textile companies in their innovation processes. But I also tried to develop my own technologies through startups. I need to note, though, that all those startup projects failed.
What did you learn from failing?
For one, I myself experienced the problems that startups encounter. You need to have capital that’s patient. At a certain stage you need to scale a technology, which can cost millions of euros. That means you need good sources of capital, which is where some ideas fail. I hope the EIC can help fix this.
A startup also needs to see Europe as its starting market. We cannot just see our nations or regions as our only markets. You need Europe to build a company at scale.
Your focus as a consultant was on the textile and fashion industries. What lessons did you learn from them?
Fashion is a very innovative industry. Every season they need to come up with new ideas and recombine concepts. Which surprisingly is a very useful mindset for European deep-tech innovation, because crossover thinking is key here. Often you combine different fields or industries. For example, new materials are used to build medical technologies. And that’s what the European innovation ecosystem does well. Everything is close to each other.
In the US, Silicon Valley is geographically very far away from, say the Research Triangle [an area in North Carolina with a heavy focus on medical industries]. In Europe we’re better at this cross-sector innovation, something I’m quite familiar with because of my experience in fashion.
What do you think about the so-called European Innovation Paradox, the idea that Europe is a world leader in science and research but that we’re not good at turning this knowledge into startups and economic activity?
The paradox exists, but it’s not an unchangeable reality. There are regions in Europe that have managed to bridge that paradox. They have managed to invest funds correctly and create a network of startups. I’m thinking of cities such as Eindhoven, Grenoble or Tallinn. On a regional level there are success stories.
The US and China, the other two big economic blocs, have much more coherent internal markets and a strong government. Europe has potential, but fundamentally it’s still 27 different member countries. There’s, of course, the single market but, particularly for startups, financing options remain fragmented. The EIC wants to create a single market for venture capital.
What about private investors? Aren’t you pushing them out?
We work by “crowding in” and never go at it alone. When we give equity, we only invest when private investors join us. We want to seduce private venture capitalists (VCs), not compete with them. Public investors de-risk a lot of the work of private VCs. They make a selection and do due diligence, which reduces the work a private investor needs to do. Research shows that companies where public and private investors work together have a higher chance of survival than companies who just get private investment.
Does an EU fund really need to do equity investments?
In every major technological transition of the last 400 years, public investment has played a big role. This can be in the form of equity, or government contracting. You, of course, need to be prudent, but history shows that it works. After the last few neoliberal decades, it might be somewhat new for governments to do equity investments again, but in the long term it’s perfectly normal for us to do this.
On the other hand, do you think private VCs are too risk averse in Europe?
This can happen, but there are plenty of private VCs that take risks. The bigger problem in Europe is that institutional investors, such as pension funds or even family offices [funds that manage and invest the money of wealthy families], invest too little in VCs. The challenge is more to have these bigger funds invest a larger share of their capital into VC, which in turn will give a boost to European startups.
As someone with a PhD, how can we stimulate scientists to also take up entrepreneurship?
We need to stimulate entrepreneurship among scientists. There aren’t enough places for all PhD students at universities. Besides, there are a lot of PhD students who prefer entrepreneurship over academia. That was also the case for me 30 ago. That of course doesn’t mean that entrepreneurship is just something for scientists.
The most successful companies are led by diverse teams. You want to mix scientists with more commercially driven people. This diversity, by the way, should also extend to gender. We see that entrepreneurial teams that also include women are more successful than teams just composed of men. Cross-border entrepreneurial teams also are more successful. Entrepreneurship isn’t about one lone genius, but about diverse teams.
There are suggestions that a recession might be setting in. What role does the EIC need to play in this kind of funding environment?
The EIC needs to work as patient capital. We have a commitment to invest in the long-term. The instrument also needs to exist for a long time. We hope that the Member States will keep supporting it in the next work programme, after 2027. We are faced with very long-term technological transitions, for example, in the area of sustainability, that go up to and beyond 2050. We need financial instruments that can think on these long-term horizons.
As the new president of the EIC, what will be your first actions?
Some regional innovation ecosystems work very well already, yet others are still lacking. I want to spend a lot of attention on countries and regions that need some help. One of my main activities would be to visit different ecosystems. In July, I start with Portugal, which has a very good technological ecosystem. But afterwards I would also like to visit Bulgaria, Slovenia, Croatia and Poland. This is called ‘widening’. We let these regions learn from other success stories, like imec in Leuven, Belgium, or Enterprise Ireland in Ireland.
We also need to steer investments into areas that are strategically important to Europe. One of the strong points of Europe is, for example, agriculture. We should explore opportunities for it to supply us with certain materials or resources used in chemicals and pharmaceuticals.
Farmers could for example supply lactic acid from sugar, which can be used to make plastics. Bio-based industries such as agriculture can in this way be coupled to our search for more autonomy in strategic economic areas.
What tips do you have for prospective entrepreneurs?
An entrepreneur needs critical friends. You need to learn how to tell your story and listen to criticism. Good entrepreneurs also never work alone. Try to join a team, and make it diverse.
A NEW EUROPEAN INNOVATION AGENDA AND THE EIC
A new wave of innovation is underway: deep-tech innovation, rooted in cutting-edge science, technology and engineering, often combining advances in the physical, biological and digital spheres with the potential to deliver solutions to the many global challenges we face.
With the new European innovation agenda, the EU is putting forward concrete new measures to help innovators, including deep-tech startups, to succeed in bringing their innovations to market.
The European Innovation Council (EIC) supports the most promising deep-tech startups in Europe with scaling up their breakthrough innovations through the EIC Fund, a combination of public grant and patient equity investment. The Fund is set to become the largest early stage, deep-tech investor in Europe: leveraging a budget of €10 billion for the EIC to crowd in €30 to €50 billion from other private investors.
This interview was originally published in Horizon, the EU Research and Innovation Magazine.
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