Outcomes of the 7th BRICS Summit in Ufa, Russia

1. BRIEFING BY THE DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION (DIRCO) TO THE PARLIAMENTARY PORTFOLIO COMMITEE ON INTERNATIONAL RELATIONS AND COOPERATION ON THE OUTCOMES OF THE THE SEVENTH (VII) BRICS SUMMIT HELD ON 8 – 9 JULY 2015 IN UFA, RUSSIA H.E. DEPUTY MINISTER L LANDERS, DIRCO 12 AUGUST 2015

2. PRESENTATION OVERVIEW • KEY OUTCOMES OF THE SEVENTH (VII) BRICS SUMMIT • SUMMIT OUTCOME DOCUMENTS (UFA DECLARATION, UFA ACTION PLAN AND STRATEGY FOR BRICS ECONOMIC PARTNERSHIP) • BRICS VII SUMMIT OUTREACH MEETING • BRICS TRACK 2 AND TRACK 3 ENGAGEMENTS (PARLIAMENTARY FORUM, CIVIL BRICS FORUM, YOUTH FORUM AND TRADE UNIONS FORUM) • REVISION OF BRICS STRATEGY • ECONOMIC OVERVIEW

3. A: KEY OUTCOMES OF THE SEVENTH (VII) SUMMIT • President JG Zuma, accompanied by the Ministers of International Relations and Cooperation, Finance, Trade and Industry, State Security, Energy and Arts and Culture attended the Seventh (VII) BRICS Summit which was held from 8-9 July 2015 in the city of Ufa in the Russian Federation • The theme for the Summit was “BRICS Partnership: A Powerful Factor of Global Development” and the key Summit outcomes attested to this partnership indeed being a powerful factor of global development • The Summit commenced with an informal dinner attended by the BRICS Leaders on the evening of 8 July 2015 in Ufa

4. A: KEY OUTCOMES (cont.) • The second day, i.e. 9 July consisted of a meeting between the BRICS Leaders and the members of the BRICS Business Council (BBC). The BBC utilized the platform to promote interventions they sought from Governments that included, inter alia, trade in local currencies, business travel facilitation, and recognition of the advisory role of the BBC • The leaders discussed the agenda during the Restricted/Closed Session as well as during the working lunch on the themes of “Global issues of politics and economy” and “BRICS activities” • BRICS Leaders delivered statements based on the theme “New Challenges and new opportunities of BRICS cooperation” during the Plenary/Open Sessions • The BRICS Leaders welcomed the establishment of the BRICS financial institutions, namely the New Development Bank (NDB) and Contingent Reserve Arrangement (CRA) and that the Ufa Summit marked their entry into force

5. A: KEY OUTCOMES (cont.) • The BRICS Leaders announced that their respective domestic ratification processes for the establishment of the New Development Bank and Contingent Reserve Arrangement were concluded. The first meeting of the New Development Bank’s Board of Governors took place on 7 July 2015 in Moscow, marking an important milestone in operationalizing the Bank • The BRICS Finance Ministers concluded the process of appointing the new President of the Bank, Vice Presidents and the Board of Directors. President Zuma congratulated the new President of the Bank, Mr Kamath (India). Four Vice Presidents have been appointed including South Africa’s Mr Leslie Maasdorp • The non-Executive Directors were also appointed which included South Africa’s Mr Tito Mboweni. The formal launch of the Bank’s headquarters will take place later this month in Shanghai • The Board of Directors consists of the Ministers of Finance of the BRICS member states

6. A: KEY OUTCOMES (cont.) • The New Development Bank (NDB) shall have an initial authorized capital of US$ 100 billion and the initial subscribed capital shall be US$ 50 billion, equally shared among founding members- South Africa has to contribute US$ 2 billion within a 7 year period. The voting power of each member shall equal its subscribed shares in the capital stock of the bank. • The Initial size of the Contingent Reserve Arrangement (CRA) will be US$100 billion: China will provide US$ 41 billion; Brazil, Russia, and India will provide US$ 18 billion each and South Africa US$ 5 billion. The Drawing limits of countries will be determined by countries’ commitments times a multiplier. China will have a multiplier of 0.5; Brazil, Russia and India of 1; and South Africa of 2

7. A: KEY OUTCOMES (cont.) • The customary pre-Summit meetings that were held included that of the BRICS Ministers of Finance as well as in their capacity as the NDB Board of Governors and the BRICS Ministers of Trade. The BRICS National Security Advisors met prior to the Summit as well as BRICS Ministers responsible for Culture and Youth • On 21 July 2015, the BRICS New Development Bank in Shanghai was officially launched by the Minister of Finance of China, Mr LOU Jiewei, the Mayor of Shanghai Mr YANG Xiong and the President of New Development Bank, Mr KV KAMATH; South Africa was represented by Mr Leslie MAASDORP, Vice President of NDB, Mr Tito MBOWENI Board Member of NDB; the South African Consul-General in Shanghai was also in attendance • The Shanghai Institute for International Studies also hosted an International Seminar of the BRICS New Development Bank under the theme: "From ideas to reality"

8. D. UFA SUMMIT OUTCOMES (cont.) • The BRICS Leaders announced that their respective domestic ratification processes for the establishment of the New Development Bank and Contingent Reserve Arrangement were concluded. The first meeting of the New Development Bank’s Board of Governors took place on 7 July 2015 in Moscow, marking an important milestone in operationalizing the Bank • The BRICS Finance Ministers concluded the process of appointing the new President of the Bank, Vice Presidents and the Board of Directors. President Zuma congratulated the new President of the Bank, Mr Kamath (India). Four Vice Presidents have been appointed including South Africa’s Mr Leslie Maasdorp • The non-Executive Directors were also appointed which included South Africa’s Mr Tito Mboweni. • Russia is the Chair of the Board of Governors and Brazil is the Chair of the Board of Directors

9. A: KEY OUTCOMES (cont.) • The following three agreements were signed in the presence of Leaders after the Plenary Session: 1. Agreement on Cooperation in the Field of Culture • The Agreement promotes the exchange of experiences between agencies of cultural and education sectors working in the field of creative industries, as a pillar of sustainable development and also encourages the exchange of information on cultural activities taking place in their states and encourages participation of their representatives in such activities 2. Memorandum of Understanding on the Creation of the Joint BRICS Website • The website which is a free online public resource, will disseminate information on activities related to the BRICS Member State which currently chairs the BRICS, including values, priorities and information on events

10. A: KEY OUTCOMES (cont.) 3. Memorandum of Understanding on Cooperation with the New Development Bank • This is an MoU between the members of the BRICS Interbank Cooperation Mechanism (the Development Bank of Southern Africa in the case of South Africa) where the parties intend to cooperate with the New Development Bank, to the extent that it is within their respective mandates, in the areas of infrastructure and sustainable development projects • The BRICS countries also concluded a BRICS Framework Programme for funding multilateral joint research projects under auspices of the Science, Technology and Innovation track during a meeting of experts prior to the Summit

11. B: SUMMIT KEY OUTCOME DOCUMENTS • The customary key outcome documents for the Summit that Leaders adopted were the Ufa Declaration and the Ufa Action Plan • The Ufa Declaration consists of 77 paragraphs and was structured according to sections that the Chair proposed, i.e. preamble (paragraphs 1-3), global politics (4- 10), world finance, economy and trade (11-26) new challenges and threats (27-35), regional issues (36-51), sectoral cooperation in the economic sphere (52-56), cooperation in the social and humanitarian sphere (57-64), sustainable development issues (65-69), cooperation with parliaments, business and civil society (70-75) and conclusion (76-77)

12. B: SUMMIT KEY OUTCOME DOCUMENTS (cont.) The key themes of The UFA Declaration are expressed in the following examples: • Global Politics: The UFA Declaration remarked on the 70th anniversary of the founding of the United Nations, the need for a comprehensive reform of the UN, including its Security Council, but without direct support for the aspirations of South Africa, India and Brazil in this regard; it also paid tribute to those who fought against fascism and militarism and for the freedom of nations in the context of the 70th anniversary of the end of World War II; it reaffirmed commitment to rigorous compliance with principles enshrined in the Charter of the UN • World Finance, Economy and Trade: The UFA Declaration expresses support for the development of action-oriented economic cooperation and systematic strengthening of economic partnership for the recovery of the global economy, resisting protectionism, promoting high and productive employment, reducing possible international financial market risks and strengthening sustainable growth

13. B: SUMMIT KEY OUTCOME DOCUMENTS (cont.) • New Challenges And Threats: The UFA Declaration referred to issues such as international terrorism and undertook cooperation in this regard as well as related financial action; the global drug problem; corruption; combatting transnational organised crime; piracy and armed robbery at sea; outer space use and exploration for peaceful purposes; the positive role of ICTs and the importance of security in the use of ICTs, disaster management cooperation; leaders specifically also expressed regret for the large-scale loss of lives of migrants in the Mediterranean and calls upon the international community, in particular the countries concerned, to provide necessary assistance to these migrants, and to intensify collective efforts to address the root causes of the growing unregulated migration and displacement of people • Regional Issues: The UFA Declaration referred to the situations in Syria; Iraq; the Middle East Peace Process; Iran; Afghanistan; Ukraine; Libya; South Sudan; Somalia; Mali; Democratic Republic of Congo; Burundi; Central African Republic; and Boko Haram

14. B: SUMMIT KEY OUTCOME DOCUMENTS (cont.) • Sectoral Cooperation in the Economic Sphere: The BRICS states are convinced about the importance of economic growth based on the balanced development of all economic sectors and on the development and introduction of advanced technologies and innovations, the mobilization of resources from financial institutions and the encouragement of private investment • Cooperation in the Social And Humanitarian Sphere: The UFA Declaration notes the direct interdependence between investment into education, the development of human capital and the improvement of economic performance. It reaffirms the need for equally accessible, high-quality, and lifelong education for all, in line with post-2015 development agenda

15. B: SUMMIT KEY OUTCOME DOCUMENTS (cont.) • Sustainable Development Issues; The BRICS intend to strengthen partnerships for advancing international development and to begin interaction through dialogue, cooperation and exchange of experience in advancing international development of mutual interest to their countries. In this connection, they welcome plans for a meeting of senior officials of the BRICS countries in charge of international development cooperation • Cooperation With Parliaments, Business And Civil Society; The BRICS states welcome the development of relations between the parliaments, businesses and civil society institutions of the BRICS countries, aimed at promoting friendship and dialogue between its nations.

16. B: SUMMIT KEY OUTCOME DOCUMENTS (cont.) • It further included various new areas of cooperation that have been embarked upon under the Russian Chairship such as e-commerce, intellectual property rights, use of national currencies in transactions, information and communications technologies, competition policy (South Africa will host the next meeting in November 2015 in Durban), disaster management, industrial initiatives such as industrial and technology parks and clusters and engineering centres, energy, and connectivity initiatives • The Ufa Action Plan reflects the following events and initiatives under the Russian Chairship: Meetings already held, notably BRICS ministerial meetings such as: • National Security Advisors; Finance Ministers and Central Bank Governors; Environment Ministers; Heads of Anti-drug Agencies (Minister of Police); Deputy Foreign Ministers; National Security Advisors; Health Ministers; Ministers of Culture; Youth Affairs Ministers and Youth Summit (Deputy Minister); Board of Governance of the New Development Bank and Trade Ministers

17. B: SUMMIT KEY OUTCOME DOCUMENTS (cont.) 26 Forthcoming Events, including the following BRICS ministerial meetings: • Foreign Affairs/International Relations; Finance Ministers and Central Bank Governors; Health Minister; Labour and Employment Ministers; Education Ministers; Agriculture and Agrarian Development Ministers; Ministers on Science, Technology and Innovation; Ministers of Telecommunications; 8 Other initiatives, including the following BRICS ministerial meetings: • Heads of Migration Authorities (Ministerial level invitation) and Ministers of Energy 3 Areas of Cooperation, namely: • BRICS Dialogue on Peacekeeping; Establishment of the BRICS Council of Regions and Cooperation and exchange of experiences among BRICS media professionals.

18. B: SUMMIT OUTCOME DOCUMENTS (cont.) • Another key outcome document of the Ufa Summit was the Strategy for BRICS Economic Partnership • The Strategy for BRICS Economic Partnership adopted by the Leaders, is aimed at the further deepening of trade and investment ties within BRICS, through increasing value-added exports as well as promoting investments into each other’s economies; this can be accomplished through exploiting areas in which BRICS countries have greater economic complementarity • President Putin stated that industrial cooperation and investments in the areas of manufacturing and mineral processing would be vital to unlock economic growth in BRICS countries and proposed that the next step in terms of its implementation is the development of a Road Map for the period until 2020 to reflect joint collaborative economic, trade and investment initiatives- BRICS countries would be required to propose such projects to complete the Action Plan by end 2015

19. C: BRICS VII SUMMIT OUTREACH MEETING • The BRICS Leaders also held an outreach meeting together with the Leaders of the Shanghai Cooperation Organisation (SCO member and observer states respectively, i.e. China, Kazakhstan, Kyrgyzstan; Russia, Tajikistan, Uzbekistan as well as Afghanistan, India, Iran, Mongolia, and Pakistan); the Eurasian Economic Union (Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia) as well as the Leader from Turkmenistan after the conclusion of the Summit • The theme for this dialogue forum was “Ways to increase the well-being of the peoples of our countries” • President Putin summarised the outcomes of the BRICS and SCO Summits by remarking that they “represent a big step in developing our countries’ multifaceted cooperation… It is this diversity and coming together of different traditions that gives the BRICS group and the SCO their strength and tremendous potential”

20. D: BRICS TRACK 2 AND TRACK 3 ENGAGEMENTS • The formalisation of the BRICS Track 2 and Track 3 engagements was initiated by the Russian Chair • Russia hosted the first BRICS Parliamentary Forum in Moscow on 8 June 2015. The South African delegation which participated in the Forum was lead by the Ms T Modise, Speaker of the National Council of Provinces accompanied by Mr S Tsenoli Deputy Speaker of the National Assembly and six members of parliament • During the meeting the participants discussed, inter alia, the significant role of parliaments of BRICS in resolving critical issues of international concern and making BRICS an international mechanism for consultation and cooperation on key issues of global politics and economy • The key outcome was the Statement of the BRICS First Parliamentary Forum which was adopted on 8 July 2015

21. D: BRICS TRACK 2 AND TRACK 3 ENGAGEMENTS • The Forum agreed to create mechanisms for cooperation between legislative bodies and exchange experiences in order to further improve their national legislative systems • The first meeting of the Civil BRICS Forum, held on 29 June to 1 July, 2015, contributed to a dialogue between civil society organizations, academia, business and governments of the BRICS countries on a wide range of important socio-economic issues and was coordinated under auspices of the BRICS Think Tanks Council; the Civil BRICS Forum Statement was signed and it is in the form of an Appeal to the BRICS leaders highlighting the importance of the civil forum as well as highlighting the main recommendation from the working groups; namely: Healthcare; Education and Science; Cultural Cooperation; Sustainable Development; Economy and Trade; Peace and Security and Strengthening Diversity and Pluralism

22. D: BRICS TRACK 2 AND TRACK 3 ENGAGEMENTS (cont.) • At the Trade Unions’ Forum, held in Ufa on 9 July 2015; an Ufa Declaration of the IVth Trade Union Forum of BRICS countries was adopted on 9 July 2015 which expressed a united voice for the working people of the BRICS countries highlighting the importance of the implementation of macroeconomic and financial policies and the undertaking of structural reforms by the developed world that creates decent jobs and sources of income • The inaugural BRICS Youth Summit was held in Moscow and Kazan on the 4-7 July 2015, enabling concerted efforts to discuss issues crucial to the development of the BRICS nations; the BRICS youth stated that they are looking for new sources of sustainable development of their respective countries and youth engagement in economic, political, humanitarian, information, scientific and technological cooperation amongst the BRICS countries • Heads of Agencies responsible for Youth Affairs signed an agreed Memorandum of Understanding and Cooperation on Youth Affairs (MoU) that will ensure collaboration in all spheres that are geared at improving youth development

23. E: REVISION OF BRICS STRATEGY • Cabinet adopted the BRICS Strategy in September 2012 • The BRICS Sherpa initiated its first review process in 2014 with members of civil society which was coordinated by the South African interim BRICS Think Tank (HSRC) • The next phase will entail interdepartmental consultations during FY 2015/16 in order to reflect the new developments and areas of cooperation in the BRICS context, notably such as engagement with its new institutions (notably the New Development Bank) • The Strategy will also serve to sensitise all government stakeholders to start planning for South Africa’s hosting of the Tenth (10th) BRICS Summit in 2018, which will also constitute its first major anniversary Summit

24. F. BRICS ECONOMIC OVERVIEW • BRICS countries produce a third of the world’s industrial products and one half of agricultural goods. Its human resources base constitutes 43 % of the global population which is an enormous consumer market with a constantly growing demand for modern goods and services. Intra-BRICS trade has grown by 70% since 2009. BRICS countries attracted 20, 5 % of global total direct investment in 2014 compared to only 16, 9 % in 2009. The share of BRICS capital investment on the global markets has also increased significantly from 9, 7 % to 14 % • Total bilateral trade between South Africa and BRICS countries increased from R203 billion in 2010 to R382 billion in 2014. During this period, South Africa has been experiencing a trade deficit against our BRICS partners (see Table 1 for information on SA trade with BRICS countries

25. F. BRICS ECONOMIC OVERVIEW (cont.) THE WORLD IN 2050 GDP (2010 USD TR) Source: International Monetary Fund

26. F. BRICS ECONOMIC OVERVIEW (cont.) TOP 10 LARGEST ECONOMIES 2020 (GDP PPP) Source: Goldman Sachs ECS Global Research

27. F. BRICS ECONOMIC OVERVIEW (cont.) Total Intra-BRICS Trade (Values in South African Rand) Source: Trademap

28. F. BRICS ECONOMIC OVERVIEW (cont.) SA Trade with BRIC Countries Source: www.thedti.gov.za

29. F. BRICS ECONOMIC OVERVIEW (cont.) Intra- Foreign Direct Investment (FDI) amongst BRICS countries from January 2003 to April 2015

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