BRICS as a promising alliance for Russia

Date of publication: 18 December 2020

During the coronavirus pandemic, many international organizations, including the Shanghai Cooperation Organization (SCO), have weakened. To some extent, Russia is able to compensate for this by expanding cooperation within the framework of the BRICS Association, whose members are also part of the group of countries of the “Big 20”. On the eve of the last summit (17 November 2020) under the chairmanship of Russian President Vladimir Putin in the videoconference took place the XII meeting of BRICS leaders on the theme of “BRICS Partnership for global stability, common security and innovative growth.”

This meeting of the BRICS leaders took place against the backdrop of a complex epidemiological situation. So, as of mid-November 2020, in India, the number of people infected with coronavirus was 8.4 million, 124 thousand people died; in Brazil, 5.6 million people fell ill, 161 thousand people died; in South Africa, 731 thousand people fell ill, less than 20 thousand people died. Of the five countries, India ranks second in the world in terms of the number of cases (after the United States), Brazil is third, and Russia is fourth. At the same time, mass vaccination of the population has begun in Russia and China, where three and eight coronavirus vaccines are at various stages of testing, respectively. Given the close relations with new Delhi, Moscow is very interested in organizing the production of one of the Russian vaccines in India, which has serious pharmaceutical capacities.

The Association (Group of countries) of Brazil, India, China, Russia and South Africa, which was created only in February 2011 (previously, since September 2006, it was called BRIC, without South Africa), is of increasing interest in our country. Unlike the SCO, the BRICS is a more balanced organization, since this Group of countries is not dominated by any one state. With the exception of India and China, other BRICS countries do not have mutual territorial claims and do not participate in military-political blocs directed against each other (there is only one unresolved armed conflict within the Association – the Sino-Indian one). All of them are members of the group of countries “Big 20”.

While the SCO initially paid great attention to military-political cooperation, in BRICS priority is given to cooperation in the financial and economic sphere and humanitarian cooperation. Terrorism is condemned, but the fight against it is not the main goal of the Association. After the meeting of the BRICS leaders in April 2011 in Sanya (China), the political component of the organization’s activities began to strengthen. So, the leaders called for a peaceful settlement of the Libyan and Syrian crises, the nuclear problem of Iran. They also discussed the situation in Eastern Ukraine.

In the West for a long time were skeptical about the BRICS. And they are still trying to split the Union, in particular, by withdrawing Brazil from it. Nevertheless, the organization has positive dynamics of development and more than the SCO, serves as a prototype of a multipolar world.

During the last meeting, the leaders of the two countries summed up the results of Russia’s BRICs presidency in 2020, considered current issues on the international agenda and agreed on their own positions in connection with the upcoming G20 summit. They also heard speakers who supervised the work on certain areas of the Association’s activities:

– Secretary of the Security Council of the Russian Federation Nikolai Patrushev informed about the interaction of the BRICS countries on countering the coronavirus pandemic, combating terrorism and cybercrime;

– President of the new BRICS development Bank (NDB) Markus Troiho presented data on the results of the financial institution’s operation and plans for 2021.;

– President of the Russian chamber of Commerce and industry Sergey Katyrin spoke about the events of the Business Council;

– Chairman of the state development Corporation “VEB Russian Federation ” Igor Shuvalov explained the mechanism of BRICS interbank cooperation:

– Anna Nesterova, Chairman of the Board of Directors of global Rustrade, made a report on the establishment of the BRICS Women’s business Alliance.

As a result of the consultations, the Moscow Declaration was adopted, which reflected the consolidated approaches of the States to the further development of the Association, as well as the BRICS economic partnership Strategy for the period up to 2025 and the BRICS anti-Terrorist strategy.

In the Moscow Declaration, the leaders of the countries noted that ” despite serious global challenges, in 2020, during the Russian presidency, the BRICS maintained the dynamics and continuity of its activities aimed at achieving concrete results in the interests of our citizens. We appreciate the strong efforts of the Russian Federation for the development of strategic partnership BRICS in three main areas – politics and security, economy and Finance, cultural and humanitarian exchanges and note the results over one hundred events held in person and via videoconference, which contributed to further progress in our mutually beneficial and pragmatic cooperation.”

In part, this document repeated the Moscow Declaration of the SCO summit (three of the five States are both members of the SCO and BRICS at the same time). Thus, the leaders of the States called for a strong stance against the rehabilitation of Nazi ideology, racism, xenophobia, colonialism and distortion of history. They reaffirmed the principles of non-interference in the internal Affairs of States and the settlement of international disputes by peaceful means and in accordance with the principles of justice and international law, as well as the inadmissibility of the threat or use of force against the territorial integrity or political independence of any state, or in any other way inconsistent with the purposes and principles of the United Nations. They also stressed the need to refrain from any coercive measures that are not based on the norms of international law and the provisions of the UN Charter. In their opinion, it is necessary to reform the UN, WTO, who, IMF.

BRICS leaders recognized the important role of large-scale immunization against COVID-19 in preventing, containing and stopping transmission of this infection once safe, high-quality, effective and affordable vaccines are available. They supported joint approaches to accelerate research, development and production of vaccines and medicines against COVID-19.

The BRICS countries expressed their support for urgent political and diplomatic efforts to maintain and strengthen international peace and security. They deplored the violation of the work of the strategic stability mechanisms and arms control regimes and pledged to support them. In this regard, they stressed the fundamental importance of the 2010 Treaty between the Russian Federation and the United States on measures for further reduction and limitation of strategic offensive arms (start III) for the nuclear disarmament and non-proliferation regime. The leaders of the countries called on the parties to agree urgently on its extension.

The BRICS leaders stressed the fundamental importance of the Convention on the prohibition of the development, production and stockpiling of bacteriological (biological) and toxin weapons and on their destruction (BTWC) as one of the pillars of the international WMD disarmament and verification regime. They stressed the need to comply with and strengthen the BTWC, including the adoption of a legally binding Protocol to the Convention, which provides for an effective verification mechanism to verify the compliance of States parties with their obligations.

The BRICS countries reiterated their support for the chemical weapons Convention (CWC) as an effective instrument in the field of disarmament and non-proliferation, and called on the participating States to maintain the integrity of the CWC and engage in a constructive dialogue in order to restore the spirit of consensus in the Organization for the prohibition of chemical weapons (OPCW, now under the control of the United States and its allies). They also stressed the importance of preventing an arms race in outer space. And noted the urgent need to agree on a legally binding multilateral instrument that could fill the gap in the international legal regime in relation to outer space.

For Russia, one of the most attractive areas of economic cooperation with the BRICS countries is energy. Financing of such projects of the Association is provided by the new BRICS development Bank.

In the future, after overcoming the consequences of the coronavirus pandemic, energy cooperation between the exporting countries of hydrocarbon resources (Russia and Brazil) and the importing countries (China, India and South Africa) will allow us to reach a qualitatively new level of relations and increase the international status of the BRICS. However, now the energy relations between the countries of the Association are more bilateral in such areas as the oil and gas industry, nuclear and hydropower. Thus, the Brazilian state oil and gas company (STC) of Petrobas I would like to expand cooperation with Russian companies in the energy sector, especially in the gas sector. However, the company Petrobas does not conduct serious negotiations with Russian companies, as it is afraid of falling under secondary American financial and economic sanctions.

Currently, the Russian “NK Rosneft Russia on the territory of Brazil is only one major project for the extraction of gas in the solimoes river basin in Amazonia. Russian companies are interested in obtaining advanced technologies and transferring experience in developing offshore hydrocarbon deposits from Petrobras. In particular, such cooperation could be expressed in technological cooperation related to increasing gas and oil recovery, production of low-tonnage LNG at the junction of high-and low-pressure gas pipelines, design, construction and maintenance of them during the construction of underground gas storage facilities (UGS). BRICS could play a key role in implementing the above.

Since 2001, the Indian state oil and gas Corporation ONGC, through its subsidiary OVL, has been involved in the Sakhalin-1 oil and gas project, in which it owns a 20 per cent stake. As part of this project, more than 1 million tons of oil are delivered to India annually.

In May 2014, Rosneft signed a Memorandum of understanding with OVL on cooperation on the Russian Arctic shelf. At the same time, it is taken into account that there are about 60 large hydrocarbon fields located beyond the Arctic circle, of which 43 are located in the Russian sector. The total recoverable resources of the Russian Arctic are estimated at 106 billion tons of oil equivalent, and gas reserves are estimated at 69.5 trillion cubic meters. Already in 2016, Indian state-owned companies became shareholders of Vankorneft, a subsidiary of Rosneft. This company is engaged in the development of the Vankor oil and gas condensate field, located in the North of the Krasnoyarsk territory. The total share of Indian state-owned companies in Vankorneft is 49.9%.

Another example of successful cooperation is the long-term agreement on the supply of 10 million tons of oil per year to India, concluded during the visit of Russian President Vladimir Putin to India in 2014. Subsequently, Rosneft acquired a 49.13% stake in India’s Essar Oil Limited. Thus, Rosneft received a stake in a modern oil refinery in Vadinar (Gujarat state in North-Eastern India).

In October 2016, the Russian oil and gas company PJSC Gazprom and the Indian Engineers India signed a Memorandum of understanding, which involves studying the route of pipeline gas supplies to India. This includes Mongolia, China, Bangladesh, Myanmar, Oman, Pakistan, Iran and Afghanistan. Among them, the most promising is the Iran – Pakistan – India (IPI) main gas pipeline project, which is temporarily frozen due to the restored us financial and economic sanctions against Iran.

In June 2018, Gazprom began supplying liquefied natural gas (LNG) to India. During the XIX annual Russian-Indian summit in October 2018, which was held in new Delhi, Vladimir Putin invited the Indian side to cooperate in the field of natural gas production within the framework of NOVATEK’s Arctic LNG-2 project, as well as in offshore projects.

However, India’s participation in oil and gas projects in Russia is limited. New Delhi is diversifying its energy supply markets and trying to develop its fields, for example, in the deep-water part of the Bay of Bengal. For this purpose, the government of India actively attracts such Western companies as British BP, French Total and Canadian NIKO, which are able to provide a high investment and technological level of implementation of this project.

The main restraining factors for the development of Russian-Indian energy relations are: transport, technical and infrastructural insufficient availability of Russian gas, limited supply volumes of Russian oil and gas companies, a high level of price and transport competition between Russia and the Middle East, as well as the growth of inflationary costs. Among the socio-economic factors, it is necessary to highlight the multi-level corruption among Indian government officials and entrepreneurs, as well as the high crime rate in India.

Russian-Chinese cooperation in the energy sector is facilitated by the incomplete construction of the underwater gas pipeline “Nord stream-2” and the incomplete implementation of a similar project “Turkish stream”. After Saudi Arabia, Russia is the second most important oil exporter to China. In June 2020, Russia delivered 7.98 million tons of oil (1.95 million barrels per day) to China, which is 11.5% higher than the same period last year. Construction of the southern section of the Chinese-Russian gas pipeline along the Eastern route has begun. Through a 5111 km pipeline by 2025. natural gas will be transported from Russia to Shanghai. The southern section of the project extends from Hebei province to Shanghai. It is expected to pump 18.9 billion cubic meters of natural gas per year, which currently accounts for 30% of China’s consumption in 2019.

In the context of the us desire to expand its LNG exports to Europe and the continuing glut of oil on world markets, China is a stable partner for Russia in the field of oil and natural gas purchases. At the same time, some concern in Moscow is caused by the fact that in the first half of 2020, China increased natural gas production by 10.3 per cent. This production in July reached 14.2 billion cubic meters in the same month China bought of 5.03 million tons of LNG. As a result, the import of pipeline gas (this is how the Russian Federation supplies gas to China) decreased to 3.03 billion cubic meters. The decline occurs both in the annual ratio (by 23%) and in the previous month – by 9 per cent. On average, China imported 101 million cubic meters per day in June 2020 – the lowest level since September 2017. So far, the countries of Central Asia have suffered more from this.

In South Africa, the main reserves of oil and natural gas are located on the continental shelf. Within the framework of the BRICS summit (2017) in Xiamen, China, an agreement was signed between the Russian geological holding Rosgeologia JSC and the South African oil and gas state company” Petros “on the development and development of blocks 9 and 11a of the southern continental shelf of South Africa. According to this agreement, a significant amount of geological exploration is expected to be carried out. Oil reserves there are estimated at 50 million tons, and gas-over 400 billion cubic meters (projected natural gas resources-1.2 trillion cubic meters). With the successful implementation of this project, up to 4 million cubic meters of gas will be produced daily with subsequent delivery to the Mossel Bay gas processing plant.

However, there are risks between the Russian Federation and South Africa, including those caused by friendly relations between President Vladimir Putin and former South African President David Zuma. This has become a serious obstacle to the construction of nuclear power plants (NPP) in South Africa. Thus, in September 2014, the Russian company Rosatom signed an agreement with the government of South Africa on cooperation in the field of nuclear energy, which allowed the Russian company to participate in the tender for the construction of a nuclear power plant. Then a number of South African media reported that this deal was actually concluded. This caused discontent among the South African opposition, who considered that the agreement was concluded in violation of national law. In April 2017 The high court of the province of Western Cape on the claim of the opposition declared illegal both this agreement and similar agreements with a number of other countries. As a result, the issue of building a nuclear power plant in South Africa was postponed for some time.

Thus, the BRICS summit held in November 2020 confirmed the high international authority of the Russian Federation and the gradual increase in the global importance of this Association. At the same time, in the field of energy, the BRICS countries mainly develop bilateral relations. The transfer of such cooperation to a multilateral format is carried out with the help of the BRICS national Bank, which finances the implementation of projects in the field of “green energy”. The Russian Federation is interested in multilateral cooperation in other areas of energy as well. In particular, Russia could significantly expand the export of oil and gas products to India, China and South Africa and develop joint projects with the BRICS countries on the development and extraction of minerals. In addition, Moscow is interested in expanding investment and technological cooperation with Brazil and South Africa in the field of deep-sea oil production, as well as the development of coal deposits and in the implementation of green energy projects.

In the political sphere, BRICS is more acceptable for Russia than the BRICS+format of cooperation. The latter involves the formation of a group of countries that want to cooperate with the BRICS around the Association. Obviously, this will complicate the organization’s activities and slow down its development.

In the economic sphere, the process of integration into BRICS is in Russia’s national interests. First, by creating a single payment system BRICS Pay as part of the development of a common platform for retail payments and transfers in the participating countries. Secondly, the formation of a special cloud platform that connects the national payment systems of the BRICS States. Third, the introduction of the so-called online wallet with access to these payment systems and the launch of a mobile application similar to Apple Pay. It will be possible to install it on a smartphone and pay for purchases in any of the BRICS countries, regardless of the currency of the funds on the buyer’s account. Moreover, the process of forming economic and financial ties outside the “dollar zone” between the BRICS countries went in parallel with US protectionism and President Donald trump’s trade wars. After the arrival in the White house of the Democrat J. Biden’s situation will only soften.



Read on the topic