V. V. KLISHIN

Candidate of Economic Sciences, Russian Standard Bank JSC

V. V. PAVLOV

Doctor of Economics Institute of Africa, Russian Academy of Sciences

Keywords: BRICS, New Bank BRICS Development Bank, BRICS Summit in Ufa, conditional foreign exchange reserve pool

The unification of the Federal Republic of Brazil, the Russian Federation, the Republic of India, the People's Republic of China and the Republic of South Africa within the BRICS framework has become an important trend in the development of the world economy in recent years, reflecting the desire of this group of countries to identify and strengthen their own position in the world economy and the global political environment.

The BRIC organization was founded in June 2006 as part of the St. Petersburg Economic Forum with the participation of the Ministers of Economy of Brazil, Russia, India, and China. The first BRIC summit was held in June 2009 in Yekaterinburg. Since then, meetings have been held annually, alternately in the member countries. When South Africa joined the organization in 2011, it became officially known as BRICS.

From 2010 to 2015, the BRICS collective position on key issues of global politics and economy, as well as on the reform of the international monetary and financial system, gradually began to be defined; the organization has significantly strengthened, it has taken its place in the global energy sector, the global banking structure and in the system of international economic and monetary and financial cooperation. Now BRICS, being an informal association, has become one of such important political associations as the G20 and G7, and has become a very active player in the global geopolitical arena.

The growing role of BRICS in international economic relations is due to the increase in the aggregate economic and political power of its member countries, as well as the common position of the participating countries, which justify the need to reform the current international monetary and financial architecture in the coming years, since it does not take into account the increased economic potential and interests of emerging in the field of international finance.

BRICS has become a geopolitical association that forms the base and structure of a certain informal interstate union of its member countries. The BRICS countries, as you know, represent five different regions of the world, have enormous internal and human resources, proven reserves of strategic mineral raw materials and fossil fuels, arable land, drinking water reserves, forests, and production facilities.

The BRICS member countries are now home to at least 43% of the world's population, and their combined GDP in 2012 was about 27% of the world's GDP by PPP and continues to grow steadily.¹ All this indicates a further increase in the aggregate economic, monetary and financial influence of the BRICS countries in the next 5-10 years. Meanwhile, the prospects for increasing the role and influence of BRICS in the global economy will depend, not least, on the degree of development and dynamics of bilateral foreign economic relations between the members of the association, on the real economic, political and diplomatic content of bilateral and multilateral interaction between them. The BRICS Economic Partnership Strategy until 2020 adopted at the VII BRICS Summit in Ufa, Russia.² Encourages further strengthening of such cooperation among countries, especially in the field of energy, including oil, gas and energy infrastructure development, mining, improving agricultural productivity and sustainability, and expanding and diversifying their participation in global trade within the World Trade Organization (WTO).

In 2013-2014, there was a significant re-evaluation of the BRICS ' perception on a global scale. This association began to be treated not as an ephemeral, transitory, unviable entity, but as a geopolitical reality, an important long-term factor in the formation of the global global economic and political architecture, and, of course, as a new force in international relations, acting as a certain counterweight to the position of the United States and other countries on many problems of world development and transformation of the world economy Of the European Union.

At the same time, we are talking about uniting unequal countries in terms of scale and level of economic development, the structure of the economy and foreign trade, and the level of well-being of citizens within the BRICS. Structure of mutual economic relations

The BRICS countries have already acquired a clearly defined star-shaped appearance. China is at the center of it, and contacts within the BRICS framework are primarily bilateral economic, credit, monetary and financial ties of each of the participating countries with China.³

One of the most important strategic tasks of the Russian Federation within the BRICS framework was to ensure a gradual reform of the international monetary and financial system based on the common approaches of the BRICS member states to this problem, and to give the global monetary and financial system a more equitable, stable and effective potential in the context of reducing the dominant influence of ^the In this regard, first of all, we are talking about progressive reform of the International Monetary Fund (IMF) on the basis of changing the size of quotas of member countries in the Fund in favor of developing countries by reducing the share of developed countries. However, such a significant restructuring of the IMF during 2000-2015 is blocked by the United States.

At the moment, within the framework of the current supranational monetary agreement, namely the Jamaican Monetary System (1976.5), quotas are distributed in such a way that the G7 countries have the opportunity to make, in fact, any decision within the framework of the IMF or block the proposal that for some reason does not suit them.

BRICS AND THE INTERNATIONAL MONETARY AND FINANCIAL SYSTEM

One of the areas of real reform of the current international monetary and financial system, which is being implemented by the BRICS countries, has become a certain strengthening of the role of national currencies of the participating countries in international payment turnover, in particular, their introduction as a certain alternative to the US dollar and euro in mutual trade and investment settlements both within BRICS and between developing countries in general.

While only the first very modest steps have been taken in this direction, there can be no serious alternative to the basic principles of determining the standard of value and universal equivalent established in the Jamaican monetary system. Nevertheless, at the penultimate sixth BRICS Summit in Fortaleza (Brazil) in July 2014, a fundamentally important agreement was reached and entered into force on July 30, 2015 on the formation of its own common collective Pool of conditional foreign exchange reserves of BRICS. Using the Pool's funds will help BRICS countries avoid short-term balance-of-payments problems associated with a lack of their own liquidity. The total volume of the Pool is set at $100 billion, of which China will contribute $41 billion, Brazil, India and Russia - $18 billion each, and South Africa - $ 5 billion. However, even more important is the progress in the positions of the participating countries regarding the creation of a collective development bank.

Thus, the Agreement on the establishment of the New BRICS Development Bank (NDB, New Development Bank) was adopted in its final version and enshrined, respectively, in Articles 11 and 12 of the Fortaleza Declaration at the VI BRICS Summit on July 15, 2014. Following the results of the VII BRICS summit in Ufa, the NDB officially began its work, its leaders were identified: the first president of the bank will be a representative of India, the first chairman of the Board of Directors - a representative of Brazil, the chairman of the Board of Governors will be the Minister of Finance of the Russian Federation Anton Siluanov.

The declared priority goal of the creation of the NDB is to mobilize additional resources for investment financing of infrastructure projects (in the sectors of solid infrastructure, including transport, energy, water resources management, communications, waste management) that ensure more sustainable development of the national economy in the BRICS countries and some other emerging market and developing countries, as well as the development of the national economy in promoting mutual cooperation among BRICS countries in the context of global economic development and achieving dynamic, sustainable and balanced growth of their national economic structures and financial markets ⁶.

The system of international financial organizations includes collective international regional and sub-regional credit and financial institutions (banks, funds, etc.) that differ in their functions and goals of activity. A separate group is formed by international regional development banks - institutions that are usually established by a group of specific countries. They are engaged in investment financing and professional consulting services in the field of national development of the participating countries (shareholders).

This type of institution should undoubtedly include the NDB currently being established. The main goal of such institutions is usually to attract additional investment to finance large capital-intensive projects in individual member countries and cross-border collective investment projects in order to maintain sustainable economic growth in the participating countries, as well as reduce the poverty level of significant segments of the population.

All currently operating international development financial institutions (banks, funds, etc.) can also be divided into four main groups according to the scope and scale of their lending activities: international, interregional, regional and sub-regional. The basic criterion for this classification is the geographical location of the member countries in which these institutions carry out their regular lending activities.

Other UN member states may also be allowed to participate in the NDB's capital, but in any case, the BRICS countries must own a total of at least 55% of the Bank's total voting shares (voting shares).

The NDB headquarters will be located in Shanghai, China, and the first sub-regional office will be located in Johannesburg, South Africa. In accordance with its Charter, the NDB will be able to conduct its transactions not only in the founding or participating countries, but also in any other developing countries. For these reasons, the NBR is not, strictly speaking, a regional bank.-

In particular, given that the BRICS countries represent five different regions of the world on four continents, they are themselves participants (shareholders) and active donors (investors) and borrowers in a number of other regional development banks.

The key difference in the fundamental nature of the NDB from other international institutions of the World Bank Group, which include the International Bank for Reconstruction and Development( IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), and the International Center for Settlement of Investment Disputes (ICSID), and other regional development institutions (including: AfDB, IaDB, AzDB, EBRD - see below) should be the absence of key financial positions and the dominant influence of the United States or the G7 countries in general in making decisions on financing investment projects being implemented.

So, at present, it is obvious that only the African Development Bank (AfDB) among the regional development banks has a certain independence from their political strategy, since the decisive share in the authorized capital of this bank (60%) belongs to African countries. Other regional development institutions cannot be characterized by this kind of investment independence.

For example, the United States is free to block, in fact, any decision of the Inter-American Development Bank (IaDB). The European Bank for Reconstruction and Development (EBRD) is fully controlled by the G7 countries. The Asian Development Bank (ADB) is also significantly influenced by major donor countries, and ADB loans are often granted primarily to the bank's two largest donors, the United States and Japan. However, it should be noted that their influence on the bank's investment decisions is much stronger than their positions in the World Bank. An example of the special role of these countries in the bank was the complete blocking of the application of the Russian Federation to join this largest development bank in the Asia-Pacific region in 2007. The main initiators of such a decision not to allow Russia to join this bank were directly the United States and Japan.

In accordance with the provisions of Articles ^7-9 of the NDB Charter7, the declared regulatory capital of the NDB will be at least $100 billion, while the initial subscription capital of the BR will be $50 billion. and it will be divided between the five founding countries in equal shares, and the paid-up capital will initially amount to $10 billion. Due to the equal distribution of subscription capital shares among the five founding countries of the NDB, at the initial stage each of these countries will have an equal number of votes when making decisions, and all decisions on the bank's current activities, including decisions on financing certain projects, will be made by a simple majority of votes. Only some of the bank's strategic decisions, such as admitting new member countries to the bank, changing the bank's charter, allocating special purpose financial funds, etc., will require the approval of four founding countries and simultaneously two-thirds of all shareholders for ratification.

Payment of their share in the bank's capital by the founding countries will have to be made in 7 consecutive stages within seven years from the date of the actual entry into force of the Agreement on the establishment of the NDB. Based on this condition, it should be assumed that the NBR will be able to start full - fledged regular work no earlier than in 3 - 5 years, obviously in 2017-2020, if not later.

The size of the NDB's capital, especially the part of it that is subject to full payment, generally corresponds to the amount of subscribed share capital of other multilateral regional development banks. Thus, in 2013, the size of the IADB's subscription capital was $128 billion, and its paid-up part was only $5 billion.⁸ In the AfDB, these figures reached $96 billion and $7.25 billion, respectively, in 2013.9 Just for comparison, we note that the size of the IBRD's subscribed share capital in 2014 was $218.7 billion, and its fully paid-up part was estimated at $14 billion.¹⁰

It is obvious that the idea that the NDB is being created, abstractly speaking, as a collective international development institution independent of the G7 countries is not without reason. Taking into account the growing economic potential of the founding countries, the NDB has every chance in the long term to become an international development institution comparable in terms of capital, scale of lending activities and competing with the World Bank Group institutions, especially if the number of member countries (shareholders) and subscription capital of the bank expands.

INVESTMENT STRATEGY OF THE NEW DEVELOPMENT BANK

The real competition between the NDB and IBRD lending activities will be especially strong if the revision of the quota adjustment of the participating countries in the IBRD is delayed for a long time. Nevertheless, there is reason to believe that in the medium term, the NDB will have to concentrate its regular lending activities on solving smaller-scale tasks, among which the priority will be to mobilize additional investment resources for development projects of the founding countries, mainly infrastructure projects. In practice, we are talking about priority financing by the bank (NDB) of investment projects in the participating countries, primarily in the sectors of solid infrastructure in the borrower (debtor) countries.

It should be noted that each of the BRICS countries has established and operates its own national development banks, both highly specialized and multidisciplinary. In Russia - Vnesheconombank( VEB), in Brazil-National Bank for the Economic and Social Development (BNDB), in India-Industrial Development Bank of India (IDBI) and National Bank for Agriculture and Rural Development (NABARD), in China-China Development Bank (CDB), in South Africa - Development Bank of Southern Africa (DBSA).

All these national development banks have approximately similar officially declared tasks of activity, which consist in financing the sustainable development of national infrastructure sectors, basic industries, local industrial production, key sectors of their national economy, etc.

priority national projects. Among the priority areas of activity of these banks, of course, is also the purposeful diversification of the sectoral structure of the national economy of their parent countries.

The experience of leading multilateral regional and sub-regional banks and development institution funds shows that usually regional development banks refrain from financing development investment projects in all cases when such projects can attract the necessary funding from other sources, such as national development banks, private investment capital. This approach is due to the limited own liquid resources of such development institutions, as well as the need to maximize the positive effect of using their loan funds to achieve the development goals of the national economy of the borrowing countries.

For these reasons, it seems that the investment strategy of the NDB will consist in forming its loan portfolio for priority financing of such projects that will not be able to attract sufficient private financing and loans from the national development banks of these countries, or other multilateral development institutions of which these host BRICS countries are permanent members. It is also obvious that these projects should simultaneously contribute to the development of national economies and deepen the integration of two or more BRICS countries.

Due to the significant, if not extreme, geographical distance of the BRICS countries from each other, the search for and correct identification of solid infrastructure projects in practice is quite a complex and ambiguous task. Meanwhile, already at the first stage of the NDB's regular lending activity, one of these investment projects may be the construction of a network of ground-based receiving stations for the GLONASS system. This will make the GLONASS system more reliable in operation and competitive. BRICS has a unique geostationary advantage on a global scale, as its member countries are located on four continents.

It is significant that regular financing of infrastructure projects opens up some additional opportunities for the NDB to develop and strengthen bilateral ties between the Russian Federation and China due to their geographical proximity, the availability of regular railway connections, the construction of cross-border gas pipelines, etc.

The NDB's portfolio investments in the financial sector (exchanges, foreign trade agencies, insurance and reinsurance in the borrowing countries) may be promising areas of activity in the future, which may contribute to the mutual convergence of the national economies of individual BRICS countries, the deepening of foreign trade relations of the participating countries within the BRICS group as a whole, as well as the expansion of investments in their joint collective cross-border projects in high-tech industries (telecommunications, medical engineering, space technologies, etc.).

The NDB, as a collective supranational credit institution, will have its own highest possible credit rating and will be able to freely attract loans from the international private loan capital market at significantly lower credit and interest rates than the national development banks of the participating countries, which have inherent country risks and whose bank credit rating objectively cannot exceed the sovereign rating of the home country. In addition, the participation of the NDB in the financing of investment projects will signal to private investors in general about the effectiveness of the project and reduce the country and political risks of the funded project. This situation is extremely favorable for investors from the Russian Federation, as all the world's leading rating agencies have significantly lowered the credit rating of the Russian Federation as a sovereign borrower since the fall of 2014.

* * *

The new BRICS Development Bank that is being created is likely to occupy a special place in the international monetary and financial system and credit and banking structure. In the future, the real strengthening of the NDB's position in the global financial market will be determined, first of all, by the dynamics of development and deepening of multilateral cooperation between the BRICS member countries and the possible expansion of this group, as well as by the real capacity of the current credit structures of the World Bank Group (first of all, the IBRD, the International Development Association, and the International Finance Corporation etc.) to modernize and really adapt to the current realities of the geopolitical balance of the world economy and take into account the vital interests of developing countries in Asia, Africa and Latin America.

¹ Novoe napravlenie rossiyskoy vneshney i vnesheneekonomicheskoy politiki - vzaimodeystvie s BRIKS. M. Novoe napravlenie rossiyskoy vneshney i vnesheneekonomicheskoy politiki - vzaimodeystvie s BRIKS. M. Novoe napravlenie rossiyskoy vneshney i vnesheneekonomicheskoy politiki-vzaimodeystvie s BRIKS. M. (2014) (in Russian)

² BRICS Economic Partnership Strategy. 09.07.2015 - http://brics2015.ru/load/382484

³ Ibid., p. 33.

⁴ Concept of the Russian Federation's participation in BRICS integration. 9.02.2013 - http://www.kremlin.ru/news/17715

⁵ The Jamaican monetary system is a modern stage in the development of the international monetary system, the principles of which were developed by the members of the IMF and enshrined in the agreement on the reform of the world monetary system, signed in 1976 in Kingston, Jamaica. The main practical significance of the new system was the rejection of fixed exchange rates, which were based on the gold content of currencies, to floating exchange rates. The gold market has gone from being the main money market to a kind of commodity market.

⁶ Ibid.

⁷ Articles of Agreement of the New Development Bank - http://brics6.itamaraty.gov.br/images/pdf/BRICSNDB.doc

⁸ Inter-American Development Bank. 2013 Annual Report - www.iadb.org/ar/2013. C. 2.

⁹ African Development Bank. 2013 Annual Report - http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Annual_Report_2013.p df. From 7.

¹⁰ Information Statement. International Bank for Reconstruction and Development. 2014 - http://treasury.worldbank.org/cmd/pdf/InformationStatement.pdf. С. 3.

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