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[l] at 9/26/19 12:46pm

“The South African government sees the success of the transaction, believed to be the largest ever out of Sub-Saharan Africa, as an expression of investor confidence in the country’s sound macro-economic policy framework and prudent fiscal management.”

The National Treasury building in Pretoria [PREUSS]

The South African government placed $5 billion worth of bonds in the international capital market on September 23 2019 in the largest bond issuance by a Sub-Saharan African country.

Despite its large size, the $2 billion 10-year bonds and the $3 billion 30-year bonds, were 2.7 oversubscribed compared with a 1.7 over-subscription in May 2018, when only $2 billion worth of bonds were issued.

The 10-year bond priced at a coupon rate and re-offer yield of 4.85 per cent which represents a spread of 313 basis points above the 10-year US Treasury benchmark bond. In May 2018 the 12-year bond was priced at a coupon rate of 5.875 per cent, which represented a spread of 280.5 basis points above the 10-year US Treasury benchmark bond.

The 30-year bond was priced at a coupon rate and re-offer yield of 5.75 per cent which represents a spread of 358.6 basis points above the 30-year US Treasury benchmark bond. In May 2018, the 30-year bond was priced at a coupon rate of 6.300 per cent, which represented a spread of 310.1 basis points above the 30-year US Treasury benchmark bond.

Investor demand for the $5 billion bonds came from Europe, North America, Asia, South America, Middle East, Africa and others. In terms of investor type, demand was supported by a mixture of Fund Managers, Insurance and Pension Funds, Financial Institutions, Hedge Funds and others.

The National Treasury mandated Citi, Deutsche Bank/Nedbank (consortium), Rand Merchant Bank, and Standard Bank as Joint Bookrunners. The empowerment partners for the respective banks are: Crede Capital Partners, Rho Capital; Theza Capital; and Africa Rising Capital.

The 2019 Budget Review made provision for $2 billion equivalent to be raised in the international capital markets in 2019/20 to fund government’s foreign currency commitments. Of the $4 billion planned for 2018/19, only $2 billion was issued and the remaining $2 billion was deferred to 2019/20, bringing the total foreign borrowing requirement for the year to $4 billion.

Due to the favorable pricing and a sizable order book, the National Treasury was able to pre-fund an additional $1 billion over the planned $4 billion. Pre-funding is the early issuance of an amount planned to be issued in future years. This is done to take advantage of good pricing and favorable market conditions while reducing future borrowing need.

Helmo Preuss in Makhanda, South Africa for The BRICS Post

[Category: BRICS News, South Africa, World News]

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[l] at 9/17/19 12:30pm

Loans are for projects in India, Russia and South Africa

The first president of the New Development Bank K. V. Kamath speaks at the 2nd annual meet of the new lender in New Delhi on April 1 2017 [Image: BRICS Business Council]

The BRICS New Development Bank (NDB) Board of Directors (BoD) approved four infrastructure and sustainable development projects with loans aggregating to some $1.4 billion, bringing the Bank’s portfolio to 42 projects with loans aggregating to $11.6 billion.

The NDB will provide two loans of $323 million each to the Republic of India for on-lending to Government of Andhra Pradesh for the Andhra Pradesh Roads and Bridges Reconstruction Project (APRBRP) and the Andhra Pradesh Mandal Connectivity and Rural Connectivity Improvement Project (APMCRCIP) respectively.

The NDB said the two projects will address the road network issues in the state of Andhra Pradesh by widening roads and widening and reconstructing weak and narrow bridges to provide all-weather road network connectivity.

APRBRP comprises widening of about 1,600 km of state highways from single/intermediate lanes to double lanes and reconstructing 269 bridges on the state highway network. APMCRCIP comprises widening of about 1,400 km of district roads from single/intermediate lanes to double lanes and reconstructing 206 bridges on the district road network.

For Russia, the NDB board approved a loan of $300 million to the Eurasian Development Bank for Renewable Energy Sector Development.

“The objective of the Project is to facilitate investment in renewable energy generation plants that will contribute to Russia’s power generation mix in line with the country’s Energy Strategy 2030, and to avoidance of carbon dioxide emissions. The proposed NDB loan will be used by EDB for on-lending to sub-projects using wind, solar, and small hydropower (less than 25 Megawatt) energy generation technologies,” the NDB said.

In the case of South Africa, the NDB board approved a loan of 7 billion rand to the South African National Roads Agency Limited (SANRAL). This loan is guaranteed by the government of the Republic of South Africa.  The NDB has received regulatory approval for a 10 billion rand local currency bond programme in South Africa.

Monale Ratsoma, the Director General at the Africa Regional Centre (ARC) for the New Development Bank (NDB) said the loan did not replace existing loans.

“The loan is for both maintenance of roads and construction of new ones, bridges etc. It will not be to refinance existing debt. Unfortunately, we cannot disclose the details of the terms, but I can tell you that as a sovereign guarantee loan, it enjoys the best rates possible by the NDB in rand,” he said.

The NDB plans to almost double its loans to $16 billion this year and increase its impact, as the bank seeks to broaden its global development partnerships and mobilize more institutional and private capital.

In 2018, the NDB approved 17 loans totaling about US$ 4.6 billion, building on its base of 13 loans worth US$ 3.4 billion as of the end of 2017. That brought the total loan book of the bank to 30 projects worth approximately US$ 8 billion by the end of last year.

Helmo Preuss in Sutherland, South Africa for The BRICS Post

[Category: BRICS Business, BRICS News]

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[l] at 9/9/19 12:48pm

“South Africa does not do boring”: World Economic Forum participant

“We must ensure that our citizens are prepared, and, if necessary, that they are shielded from any adverse consequences. Our response must be collaborative, multi-sectoral and inclusive,” Ramaphosa noted [PREUSS]

In the opening session at the World Economic Forum (WEF) on Africa on Wednesday, President Cyril Ramaphosa said in response to criticism from a panel of business leaders who bemoaned the lack of implementation of government’s plans on economic reform that his middle name was ‘Implementation’.

The 2019 World Economic Forum on Africa took place between September 4 and 6 September in Cape Town, South Africa, under the theme “Shaping Inclusive Growth and Shared Futures in the Fourth Industrial Revolution.”

The meeting saw more than 1,000 regional and global leaders from government, business, civil society and academia at a time that South Africa was wracked by civil unrest. Some criminals exploited this unrest to loot shops owned by foreigners, while several females have died in recent days due to gender based violence, but the response was in some ways hampered by fake news and conspiracy theories.

On September 6, the world woke up to the fact that former Zimbabwean President Robert Mugabe had died in Singapore, while 1995 Rugby World Cup hero Chester Williams, died over the weekend.

Zimbabwe’s President Emmerson Mnangagwa, who attended the conference, said he is striving to rebuild Zimbabwe’s “collapsed economy”, and he said it was vital to understand the needs of the private sector for investment in technology that could add value locally.

Ecocash, is a trusted transactions and payments platform that has allowed Zimbabwe to continue to operate despite the lack of access to foreign capital, in part due to American and European sanctions.

Although the sanctions are targeted against individuals, the unintended consequence is that for most risk compliance officers at banks, Zimbabwe is so tainted that they suggest that other African economies are far less risky and just as lucrative.

Dramatic shifts

As one participant said, “South Africa does not do boring”, as the conference explored new models to help Africa achieve succeed at a time when technology is creating dramatic economic and societal shifts that would allow Africa to leapfrog legacy infrastructure and ways of operating. That is why there were sessions on how technology could change climate change and increase rainfall by 27 percent and reverse the effects of global warming, as well as sessions on the ocean economy, the economic impact of drones, free trade and e-commerce.

South Africa has suffered three quarterly economic contractions since Ramaphosa was elected President in February 2018. At the time he promised a ‘New Dawn’ and the briefing session in Cape Town conference was organised by Brand South Africa to highlight what progress has been made to ease the cost of doing business.

“We are currently ranked 82 out of 190 countries in the World Bank’s Ease of Doing Business, but it is our aim to be among the top 50 within five years. To achieve that we are actively engaged with stakeholders and a road map with short-medium- and long-term goals has been set out,” Ramaphosa said.

“We already have a one-stop investment shop and are busy with visa regime reform. The evisa system will be piloted in October and the critical skills list for priority immigrants and the Integrated Resource Plan is in the process of being finalised,” he added.

Ramaphosa started the briefing session with a condemnation of the current spate of violence that seems to have targeted women and foreigners and asked the audience to stand as a sign of respect for those who have lost their lives.

“We are a country that is completely committed against xenophobia and South Africa is a home for all. We need to live side by side and people who kill others do not belong in South Africa,” he said.

Police have fanned out across areas in Johannesburg and Pretoria as the country was racked by a third day of violence. Police have arrested more than 100 people in five areas impacted by the violence. Many shops remained closed as shop owners, many of them foreign, feared to return to their property.

More than 200,000 South Africans have signed a petition calling on Parliament to declare gender-based violence a state of emergency in the country.

“We welcome the green shoots of recovery that we saw in the second quarter GDP release, but the reality is that we are barely growing. We are hard at work at restoring growth. It is an arduous task and it will take time,” Ramaphosa said.

Real GDP growth of 3.1% quarter-on-quarter at a seasonally adjusted annualised basis was recorded in the second quarter, but most economists expect 2019 growth to be the slowest since the 2009 recession.

Seven of the 10 production sectors accelerated on a quarterly basis in the second quarter, but the labour-intensive construction, transport, and agricultural sectors remained in contractionary territory.

The majority of South Africans are appalled at the attacks on African migrants and refugees in the country by South Africans, said its Finance Minister Tito Mboweni at the opening plenary.

“We welcome all Africans who have come to this conference; we welcome all Africans who live in South Africa. We are all Africans. We need to tell our people that what they are doing is wrong. These artificial barriers we have created and the hatred among ourselves must really become a thing of the past,” he said.

Amina Mohammed, Deputy Secretary-General of the United Nations, said leaders at all levels, not just at the political level, must “dig deep to bring back social cohesion. We need to look at what binds us and not what separates us.”

Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, said the rapid pace of technology required renewed frameworks for cooperation to be developed to deliver an inclusive and sustainable future for Africa.

“Africa cannot afford to be left behind. The Fourth Industrial Revolution can solve many of the issues that came with the first, second and third industrial revolutions. It is a catalyst for Africa to leapfrog into the 21st century,” said Schwab.

Inclusive growth

That is why South Africa has appointed a Presidential Commission on the Fourth Industrial Revolution to guide government policy to ensure inclusive growth.

“Disruptive trends and technologies are changing the way we live, the way we work and do business, and the way we govern. We must respond with agility to craft a roadmap for navigating this new environment. We must ensure that our citizens are prepared, and, if necessary, that they are shielded from any adverse consequences. Our response must be collaborative, multi-sectoral and inclusive,” Ramaphosa said.

Seychelles President Danny Faure said the over-arching requirement was for African countries to reassure their own populations and investors that they can offer a stable regulatory framework that enables sustainable growth.

“We need to deepen the reform that we are doing to better reflect the need for Africa to have what is necessary in terms of good governance, transparency, accountability and the rule of law,” he said.

While big challenges remain to translate the promise of the Africa Continental Free Trade Area (AfCFTA) into jobs and economic growth on the ground, there is a palpable sense of hope that the time for talking is over and that the time for implementation is now upon us.

Arancha Gonzalez Laya, Executive Director of the International Trade Centre likened the AfCFTA to a most delicious African dish.

“The ingredients have been assembled, the cooks are in the kitchen. The guests are impatiently waiting for this dish to be served,” she said.

Sipho Pityana, Chairman of AngloGold Ashanti, said the free trade deal is a “catalyst”, but it was now up to political and business leaders to implement the removal of trade barriers and ensure sufficient investment in infrastructure and logistics to truly accelerated cross-border trade flows.

André Hoffmann, Vice-Chairman of Roche, said Africa’s extraordinary natural heritage also needs to be cherished and is an opportunity for development.

“Nature is not something that stops you from developing, but it is an opportunity. In fact it is a $1 trillion opportunity for investment,” he said.

In terms of implementation, the meeting produced numerous notable outcomes such as an action plan to tackle the crisis of gender-based violence. This plan would work with the technology industry to deploy a free emergency response system for women under attack in nine provinces in South Africa, support for female entrepreneurs as a means of promoting economic empowerment and establish a fund to help support South Africa’s gender-based violence strategy and action plan.

The Africa Growth Platform was launched to help start-up businesses access finance, advice and better regulatory conditions. Founding partners are Alibaba Group, A.T. Kearney, Dalberg Group, Export Trading Group, US African Development Foundation and Zenith Bank.

The African Risk Resilience Platform was initiated. It will combine private-sector resources with those of governments to help countries prepare for climate- and disease-related disasters.

The World Economic Forum teamed with the International Trade Centre to kick off an E-Commerce Action Agenda. The initiative is aimed at promoting cross-border data services in Africa, an industry that could create 3 million jobs across the region by 2025.

The World Bank and the Forum teamed up with African governments to launch an innovation challenge aimed at finding new ways of using drones across Africa. The competition, supported by the United Kingdom’s Department for International Development, is a precursor to the Africa Drone Forum, which will be held for the first time in February 2020 in Rwanda.

“We have the wherewithal to be able to reach for higher levels of growth.  The future is great. It looks very bright for the African continent. If there ever was a time when Africa definitely could be said to be on the rise, this is the time,” Ramaphosa concluded.

Helmo Preuss for The BRICS Post in Cape Town, South Africa

[Category: BRICS Business, BRICS News, South Africa]

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[l] at 8/30/19 11:44am

The public have until September 15 to comment

The National Treasury building in Pretoria [PREUSS]

The National Treasury’s growth strategy entitled ‘Economic Transformation, Inclusive Growth and Competitiveness Plan’ should encourage policy debate, but implementation is key according to economists.

Intellidex’s head of capital markets research Peter Attard Montalto said the plan had already caused quite a stir amongst political and policy circles.

“The buzz comes from the fact this is a very tightly argued, heavily referenced, evidence based policy paper written by the Economic Policy team within Treasury, but with full direction and authorisation from the Minister. It is the culmination of a workstream since the Minister came into office at the end of last year, through Mboweni’s roundtables in December and January and more recently a detailed series of interactions with academics and others on key issues,” he said.

Investec’s chief economist Annabel Bishop reflected the view of many economists when she focused on the implementation.

“It is a clear, fairly detailed plan with perceived tangible outcomes if implemented. It proposes to change South Africa’s trajectory to one of falling unemployment and accelerating economic growth, bringing SA into line with a number of successful economies globally,” she wrote in her reaction piece.

She said the plan focuses on key themes to boost private sector led economic growth in a current environment of near stagnant economic activity and rising unemployment.

The themes included modernizing the network industries to promote competitiveness and inclusive growth; lowering barriers to entry and addressing distorted patterns of ownership through increased competition and small business growth; prioritizing labour-intensive growth in agriculture and services; implementing focused and flexible industrial and trade policy to promote competitiveness and facilitate long-run growth, promoting export competitiveness and harnessing regional growth opportunities and quantifying the impact of proposed growth reforms.

“The plan will only be successful however, if red tape is substantially reduced, likely by around 25%, if economic growth reforms supporting the private sector are put in place and government follows through on its plans of providing the necessary support to the business environment. Key therefore is continual examination of the proposed reforms to ascertain whether they are likely to promote private sector economic activity,” she concluded.

Professor Raymond Parsons from the North West University Business School also emphasised implementation in his response.

“The National Treasury’s 77-page growth plan now published for comment offers wide ranging, constructive and fruitful ways for South AFrica to make sense of its current economic malaise and in proposing several sensible policies and projects urgently needed to turn the economy around,” he wrote.

Drawing on the National Development Plan the Treasury’s growth plan reiterates the extent to which South Africa’s weak economic performance is largely the outcome of domestic constraints and structural rigidities which have weakened the willingness of business to invest. To successfully get the necessary investment and economic growth South Africa requires, the growth plan recognizes the need to reduce policy uncertainty and create an overall supportive business environment, especially for small businesses,” he added.

“The success of any growth plan will therefore again hinge on its consistent and effective implementation, in collaboration with key stakeholders. South Africa therefore needs to urgently build a national economic purpose. At a practical level the confidence-building potential of the Treasury’s growth plan thus requires early evidence of commitment, consistency and steady implementation of its key strategies, such as in the forthcoming Medium-Term Budget Policy Statement in October and at the Presidential investment ‘summit’ in November,” he concluded.

Agricultural industry body Agri SA welcomed the plan in principle as it addresses several policy challenges and structural issues, giving specific solutions that are otherwise absent in many policy proposals. In their view, Agri SA is well-positioned to give effect to the proposal of making the agriculture sector the driving force of job creation.

“The scope and the level of detail is refreshing, as well as the honest reflection on the current flaws in the economic policy framework. We congratulate the Minister of Finance, Tito Mboweni on this initiative, but of course the success ultimately depends on the degree of implementation,” Omri van Zyl, Agri SA Executive Director said.

Agri SA said that in order to create an enabling environment for investment for agriculture, we need several policy outcomes. These include innovative financing solutions, affordable agriculture insurance, improved extension services, enhanced trade promotion, market access, access to water for irrigated agriculture and investment to establish innovative market linkages for smallholders.

By Helmo Preuss for The BRICS Post

[Category: BRICS Business, BRICS News, South Africa]

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[l] at 8/28/19 5:33am

Despite their differences over Syria, Russia and Turkey are cementing closer ties built on a boost in trade and advanced weapons deals.

Putin and Erdogan discuss arms sales at the nternational Aviation and Space Salon (MAKS) aviation exhibition in Moscow, August 27, 2019 [PPIO]

During a joint press conference on the sidelines of the International Aviation and Space Salon (MAKS) aviation exhibition highlighting advanced Russian fighters in Moscow, Turkish President Recep Tayyip Erdogan and President Vladimir Putin said they would expand their military ties.

“We have used the opportunity of Mr. Erdogan’s visit to discuss promising joint projects not only in aviation but also in other sectors of military-technical cooperation,” Putin said

Russia has said that it would help train Turkish pilots on its Su-30SM fighter jets and cooperate on the advanced Su-35 and SU-57 fighters.

At one point as the two presidents toured the MAKS exhibition grounds, Erdogan asked if the SU-57 could be sold to Turkey, to which Putin said yes.

Erdogan’s visit, and the highlighting of arms purchases, comes at a time of growing rifts between Turkey and its North Atlantic Treaty Organization (NATO) allies, particularly the US.

Relations between Ankara and Washington have been strained since Turkey signed a deal to purchase S-400 advanced Russian anti-missile technology.

Ankara began receiving components of the S-400 system in July.

The US has tried to block the deal by pressuring Ankara with possible sanctions. There have been hints that Turkey could end up forfeiting purchase of Lockheed Martin F-35 advanced fighter jets. US officials had previously warned that the air defense system was not compatible with NATO weapons.

Turkish Foreign Minister Mevlüt Çavusoglu, who accompanied Erdogan to Moscow, indicated that if Russia were to go ahead and sell his country the advanced Su-57 fighter jets these would serve as likely replacements for the F-35s which Ankara may never receive from Washington.

The two countries are also working toward settling trade transactions in their local currencies, as well as a $1 billion joint investment fund. Erdogan wants to significantly boost the volume of trade between the two.

“The trade turnover between our countries already exceeds $25 billion, but our task is to bring it to $100 billion,” Erdogan told Turkish media during his MAKS tour.

Meanwhile, Russia and Turkey are continuing work on the joint project, known as Turkstream, which is seen as a vital economic enterprise by Moscow because it would involving building a pipeline which will carry Russian gas straight to Europe.

Turkstream is expected to go online by December 2019.

The BRICS Post with inputs from Agencies

[Category: BRICS News, Russia, World News]

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[l] at 8/21/19 6:40am

File photo of Iranian President Hassan Rouhani (2nd from right) with his Russian counterpart Vladimir Putin in Sochi, Russia, and Foreign Minister Zarif (3rd from left) [PPIO]

Iranian Foreign Minister Mohammad Javad Zarif has told Russian media that his country is ready to re-comply with the 2015 nuclear deal, known as the Joint Comprehensive Plan of Action (JCPOA), if Europe fulfills its part of the agreement.

His comments came amid a diplomatic tour to assuage fears among neighbors of Iran’s nuclear program and convince European powers that the JCPOA can be salvaged.

“If Europe fulfils its deal obligations, we will return to complying with ours. We will do it even in case the United States won’t return to the JCPOA,” Zarif told TASS, the Russian news agency.

Zarif launched his diplomatic tour with a stop on Saturday in neighboring Kuwait where he told his counterpart there that Iran was ready to defuse tensions with regional rival Saudi Arabia immediately if Riyadh expressed its readiness for dialogue.

He then flew to Finland, Norway and Sweden.

On Friday, Zarif is scheduled to meet with French President Emmanuel Macron and France’s foreign minister to discuss bilateral relations and the nuclear deal. Macron is to meet with US President Donald Trump on the weekend during the G7 Summit.

Zarif will then fly to Beijing and Tokyo in a bid to convince Asia’s economic powers to continue purchasing Iranian crude in circumvention of renewed US sanctions.

Tensions between Tehran and Washington took a turn for the worse when Trump unilaterally pulled out of the JCPOA on May 9, 2018 saying that the “Iran deal is defective at its core” and that “any nation that helps Iran in its quest for nuclear weapons could be strongly sanctioned”.

Iran reacted a year later and said it would suspend some of the obligations it made as part of the deal in 2015.

Since then, European powers and Iran have been trying to salvage the JCPOA. Iran says it will not renegotiate a new deal.

Moscow has strongly condemned Trump’s decision to pull the United States out of the historic 2015 Iran nuclear deal and reimpose sanctions with the Russian Foreign Ministry saying it is “deeply disappointed”.

“There are and there may be no grounds for undermining the JCPOA. The plan fully proved its efficiency. It effectively copes with all the goals set for it. Iran strictly sticks to its commitments, which is regularly confirmed by the IAEA. We are fully supporting and welcoming that,” the Russian Foreign Ministry has maintained.

On July 14, 2015, the P5+1 (China, France, Germany, Russia, the United Kingdom, and the United States), the European Union and Iran reached a Joint Comprehensive Plan of Action (JCPOA) on Iran’s long-term nuclear programme.

Meanwhile, Russia had said it would back further cooperation within the parties that brokered the Iran deal.

Russia is one of Iran’s oldest allies. Both countries support Syrian President Bashar Al Assad and have provided support to his forces to defeat Islamist rebels in Syrian cities.

The BRICS Post with inputs from Agencies

[Category: BRICS News, World News]

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[l] at 8/20/19 10:17am

The BRICS New Development Bank is also rated AA+ by Fitch and S&P Ratings

The first president of the New Development Bank K. V. Kamath speaks at the 2nd annual meet of the new lender in New Delhi in April 2017. In 2018, the NDB approved 17 loans totaling about $4.6 billion, building on its base of 13 loans worth $3.4 billion as of the end of 2017 [Image: BRICS Business Council]

The BRICS New Development Bank (NDB) was assigned a ‘AAA’ foreign currency long-term issuer rating with a stable outlook by Japan Credit Rating Agency, Ltd (JCR) on August 20.

In its press release, JCR stated that NDB’s ‘AAA’ rating is based on its appraisal of the strong support for the Bank’s operations by the member countries, the NDB’s solid capital base and conservative risk management framework to ensure financial soundness, and the preferred creditor status enjoyed by the bank.

“BRICS is facing enormous financial requirements in the infrastructure development and sustainable growth, and governments have clarified their policy of utilizing the NDB as the core institution for mobilizing resources in these fields. Capital payments from the five founding member countries have also made steady progress in creating a robust financial structure, and the NDB is expected to maintain a sound financial structure through conservative risk management even when its loans expand further in volume,” JCR said in their media release.

Leslie Maasdorp, the NDB’s Chief Financial Officer welcomed the rating.

“The AAA international rating is a significant milestone for the Bank that is fully owned and led by developing countries. The AAA rating from JCR combined with the AA+ from S&P and Fitch respectively reflects the strong credit quality of the Bank. Given its international credit ratings, NDB is well positioned to raise capital at competitive rates through the bond markets and ensure competitive loan pricing to our clients,” he said.

The NDB was established by Brazil, Russia, India, China and South Africa (BRICS) in 2014 to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.

To fulfill its purpose, the NDB will support public or private projects through loans, guarantees, equity participation and other financial instruments.

The NDB plans to almost double its loan book to US$ 16 billion this year and increase its impact, as the bank seeks to broaden its global development partnerships and mobilise more institutional and private capital.

In 2018, the NDB approved 17 loans totaling about $4.6 billion, building on its base of 13 loans worth $3.4 billion as of the end of 2017. That brought the total loan book of the bank to 30 projects worth approximately US$ 8 billion by the end of last year.

The NDB has received regulatory approval for a ZAR 10 billion local currency bond programme in South Africa.

Helmo Preuss in Makhanda, South Africa for The BRICS Post

[Category: BRICS Business, BRICS News]

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[l] at 8/11/19 5:23am

The municipal government of Jiangsu Province in eastern China announced today that it had reached an agreement with the US-based Ford Motor company to establish a research and development (R&D) center in the capital Nanjing.

In addition to the R&D center, Ford will also set up a China operations center in the same city.

The announcement comes amid further strains in the China-US trade relationship as expectations of a settlement between the two countries fade among market investors.

Could investment in China – such as the Ford operations upgrade – offer a helping hand to resolve the China-US trade impasse? [Image: Archives]

The latest blow to these hopes of an early resolution came on August 9 when US President Donald Trump said he was not ready to make a deal with China and could even cancel trade negotiations slate for September.

Nevertheless, Ford’s plans are expected to fully support the automotive company’s China operations with a some 30 new Ford and Lincoln cars customized domestically to be rolled into the market by 2022.

The city of Nanjing has in the past decade seen growth in the automotive manufacturing and R&D industries. The current focus is on new energy automotive R&D, including Chinese electric vehicle startups and electirc-battery production.

The Beijing government is currently pushing to maximize the efficiency of the new vehicles being manufactured in a bid to become a global center for the development of electric cars.

The BRICS Post with inputs from Agencies

[Category: BRICS Business, BRICS News, China]

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[l] at 8/11/19 4:38am

“One small step for Minergy, one giant leap for Botswana’s coal industry,” says Minergy CEO Morne du Plessis.

A Minergy pit in the country’s southeast. Botswana is entering the coal market in a big way, analysts predict [PREUSS]

With these words, a paraphrase play on American Astronaut Neil Armstrong’s famous speech at the first Moon landing in July 1969, du Plessis welcomed media representatives to the Botswana Stock Exchange (BSE)-listed Minergy Limited’s 390-million ton Masama Coal Project in the Mmambula Coalfield in the southeast.

This sentiment was echoed by coal analyst Xavier Prevost who said he expected Botswana coal to replace South African coal in the South African domestic market as mines in the Witbank area in Mpumalanga were reaching the end of their life.

“I absolutely think this is great news that Botswana is entering the coal market in a big way. There will be more coal producers in Botswana, for sure, just watch this space,” he said.

Botswana Minister of Transport and Communications Dorcas Makgato told the 14th Annual Southern African Coal Conference in January 2019 in Cape Town that her government aims to unlock the vast coal resources.

Botswana has more than 210 billion tons of coal or more than three times those of South Africa, but it has been long transport distances that have prevented Botswana from exporting this resource, while with a population of just over 2 million, there is little need for coal-based power stations like those in South Africa.

Botswana had only one operating colliery, which was the government-owned underground mine, which supplies its Morupule power station.

Botswana has strong macroeconomic fundamentals, solid economic and fiscal policies, and low public debt levels. It is perceived as one of the least corrupt countries in Africa and is ranked at 34 out of 180 countries compared with South Africa at 73.

This has meant that Botswana has far better credit rating than South Africa, which is rated junk by S&P Global Ratings, while Botswana stands at A- with stable outlook.

“The Mmamabula – Lephalale rail link will create an alternative corridor for export commodities. Collaboration and partnerships between governments and the private sector is critical,” she said.
From this month Minergy will be mining 110,000 tons run of mine coal per month. The same quantities will be put through the washing plant and this should result in saleable coal of between 70,000 to 80,000 tons, increasing to 100,000 tons per month next year.

The Masama mine uses a truck and shovel mining method with blasting taking place once a week on a Thursday with the mine operating on a six-day shift cycle with Sundays being a day of rest.

The mine practices a rollover rehabilitation process, so as the open cut proceeds to the east, so the open cut is filled in the west back to the original ground level, so the pit itself will only be as big as it is currently.

The mine has in excess of 340,000 tons exposed in the pit, which only needs to be blasted and put through the plant. This equates to roughly three months of feedstock.

It will initially truck the coal across the border to the Mahikeng rail head for distribution within South Africa to customers such as cement plants.

Coal and energy company Maatla Energy is likely to be the next mining company to start coal production in Botswana. Its Mmamabula coal mine has received approval of an environmental impact assessment and has submitted a mining license application to Botswana authorities for the mine and expects approval before the end of this year.

Helmo Preuss in Gaborone, Botswana for The BRICS Post

[Category: BRICS Business, BRICS News, South Africa, World News]

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[l] at 7/22/19 1:42pm

Indian Prime Minister Narendra Modi called the launch of the moon lander a source of national pride [ISRO]

Just two days after the world celebrated the 50th anniversary of humans first setting foot on the moon, India launched the unmanned Chandrayaan-2 mission to land spacecraft on the surface of Earth’s natural satellite.

The launch was delayed from an initial date last week due to a technical issue, but this has not deterred India and its Space Research Organization (ISRO) from trying to become the fourth nation – after the US, Russia, and China – to land on the moon.

The Chandrayaan-2 – which means moon craft in Sanskrit – is expected to land in the southern pole area of moon in September.

Eleven years ago, India launched the Chandrayaan-1 mission to orbit the moon and in particular the southern pole, where it dedicated the possible existence of water.

Hoping to capture more of the $304-billion global space market, India is also expected to send a multi-million dollar mission to probe the Sun by 2020.

In 2013, India launched the Mangalyaan Mars mission and it reached the red planet’s orbit in September of 2014, making it the fourth to reach the planet after the US, Russia, and the European Space Agency.

The BRICS Post with inputs from Agencies

[Category: BRICS News, India, World News]

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[l] at 7/12/19 2:12pm

With a range of 400 kilometers, S-400 Triumf is designed to shield from air strikes, strategic, cruise, tactical and operating tactical ballistic missiles and medium-range ballistic missiles [Russian MoD]

In a move that is likely to strain relations between Ankara and Washington Turkey today began to receive components of the S-400 advanced Russian anti missile technology.

The transfer of this advanced weaponry from Russia comes after two years of negotiations between the two countries hand despite us threats that Ankara will face sanctions from its erstwhile allies.

Negotiations over the S-400 anti missile system began in earnest and September 2017 but were only finalised as of March of this year.

The US has tried to block the deal by pressuring Ankara with possible sanctions. There have been hints that Turkey could end up forfeiting purchase of Lockheed Martin F-35 advanced fighter jets.

Turkey is a member of the North Atlantic Treaty Organization (NATO), which considers Russia a threat in Europe.

“There is no need to make any statements regarding S-400, this is a done deal. Turkey will never backtrack on its earlier promises. What others say does not concern us,”  Turkish Foreign Minister Mevlut Cavusoglu said of the contract signed in September 2017 for $2.5 billion.

Russian sources say Turkish military personnel began training on operating the S-400 system as early as this April.

The response from NATO headquarters in Brussels has so far been muted but it is likely that NATO defense Chiefs will meet to discuss the Turkish purchase of Advanced Russian weaponry.

US officials had previously warned that the air defense system was not compatible with NATO weapons.

The S-400 is believed to be able to engage all types of aerial targets including aircraft and VLO (Very Low Observable) craft.

With a range of 400 kilometers and an altitude of close to 32 kms, S-400 Triumf is designed to shield from air strikes, strategic, cruise, tactical and operating tactical ballistic missiles and medium-range ballistic missiles, as well as neutralize drones.

The S-400 ‘Triumf’ air defense missile systems is equipped with three different types of missiles and an acquisition radar capable of tracking up to 300 targets within the range of nearly 600 kms.

Triumf is a system made of eight launchers and a control station.

Turkey follows China (in 2015) and India (in 2016) as major customers for the S-400.

Read more: S300, 400 missile systems to protect Russians in Syria

The BRICS Post with inputs from Agencies

[Category: BRICS News, Russia, World News]

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[l] at 6/28/19 3:40pm

The BRICS leader agreed that global trade and cooperation is threatened by protectionist measures [PPIO]

Leaders of the BRICS nations – Brazil, Russia, India, China, and South Africa – met ahead of the G20 summit in Osaka, Japan.

This was the first major BRICS meeting for Brazilian President Jair Bolsonaro and South African President Cyril Ramaphosa, who replaced their predecessors since the last BRICS Summit in Johannesburg.

The leaders meet at a time of tense global politics: The G20 is sure to discuss the recent war footing between Iran and the US, on the one hand, and the trade war of attrition between the US and China.

BRICS leaders are likely to raise the importance of multilateralism ad a means to overcome trade protectionism, as espoused by US President Donald Trump.

“The global economic situation cannot but raise concerns. It is indicative that international trade is no longer the driving force of economic growth and is carrying an increasingly heavier burden of protectionism, politically motivated restrictions and barriers,” Russian President Vladimir Putin told his BRICS counterparts.

“BRICS can and must play a more influential role in global finances, insist on continuing the IMF reform and strengthening authority of emerging economies and developing countries in the fund,” he added.

For his part, Chinese President Xi Jinping presented to his counterparts a three-tier economic proposal to expand BRICS cooperation in the face of the global economic protectionism.

Xi stressed BRICS countries should make joint efforts to improve global governance and uphold multilateralism, and called on BRICS members to enhance practical cooperation.

Indian Prime Minister Narendra Modi started off by congratulating Blosonaro for his recent election win, as well as Ramaphosa.

Modi’s party – the Bharatiya Janata Party (BJP) – recently won in elections in India.

“The synergy between BRICS countries can lead, to some extent to the resolution of the side effects of unilateral decisions. We have to keep on emphasizing for reformed multilaterism in international financial and business institutions and organizations for the necessary reforms,” Modi said in response to grow global trade inequality.

The informal BRICS meeting was chaired by Bolsonaro.

Ramaphosa, meanwhile, focused on a decade of BRICS achievements but also charted the way forward.

“The BRICS countries are increasingly recognised as an influential formation in reinforcing the principles of transparency, inclusiveness and compatibility within the multilateral trading system,” he said.

“There is also much scope to expand the value of trade between BRICS countries,” he added.

The BRICS Post with inputs from Agencies

[Category: BRICS News, World News]

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[l] at 6/25/19 1:05pm

Ramaphosa sets five goals to be achieved in next decade

Ramaphosa announced that R230 billion in fiscal support would be directed to debt-laden power utility Eskom over the coming ten years [GCIS]

South African President Cyril Ramaphosa’s State of the Nation Address was lofty in terms of dreams, but failed to show how these dreams would be implemented and consequently underwhelmed most commentators.

“Let us agree, as a nation and as a people united in our aspirations, that within the next 10 years we will have made progress in tackling poverty, inequality and unemployment, where: No person in South Africa will go hungry. Our economy will grow at a much faster rate than our population. Two million more young people will be in employment. Our schools will have better educational outcomes and every 10 year old will be able to read for meaning. Violent crime will be halved,” Ramaphosa said.

The Organisation Undoing Tax Abuse (OUTA) said although SONA 2019 was filled with good intentions, it was lackluster in terms of implementation.

“We’ve heard about Government’s desire to create millions of jobs in the past, of plans for economic growth and less red tape for businesses, but seen little concrete progress. It does not help to say what we want to do, but rather how we will do this,” Wayne Duvenage, OUTA CEO, said.

OUTA acknowledged that while SONA might not be the place to offer detailed plans, OUTA would like to have heard the President inform the nation of a new focus and energy in Government’s implementation strategies with meaningful targets and timelines.

Dawie Roodt, the chief economist at Efficient Group said the purpose of SONA was not to present a detailed blueprint, but rather to present a vision.

“I think the President did set a vision of a prosperous South Africa that embraces the Fourth Industrial Revolution. The details will be spelt out by the responsible ministers, who have accountability for implementation,” Roodt told The BRICS Post.

The President has appointed a Commission for the Fourth Industrial Revolution that will guide government policy. The first meeting of the commission is due in August.

Nelson Mandela University Business School economist Professor Chris Adendorff, who is a member of the commission, said the President deserved more credit for setting out his vision.

“The speech was very encouraging, but unfortunately some people do not see the vision contained in it,” he told The BRICS Post.

Ramaphosa said it was time South Africa built a new ‘smart city’ with bullet trains and smart ways of doing things to coincide with the fourth industrial revolution.

Smart cities and bullet trains however require a reliable power supply, so a fair amount of SONA was devoted to energy.

Ramaphosa announced that R230 billion in fiscal support would be directed to debt-laden power utility Eskom over the coming ten years. It would be structured in such a way that a significant portion would be provided in the early years.

A Special Appropriation Bill would be tabled in Parliament on an urgent basis to facilitate such front-end loading.

Stanford Mazhindu, the spokesperson for trade union UASA told The BRICS Post that the SONA did nothing to ease the fears of workers and jobseekers.

“There was nothing new to indicate a move away from talk and promises towards the real and decisive action the country needs,” he said.

Lucie Villa, Moody’s Vice President and lead Sovereign analyst for South Africa said the SONA came in the context of the government’s limited fiscal flexibility amid a challenging economic environment.

“The recent first quarter GDP results indicating the sharpest quarterly contraction in the past 10 years and the February budget pointing to weaker fiscal metrics and a higher government debt burden under the strain of support for Eskom underscore the credit challenges the country faces,” Villa said.

North West University Business School economist Professor Raymond Parsons said the crucial test of SONA would be implementation.

“President Cyril Ramaphosa projected in the latest SONA on the need for job-rich growth, expanding job opportunities for unemployed youth, ensuring good governance, and addressing the Eskom crisis strongly resonates with the well-known concerns of business and the markets. President Ramaphosa rightly wants to see a much higher growth rate than the current population growth if South Africa is to successfully combat unemployment, poverty, and inequality,” Parsons wrote in his reaction piece.

He said two risk factors arising from the SONA are implications of the low growth rate for the Medium-Term Budget Policy Statement in October and the fiscal consequences of another bailout for Eskom.

“Some tough decisions still need to be taken to reconcile expectations with affordability in South Africa’s public finances. The Medium Term Budget Policy Statement in Octo0ber will probably need to reflect a revised fiscal plan to manage shifting economic realities if SA is to protect and rebuild its investment rating. The implementation of pro-growth reform policies and projects will therefore remain essential if the SONA’s growth and employment targets and financial stability goals are to be reached over the next decade,” he concluded.

By Helmo Preuss for The BRICS Post

[Category: BRICS News, South Africa]

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[l] at 6/6/19 8:12am

Domestic final demand, which excludes the change in inventories and foreign trade, is more stable

The South African economy, if measured from the expenditure side, swung from a 1.6% quarter-on-quarter (q/q) seasonally adjusted annualized (saa) expansion in the fourth quarter 2018 to a 3.4% q/q saa contraction in the first quarter 2019, but if the volatile change in inventories and foreign trade sectors are excluded, then final domestic demand only swung from a 1.6% expansion to a 1.1% contraction.

Although inventories were once again depleted in the first quarter as the production side could not produce enough due to electricity load shedding in February and March, the decline was not as great as in the fourth quarter when there had been a surge in exports.

The constrained ability to produce meant that the goods producing sectors such as agriculture, mining, manufacturing and construction all suffered quarterly contractions and that had a spillover effect into the trade, transport and electricity sectors.

The only sectors that showed a quarterly increase in the first quarter were government services, personal services and financial services.

In the fourth quarter, exports surged by 11.1% on the same basis, while imports plunged by 16.0%.

This meant that net exports added 8.7 percentage points to GDP growth, offsetting the 8.7 percentage points decline caused by a massive drawdown in inventories as domestic producers were unable to meet external demand.

In the first quarter, exports plunged by 26.4% q/q saa, while imports slipped by 4.8% q/q saa. This meant that net exports subtracted 7.5 percentage points from GDP growth, which was not offset by the 5.3 percentage point addition caused by a smaller drawdown of inventories.

The fourth quarter inventory drawdown was the largest for quarterly data going back to 2010. The previous largest drawdown was in the second quarter 2016 when the constant 2010 rand reduction was R37.4 billion.

The inventory drawdowns lead to wild swings in gross domestic expenditure.

In the second quarter 2016 the drop was 4.1 per cent followed by a 5.7 per cent increase the subsequent quarter as inventories are replenished. In the fourth quarter 2018 gross domestic expenditure plummeted by 6.8%, so one should an increase of similar magnitude in the first quarter 2019 and in the event it came in at 4.3%.

Economists and policy makers however react to the headline GDP data, not the domestic demand number, which is seldom reported in the media.

That means that the odds of a repo rate cut in July has risen substantially after two members of the South African Reserve Bank’s Monetary Policy Committee voted for a 25 basis point cut at the last meeting in May. The other three members voted to keep the repo rate steady.

At the time, South African Reserve Bank Governor Lesetja Kganyago downgraded the SARB’s forecast of GDP growth in 2019 to 1.0% from 1.3% forecast in March. This was in response to a “larger than expected slowdown in the first quarter, weak business and consumer confidence as well as growing pressure on household disposable income.”

The last time the key South African interest rate changed was in November 2018, when it was hiked to 6.75% from 6.50% on a three-to-three vote split with Kganyago breaking the deadlock.

The implied path forecast by the SARB’s econometric model in May was for one 25 basis point cut by the end of the first quarter next year.

First National Bank chief economist Mamello Matikinca-Ngwenya expected a 25 basis points cut in July given the weakness in the economy, which has failed to grow over the past year.

“Today’s disappointing GDP print reaffirms our view of easier monetary policy. Given the significantly weak growth outcome relative to the SARB’s expectation and benign inflation outlook we expect the SARB to cut the repo rate by 25 basis points at the next MPC meeting,” she said.

Mike Schussler from economists.co.za said the MPC was unlikely to cut in July as it could lead to a credit ratings downgrade.

“They are going to get real worried about ratings now. They can’t cut so the stink is going to get bigger. Even if they cut it will not help much. We need more than a rate cut. We need an economic revival on par with what China did in the early 1980’s,” he said.

Sanlam Investment economist Arthur Kamp said a rate cut was possible in either July or September provided the rand remained stable and inflation expectations did not deteriorate.

“If the above conditions are met and if the SARB shares my concern that real GDP growth is likely to average something similar to last year’s weak outcome, then I think there is a robust case for a rate cut,” he said.

Helmo Preuss in Makhanda (formerly Grahamstown), South Africa for The BRICS Post

[Category: BRICS Business, BRICS News, South Africa]

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[l] at 6/2/19 12:02pm

Streamlined cabinet aimed at reviving economic growth  

Economists  welcomed the new South African cabinet with cautious optimism as the mood has swung from “ Ramaphoria ” in December 2017, when Cyril Ramaphosa won the leadership of the African National Congress ,  to “ Cystopia ” in mid-2018 after the economy sank into a recession in the first half of 2018 and now to “ Ramafixit ”.  

Ramaphosa said the number of ministers had been reduced from 36 to 28 to promote “greater coherence, better co-ordination and improve efficiency”.  

“We need a capable, efficient and ethical government,” Ramaphosa said  when he announced the cabinet .  

Here are the names of the newly appointed ministers:  

David Mabuza, deputy president
Nkosazana Dlamini-Zuma, co-operative governance and traditional affairs
Tito Mboweni, finance
Naledi Pandor, international relations
Pravin Gordhan, public enterprises
Gwede Mantashe, mineral resources and energy
Ebrahim Patel, trade and industry
Patricia de Lille, public works and infrastructure
Thoko Didiza, agriculture, land reform and rural development
Angie Motshekga, basic education
Stella Ndabeni-Abrahams, communications
Nosiviwe Mapisa-Nqakula, defence and military veterans
Barbara Creecy, environment, forestry and fisheries
Thulas Nxesi, employment and labour
Zwelini Mkhize, health
Blade Nzimande, higher education, science and technology
Aaron Motsoaledi, home affairs
Lindiwe Sisulu, water, sanitation and human settlements
Ronald Lamola, justice and correctional services
Bheki Cele, police
Jackson Mthembu, presidency
Maite Nkoana-Mashabane, presidency for women, youth, and people with disabilities
Senzo Mchunu, public services and administration
Khumbudzo Ntshavheni, small business
Lindiwe Zulu, social development
Nathi Mthethwa, sports, arts and culture
Ayanda Dlodlo, state security
Mmamoloko Kubayi-Ngubane, tourism
Fikile Mbalula, transport 

Ramaphosa said he would sign performance agreements with all ministers and deputy ministers.  

Professor Chris Adendorff from the Nelson Mandela University Business School welcomed the  streamlined  cabinet.  

“This is a g reat move thus far .  Ramafixit   is now  in motion ,” Adendorff told  The BRICS Post.   

Professor Raymond P arson s  from the North West University Business School was equally enthused.  

“ Given the inevitable balance of political forces driving the shape and size of the new   Cabinet, the broad economic message emerging from the reconfigured and leaner Cabinet   is potentially a very positive on e for business and the markets,” Parsons said.  

“ Credible and experienced re-appointments to the core economic portfolios like Finance,   Public Enterprises, Trade and Industry, and Mineral Resources are likely to facilitate meeting   the crucial challenge of boosting investor and business confidence. The restructured   Ministerial economic ‘cluster’ must therefore now give the economy a better sense of   direction and reduce policy uncertainty if economic recovery as well necessary structural  reforms are to be promoted,” he added.  

Economists have said recently  that load shedding in February and March was the main swing factor in terms of economic performance in the first half of 2019 with a quarterly contraction in first quarter GDP followed by a rise in the second quarter.  

The  South African Chamber of Commerce and Industry   welcome d  the appointment of the new cabinet by President Ramaphosa.   

“We  acknowledge the statement made by the President at the event that growing the economy and fixing constraints of the country’s public finances ranked highest and were top of mind in rationalizing and combining the various port folios in the economic cluster,” the industry body said.    

“ At a glance, the selection looks promising in its balance in terms of generational, gender and racial mix. Whilst we hope that the President has made good judgement with his selection, it is delivery that will tell the world that this indeed is the new dawn. The President’s upfront commitment to hold each of the appointed ministers to a performance management system that has mechanisms to detect and report sub/ nonperformance , and to introduce appropriate consequences is most welcome. The commitment provides much needed assurance that the President is asking South Africa and all other stake holders to hold him accountable,” it said.  

  “ Now that the provincial and national executive teams, especially ministers and members of the executive council in the economic clusters have been announced, we are urgently looking forward to their short term and medium term plans and in particular how performa nce management is to be handled,” it concluded.  

By Helmo Preuss for The BRICS Post

[Category: BRICS News, South Africa]

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[l] at 5/13/19 1:13pm

But down on 2014 national elections

A record 26.8 million South Africans were registered to vote in this election, but there were a further 7 million who were eligible to vote, but did not register [PREUSS]

The ruling African National Congress (ANC), which was formed in 1912 to combat the 1913 Land Act, and banned from 1960 to 1990, retained its majority in the 2019 elections with a 57.5 per cent share of the vote.

This was better than the 53.9 per cent share of the vote in the 2016 local government elections, but down on the 62.2 per cent share it had in the 2014 national elections and its recent peak of 69.7 per cent in 2004, when the economy was booming under former President Thabo Mbeki.

A record 26.8 million South Africans were registered to vote in this election, but there were a further 7 million who were eligible to vote, but did not register.

Each voter has two ballots, one for the national legislature and one for the provincial legislature, so a voter can choose to vote for two different parties. South Africa uses a proportional representation voting system, so each vote has equal weight.

Voters choose a party, not a person, and the party selects who will go to the legislatures to represent it. The executive president is chosen by Parliament, which means that effectively it is the leader of the majority party.

The Western Cape is the only province governed by the official opposition party, the Democratic Alliance (DA), while the other eight provinces are governed by the ANC.

The national assembly now has 14 political parties represented, with the ANC and the DA losing 19 and 5 seats each respectively, and the Economic Freedom Fighters (EFF), Freedom Front Plus (FF+) and Inkatha Freedom Party (IFP) gaining 15, 6 and 4 seats each, respectively.

Economists are now waiting to see by how much President Cyril Ramaphosa will shrink his cabinet and who he will appoint to re-invigorate economic growth. Another contraction in the economy is expected in the first quarter 2019 after contractions in the first and second quarters of 2018.

“Jobs will be created by the private sector only within a favourable investment environment and not with policy uncertainty, corruption, doublespeak and Expropriation Without Compensation hanging over our collective heads. No-one will invest if they believe their money or investment isn’t safe. The ruling party needs to send clear messages after this election regarding its policies and we need a renewed collaboration between government, business and labour in order to place the country on a renewed growth path – away from conflict to joint goals around growth that will, in turn, create jobs and a thriving economy,” Peter Armitage, the CEO of Anchor Capital, said.

Professor Raymond Parsons from the North West University Business School was confident that the non-violent passage of the election would reduce political uncertainty and boost business and consumer confidence.

The overall outcome so far of the 2019 elections has the potential, if present trends continue and policy promises are kept, to significantly lift business and investor confidence from their present low levels.

A strong economic message coming from the election is the overwhelming need, apart from issues of good governance, to now focus on turning the economy around and putting it on a much higher growth path. The hope is that the 2019 elections will give President Cyril Ramaphosa room to make headway with structural reforms that will boost investment and growth,” he said.

Helmo Preuss in Pretoria, South Africa for The BRICS Post

[Category: BRICS News, South Africa]

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[l] at 5/6/19 4:05am

Indaba was shifted one week earlier due to May 8 election

“This industry must be positioned as a key empowering sector of the economy whose
power we should unleash and use to change the lives of people in our urban and rural
areas,” Ramaphosa noted [PREUSS]

Many delegates said that although this year’s Indaba was quieter than previous years due to the date shift from the traditional second week of May, they also said that they had a better Indaba as they could engage for longer with their partners.

“Let’s work together to replace the sometimes negative narrative of Africa with the real story of so many nations on the move, of people innovating and moving confidently into the future.

Let’s ensure that tourism makes a positive and meaningful contribution to the lives of all the people of Africa,” South African Minister of Tourism Derek Hanekom said in his opening speech.

He noted that 2018 had been a good growth year for African tourism and he urged the delegates to build on that growth.

In 2018 Africa attracted 67 million international tourist arrivals, a growth of 7 per cent on 2017, comfortably ahead of the world average growth of 6 per cent, but South Africa lagged this growth with only a 1.8 per cent rise.

Although the number of exhibitors eased to 1,023 in 2019 from 1,093 in 2018, the number of exhibitors from 19 other African countries rose to 257 from 229. There was also a large increase in the number of approved buyers to 1,828 from 1,417 as buyers aimed at giving their customers a wider choice of tourist offerings.

Hanekom highlighted that the United Nations World Tourism Organisation predicted that 1.8 billion people will be travelling globally by 2030, and that Africa will increase its share from to 7 per cent from 5 per cent of all global arrivals.

“This would be 126 million arrivals; almost double the number we have now,” Hanekom said.

South Africa has a target of doubling its tourist arrivals to 21 million within five years.

To meet this target, South African President Cyril Ramaphosa in his address to the Indaba said the tourism industry needed to address ten challenges.

The first was easier visa access and in that respect the government is piloting an evisa system in New Zealand.

“As South Africa, we are committed to working towards the African Union’s goal of visa free travel and a single African air transport market. We are in the process of radically overhauling our visa dispensation for the rest of the world and introducing a world class e-visa system,” he noted.

The second challenge was the perception of crime, which was especially prevalent amongst Chinese tourists and this factor had been highlighted in interactions between South Africa and its BRICS partner governments.

“Initiatives like the Kenya Tourism Federation Safety and Communication Centre, the Tourism Police in Uganda and our own tourism safety monitors in South Africa are examples of measures that can be undertaken,” Ramaphosa said.

The third challenge was to get governments to promote domestic tourism.
The fourth challenge was to forge stronger public-private partnerships in the tourism industry.

The fifth challenge was to coordinate government agencies to work with each other so that there was a concerted national effort to promote tourism.
The sixth challenge was to make sure that the physical infrastructure was in place to deliver a world class experience whether that was roads, access to the Internet and hospitals.

The seventh challenge was to empower women and youth in the tourism industry.

“This industry must be positioned as a key empowering sector of the economy whose power we should unleash and use to change the lives of people in our urban and rural areas,” Ramaphosa noted.

The eighth challenge was to brand Africa as a continent of success.

The ninth challenge was to embrace technology.

“Artificial intelligence, blockchain and the internet of things requires that our tourism offerings must be well aligned with enveloping technologies. Let’s get ready for the brave new world that is coming,” he added.

The tenth challenge was to benchmark the tourism industry to international standards to enhance the competitiveness and the quality of our domestic tourism industry.

“This Indaba, with all that it offers, is a testimony to the fact that Africa is a continent of innovation with a strong focus on the future. We are a continent that is open and welcoming. When it comes to tourism and many other areas of human endeavour we are a continent on the move,” he concluded.

Helmo Preuss in Durban, South Africa for The BRICS Post

[Category: BRICS Business, BRICS News, South Africa]

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[l] at 4/30/19 12:16pm

The 30-member body will guide government policy

Ramaphosa wants the commission members to be from different sectors of society and reflect a balance in gender, youth, labour and business [PPIO]

The euphoria that accompanied the election of Cyril Ramaphosa as leader of the African National Congress (ANC) in December 2017 has morphed into a dystopia, as business executives wonder whether the ANC is capable of leaving its ideological baggage of Marxism /Leninism behind and instead embrace the Fourth Industrial Revolution (4IR).

It is to address this scepticism that Ramaphosa in April 2019 announced the establishment of a 30-member commission to guide government policy with regards to 4IR.

One of the commission members, Professor Chris Adendorff from the Nelson Mandela University in Port Elizabeth, told The BRICS Post that he was honoured to be selected for the commission and looked forward to working with his fellow commissioners to make a meaningful change to policy.

“Although there is a lot of hype around the Fourth Industrial Revolution, especially as this is a focus of the World Economic Forum, the sad reality is that South Africa is one of only 20 countries that have actually appointed a commission on the 4IR to guide policy,” he said.

In his 2015 book “An umbrella for a rainbow nation”, Adendorff pointed out that we needed to make fundamental changes in the way we approach and plan for the future of South Africa towards 2055.

“The traditional ‘predict and provide’ model for a National Development Plan (NDP) needs to give way to a fresh, future-oriented approach, which can best be described as ‘explore, envision and plan’.

Life on earth today is a continual series of disruptive and disorienting changes with many of them happening at the same time.

It is becoming increasingly difficult to anticipate future conditions with any degree of confidence. This is because existing theories and practices often become obsolete under hyper-turbulent circumstances,” he wrote.

It is this “hyper-turbulence” that distinguishes 4IR from the Third Industrial Revolution.

According to the World Economic Forum, the First Industrial Revolution used water and steam power to mechanize production. The Second used electric power to create mass production.

The Third used electronics and information technology to automate production.

In their view, the 4IR is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.

“There are three reasons why today’s transformations represent not merely a prolongation of the Third Industrial Revolution, but rather the arrival of a Fourth and distinct one: velocity, scope, and systems impact. The speed of current breakthroughs has no historical precedent. When compared with previous industrial revolutions, the Fourth is evolving at an exponential rather than a linear pace.”

Moreover, it is disrupting almost every industry in every country. And the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance,” the forum said on its website.

The Presidency said the commission members are from different sectors of society and reflect a balance in gender, youth, labour and business, including digital start-ups as well as digital entrepreneurships.

The Presidency reiterated that the commission’s mandate is to “assist government in taking advantage of the opportunities presented by the digital industrial revolution”.

Ramaphosa will chair the commission, and operational support will be provided by a secretariat of officials of various national departments, led by the Department of Communications.

Helmo Preuss in Makhanda for The BRICS Post

[Category: BRICS News, South Africa]

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[l] at 4/24/19 6:40pm

If China builds it, will they still come?

If China builds it, they will likely come, but with conditions … it, being the Silk Road economic initiative, and they, being countries of the European heartland.

Russia sees the Belt and Road Initiative as a necessary economic counterbalance to EU and US sanctions [PPIO]

The Second Belt and Road Forum for International Cooperation opens in Beijing April 25 with China already having scored a number of victories in 2019.

Putting aside that the Forum will be attended by 40 heads of state including Russia’s Vladimir Putin, Prime Minister Imran Khan of Pakistan, and Egyptian President Abdel Fatah El-Sisi – and thousands of delegates representing another 100 countries, China’s mega-economic initiative to create a modern-day Silk Road is winning over pundits in Europe … where it probably counts the most.

Prime Minister Giuseppe Conte of Italy will also be participating in the two-day Forum but he may as well be taking a victory lap around Beijing because his country was the first among G7 nations to sign on to the One Belt One Road initiative, despite US protests, during Chinese President Xi Jinping’s visit to Rome on March 23.

Some European allies at first criticized Italy’s move, with Italian officials firing back that many leading European economies were secretly looking to do the same with China, and would likely do so.

It appears Europe, led by German Chancellor Angela Merkel, now appears to be coming round.

The Europeans had initially criticized Italy for not allowing a united European Union approach to the Silk Road, but given the debacle over Brexit, they may be singing a new tune.

Not ones to waste … time … the Swiss announced on April 17 that they would join the Belt and Road Initiative when President Ueli Maurer arrives with a large trade delegation on an eight-day visit to China, including his participation in the Forum.

The French and Germans will likely want to be involved in the Initiative but pressure Xi to meet them half way with assurances and increased transparency about Chinese investments in Europe.

Whereas heads of state from Hungary, Austria, Greece, and Croatia will attend the Forum on April 25, France and Germany are just sending high-level delegations.

The ancient Silk Road connected China and Europe from around 100 B.C. The 6,000-km road linked ancient Chinese, Indian, Babylonian, Arabic, Greek and Roman civilizations.

Trade conducted along the Silk Road reached much of Arabia and the eastern Africa and allowed for a proliferation of not just tradeable commodities like spices and textiles, but science and technology.

The Initiative is core to Xi’s vision to expand China’s economic prowess westward; it has become all the more crucial in light of Chinese admission that GDP growth has slowed significantly over the past ten years, from double digits to just six per cent projected for 2020.

Xi wants to revive the splendor of the ancient Silk Road to create an Economic Belt – a 21st Century Maritime Silk Road to facilitate lucrative trade deals with the West and thereby entrench Chinese influence over an area of several thousand kilometers spanning dozens of countries.

So far, it is estimated that China will over the next few years invest or lend $3 trillion to its Belt and Road partners, which number more than 100 countries. The number of partners as well as projects has increased since the last Forum in Beijing in 2017.

There has been criticism that the lucrative deals China is making with these countries who have signed onto the initiative could increase their national debt.

Just last month Malaysia put the brakes on a railway deal known as the East Coast Rail Link with China as part of the initiative because it said the project was spiralling out of fiscal control.

The project was saved when the Chinese and the Malaysians renegotiated and agreed to reduce the miles of rail thereby decreasing the cost by more than $2 billion.

European nations who have signed deals worth billions of dollars with China but have not yet fully committed to the Belt and Road initiative cite fears of runaway debt and lack of transparency as reasons behind there hesitation.

Spanish Foreign Minister Josep Borell Fontelles, who will be attending the forum, admits that China is a major economic player in Europe but like his French and German allies believes that China should apply equal and fair policies when dealing with its counterparts.

One of these concerns is that China pressures debt-ridden countries to waive competitive bidding and award deals to Chinese companies.

Some countries are either scaling back their joint projects with China or asking for fiscal reassessment.

According to reports from China, Beijing has acknowledged these issues and is promising to exert more auditing and anti-corruption efforts, including environmentally responsible policies, to allay the fears of its Belt and Road partners.

Chinese President Xi Jinping is likely to roll out a version 2.0 of the Belt and Road Initiative, taking into account concerns voiced by both France and Germany during his meetings with their leaders late March.

He wants to convince critics and those in Europe who remain suspicious of Chinese motives that the initiative is designed to be more inclusive and produce win-win scenarios for his country’s partners.

To do that, the Forum will need to agree on transparent means of financing for the multi-billion dollar projects.

Xi will also need to focus on what the Belt and Road Initiative represents. In its early days in 2013, the Initiative focused on infrastructure projects but since then it has been expanded to include foreign assistance and aid to many of the partner countries.

In China, a number of investment and property developers have also latched on to the Initiative creating further lack of clarity on what the initiative actually stands for.

To that end, the Chinese president will have to specifically highlight which projects will be the vanguard of this Initiative.

He will also have to show that while this Initiative was born in Beijing, it’s success lies in the fact  that it has become one of multilateral global economic cooperation.

The BRICS Post with inputs from Agencies

[Category: BRICS News, China, World News, ancient, Belt and Road Initiative, BRI, BRICS, France, Germany, infrastructure, Italy, One Belt One Road, Silk Road, Xi Jinping]

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[l] at 4/11/19 1:47pm

Michel Temer entered the presidency vowing to slash spending but he ended his presidency having failed to push pension reforms through Brazil’s Congress [PPIO]

Despite severe criticism in Brazil against the controversial pension reform plan, the government says it is confident the measure will pass in Congress and save the country one trillion reais, or $262 billion dollars over the next 10 years.

The government says that the reform plan, which was a core policy of the former cabinet led by Michel Temer, is necessary to boost growth.

On Thursday, speaker of the lower house of the National Congress Rodrigo Maia says he expects the reforms will pass by the end of June. The lower house is also known as the Chamber of Deputies and it is where Temer faced defeat, and the new government is hoping for a reversal of fortune.

The Brazilian economy has been in a quicksand of sorts for five years, sinking into recession and then struggling to reach one per cent GDP growth in 2017. The forecasts are repeatedly slashed; for 2019 an initial GDP growth of 2.2 per cent has been revised down to 1.8 per cent because the already slow recovery is itself slowing down.

Economists are pointing to the fourth quarter of 2018 as a worrying sign that Brazil hasn’t entirel shed its ability to fall back into recession. In the fourth quarter, GDP growth was just 0.1 per cent.

That helps to explain why the government is hoping that the pension reforms will give the economy a boost. It says that overhauling the pension system is necessary to cap government spending, which some economists say was overblown and a factor in the recession since 2014.

The reforms call for the government to lift the retirement age, for example, well into the 60s, easing the burden on the national coffers. Temer’s proposal would have men retiring at 65 and women at 62, but under the Bolsonaro government, the retirment age is now 65 for all – men and women.

Most Brazilians in the public sector retire in their mid to late 50s.

In the rural industries, women will retire at 55 and men at 60, according to the initial proposal. But this, too, has been revised to 65 nationwide. Furthermore, in order to qualify for pension, those in the public and private sector should have served for at least 40 years.

According to the constitution, the proposal requires 308 of 513 votes in congress to pass. It was shot down during Temer’s tenure and it looks increasingly an uphill battle for Bolsonaro’s government to pass it this year.

The government says the reforms will help fill a funding gap and cut the national deficit.

The BRICS Post with inputs from Agencies

[Category: Brazil, BRICS News]

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[l] at 4/2/19 3:24am

Indian Prime Minister Narendra Modi with Russian President Vladimir Putin at a bilateral summit in Goa, India on 15 October 2016 [PPIO]

Russian Deputy Foreign Minister Sergei Ryabkov received Foreign Secretary of India Vijay Gokhale in Moscow on Monday to discuss the work of both countries in BRICS as well as other issues to do with their strong strategic ties.

“[The sides] discussed cooperation in the BRICS, problems of the leading multilateral export-control regimes, including New Delhi’s application for membership in the Nuclear Suppliers Group (NSG), other issues of arms non-proliferation and control, as well as current issues on the international agenda of mutual interest,” the foreign ministry said in a statement carried by the Russian News Agency TASS.

India and Russia have long-standing and historic ties, with Moscow seeing itself as an ally to New Delhi.

The two countries also maintain strong military ties.

In early March, India signed a $3 billion deal with Russia to lease a third nuclear-powered submarinem, which would be delivered to the Indian Navy by 2025.

Despite US objections and the threat of sanctions, India says it will go ahead and purchase advanced Russian defense systems.

The US has sought to sway India to purchase alternatives to advanced Russian weaponry.

India and Russia signed a multi-billion dollar defense deal revolving around the sale of five advanced S-400 Triumf surface to air missile systems, during Russian President Vladimir Putin’s visit to New Delhi in October.

he S-400 is believed to be able to engage all types of aerial targets including aircraft and VLO (Very Low Observable) craft.

With a range of 400 kilometers and an altitude of close to 32 kms, S-400 Triumf is designed to shield from air strikes, strategic, cruise, tactical and operating tactical ballistic missiles and medium-range ballistic missiles, as well as neutralize drones.

The S-400 ‘Triumf’ air defence missile systems is equipped with three different types of missiles and an acquisition radar capable of tracking up to 300 targets within the range of nearly 600 kms.

Triumf is a system made of eight launchers and a control station.

India says the purchase, to be delivered within the next three years, will significantly boost its defensive capabilities.

The BRICS Post with inputs from Agencies

[Category: BRICS News, India, Russia, World News, Delhi, Moscow, Narendra Modi, New Delhi, S-400, Triumf, Trump, US sanctions, Vladimir Putin]

As of 10/16/19 1:18pm. Last new 9/26/19 1:30pm.

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