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BRICS leaders discuss global economic setbacks

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BRICS leaders discussed current global economic challenges on Wednesday with a commitment to overcome them. At an event for business executives in the Brazilian capital, Brasilia, Russian president Vladimir Putin expressed optimism.

“Due to the double recession we faced, we have seen an increase in protectionist attitudes with problems in customs, but the countries of BRICS have to make an effort for not being dejected by those kind of things. We have to keep the livelihood of our people and improve it”, Putin said.

Five of the largest  emerging economies railed against protectionism on Thursday as they vowed to overcome “significant challenges” facing multilateralism, in a swipe at US tariffs and unilateral action.

The joint declaration by Brics countries — Brazil, Russia, India, China and SA  — came on the second day of the annual gathering, which Brazilian host President Jair Bolsonaro used to boost ties with Chinese counterpart Xi Jinping. “Trade tensions and policy uncertainty have taken a toll on confidence, trade, investment and growth” in the global economy, said Bolsonaro, as he read out the declaration that also touched on conflicts around the world, including Syria.

Brics states  “reaffirm our commitment to helping overcome the significant challenges currently facing multilateralism”. The US  is locked in a protracted trade war with Brics titan China.

The 20-page statement made no mention of the economic and political crisis raging in Venezuela — an issue that has divided the emerging markets group — or unrest in Hong Kong, which Xi warned on Thursday was threatening the “one country, two systems” principle governing the semi-autonomous city.

Ramaphosa told the summit earlier on Thursday that SA wanted to develop more value-added economic initiatives rather than its historic role as an exporter of commodities, reports said.

“There is tremendous scope to expand the value of trade and investment between Brics countries, and to address the trade imbalance between our economies,” said Ramaphosa.

More than 50 countries, including Brazil, recognised Venezuelan opposition leader Juan Guaido as acting president earlier in 2019 after rejecting Maduro’s re-election as fraudulent.

But the other Brics states back Maduro. Guaido supporters partially occupied the country’s embassy in Brasilia on Wednesday, a few kilometres from the summit venue.

Xi and his Russian counterpart Vladimir Putin have repeatedly slammed protectionism during the Brics  meeting, also attended by Indian Prime Minister Narendra Modi and South African President Cyril Ramaphosa.

“Mounting protectionism and bullyism have eroded international trade and investment and are weighing down the world economy,” Xi told business leaders on Wednesday.

Putin said “protectionism was thriving” amid the use of “unilateral sanctions”.

Bolsonaro said earlier on Thursday he would not get involved in a trade war, in an apparent attempt to distance himself from the two men and avoid upsetting his key ally, US President Donald Trump.

While there have been no major announcements, the Brics summit has given Bolsonaro the chance to deepen ties with Xi — a relationship that only months ago looked to be in jeopardy.

Signalling a pragmatic approach to Brazil’s biggest trade partner, Bolsonaro said on Wednesday that China was becoming “more and more” part of the Latin American country’s future.

Bolsonaro — an ardent admirer of Trump with whom he shares a contempt for multilateralism and left-wing ideology — has been under pressure from Brazil’s powerful beef, farming and mining sectors to stay on good terms with China.

“We are talking to China about the possibility of a free-trade area,” economy minister Paulo Guedes told a forum on the sidelines of the summit, Brazil’s state news agency reported. “Our policy from the beginning was very clear: we are seeking higher grounds of integration.”

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