ISSN 0798 1015

Vol. 40 (Issue 42) Year 2019. Page 23

Drivers of deepening the BRICS countries partnership (based on a comparative analysis of national development strategies)

Impulsores de la profundización de la asociación de países BRICS (basado en un análisis comparativo de las estrategias nacionales de desarrollo

PERSKAYA, Victoria 1; SOKOLOVA, Elizaveta 2; MEKHDIEV, Elnur 3 & GULIEV, Igbal 4

Received: 21/08/2019 • Approved: 22/11/2019 • Published 09/12/2019

Contents

1. Introduction

2. Methodology

3. Results

4. Conclusions

Bibliographic references

1. Introduction

The main aim of cooperation of the BRICS states (Brazil, Russia, India, China and South Africa), as it is positioned in the Johannesburg Declaration (Official Internet Resources of the President of Russia, 2018a), is to ensure peace, harmony, common development and prosperity. At the same time, the question of further strengthening cooperation is one of those that is on the agenda of almost every of the BRICS summits that were held. Symptomatic for the interaction of the BRICS states is that this non-formalized organization realizes its activities, seeking to find consensus and common points of concurrence of partnership in terms of the obligation to ensure the national interests and to improve the living standards of the participating countries.

Based on a comprehensive analysis of the national economy development strategies in the BRICS states, it has been substantiated that all of them are subordinated to the goal of enhancing the role and importance of positioning states in the world community; it is proven that the national economies of the BRICS states do not pursue integration goals, but at the same time develop the potential for deepening regional integration; it is proven that the formation of a consolidated position of the BRICS states within the framework of the United Nations Security Council and other United Nations (UN) organizations is the guarantor of the preservation of the dominance of international law and the preservation of the role of the UN Security Council.

Thus, the expansion of the strategic partnership of the BRICS is aimed at enhancing the well-being of peoples in the conditions of preserving peace, the establishment of a more equitable international order, the achievement of sustainable development and inclusive growth. At the same time, strengthening cooperation, as defined in the Johannesburg Declaration (Official Internet Resources of the President of Russia, 2018a), should be implemented in three key areas – in the sphere of economy, peace and security, and humanitarian exchanges.

Most Western experts (O'Neill, 2001; Miskimmon et al., 2013; Svetlicinii, 2017) view the BRICS group exclusively from the standpoint of a diplomatic platform that allows countries to produce a kind of “watch reconciliation” in terms of positioning in the international arena. Researchers point out that BRICS is not an organization or partnership that is not formalized by strict contractual obligations, but this is precisely the potential of BRICS as a soft power for realizing agreed goals and solving strategically important tasks (Miskimmon et al., 2013; Svetlicinii, 2017). At the same time, Western analysts emphasize that the BRICS countries cannot be a single actor, since there is no cementing basis for this to implement a truly new foreign policy strategy to increase their soft influence in the world, and they are focused on their own values and objectives.

Questions assessing the significance of the transition to a multipolar world community, reflected in international agreements and national development concepts of the BRICS countries, as well as the conditions for the realization of national interests in a polycentric world, which form a single political platform of the BRICS countries, are considered in (Perskaya and Eskindarov, 2015; 2018).

The assessment of BRICS as a civilization unification of a new generation with a more pronounced manifestation of the historical trend of a shift in the center of civilizational progress to the East is explored in (Sadovnichy et al., 2014), and also the place of BRICS in the geo-civilization space of the 21st century is determined, and a forecast of the dynamics of BRICS for the period up to 2050 is made on the basis of global models. The strategic priorities of development and partnership of the BRICS, enhancing its role in the development of an integral world civilization are justified.

The role of the international innovation activity of the BRICS countries and the degree of their involvement in the international innovation market as a factor influencing the overall level of competition of these economies, analyzing the innovative development of the BRICS countries and identifying the prerequisites and prospects for deepening their cooperation in this field affect the competitiveness of each country are considered in (Sidorova, 2018).

The purpose of the study is to identify drivers for the development of mutual cooperation, allowing to strengthen the partnership of the BRICS countries, including in the field of economics, consolidated political positioning and humanitarian nature. The organization of the BRICS countries does not pursue the goal of integration, is not institutionally formalized, and therefore the partnership of countries is aimed at identifying common approaches and tasks that will ensure the continuity and sustainability of the development of national economies and the growth of welfare of the population.

The research methodology is based on general and special methods of cognition, on an empirical approach to identify the specifics of the modern development of economic partnership processes, on current and prospective analyzes and synthesis of materials of theoretical and practical nature. The main conclusions are verified by an imitation econometric model.

The BRICS partnership is a new approach to the development of international cooperation, which is fundamentally different from the existing global leadership of Western civilization. The interaction of the BRICS countries on the basis of preventing the imperial domination of the Anglo-American oligarchy, the unconditional preservation of the national sovereignty of countries and the diversity of cultures and mutual respect for the national identity of the population of each country all serve as a prototype for the formation of a new global political and economic world order (Thomson 2018).

Within this research, we estimate the effectiveness of the BRICS countries development strategies by the GDP growth and the social effect of these strategies by the GDP per capita growth, which demonstrates the rise of the production efficiency, not just the rise in the labor force on a national scale. Dynamics of GDP and GDP per capita (Figure 1 and 2) and GDP growth rates (Table 1) show the BRICS countries’ economy effectiveness resulting from the implementation of their national development strategies.

Figure 1
Dynamics of the BRICS countries GDP in 2000–2016
(billion US dollars, current prices)

Source: compiled by the authors, based on (National Committee on BRICS Research, 2017).

Figure 2
Dynamics of the BRICS countries GDP per capita
in 2000–2016 (US dollars, current prices)

Source: compiled by the authors, based on (National Committee on BRICS Research, 2017).

Table 1
GDP growth rates
(% per year)

Source:(National Committee on BRICS Research 2017, p. 48; CIA 2019b).

Thus, there is a sharp increase in the GDP of China, and in terms of volume it is incomparable with any of the BRICS countries, but at a rate close to that of India. The GDP dynamics of Russia and Brazil, as evidenced by Figure 1, is similar, which is explained by the real economic policies of these countries, which have accepted the determinants of global regulation and have made their economies financially dependent on the global capital market. South Africa, with a good average GDP per capita, was able to increase GDP in the period 2000–2016 only 2.2 times, while Chine’s GDP increase is almost 11 times, India about 6 times, Russia 5 times, Brazil about 3 times. It is also characterized that the disproportionality of household income is quite high in South Africa and Brazil, while in India the Gini index is like in the European Union (EU), although the GDP per capita among the BRICS countries is the lowest.

The data on the comparability of the consumer price index in 2000–2016 presented in Table 2 and Figure 3 characterize the national development of the BRICS countries.

Table 2
Consumer price index in the BRICS countries
(% change from the preceding year)

Source:(National Committee on BRICS Research, 2017).

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Figure 3
Consumer price index dynamics 2000–2016

Source: compiled by the authors, based on Table 2

These data indicate that China and South Africa regulate domestic prices and stimulate business lending from the resources of the national monetary system. India is trying to combine the strategy of state regulation of the financial sector and its dependence on financial resources from the world market, focusing on the UK and the countries of the British Commonwealth, and Brazil and Russia are in the very paradigm when the national financial system is focused exclusively on targeting inflation, and sources of investment in the national economy should be external borrowed resources or foreign direct investment (FDI), as well as funds of business entities. Hence the investment in fixed assets in 2016–2017 in Russia did not exceed 21.1%. For comparison, according to the calculated data of the same source, investment in fixed assets in 2016–2017 in China they accounted for 43.3%, in India – 27.5%, Brazil – 16.6%, South Africa – 16.6% (CIA 2019a).

During the study, the following national program documents of the BRICS countries were considered.

Within the framework of India’s strategic priorities, the following programs were developed: Political participation as a great strategy (Das, 2016) or geopolitical positioning in the world community; National Education Policy (Ministry of Human Resource Development, 2016); India’s National Energy Security Strategy till 2047 (NITI Aayog, 2017); National Standardization Strategy; National infrastructure development strategy; Social reforms in the social model – caste politics. India is an innovation platform or innovation policy aimed at accelerated growth of the green economy, accelerated introduction and development according to national progressive standards (The Innovation Policy Platform, 2016).

With respect to the PRC, we analyzed China’s 13th Five Year Plan: 2016–2020 (LehmanBrown International Accountants, 2016); the Belt and Road Initiative, which is an important substantive part of the bilateral intergovernmental relations of the PRC with practically all states of Eurasia; Outline of China’s National Plan for Medium and Long-term Education Reform and Development (2010–2020) (CPC, 2010); The 13th Five-Year Plan for the Development of Renewable Energy (2016–2020) (IEA, 2018).

As to South Africa and Brazil, we analyzed: The National Development Plan until 2030 (Government of South Africa, 2019); Brazil´s Adjusted Growth Strategies for 2017 (G20 Germany, 2017); Programa de Investimento em Energia Elétrica (EPE, 2015; Mayer Brown, 2015); Plano Estratégico de Desenvolvimento do Centro-Oeste (Lima and Aurélio Neto, 2017).

The analysis of Russia was based on the Executive Order on National Goals and Strategic Objectives of the Russian Federation through to 2024 (Official Internet Resources of the President of Russia, 2018b).

An analysis of the national development strategies of the BRICS countries allowed us to identify the strategic orientations of all the BRICS countries, which are positioned for the medium and long term. Table 3 is compiled according to the priority of the tasks designated by each country in various program and strategic documents.

Table 3
Strategic goals and objectives identified in the program
documents of the BRICS countries, starting from 2018

Source: compiled by the authors on the basis of an analysis of the BRICS countries
national development strategies and arranged in order of priority, defined in national strategies.

Table 3 shows that the Russian and the Chinese strategies aim mostly on the development of the innovative products and infrastructure, especially in the context of trade war for China and the sanctions for Russia. At the same time, India puts the social and demographic goals forward and concentrates its efforts on better social situation in the country. Brazil and South Africa put most efforts into education and climate issues, as they see their main problems in this sphere. Because of the different approaches to the national economic policies the BRICS countries need to find joint drivers for their future development – these are innovations, infrastructure, energetics and green development, as it follows from the table above. The unification of the goals of the national strategies is needed in order to conduct an effective policy in the mentioned spheres and to gain synergetic effect from it. The economic growth of the researched economies could be much higher – the resources available are to be used more effectively, but in order to achieve it, the implementation of the joint vision of the future is needed – one of the mechanisms, available and suitable for this goal is the New Development Bank of BRICS, which is to coordinate the economic and financial aspects of cooperation between the BRICS countries in our vision.

The given propositions are based on the long-term vision of the BRICS development, but the process of their development and implementation should be began today.

Thus, the following segments and sectors of the economy can be drivers of growth of the national economies of the BRICS countries:

• Information and communication technologies, including artificial intelligence, the development of new digital platforms, the introduction of new technologies, including blockchains, the creation of supercomputers, the transfer of automated infrastructure and logistics systems, the transition to an accessible for widespread use of the digital system of the national economy. “Smart Village” for India, “Smart City” for China, “Smart Home” for Russia are absolute drivers of national development.

• The task of levelling disproportion in the development of territories, the eradication of poverty determines the direction of public resources, primarily to the development of health care, social welfare and services to citizens who need social support and protection, to an affordable quality education that meets modern requirements for the development of national economies.

• For India and China, national programs “made in the country” imply a developed system of support for financial, organizational and legal tools, which, of course, stimulates the national producer.

• The national interests of each of the BRICS countries clearly formulate a system of priority sectors and sectors to stimulate national development. The potential of their interrelationship with partners from the BRICS countries in the form of a foreign economic partnership is currently determined mainly by the commercial benefit of direct economic entities. In the absence of established long-term regular contacts in the field of research and development work between universities, research institutes and, respectively, in the real sector of the industry or the service segment (i.e., reproduction value chains are focused exclusively on national partners, if they, however, are not involved in the resources and interests of Western TNCs), the real partnership does not have the opportunity to be realized without an appropriate state support. In other words, in the context of the planning of the national economy of the PRC, programmatic forecasting in India and Brazil, state planning in South Africa, national drivers of economic growth of the BRICS countries may be the subject of foreign economic cooperation and production horizontal cooperation subject to the existence of an appropriate interstate agreement or framework agreement, where all the resource support of the project is being worked out and the direct economic entities are indicated for its realization (including universities and research institutes and universities), including: stipulates rules for the protection of copyright and intellectual property.

The partnership aims to strengthen comparative advantages, stimulate economic growth and promote economic transformation of the BRICS countries, strengthen sustainable industrial production capacity, create networks of science parks and technological business incubators, as well as support small and medium-sized enterprises in high-tech sectors. At the same time, a more active regulatory function of state actions is needed, brought to the level of direct economic entities, which is determined by the specifics of the formation and development of entrepreneurship in the BRICS countries.

In the political sphere, the partnership of the BRICS countries is aimed at the formation of a multipolar world order. It is the collective actions of the BRICS countries to ensure a peaceful transition to polycentrism as the growth driver of political partnership and mutual support in the international arena. In national strategies this aspect is indicated, but to a greater extent it is analyzed in the programs of foreign policy positioning of countries in the world arena and in joint declarations of BRICS summits (Perskaya and Eskindarov, 2018).

The multipolarity, which is the presence of equal rights of the sovereign fields - states of international relations, ensures the formation of a more honest, fair and representative polycentric world order in order to flourish all of humanity, which fully respects the general ban on the use of force and eliminates the use of unilateral coercive measures in violation of the UN Charter. At the same time, the BRICS countries emphasize in their joint documents and national development strategies that no country should strengthen its security at the expense of the security of others. At the same time, the BRICS states stand on the position of expediency of reforming the UN, including the UN Security Council, in order to increase its representativeness, efficiency and effectiveness, ensuring the possibility of its effective response to global challenges. China and Russia are consistently in favor of raising the profile and role of Brazil, India and South Africa in international affairs and support their desire to play a more significant role in the UN.

To ensure effective work in this direction, the BRICS group formulates “strategic goals” that allow the BRICS countries to be considered as a collective actor in the international arena. This is a kind of "means for political actors to build a common sense of the past, present and future of international politics, to shape the behavior of domestic and international actors."

The effect of the soft power of BRICS should not be interpreted from the standpoint of state propaganda or agitation. Rather, it manifests itself in strengthening the socio-economic, cultural and political interests of growing countries by spreading the ideology and determinants of world development in the world community that meet the aspirations of the overwhelming majority of the population of the world community countries (Nye, 1990). In other words, the conviction of others is a soft means of foreign policy, which is also implemented in the field of cultural interaction and cooperation in the field of education (Van Noort, 2017).

The growth driver in the sphere of humanitarian partnership, is that, in addition to intercultural exchanges and holding culture days in each of the countries, BRICS countries can interact in the development of the educational environment.

The BRICS countries are experiencing roughly the same problems in the development of the education sector (lack of modern educational infrastructure, insufficient harmonization of national standards for personnel training, a weak link between curricula and labor market needs, etc.). The task of creating high-quality national educational systems that are focused both on solving national development tasks and expanding the network of attracting foreign students (internationalization of education) is a common interest of the BRICS countries.

The practical significance of the study lies in the fact that the analysis made it possible to ascertain that the operation of the non-formalized organization of the BRICS countries allows for a “verification of the development vectors” of the partners and to ensure a consolidated position of the countries in the geopolitical arena. However, national development strategies are not yet synchronized, although they have common goals and objectives. Consequently, when deepening interstate, mainly bilateral cooperation, development drivers agreed by the parties can be incorporated into these programs and strategies. In this regard, the main recommendations formulated may be applicable to strengthen interstate cooperation in the framework of the partnership of the BRICS countries.

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1. Doctor of Economics, Professor, Director of the Institute of International Economic Relations Research, Financial University under the Government of the Russian Federation, Moscow, Russia

2. Doctor of Economics, Professor, Director of the Center for Analysis, Risk Management and Internal Control in Digital Space, Financial University under the Government of the Russian Federation, Moscow, Russia.

3. PhD, Leading researcher, Center for Analysis, Risk Management and Internal Control in Digital Space, Financial University under the Government of the Russian Federation, Moscow, Russia.  Contact e-mail: e.mehdiev@gmail.com

4. PhD, associate professor, deputy director of International Institute of Energy Policy and Diplomacy, MGIMO University, Moscow, Russia