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BRICS Journal of Economics No.4 (2020)

Foreword

Viktoriya Panova

Dear friends!

Allow me to congratulate the winners of the Contest for BRICS Young Leaders whose papers are published in this special issue of the BRICS Journal of Economics, partner of the Contest. No doubt, these articles bring to the BRICS agenda the most promising projects for promoting practical cooperation among the youth of our five countries.

The Contest for BRICS Young Leaders was held within the annual BRICS International School by the Russian National Committee on BRICS Research and supported by the Ministry of Foreign Affairs of the Russian Federation, the Alexander Gorchakov Public Diplomacy Fund and other partner organizations. The BRICS International School was initially established to train young professionals in BRICS studies through educational experiences focusing on fostering the pentalateral partnership of the BRICS countries. As the project evolves, we are proud to say that it has been widely contributing to building the pool of talented youth from BRICS and beyond.

On behalf of the Russian National Committee of BRICS Research, I would like to extend our gratitude and appreciation to the BRICS Journal of Economics for the support of the Contest as a part of the youth track within the Russian BRICS Chairmanship in 2020. Let me express my hope that the BRICS Journal of Economics will further expand its impact in promoting knowledge and cutting-edge research as one of the most forward-looking journals in the field of BRICS studies.

Since the creation of BRICS in 2009, the participating countries have made a significant progress in economic, technological, social, and humanitarian development, and have strengthened their positions in the institutions of the global governance. During its first decade, efforts of the BRICS countries became one of the key factors in world politics and global economic development.

This year Russia took over the Chairmanship in BRICS for the third time under the motto “BRICS Partnership for Global Stability, Shared Security and Innovative Growth.” Its main purpose was determined as raising standards and quality of life of the peoples of our five countries. The Chairmanship is built on the three pillars of BRICS strategic partnership — policy and security, economy and finance, and cultural and humanitarian contacts. As a part of its policy track, BRICS countries continued to promote universal principles of international law, central role of the United Nations in international affairs and contributed to forming of a more democratic and multilateral system of the global governance.

Efforts of the BRICS countries within economic pillar focused on the renewal of the Strategy for BRICS Economic Partnership 2025. The new Strategy emphasized trade,

The Quality of Competition Law Institutions and Enforcement 5 investment and finance, support of the digital economy and sustainable development as its priority areas. By adopting the Strategy, the five countries expressed their commitment to strengthen cooperation within the BRICS businesses communities, to facilitate the reform of the global trade and financial system, to advance cooperation within the BRICS Contingency Reserve Arrangement and the New Development Bank. The BRICS countries prioritized working in the fields of innovation and technology and addressing the challenges of the Fourth Industrial Revolution, sustainable development, climate change, energy, infrastructure development and food security.

Within the humanitarian track, Russia prioritized strengthening of people-to-people contacts with the development of the youth track one of its core tasks. The BRICS countries continued strengthening youth exchanges in the fields of science, technology and innovation, volunteerism and entrepreneurship. It is illustrated by the comprehensive support of youth initiatives within the Russian Chairmanship and reflected in the XII BRICS Summit Moscow Declaration.

This year BRICS reached a number of practical agreements to support our economies to recover from the health crises. BRICS countries agreed to support small, medium and micro businesses to participate in international trade, to foster interbank cooperation and strengthen the role of the New Development Bank.

Certainly, the COVID-19 pandemic outbreak affected the Russian BRICS Chairmanship this year. The global healthcare crises and its implications for BRICS became the cross-cutting issue of discussions within the meetings at all levels and all fields of our cooperation. As an example of BRICS response to this challenge, the BRICS countries agreed to establish an early warning system for epidemiological threats and to develop specific steps for the legal regulation of medical products that will improve our capacities to combat similar threats in the future.

I am proud that the Contest for BRICS Young Leaders and the BRICS International School engaged so many capable young people to elaborate solutions addressing the most pressing issues for the global community. The innovative ideas to foster partnership and friendship among the peoples of BRICS proposed by the participants of these projects will bring a positive change. I am convinced that with the contribution of the young leaders to the BRICS agenda, we will be able to solve issues of international importance and to build a better world.

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Quantitative dynamics of intra-BRICS trade

Mohd Nayyer Rahman, Zeenat Fatima, Nida Rahman

The study uses an augmented gravity model to analyse intra-BRICS trade flows and the potential for establishing economic cooperation. It examines trade relations between BRICS with the help of the gravity model of international trade. Panel data from 2000 to 2017 were reviewed for bloc analysis of 20 trade partners. The analysis of the intra-BRICS trade flows is based on the Heckscher-Ohlin model. The results obtained confirm that the intra-BRICS trade relations have a sound positive impact on economic performance in these countries. Market size and economic index have a beneficial effect on the intra-BRICS trade flows. Market size is very elastic to trade, while trade tariffs and taxes within BRICS are manageable. Hence, the intra-BRICS trade has the potential to create strong economic ties within the member countries, and cooperation between the BRICS countries can have a significant influence on the globalisation of the world economy.

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Investment cooperation in the BRICS countries

Maria Sholokhova

The purpose of the study is to analyze the current stage of investment cooperation between the BRICS countries in terms of current investment projects and legislation regulating investment interaction. The methods of the research are as follows: investigating the issue of investment cooperation between different member states and the legal framework for such cooperation; finding sources such as books, magazines, journals, legal acts, and websites; collecting all the necessary data; critical analysis of the data on the issue of the research; developing an outline. The investment interaction under study is presented at three different levels: outward foreign direct investments from the BRICS countries; foreign direct investments into the BRICS countries; and investment cooperation between the BRICS countries. All levels of investment cooperation are regulated both at the national and international levels.

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Impact of a BRICS integrated payment system on cross-border e-commerce

Daniel Coelho Barbosa

This article examines what a BRICS integrated payment system can be and how it may affect the cross-border e-commerce dynamics. First, we show how the current international transaction system works, its geopolitical consequences and what a BRICS independent payment system implies. Second, we examine the current e-commerce scenario in BRICS, its main challenges, and what can be improved in it with the help of the proposed exclusive financial network. In conclusion, we review the current situation and make some necessary comments.

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Comparison of approaches to legal regulation of e-commerce in the BRICS countries

Evgenia Serova

The article examines the importance of e-commerce in the modern world, as well as the level of its development and legal regulation in the BRICS countries. The author studied the problems of functioning of international electronic commerce during the 2020 coronavirus pandemic. For the purpose of comparative legal research, the legislation on electronic commerce of the Russian Federation, the People’s Republic of China, Brazil, India, and the Republic of South Africa was considered. In the course of the study, it was concluded that the existence of a single normative act
regulating exclusively legal relations within the framework of electronic commerce was the most effective way of legal regulation in this area.

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On de-risking and de-dollarizing intra-BRICS trade via smart contracts

Parv Aggarwal

This study explores the existing systemic barriers to intra-BRICS national currency use (“de-dollarization”) in currency swaps and trade finance. The author examines the current de-dollarization initiatives, as well as the actual levels of de-dollarization in Russia’s intra-BRICS settlements (as a representative sample), to find gaps between de-dollarization goals and current initiatives and offers a near-term phased solution to overcome these gaps and de-risk trade within BRICS. It is found that 1) the New Development Bank’s Contingency Reserve Arrangement has built-in systemic barriers which are preventing direct currency swaps between BRICS member states; 2) the Euro is replacing the Dollar as Russia’s preferred settlement currency within BRICS, indicating a gap between Russian traders’ settlement currency choice and BRICS de-dollarization priorities; and, furthermore, 3) while payment and settlement systems are being integrated and FinTech applications are being explored, efforts to fundamentally address the systemic market factors preventing national settlement use are missing. A phased solution is proposed to address the fundamental market barriers to national currencies by using smart contracts to de-risk intra-BRICS trade. Specific mechanisms are outlined to promote trade contracts in national currency and reduce dependency on both the Dollar/Euro and Western institutions (such as the IMF and Western commodities markets), a high-level architecture is proposed, and implementation considerations are discussed.

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Institutionalization of the BRICS discourse: How does the NDB embody the group’s views on global financial governance?

Valdir da Silva Bezerra

The architecture of global financial governance has recently been complemented by emerging economies’ efforts to coordinate policies, as exemplified by new coalitions of states and a new set of non-Western international institutions. BRICS, in its turn, has made a significant contribution in this direction by establishing the New Development Bank — an alternative to traditional mechanisms of financing development projects with an emphasis on sustainability. As a representative of the growing cooperation of the BRICS countries in recent decades, the NDB highlights most of the group’s views on financial governance. This paper applies a qualitative/analytical approach to the BRICS and NDB Communiqués and practices in order to demonstrate how the bank has managed to successfully institutionalize the group’s discourse over time.

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Population trends in BRICS: Developments and projections

Lucas Gualberto do Nascimento

The purpose of the article is to analyze population trends in the BRICS countries in the period from 2000 to 2019 based on local realities and socio-economic indexes, as well as to study projections up to 2050. The article also explores initiatives of the United Nations Population Fund (UNFPA) in the field of demographic research relevant to BRICS, such as fertility, birth, and mortality rates. Thus, it is possible to determine the main characteristics of the population of the BRICS countries, their challenges and objectives, which allow us to predict with an eye to 2050 and the dynamics of the evolution of each member of the international cooperation grouping. Overall, it is argued that urbanization processes were one of the key factors driving population trends in the BRICS countries, especially those related to lower fertility rates. Finally, the current situation of BRICS
in the international scenario is evaluated, given the explored attributes, with an emphasis on the importance of public policies favorable for the full development of the potential of the BRICS population. Therefore, member states’ initiatives to promote higher levels of social welfare are investigated, as well as their benefits to local peoples, who together account for more than 40% of the world’s total population.

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Bibliometric analysis of the most cited articles in BRICS research

Matheus Machado Rech, Germano Luciano Almeida

Bibliometric analysis identifies the most impactful and prolific journals, authors, countries, and institutions by assessing the most cited articles in a specific research area. The aim of this study is to analyze and to provide a scope of modern scientific products related to BRICS. The 100 most cited articles related to the BRICS research were retrieved from the study “(BRICS)” in the Scopus database. The variables collected and included in this analysis are: number of citations, article title, first author’s name, year and journal of publication and its impact factor, theme and country mentioned in the database at the time of publication, and category of the paper (original article or review).

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