From theory to practice

During the RF presidency of BRICS, extensive work has been carried out that will improve transport and logistics interaction of the countries participating in the international association. 

Currently, the BRICS has 9 members: Russia, Brazil, India, China, South Africa (since December 2010), and since 1 January 2024 - Egypt, Ethiopia, Iran and the United Arab Emirates. These countries account for 40% of world oil production and about one third of world merchandise exports. The share of BRICS countries accounts for more than one third of world GDP by purchasing power parity (35%).

The Alliance is currently working on many initiatives for new payment systems, creation of financing instruments for sustainable development projects, global security, insurance and development of international transport corridors, human development and a number of others.

While global trade has grown at an average of 3% per year over the past decade, it has grown at 11% per year among BRICS countries. Given the dynamics of trade between countries of the Group, it is increasingly important to improve their logistical connectivity and develop international transport routes connecting partner states with reliable and efficient infrastructure. 

There has been a significant increase in intra-BRICS investment, along with increased trade between the countries. Much of this funding has been directed to important sectors including infrastructure, energy, technology and manufacturing. 

During the period of Russia’s chairmanship of BRICS, in 2024, the work of the Subgroup on Transport and Logistics was organized in the BRICS Business Council, which has now brought together representatives of more than 100 specialized organizations from the countries of the group. 

 «This year regular dialogue within the BRICS on this subject has been launched, subgroups on transport and logistics have been formed within the Business Council. We discuss such promising projects as the formation of a permanent logistics platform BRICS, the compilation of a survey of transport routes, the opening of an electronic communication platform for transport, the establishment of a reinsurance pool», - Russian President Vladimir Putin said during his speech at the XVI BRICS summit in Kazan this autumn. 

This allowed the partners to align their vision on key trade routes as closely as possible and to identify physical and non-physical barriers that prevent further growth of foreign trade. 

The subgroup has formed a BRICS Survey of Transport Barriers, and has outlined directions for joint work on their elimination through development of all modes of transport - maritime, aviation, road and rail.

The First Deputy Director General of JSC «RZD» Sergei Pavlov reported that the transport companies of BRICS countries have identified 37 projects to increase the logistic connectivity of the countries of the association. «Together we have now started to form a system document (BRICS Review of Transport Barriers. - Ed.), in which we will reflect the directions of common efforts to remove barriers for logistic connectivity and development of transport routes», he said.

In addition, the subgroup has defined priority routes that ensure the logistical connectivity of BRICS countries, including «North-South» and «East-West» corridors, international maritime lines, promising trans-African corridors and others. Active work on identifying bottlenecks» continues, recommendations for their resolution are being developed. We are talking about all modes of transport - rail, sea and air. Also, a list of infrastructure projects is being developed that could contribute to the efficiency of BRICS routes. 

«The potential of cooperation of «RZD» holding with BRICS countries in the field of transport development is huge», - said Sergei Pavlov during the summit in Pendar.  

This opinion is held by k.E.N., Associate Professor of the Financial University under the Government of the RF Elena Ganshin: «Russia has a great potential to participate in the creation and modernization of railway infrastructure both within the country and in BRICS countries, acting as an external contractor. BRICS countries are also interested in projects within the framework of the formation of a unified transport space of the Eurasian Economic Union».

Freight traffic on the network of RZD in communication with BRICS countries (10 including Saudi Arabia) at the end of 11 months 2024 amounted to 273 million. The total volume of freight traffic was 2.5 billion. tons (+6.2% compared to the same period a year earlier). In geographical division - the largest volume transported is in the communication with China (160.2 mln. tons, +8.6). Also marked growth in the traffic of the last 11 months of 2024 is recorded in the communications from UAE (+23% - to 58 million tons), Brazil (+17.3% to 19.2 million tons), Saudi Arabia (+44%, to 3.9 million tons) and Iran (+10.1% to 0.7 million tons).

One of the key decisions of the 2024 meeting of the Subgroup on Transport and Logistics was to support the proposal by the UAE to establish a permanent Global Transport and Logistics Platform. It is planned to be launched in 2025.
 
The platform will be an important focal point for coordination of logistics among BRICS countries, complementing the work of the Business Council with the implementation of recommendations.

The Platform is expected to play a coordinating role, ensuring effective interaction between BRICS countries, international partners, government bodies and business. It will operate on the basis of open and voluntary participation, ensuring the practical implementation of the recommendations of the Business Council for the development of transport and logistics, the introduction of advanced solutions, innovative technologies, environmental standards and policies in the field of transport and infrastructure development. 

This will facilitate the development of the transport and logistics industry in line with the best world practices, while providing flexibility to adapt solutions according to national characteristics and priorities of each participant.

The Platform will be open to participation by other States and international organizations, if they are interested in sustainable and safe transport processes. 

Also for the exchange of best practices and innovations based on the concept developed this year, it is planned to create an electronic communication platform «BRICS Transport», which will help to consider and identify possible ways of improving coordination in the development of joint projects within BRICS.

At the same time, the project «BRICS Transport Academy» is gaining momentum. The project aims to provide mutual contacts in technical visits, internships, training, including youth programs; support educational and awareness-raising activities (online and face-to-face) on transport and logistics. 

Note that within the project for all those who wish to have already held seven webinars (last - December 25, on average they gather 200-300 online participants), as well as an in-person internship of Chinese railway and logistics in Saint Petersburg on the topic of development «East - West». Further development of this project is planned. 

At the same time, in BRICS, Russia initiated the creation of a new investment platform to support national economies and countries of the global South and East. BRICS colleagues are discussing the possibility of creating a banking system that would reduce the costs to member countries and not replace national systems in BRICS. Parties agreed that the use of national currencies in financial transactions between BRICS countries. 

According to Elena Ganshina, ideas of various projects in the BRICS space can arise at different levels: government, regional authorities or JSC «RZD». However, for international projects to move from discussion to implementation, a coordinator is needed who will assess the economic impact for all participants. In the case of BRICS, this role is played by the New Development Bank (NDB), which should conduct a comprehensive feasibility study, develop project documentation and form a consortium of participants.

The key role of which countries have the most influence on decision-making is fundamental to the bank’s policy formation.
 
Recall that the BRICS integration platform was created for a mutually beneficial partnership and now attracts the interests of new participants. Thus, Russia has already received confirmation from a number of countries about their willingness to become BRICS partners, said the Assistant President of the Russian Federation Yuri Ushakov.

One of the important results of the summit was the establishment of the category of BRICS partner countries and the agreement on a list of 13 states. Invitations were sent to those States. Confirmations of readiness to become a state - partner BRICS by today have been received from Belarus, Bolivia, Indonesia, Kazakhstan, Cuba, Malaysia, Thailand, Uganda and Uzbekistan», he explained.

Thus, as of 1 January 2025, the above countries will officially acquire the status of BRICS partner states. «But we expect to receive responses from four other countries that have also been invited,» he added.

Representatives of these countries will be invited to attend separate meetings within the framework of BRICS summits and foreign ministers' meetings. 

In 2025, the seat of BRICS presidency will be taken by Brazil, and it is expected that work priorities and programme will be presented early next year, with the next summit scheduled for July 2025.