Russia to Accelerate Economic Integration with Asia-Pacific Region
Apr. 14 – Today President Dmitry Medvedev will attend Asia’s annual Boao Forum (BFA) Annual Conference in China’s Hainan Island and visit Hong Kong, according to the Kremlin.
Ahead of Wednesday’s BRICS summit, Medvedev met separately with the leaders of the other member nations – China, Brazil, India and South Africa, which recently joined the organization.
South Africa was invited in December to join the group originally known as the BRIC countries, which held its first summit in 2009 in Russia, followed a year later by a meeting in Brazil. The leaders of the five economies have called for a bigger voice in international financial institutions and a more diversified global monetary system.
When South Africa is included into the mix, the BRICS make up 40 percent of the world’s population.
Medvedev’s participation “will expedite Russia’s economic integration into the integration processes unfolding in the Asia Pacific region,” presidential foreign policy aide Sergei Prikhodko said.
Among other BRICS member nations, China already became Russia’s largest trading partner last year, with trade jumping 50 percent to US$59 billion, Russian Economic Development Ministry data says.
Chinese investment in Russia, including the loans to oil companies, reached almost US$28 billion last year, while Russia invested US$150 million in China. Equipment and machinery accounted for 8 percent of Russian exports to China and 50 percent of China’s shipments to Russia, according to the Economic Development Ministry.
When Russian arms exports to China dried up in 2005, India became the biggest purchaser of Russian weapons since 2007, said Konstantin Makiyenko, deputy head of the Center for the Analysis of Strategies and Technologies.
During Medvedev’s last visit to Beijing in September 2010, he promised to supply China with all the natural gas it needs for economic development. Deliveries may start in 2015, but Russia is still sparring with Beijing over the price of oil it sells to the PRC.
Russia agreed in 2009 to supply China with oil for 20 years in return for US$25 billion of loans to state oil company Rosneft and oil pipeline monopoly Transneft. Commercial deliveries began in January 2011, and China is seeking to increase shipments to 30 million tons a year from the agreed 15 million tons.
China has also asked Russia to build two more 1,000-megawatt nuclear reactors at the Tianwan complex near Shanghai. Atomstoiexport completed construction of two units at the site in 2007.
To its detractors, BRICS is an artificial construct – an example of life imitating not art, but Goldman Sachs, which coined the acronym BRIC in 2001 for four fast-growing, politically diverse countries that it reckoned were reshaping the global economy.
Yet a more optimistic view holds that the explosion in South-South trade, which leapt to 17 percent of the global total in 2009 from 7 percent in 1990, has a long way to run.
The BRIC countries, excluding South Africa, are expected to account for 21.6 percent of world GDP by 2015, according to the International Monetary Fund. It is around 14 percent currently.
In terms of global trade, the BRIC countries currently account for around 12.4 percent of global exports, rising to 20.1 percent in 2015. For imports, the BRIC countries will likely account for 18 percent of that market, up from around 11 percent today.
“BRICS is not anti-Western project anymore, it’s just another platform for cooperation,” a source from Russian Ministry of Foreign Affairs explained to the Russian daily Kommersant. “We are about to find out a uniting subjects and defend BRICS’s viewpoint in the UN and G20.”
Signing an agreement to facilitate trade among member states in local currency for access to local markets, appointed for today, has been already named as the main result of the BRICS summit. According to it, countries would issue credit to one another in their own currency.