Saturday 4 July 2015

Bold Steps Needed at UFA Summit (Pakistan Observer)

Friday, July 03, 2015 - Days from now, both the BRICS nations as well as the Shanghai Cooperation Organisation (SCO) will meet at Ufa, in Russia. Media outlets within the NATO alliance will follow the usual track of calling the conference a “talking shop” (as though talk gets banned in meetings favoured by NATO) and point to the “negligible results” arising out of the discussions. Despite their presumption of democracy, it is extraordinary the way the geopolitical discourse within even the more developed NATO member-states follows a narrow band. This restricted space conforms to the strategic direction and vision favoured by the alliance. 

An example was Libya in 2011,where the “consensus” was that enforcing regime change in Tripoli at the point of a missile would lead to the “liberation” of the people of that country. This columnist warned early enough - indeed, a s soon as the campaign was being planned - that the intervention would lead to the creation of terrorist sanctuaries in Libya, the collapse into anarchy of that country, and Europe getting flooded with refugees, including not a few with extreme tendencies who would attempt to set up sleeper cells on that continent. Regrettably, all this has come true. Libya has become the new Afghanistan, a haven for extremism and a safe zone for terror groups basing themselves on theology.

However, this descent into fission has not occasioned any post-mortem within NATO media, which follows the usual trajectory of placing the blame for unpleasant consequences on local groups rather than on the policies of the alliance which created the conditions for disaster. Neither BRICS not the SCO are popular within NATO, for the reason that the alliance has been excluded from both in a context where it believes in its “right” to intervene across the globe, of course,” to promote human rights”. However, both have emerged as key institutions, which are strengthening themselves rather than disappearing.

The confluence of BRICS and the SCO at Ufa is significant, as it is the first such meeting since a similar summit in 2009,again in Russia. That meeting took place in the shadow of the 2008 financial collapse, caused by the greed of money managers in London, New York, Frankfurt and Zurich, and which wiped out more than $ 4 trillion of financial assets owned by citizens of the GCC, Russia, China and India. It would have been reasonable to assume that the experience of losing huge amounts of capital because of the cupidity of specific joey managers would have inoculated investors in the BRICS-SCO countries from once again trusting their fortunes to the same individuals. However, it would appear that commonsense has yet to dawn, for once again, vast amounts of money is being poured into the very capitals, the very institutions, which were responsible for the 2008 crash. 

This columnist has warned more times than once that the Eurozone is in reality bankrupt, and that only infusions of money from outside Europe are keeping it from an implosion. It is inevitable that Greece leave the Eurozone, and be followed by Spain and later, Italy and perhaps France. The departure of Spain would lead to several banks in Europe becoming bankrupt, while an expansion in the list would spread such a contagion to institutions across the Atlantic. How much longer will profits from Asia and money from Asia get poured into the pit that profligacy in Europe as evolved into? Rather than continue with the present policy of - in effect- trusting the financial health of the SCO-BRICS countries to countries in the NATO bloc, what is needed is to create alternative pathways to investment which would not be vulnerable to the greed of money managers in London, New York, Frankfurt and Zurich. 

The SCO-BRICS meeting should work towards making each others currencies convertible in the expanded group. The basket of internationally traded currencies needs to expand beyond those of the very countries where the 2008 financial crisis was midwifed. First the RMB and later the Rupee needs to mature into internationally traded currencies which would be legal tender across the globe. Oil and other commodities need to get traded in currencies other than the dollar and the euro, and this can be done, should Russia for example agree to sell oil in currencies other than these two. The time for baby steps is over. What is needed is a leap into the future, and the Ufa meeting needs to ensure this. 

For decades, there has been talk of a 21st century architecture of global responsibility. However, thus far action on crafting such a change has been scanty. Hopefully, India and Pakistan will become full members of the SCO at Ufa. They need to be joined by Iran and Indonesia, two very significant global players of the future. Indeed, Indonesia would be a natural fit within BRICS, which can thereby change into BRIICS. The country has a vibrant culture composed of different strands, and has been noted for the moderate chemistry of its society despite the efforts of extremists to radicalise elements of the population.

In order to influence the foreign and domestic policies of Russia, for over a year this country has been subjected to very harsh sanctions by the EU and the US. However, President Vladimir Putin has declined to be intimidated. The refusal of other BRICS countries to join the NATO bloc in imposing sanctions on Moscow has resulted in a severe dilution of the efficacy of such measures, and a rising geopolitical cost to the US as well as the EU. Indeed, to challenge Russia at a time when several economies in Europe are on the edge of frank bankruptcy is folly, but good sense has seldom been an imperative within the EU, which appears to believe that they are functioning a century before, at a time when Europe was at the centre of the globe and indeed its master.

The coming together of the BRICS and SCO countries is a timely measure in a situation where much more coordination is needed between SCO-BRICS powers. What is expected is that the Ufa meeting (besides expanding the SCO to include India and Pakistan, if not Iran) will begin the operationalising of steps to ensure the convertibility of key currencies other than the dollar and the euro in every member state, so that the sale and purchase of items can take place through such currencies rather than the pair of currencies responsible for the melting away of more than $11 trillion of value (including several investors in the SCO-BRICS grouping) in 2008,and which appea headed for another round of crisis between 2017 and 2019. Prime Minister Narendra Modi will attend the Ufa summit, in a recognition of its importance to global geopolitics, and can be expected to present clear and comprehensive suggestions as to how the BRICS-SCO alliance can ensure prosperity and security to each of its members.

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