DOI: 10.3897/brics-econ.5.e133581

Authors: Nikolay Nenovsky, Gildas Bondi

Abstract: On 6 July 2024 in Niamey, the leaders of Mali, Burkina Faso and Niger signed the constitutive act of the Confederation of Sahel States, at the same time confirming the departure of these three countries from the Economic Community of West African States (ECOWAS). The new Confederation of the Sahel States has decided, among other things, to set up an investment bank and a stabilisation fund. It is therefore plausible that the confederation will soon adopt a common currency. This issue is of utmost importance for many countries so it is worthwhile to see how the proposed new currency will be guaranteed by the natural resources of the Alliance of Sahel States (AES). The aim of this article is to examine the theoretical foundations and practical aspects underlying the creation of a common currency based on natural resources within the AES.

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DOI: 10.3897/brics-econ.4.e112531

Authors: Anton Pyzhev

Abstract: The changing global geopolitical and economic landscape generates growing interest in new strategic alliances among the world’s fastest growing economies. This is certainly true for the BRICS countries, whose importance for the contemporary world cannot be overestimated. As soon as the group begins to turn into a more institutionalized organization, the question of establishing closer and more numerous economic and social ties will arise. The paper analyzes the trends in the development of the forest economy in Brazil, Russia, India, China and South Africa over the past two decades. It assesses each country’s share in the global timber harvesting and its position on the international market for forest products. Accounting for slightly less than 1/3 of the global annual harvest, the BRICS countries have boosted production and export of their forest products in the XXI century. According to our calculations, only India and China’s production and export of sawn timber and wood panels increased tenfold. The paper examines conditions for turning the forest economy into one of the drivers of cooperation between the BRICS countries and the existing financial, political and environmental constraints. Such cooperation will be possible if there is sufficient demand for forestry products in BRICS; it will require measures to radically improve the logistics of trade between the countries, given their great mutual remoteness. The important role of the BRICS countries in the global forest economy can become an important factor in the further development of cooperation within the group, especially after the expansion expected in 2024.

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DOI: 10.3897/brics-econ.4.e102638

Authors: Andrey Gnidchenko

Abstract: The paper aims to model the currency structure of intra-BRICS trade using readily available data at the product-country level. The research is motivated by the existence of data availability problem that has arisen because the Bank of Russia does not publish data on invoicing currencies in a detailed breakdown by currency and partner. It involves the two factors that require only trade data: the index of trading partners’ bargaining power and the degree of product quality differentiation. First, I link the hypothetical model share of trade invoiced in the producer currency to the ratio of the bargaining powers of exporter and importer countries by logistic curves with different parameters; assuming that trade in homogeneous products with low quality differentiation is invoiced in vehicle currencies, I then compare the model structure of Russia’s intra-BRICS trade with the aggregated data, and choose the parameters of the logistic curve that provide the best fit. I use CEPII BACI database for 2019. The results show that the actual and the model invoicing currency structures for Russia’s intra-BRICS trade are very close for exports but differ for imports, which highlights the role of the importer’s foreign exchange reserves currency structure. The model share of Chinese renminbi in total intra-BRICS trade is about 47% and the model share of vehicle currencies is estimated at 38%. The long-term potential share of Chinese renminbi in total intra-BRICS trade may exceed 80% that makes it the strongest candidate for substituting vehicle currencies in intra-BRICS trade.

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