
Novye Izvestiya
The summits of two organizations – the Shanghai Cooperation Organization (SCO) and the BRICS – held in Ufa several days ago may unquestionably be ranked among the most significant recent international events. Sergei KATYRIN, President of the Trade and Industry Chamber of the Russian Federation, speaks about the impact of the decisions of these meetings on business relations among the member-countries and on the implementation of particular projects.
Mr.Katyrin, how do you assess the results of the BRICS and SCO summits?
I believe them to be epochal events, both from the political and economic point of view. First, the development strategies of both organizations have been formulated: the BRICS through 2020 and the SCO through 2025. Second, the New Development Bank with a $100 billion capital and a currency reserve pool of the same amount have been set up. The configuration of the BRICS will be fundamentally altered, thus turning it into a weighty financial force on the international arena. It is important, that the appearance of the New Development Bank opens up the opportunity to launch large-scale projects. It is also difficult to overestimate the significance of the currency reserve pool, which is a solid shield granting security to the BRICS countries in the case of emergency economic situations. This reminds me of a locomotive engine: during the preceding period, the BRICS was warming up, but now it is moving forward. In a word, the Ufa summits may be defined as breakthrough events.
You said that the New Development Bank would make it possible to develop large-scale projects in the framework of the BRICS. What are these projects?
These are, primarily, infrastructure projects. For example, Brazil is proposing to build a transoceanic railroad corridor connecting its port Paranaque with the Pacific port of Antofagasta in Chile.
Russia is focusing on the project of a high-speed railroad line Moscow – Kazan – Yekaterinburg.
India is promoting a project of a railroad Mysore – Bangalore – Chennai and a six-lane highway and a bridge in the state of Bihar. China is considering the project of reviving the Great Silk Way. The Republic of South Africa intends to build a high-speed railroad between Durban and Johannesburg. Besides, much interest is being displayed in energy, aviation and machine-building projects.
What other practical questions were discussed?
The Business Council considered all the aspects of the BRICS countries cooperation. The results of these discussions have helped determine the priority areas of our business cooperation. Among them are such as simplifying visa procedures; harmonizing technical standards in the BRICS countries; creating favorable conditions to facilitate ties among countries; expanding transportation communication; and developing the public private partnership institute.
Is there any progress in these areas?
Yes, there is progress. Let us take visas, for example. We always and on all levels have emphasized that the freedom of movement is key to business development. In Ufa, when the leaders of the BRICS member-states met with the Business Council, the President of the Republic of South Africa, Jacob Zuma, announced that his country would issue 10-year visas to entrepreneurs from the BRICS countries. This is a very important step, which I believe will be followed by the other countries.
For the first time the BRICS Business Council included not five, but seven working groups. Why?
Indeed, up to recently we only had five working groups that encompassed the following areas: infrastructure, industry, finances, energy and professional training. In addition to these, the RSF and India suggested founding a working group for agriculture and Russia proposed one intended for removing excessive administrative barriers.
How badly do administrative barriers get in the way of business cooperation?
Everyone has these barriers and they always hinder business activity. For example, in Russia, international entrepreneurs complain about rigid sanitary and veterinary controls. In Brazil, the internal market is practically closed for foreign companies. It is clear that we need decisions simplifying the establishment and development of business relations.
The Business Council adopted a Declaration on Investment Principles. For what was this done?
According to the metaphor used by the Chair of the Brazilian part of the BRICS Business Council and Marcopolo CEO, José Rubens de la Rosa, the Declaration on Investment Principles is a kind of an “umbrella” under which the New Development Bank and businesses of the BRICS countries will begin to work. Basically, this is our appeal to the heads of the BRICS countries to provide equal investment terms. Today these terms are different, which is quite understandable. This concerns practically everything: the issue of permits, connecting to supply networks, securing land rights, etc. This also concerns the rules of e-auctions, which are, incidentally, among the world’s best-organized procedures. Obviously, all the BRICS countries should ensure more or less equal conditions for conducting business. Overall, I believe that a harmonization of laws and rules is a priority objective for the BRICS countries. On how well it is achieved will depend the dynamics of specific projects and the development of overall business relations.
Small and middle-sized businesses are practically not represented in the Business Council, though their share in the economies of the BRICS countries is quite large. Why?
The most probable reason for this is history. In the beginning, the BRICS countries delegated their most prominent entrepreneurs to the Business Council. And this, of course, may be explained – there is a special attitude toward well-recognized brand names. However, it has become quite clear, that we cannot do without small and middle-sized businesses. If for no other reason than because large companies are able to resolve their problems directly through the government, while small enterprises are often left alone with their problems. The more so since interregional cooperation, which is the format of developing business relations among the BRICS countries, is always based on small and middle-sized businesses. Therefore, we are propounding the formation of a special platform for these businesses. It must be said that in this direction there is a process already under way. In June of this year, the BRICS Business Forum, which took place under the St.Petersburg International Economic Forum, adopted the initiative of the head of Bashkortostan, Rustem Khamitov, to organize in Ufa a forum of small and middle-sized businesses of the BRICS and SCO countries. It is quite likely that it may become a regular event.
However, it is also important to have a permanent representation of small and middle-sized businesses in the Business Council.
Certainly. That is why to meet the interests of small and middle-sized businesses, a separate working group or even a body with a higher status, say, a coordination council at the Business Council, may be created. Although, there is one constraint here – the principle of representation. We know that in Russia and in the other BRICS countries thousands of small business are operating and it is practically unrealistic to decide which of these should represent the common interests in the Business Council. It would probably be more logical if these were representatives of unions or associations of small and middle-sized businesses.