Role of BRICS in International Development Assistance Prof

Role of BRICS in International Development Assistance Prof. Guo Shuyong, dean of School of International Relations and Public Affairs , SISU. Sun Yulin , master’s degree student of SISU. Pavel Demidov, master’s degree student of SISU. 1

Catalogue 1. The form and position of the BRICS countries’ international development assistance 2. Summary of the international development assistance work of the BRICS countries 3. Unfavorable and favorable factors for BRICS countries to participate in international development assistance 4. The Future Prospects and Forms of BRICS Participation in International Development Assistance and China's Efforts 2

The form and position of the BRICS countries’ international development assistance 3

Forms of International Development Assistance Adopted by BRICS Countries The BRICS countries’ foreign aid methods are mainly concentrated on bilateral, trilateral and multilateral aid. Brazil : trilateral assistance, both Japan and the ILO are important partners. Russia : multilateral aid, influenced by traditional donor countries and international organizations led by them. India and China : bilateral aid. They hope to use the means of foreign aid to seek the support. South Africa adopts bilateral and trilateral foreign aid work, and participates in the multilateral aid team through BRICS and AIIB. 4

Position of BRICS countries in the foreign aid system 5

The 30 largest development concession financing providers in 2015 6

Summary of the international development assistance work of the BRICS countries 7

Review of the practice of BRICS’s assistance BRICS countries and their contribution to global economic growth 8

Review of the practice of BRICS’s assistance The economic development of the BRICS countries is even faster. In 2018, the average GDP growth of the BRICS countries was 5. 7%, contributing 43. 2% to the world economic growth. According to purchasing power parity (PPP), the BRICS global GDP share rose from 27. 2% in 2010 to 32. 7% in 2018, greater than the total of G 7 added up. 9

Review of the practice of BRICS’s assistance 1. BRICS New Development Bank. The main purpose is to provide infrastructure and sustainable resources for BRICS and emerging countries. The proportion of NDB's total infrastructure investment in BRICS countries will rise from 0. 1% in 2018 to 0. 5% in 2021. 27% of NDB loans were used to promote infrastructure construction and promote clean energy technology for member states. 10

Review of the practice of BRICS’s assistance 2. BRICS Leaders Summit System. Ⅰ Promoting non-discrimination and opening up international trade to promote peace and common prosperity. II Support the role of international organizations such as the United Nations in international affairs. III Reduce poverty and inequality. 11

The role of the BRICS countries in international development assistance 1. Innovator. The BRICS countries have broken through old road of assistance with discrimination and conditions, and have truly achieved equal assistance and equal cooperation. Xi Jinping : BRICS countries should promote the “innovative BRICS” network, adhere to multilateralism, and seek common development with other emerging market countries and developing countries. 12

The role of the BRICS countries in international development assistance 2. Booster. The foreign aid of the traditional OCED-DAC countries far below the target of 0. 7% of its commitment. (Accounted for 0. 29% of the GNI in 2014) The proportion of BRICS is increasing, some countries (such as Russia) successfully transformed from recipient countries to the status of foreign aid countries. 13

The role of the BRICS countries in international development assistance 3. Haven. The BRICS countries are strengthening cooperation in humanitarian assistance, attaching importance to the eradication of poverty , implement projects in the fields of health, education and technological development in Asia and Africa. 14

Trends in DAC countries' aid to non-DAC countries versus Africa. Source: Africa Economic Outlook, https: //www. africaneconomicoutlook. org/statistics 15

Trends in DAC countries' aid to non-DAC countries versus Africa. Source: Africa Economic Outlook, https: //www. africaneconomicoutlook. org/statistics 16

Unfavorable and favorable factors for BRICS countries to participate in international development assistance 17

Unfavorable factors 1. Insufficient infrastructure and funding. China, Russia, South Africa, Brazil, and India rank 86 th , 74 th , 59 th , 120 th , and 90 th in infrastructure construction , and these countries rank 28 th , 53 th , 56 th , 57 th , 71 th in competitiveness. There is still a certain gap in the funds for infrastructure construction. The outflow of foreign capital and its own structural problems have caused the domestic currency to depreciate. 18

Unfavorable factors 2. Lack of aid documents and regulations. The documents of the BRICS countries in achieving international development assistance cooperation do not have legal effect. Although China has promulgated the "China Foreign Aid (2014) White Paper", and Russia has issued its foreign aid concept, but fundamentally, these documents are not programmatic. 19

Unfavorable factors 3. Lack of supervision of aid projects. Good international development assistance must require certain supervision mechanisms and departments to manage the process. BRICS countries has not yet established a comprehensive project evaluation mechanism, and it cannot play an important role in the implementation of projects in terms of institutions and policies. 20

Favorable factors 1. Excellent external environment. The developed countries have transferred a large number of equipment manufacturing industries to developing countries , so that emerging countries represented by the BRICS countries have invested in foreign aid. At the same time, the multi-polarization of the political structure has also created a good external environmental foundation for the BRICS countries. 21

Favorable factors 2. The importance the United Nations attached to international development assistance. BRICS countries agreed to fully implement the 2030 Sustainable Development Agreement. It also emphasized support for the United Nations, including its high-level political forum on sustainable development, advocating fair/comprehensive/inclusive development. 22

Favorable factors 3. Sufficient financial support of the NDB. 2017 SPECIES transportation energy loans water resources 2017 AMOUNT $419 million $1, 418 million $1, 122 million infrastructure $460 million In 2018 BRICS infrastructure investment is expected to rise from 40. 1% in 2018 to 42. 5% in 2030, compared with 1. 1% of G 7 and 1. 9% of growth in other countries. 23

Favorable factors 4. Sufficient experience in practices provided by western countries. BRICS countries have learned from Western countries’ foreign aid experience and established relevant foreign aid management departments. The BRICS countries have already achieved obvious results. Brazil’s international development cooperation increased from 158 million to 923 million, technical assistance expenditures quadrupled from $11. 4 million to $57. 7 million. Humanitarian assistance rose from $488, 000 to $161 million. 24

The Future Prospects and Forms of BRICS Participation in International Development Assistance and China's Efforts 25

Prospects for the future of BRICS foreign aid work The main prospects of BRICS future foreign aid work including these three ways: 1. Take the lead in the international development assistance 2. Improve the system of international development assistance 3. Promote investment in the “Aid for Trade” system 26

Prospects for the future of BRICS foreign aid work 1. Leading the international development assistance In 2010, the amount of international development assistance provided by BRICS countries, have reached UN standard – 0. 7%. Amount of the aid to the least developed countries have reached 44 billion USD or 0. 11% of the gross national income of OECD countries. In 2011, OECD countries invested 133. 5 billion USD in foreign aid, did not reach the UN target of 0. 7%. 27

Prospects for the future of BRICS foreign aid work 2. Improving of the international assistance system Empowering its cooperation in foreign aid field, will allow BRICS to gain dominant position in the international development assistance system. At the same time, BRICS could join efforts with other emerging countries to contribute to poverty eradication, sustainable development, as well as with OECD countries to avoid excessive competition. 28

Prospects for the future of BRICS foreign aid work 3. Promoting the investment in “Aid For Trade” system Amount of foreign investment in Africa was 308. 74 billion USD. (77% for developed countries and 13. 8% for BRICS countries, respectively) In 2012, the amount of direct investment of emerging economies into Africa surpassed that in the West. Meanwhile, the proportion of non-greenfield investment in developing countries increased from 42. 5% to 63% in 2011, while that in developed countries decreased from 54. 6% to 36. 9%. 29

Obstacles for investment policy According to the World Economic Report (2018), due to the tightening of investment policies and the long-term effects of the commodity bubble burst, foreign investment in Africa will reach US$42 billion in 2017, which is 21% lower than in 2016. The proportion of greenfield investment is also decreasing, with total amount falling by 14%. Global proportion of foreign aid and investment fell by 23%, from $1. 87 trillion in 2016 to $1. 43 trillion in 2017. 30

China’s efforts in foreign aid field 1. Institutional level China established the National Agency for International Development Cooperation in March 2018. Its purpose is to formulate guidelines and plans foreign aid, coordinate major issues, make recommendations, promote reforms of foreign aid, supervise and evaluate actual conditions. 31

China’s efforts in foreign aid field 2. China-Africa cooperation In 2006, China pointed out in the "China Policy on Africa" that China and Africa should adhere to mutual trust, develop political equality and mutual trust, “winwin” economic cooperation, strategic partnership and cultural exchange. Until 2006, China has more than 800 foreign aid projects in Africa, including 137 agricultural projects and 133 infrastructure projects. 32

China’s achievements in foreign aid field In May 2019, China signed cooperation agreements with Laos, the Philippines, Myanmar, Serbia, Vietnam and other countries. In June, China signed cooperation agreements with Nepal, Kyrgyzstan and Tajikistan. In July 2019, China signed cooperation agreements with many countries, such as: South Sudan, Liberia, Equatorial Guinea, and Bangladesh, and signed an aid fund project agreement with the United Nations Industrial Development Organization and the United Nations International Civil Aviation Organization. 33

Conclusion 34

BRICS countries have innovated means of providing foreign aid, promoting the 2030 UN Sustainable Development Agreement, safeguarding world peace and security. BRICS countries are also improving their cooperation model, and join its forces to build a “BRICS+” platform, taking responsibility for poverty eradication, becoming a booster of international development cooperation and non -alignment. 35

Prof. Guo Shuyong, dean of School of International Relations and Public Affairs , SISU. Sun Yulin , master’s degree student of SISU. Pavel Demidov, master’s degree student of SISU. Thanks for your listening! 36