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a new currency......

The new currency should be able to become an “external money” storage of capital and reserves down the road, not just a settlement unit.

Ah, the joys of the Big Circle Line (BKL, in Cyrillic): circumnavigating the whole of Moscow for 71 km and 31 stations: from Tekstilshchiki – in the old textile quarter – to Sokolniki – a suprematist/constructivist gallery (Malevich lives!); from Rizhskaya – with its gorgeous steel arches – to Maryina Roscha – with its 130 meter-long escalator.

 

BY PEPE ESCOBAR

 

The BKL is like a living, breathin’, runnin’ metaphor of the capital of the multipolar world: a crash course in art, architecture, history, urban design, tech transportation, and of course “people to people’s exchanges”, to quote our Chinese New Silk Road friends.

President Xi Jinping, by the way, will be ridin’ the BKL with President Putin when he comes to Moscow on March 21.

So it’s no wonder that when a savvy investor at the top of global financial markets, with decades of experience, agreed to share some of his key insights on the global financial system, I proposed a ride on the BKL – and he immediately accepted it. Let’s call him Mr. S. Tzu. This is the minimally edited transcript of our moveable conversation.

Thank you for finding the time to meet – in such a gorgeous setting. With the current market volatility, it must be hard for you to step away from the screens.

S. Tzu: Yes, markets are currently very challenging. The last few months remind me of 2007-8, except instead of money-market funds and subprime mortgages, these days it is pipelines and government bond markets that blow up. We live in interesting times.

The reason I reached out to you is to hear your insights on the “Bretton Woods 3” concept introduced by Zoltan Poszar. You’re definitely on top of it.

S. Tzu: Thank you for getting straight to the point. There are very few opportunities to witness the emergence of a new global financial order, and we are living through one of those episodes. Since the 1970s, perhaps only the arrival of bitcoin just over fourteen years ago came close in terms of impact to what we are about to see in the next few years. And just as the timing of bitcoin was not a coincidence, the conditions for the current tectonic shifts in the world financial system have been brewing for decades. Zoltan’s insight that “after this war is over, ‘money’ will never be the same again…” was perfectly timed.

Understanding “external money”

You mentioned bitcoin. What was so revolutionary about it at the time?

S. Tzu: If we leave aside the crypto side of things, the promise and the reason for bitcoin’s initial success was that bitcoin was an attempt to create “external” money (using Mr. Zoltan’s excellent terminology) that was not a liability of a Central Bank. One of the key features of this new unit was the limit of 21 million coins that could be mined, which resonated well with those who could see the problems of the current system. It sounds trivial today, but the idea that a modern monetary unit can exist without backing of any centralized authority, effectively becoming “external” money in digital form, was revolutionary in 2008. Needless to say, Euro government bond crisis, quantitative easing, and the recent global inflationary spiral only amplified the dissonance that many felt for decades. The credibility of the current “internal money” system (again, using Mr. Poszar’s elegant terminology) has been destroyed long before we got to the Central Bank reserve freezes and disruptive economic sanctions that are playing out currently. Unfortunately, there is no better way to destroy credibility of the system based on trust than to freeze and confiscate foreign currency reserves held in Central Bank custody accounts. The cognitive dissonance behind the creation of bitcoin was validated — the “internal money” system was fully weaponized in 2022. The implications are profound.

Now we are getting to the nitty-gritty. As you know, Zoltan argues that a new “Bretton Woods 3” system will emerge at the next stage. What exactly does he mean by that?

S. Tzu: I am also not clear on whether Mr. Poszar refers to the transformation of the current Western “internal money” system into something else, or whether he hints at the emergence of the “Bretton Woods 3” as an alternative, outside of the current financial system. I am convinced that a new iteration of the “external money” is unlikely to be successful in the West at this stage, due to the lack of political will and to the excessive government debt that has been building up for some time and grew exponentially in recent years.

Before the current Western financial order can move to the next evolutionary stage, some of these outstanding liabilities need to be reduced in real terms. If history is any guide, it typically happens via default or inflation, or some combination of the two. What seems highly likely is that the Western governments will rely on financial repression in order to keep the boat afloat and to tackle the debt problem. I expect there will be many initiatives to increase control over the “internal money” system that will likely be increasingly unpopular. Introduction of CDBC’s, for example, could be one such initiative. There is no doubt in my mind that we are in for eventful times ahead in this respect. At the same time, it also seems inevitable at this stage that some sort of an alternative “external money” system will emerge that will compete with the current “internal money” global financial order.

And why is that?

S. Tzu: The global economy can no longer rely on the “internal money” system in its current weaponized state for all its trade, reserve, and investment needs. If sanctions and reserve freezes are the new instruments of regime change, every government out there must be thinking about alternatives to using someone else’s currency for trade and reserves. What is not obvious, however, is what the alternative to the current flawed global financial order should be. History does not have many examples of successful “external money” approaches that could not be reduced to some version of the gold standard. And there are many reasons why gold alone, or a currency fully convertible into gold, is too restrictive as a foundation of a modern monetary system.

At the same time, recent increases in trade in local currencies unfortunately have a limited potential as well, as local currencies are simply a different instance of “internal money.” There are obvious reasons why many countries would not want to accept other’s local currencies (or even their own, for that matter) in exchange for exports. On that I fully agree with Michael Hudson. Since “internal money” is a liability of a country’s Central Bank, the lower the credit standing of the country, the more it needs investable capital, and the less willing other parties become to hold its liabilities. That is one of the reasons why a typical set of “structural reforms” that IMF demands, for example, is aimed at improving credit quality of the borrower government. “External money” is badly needed precisely by the countries and the governments that feel they are hostages to the IMF and to the current “internal money” financial system.

Enter the “newcoin”

A lot of experts seem to be looking into it. Sergey Glazyev, for instance.

S. Tzu: Yes, there were some indications of that in recent publications. While I am not privy to these discussions, I certainly have been thinking how this alternative system could work as well. Mr. Pozsar’s concepts of “internal” and “external” money are a very important part of this discussion. However, the duality of these terms is misleading. Neither option is fully adequate for the problems that the new monetary unit – let’s call it “newcoin” for convenience – needs to solve.

Please allow me to explain. With the weaponization of the current US dollar “internal money” system and a simultaneous escalation of sanctions, the world has effectively split into the “Global South” and the “Global North,” slightly more precise terms than East and West. What is important here, and what Mr. Pozsar immediately noticed, is that the supply chains and commodities are also getting weaponized to some extent. Friend-shoring is here to stay. The implication is that the newcoin’s first priority would be facilitating intra-South trade, without relying on currencies of the Global North.

If this were the only objective, there would have been a choice of relatively simple solutions, ranging from using renminbi/yuan for trade, creating a new shared currency (fashioned after euro, ECU, or even Central African CFA franc), creating a new currency based on the basket of participating local currencies (similar to the SDR of IMF), potentially creating a new gold-pegged currency, or even pegging existing local currencies to gold. Unfortunately, history is full of examples of how each one of these approaches creates their own host of new problems.

Of course, there are other parallel objectives for the new currency unit that neither of these possibilities can fully address. For example, I expect that all participants would hope that the new currency strengthens their sovereignty, not dilutes it. Next, the challenges with the Euro and previously gold standard demonstrated the broader problem with “fixed” exchange rates, especially if the initial “fix” was not optimal for some members of the currency zone. The problems only accumulate over time, until the rate is “re-fixed,” often through a violent devaluation. There needs to remain flexibility in adjusting relative competitiveness inside the Global South over time for participants to remain sovereign in their monetary decisions. Another requirement would be that the new currency needs to be “stable,” if it were to become successful unit of pricing for volatile things like commodities.

Most importantly, the new currency should be able to become an “external money” storage of capital and reserves down the road, not just a settlement unit. In fact, my conviction that the new monetary unit will emerge comes primarily from the current lack of viable alternatives for reserves and investment outside of the compromised “internal money” financial system.

So considering all these problems, what do you propose as a solution?

S.  Tzu: First allow me to state the obvious: the technical solution to this problem is a lot easier to find than to arrive at the political consensus among the countries which might want to join the newcoin zone. However, the current need is so acute, in my opinion, that the required political compromises will be found in due course.

That said, please allow me to introduce one such technical blueprint for the newcoin. Let me start by saying that it should be partially (I suggest a share of at least 40% of value) backed by gold, for reasons that will soon become clear. The remaining 60% of the newcoin would be composed of the basket of currencies of the participating countries. Gold would provide the “external money” anchor to the structure and the basket of currencies element would allow the participants to retain their sovereignty and monetary flexibility. There would clearly be a need to create a Central Bank for the newcoin, which would emit new currency. This Central Bank could become a counterparty to cross-swaps, as well as provide clearing functions for the system and enforce the regulations. Any country would be free to join the newcoin on several conditions.

First, the candidate country needs to demonstrate that it has physical unencumbered gold in its domestic storage and pledge a certain amount in exchange for receiving corresponding amount of newcoin (using the 40% ratio mentioned above). Economic equivalent of this initial transaction would be a sale of the gold to the “gold pool” backing the newcoin in exchange for proportional amount of the newcoin backed by the pool. The actual legal form of this transaction is less important, as it is necessary simply to guarantee that the newcoin that is being emitted is always backed by at least 40% in gold. There is no need to even publicly disclose the gold reserves of each country, as long as all participants can be satisfied that sufficient reserves are always present. An annual joint audit and monitoring mechanism may be sufficient.

Second, a candidate country would need to establish a gold price discovery mechanism in its domestic currency. Most likely, one of the participating precious metals exchanges would start physical gold trading in each of the local currencies. This would establish a fair cross-rate for the local currencies using “external money” mechanism to set and adjust them over time. The gold price of the local currencies would drive their value in the basket for the newly-emitted newcoins. Each country would remain sovereign and be free to emit as much of local currency as they choose to, but this would eventually adjust the share of their currency in the newcoin’s value. At the same time, a country would only be able to obtain additional newcoin from the central bank in exchange for a pledge of additional gold. The net result is that the value of each component of newcoin in gold terms would be transparent and fair, which would translate into the transparency of newcoin’s value as well.

Finally, emissions or sales of newcoin by the central bank would be allowed only in exchange for gold for anyone outside the newcoin zone. In other words, the only two ways external parties can obtain large amounts of newcoin is either receiving it in exchange for physical gold or as a payment for goods and services provided. At the same time, the central bank would not be obliged to purchase newcoin in exchange for gold, removing the risk of the “run on the bank.”

Correct me if I’m wrong: this proposal seems to anchor all trade inside the newcoin zone and all external trade to gold. In this case, what about the stability of newcoin? After all, gold has been volatile in the past.

S. Tzu: I think what you are asking is what could be the impact if, for example, the dollar price of gold were to decline dramatically. In this case, as there would be no direct cross-rate between newcoin and the dollar, and as the central bank of the Global South would be only buying, not selling gold in exchange for newcoin, you can immediately see that arbitrage would be extremely difficult. As a result, the volatility of the currency basket expressed in newcoin (or gold) would be quite low. And this is exactly the intended positive impact of the “external money” anchoring of this new currency unit on trade and investment. Clearly, some key export commodities would be priced by the Global South in gold and newcoin only, making the “run on the bank” or speculative attacks on newcoin even less likely.

Over time, if gold is undervalued in the Global North, it would gradually, or perhaps rapidly, gravitate to the Global South in exchange for exports or newcoin, which would not be a bad outcome for the “external money” system and accelerate the broad acceptance of newcoin as reserve currency. Importantly, as physical gold reserves are finite outside of the newcoin zone, the imbalances would inevitably correct themselves, as the Global South will remain a net exporter of key commodities.

What you just said is packed with precious info. Perhaps we should revisit the whole thing in the near future and discuss the feedback to your ideas. Now we’ve arrived at Maryina Roscha, it’s time to get off!

S. Tzu: It would be my pleasure to continue our dialogue. Looking forward to another loop!

 

READ MORE:

https://strategic-culture.org/news/2023/03/10/moveable-multipolarity-in-moscow-ridin-the-newcoin-train/

 

 

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of multipolarity....

 

BY PEPE ESCOBAR

 

The headquarters of the Eurasian Economic Commission (EEC) in Moscow, linked to the Eurasia Economic Union (EAEU) is arguably one of the most crucial nodes of the emerging multipolar world.

That’s where I was received by Minister of Integration and Macroeconomics Sergey Glazyev – who was previously interviewed in detail by The Cradle – for an exclusive, expanded discussion on the geoeconomics of multipolarity.

Glazyev was joined by his top economic advisor Dmitry Mityaev, who is also the secretary of the Eurasian Economic Commission’s (EEC) science and technology council. The EAEU and EEC are formed by Russia, Belarus, Kazakhstan, Kyrgyzstan, and Armenia. The group is currently engaged in establishing a series of free trade agreements with nations from West Asia to Southeast Asia.

Our conversation was unscripted, free flowing and straight to the point. I had initially proposed some talking points revolving around discussions between the EAEU and China on designing a new gold/commodities-based currency bypassing the US dollar, and how it would be realistically possible to have the EAEU, the Shanghai Cooperation Organization (SCO), and BRICS+ to adopt the same currency design.

Glazyev and Mityaev were completely frank and also asked questions on the Global South. As much as extremely sensitive political issues should remain off the record, what they said about the road towards multipolarity was quite sobering – in fact realpolitik-based.

Glazyev stressed that the EEC cannot ask for member states to adopt specific economic policies. There are indeed serious proposals on the design of a new currency, but the ultimate decision rests on the leaders of the five permanent members. That implies political will – ultimately to be engineered by Russia, which is responsible for over 80 percent of EAEU trade.

It’s quite possible that a renewed impetus may come after the visit of Chinese President Xi Jinping to Moscow on March 21, where he will hold in-depth strategic talks with Russian President Vladimir Putin.

On the war in Ukraine, Glazyev stressed that as it stands, China is profiting handsomely, as its economy has not been sanctioned – at least not yet – by US/EU and Beijing is buying Russian oil and gas at heavily discounted prices. The funds Russians are losing in terms of selling energy to the EU will have to be compensated by the proposed Power of Siberia II pipeline that will run from Russia to China, via Mongolia – but that will take a few more years.

Glazyev sketched the possibility of a similar debate on a new currency taking place inside the Shanghai Cooperation Organization (SCO) – yet the obstacles could be even stronger. Once again, that will depend on political will, in this case by Russia-China: a joint decision by Xi and Putin, with crucial input by India – and as Iran becomes a full member, also energy-rich Tehran.

What is realistic so far is increasing bilateral trade in their own currencies, as in the Russia-China, Russia-India, Iran-India, Russia-Iran, and China-Iran cases.

Essentially, Glazyev does not see heavily sanctioned Russia taking a leadership role in setting up a new global financial system. That may fall to China’s Global Security Initiative. The division into two blocs seems inevitable: the dollarized zone – with its inbuilt eurozone – in contrast with the Global South majority with a new financial system and new trading currency for international trade. Domestically, individual nations will keep doing business in their own national currencies.

 

The road to ‘de-offshorization’

Glazyev has always been a fierce critic of the Russian Central Bank, and he did voice his misgivings – echoing his book The Last World War. He never ceases to stress that the American rationale is to damage the Russian economy on every front, while the motives of the Russian Central Bank usually raise “serious questions.”

He said that quite a few detailed proposals to reorient the Central Bank have been sent to Putin, but there has been no follow-up. He also evoked the extremely delicate theme of corruption involving key oligarchs who, for inscrutable reasons, have not been sidelined by the Kremlin.

Glazyev had warned for years that it was imperative for Moscow to sell out foreign exchange assets placed in the US, Britain, France, Germany, and others which later ended up unleashing sanctions against Russia.

These assets should have been replaced by investments in gold and other precious metals; stocks of highly liquid commodity values; in securities of the EAEU, SCO, and BRICS member states; and in the capital of international organizations with Russian participation, such as the Eurasian Development Bank, the CIS Interstate Bank, and the BRICS Development Bank.

It seems that the Kremlin at least is now fully aware of the importance of expanding infrastructure for supporting Russian exports. That includes creating international exchange trading marketplaces for trade in Russian primary goods within Russian jurisdiction, and in rubles; and creating international sales and service networks for Russian goods with high added value.

For Russia, says Glazyev, the key challenge ahead in monetary policy is to modernize credit. And to prevent negative impact by foreign financial sources, the key is domestic monetization – “including expansion of long and medium-term refinancing of commercial banks against obligations of manufacturing enterprises and authorized government bodies. It is also advisable to consistently replace foreign borrowings of state- controlled banks and corporations with domestic sources of credit.”

So the imperative way to Russia, now in effect, is “de-offshorization.” Which essentially means getting rid of a “super-critical dependence of its reproduction contours on Anglo-Saxon legal and financial institutions,” something that entails “systematic losses of the Russian financial system merely on the difference in profitability between the borrowed and the placed capital.”

What Glazyev repeatedly emphasized is that as long as there’s no reform of the Russian Central Bank, any serious discussion about a new Global South-adopted currency faces insurmountable odds. The Chinese, heavily interlinked with the global financial system, may start having new ideas now that Xi Jinping, on the record, and unprecedentedly, has defined the US-provoked Hybrid War against China for what it is, and has named names: it’s an American operation.

What seems to be crystal clear is that the path toward a new financial system designed essentially by Russia-China, and adopted by vast swathes of the Global South, will remain long, rocky, and extremely challenging. The discussions inside the EAEU and with the Chinese may extrapolate to the SCO and even towards BRICS+. But all will depend on political will and political capital jointly deployed by the Russia-China strategic partnership.

That’s why Xi’s visit to Moscow next week is so crucial. The leadership of both Moscow and Beijing, in sync, now seems to be fully aware of the two-front Hybrid War deployed by Washington.

This means their peer competitor strategic partnership – the ultimate anathema for the US-led Empire – can only prosper if they jointly deploy a complete set of measures: from instances of soft power to deepening trade and commerce in their own currencies, a basket of currencies, and a new reserve currency that is not hostage to the Bretton Woods system legitimizing western finance capitalism.

(Republished from The Cradle

 

READ MORE:

https://www.unz.com/pescobar/sergey-glazyev-the-road-to-financial-multipolarity-will-be-long-and-rocky/

 

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IN THE TOON AT TOP, GUS LEONISKY PROPOSES A NEW NAME FOR THE NEW CURRENCY: THE MULTI.... (M BARRED)

 

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de-dollarisation......

https://www.youtube.com/watch?v=S6B9G8iQGco

BRICS makes major breakthrough in de-dollarization, with many U.S. allies on board to help.

Global de-dollarization is accelerating, and many countries are developing policies to do so. The U.S. Federal Reserve is trying to harvest global currency spreads by raising interest rates and implementing other measures, but the U.S. continues to monetize its debt. Economist John Carney has issued a dire warning that the dollar is facing an "inevitable and serious threat," which is bad news for the United States.

The acceleration of global de-dollarization is a landmark, but U.S. economic managers do not fully understand it all. U.S. Treasury Secretary Yellen said in late March that China and Russia were developing alternatives to the dollar, but it was very difficult. However, shortly thereafter, Russia publicly stated that the BRICS countries, which account for more than 40% of the world's population and nearly a quarter of global GDP, are working to develop a "new currency" and that "the transition to settlement in national currencies is the first step. The next step is to offer a new currency in circulation in the near future, digital or otherwise. It is expected that this new form of currency will be announced, possibly in August of this year." The new currency is not only tied to the value of gold but may also be tied to "rare earths or other resources."

Local currency settlements between BRICS countries have been making breakthroughs in the past few months. Russia and China have achieved a significant portion of local currency settlement in their trade and commerce, and India and Russia have achieved partial local currency settlement in their trade and commerce. India has officially announced that it is using multiple currencies, including the local rupee and other non-dollar currencies, for global trade as a direct substitute for the U.S. dollar in order to avoid volatility in the Indian currency and markets due to monetary strategies such as interest rate hikes by the Federal Reserve.

 

 

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full text....

At the invitation of President of the People’s Republic of China Xi Jinping, President of the Russian Federation Vladimir V. Putin visited China on 4 February 2022. The Heads of State held talks in Beijing and took part in the opening ceremony of the XXIV Olympic Winter Games.

The Russian Federation and the People's Republic of China, hereinafter referred to as the sides, state as follows.

Today, the world is going through momentous changes, and humanity is entering a new era of rapid development and profound transformation. It sees the development of such processes and phenomena as multipolarity, economic globalization, the advent of information society, cultural diversity, transformation of the global governance architecture and world order; there is increasing interrelation and interdependence between the States; a trend has emerged towards redistribution of power in the world; and the international community is showing a growing demand for the leadership aiming at peaceful and gradual development. At the same time, as the pandemic of the new coronavirus infection continues, the international and regional security situation is complicating and the number of global challenges and threats is growing from day to day. Some actors representing but the minority on the international scale continue to advocate unilateral approaches to addressing international issues and resort to force; they interfere in the internal affairs of other states, infringing their legitimate rights and interests, and incite contradictions, differences and confrontation, thus hampering the development and progress of mankind, against the opposition from the international community.

The sides call on all States to pursue well-being for all and, with these ends, to build dialogue and mutual trust, strengthen mutual understanding, champion such universal human values as peace, development, equality, justice, democracy and freedom, respect the rights of peoples to independently determine the development paths of their countries and the sovereignty and the security and development interests of States, to protect the United Nations-driven international architecture and the international law-based world order, seek genuine multipolarity with the United Nations and its Security Council playing a central and coordinating role, promote more democratic international relations, and ensure peace, stability and sustainable development across the world.

I

The sides share the understanding that democracy is a universal human value, rather than a privilege of a limited number of States, and that its promotion and protection is a common responsibility of the entire world community.

The sides believe that democracy is a means of citizens' participation in the government of their country with the view to improving the well-being of population and implementing the principle of popular government. Democracy is exercised in all spheres of public life as part of a nation-wide process and reflects the interests of all the people, its will, guarantees its rights, meets its needs and protects its interests. There is no one-size-fits-all template to guide countries in establishing democracy. A nation can choose such forms and methods of implementing democracy that would best suit its particular state, based on its social and political system, its historical background, traditions and unique cultural characteristics. It is only up to the people of the country to decide whether their State is a democratic one.

The sides note that Russia and China as world powers with rich cultural and historical heritage have long-standing traditions of democracy, which rely on thousand-years of experience of development, broad popular support and consideration of the needs and interests of citizens. Russia and China guarantee their people the right to take part through various means and in various forms in the administration of the State and public life in accordance with the law. The people of both countries are certain of the way they have chosen and respect the democratic systems and traditions of other States.

The sides note that democratic principles are implemented at the global level, as well as in administration of State. Certain States' attempts to impose their own ”democratic standards“ on other countries, to monopolize the right to assess the level of compliance with democratic criteria, to draw dividing lines based on the grounds of ideology, including by establishing exclusive blocs and alliances of convenience, prove to be nothing but flouting of democracy and go against the spirit and true values of democracy. Such attempts at hegemony pose serious threats to global and regional peace and stability and undermine the stability of the world order.

The sides believe that the advocacy of democracy and human rights must not be used to put pressure on other countries. They oppose the abuse of democratic values and interference in the internal affairs of sovereign states under the pretext of protecting democracy and human rights, and any attempts to incite divisions and confrontation in the world. The sides call on the international community to respect cultural and civilizational diversity and the rights of peoples of different countries to self-determination. They stand ready to work together with all the interested partners to promote genuine democracy.

The sides note that the Charter of the United Nations and the Universal Declaration of Human Rights set noble goals in the area of universal human rights, set forth fundamental principles, which all the States must comply with and observe in deeds. At the same time, as every nation has its own unique national features, history, culture, social system and level of social and economic development, universal nature of human rights should be seen through the prism of the real situation in every particular country, and human rights should be protected in accordance with the specific situation in each country and the needs of its population. Promotion and protection of human rights is a shared responsibility of the international community. The states should equally prioritize all categories of human rights and promote them in a systemic manner. The international human rights cooperation should be carried out as a dialogue between the equals involving all countries. All States must have equal access to the right to development. Interaction and cooperation on human rights matters should be based on the principle of equality of all countries and mutual respect for the sake of strengthening the international human rights architecture.

II

The sides believe that peace, development and cooperation lie at the core of the modern international system. Development is a key driver in ensuring the prosperity of the nations. The ongoing pandemic of the new coronavirus infection poses a serious challenge to the fulfilment of the UN 2030 Agenda for Sustainable Development. It is vital to enhance partnership relations for the sake of global development and make sure that the new stage of global development is defined by balance, harmony and inclusiveness.

The sides are seeking to advance their work to link the development plans for the Eurasian Economic Union and the Belt and Road Initiative with a view to intensifying practical cooperation between the EAEU and China in various areas and promoting greater interconnectedness between the Asia Pacific and Eurasian regions. The sides reaffirm their focus on building the Greater Eurasian Partnership in parallel and in coordination with the Belt and Road construction to foster the development of regional associations as well as bilateral and multilateral integration processes for the benefit of the peoples on the Eurasian continent.

The sides agreed to continue consistently intensifying practical cooperation for the sustainable development of the Arctic.

The sides will strengthen cooperation within multilateral mechanisms, including the United Nations, and encourage the international community to prioritize development issues in the global macro-policy coordination. They call on the developed countries to implement in good faith their formal commitments on development assistance, provide more resources to developing countries, address the uneven development of States, work to offset such imbalances within States, and advance global and international development cooperation. The Russian side confirms its readiness to continue working on the China-proposed Global Development Initiative, including participation in the activities of the Group of Friends of the Global Development Initiative under the UN auspices. In order to accelerate the implementation of the UN 2030 Agenda for Sustainable Development, the sides call on the international community to take practical steps in key areas of cooperation such as poverty reduction, food security, vaccines and epidemics control, financing for development, climate change, sustainable development, including green development, industrialization, digital economy, and infrastructure connectivity.

The sides call on the international community to create open, equal, fair and non-discriminatory conditions for scientific and technological development, to step up practical implementation of scientific and technological advances in order to identify new drivers of economic growth.

The sides call upon all countries to strengthen cooperation in sustainable transport, actively build contacts and share knowledge in the construction of transport facilities, including smart transport and sustainable transport, development and use of Arctic routes, as well as to develop other areas to support global post-epidemic recovery.

The sides are taking serious action and making an important contribution to the fight against climate change. Jointly celebrating the 30th anniversary of the adoption of the UN Framework Convention on Climate Change, they reaffirm their commitment to this Convention as well as to the goals, principles and provisions of the Paris Agreement, including the principle of common but differentiated responsibilities. The sides work together to ensure the full and effective implementation of the Paris Agreement, remain committed to fulfilling the obligations they have undertaken and expect that developed countries will actually ensure the annual provision of $100 billion of climate finance to developing states. The sides oppose setting up new barriers in international trade under the pretext of fighting climate change.

The sides strongly support the development of international cooperation and exchanges in the field of biological diversity, actively participating in the relevant global governance process, and intend to jointly promote the harmonious development of humankind and nature as well as green transformation to ensure sustainable global development.

The Heads of State positively assess the effective interaction between Russia and China in the bilateral and multilateral formats focusing on the fight against the COVID-19 pandemic, protection of life and health of the population of the two countries and the peoples of the world. They will further increase cooperation in the development and manufacture of vaccines against the new coronavirus infection, as well as medical drugs for its treatment, and enhance collaboration in public health and modern medicine. The sides plan to strengthen coordination on epidemiological measures to ensure strong protection of health, safety and order in contacts between citizens of the two countries. The sides have commended the work of the competent authorities and regions of the two countries on implementing quarantine measures in the border areas and ensuring the stable operation of the border crossing points, and intend to consider establishing a joint mechanism for epidemic control and prevention in the border areas to jointly plan anti-epidemic measures to be taken at the border checkpoints, share information, build infrastructure and improve the efficiency of customs clearance of goods.

The sides emphasize that ascertaining the origin of the new coronavirus infection is a matter of science. Research on this topic must be based on global knowledge, and that requires cooperation among scientists from all over the world. The sides oppose politicization of this issue. The Russian side welcomes the work carried out jointly by China and WHO to identify the source of the new coronavirus infection and supports the China – WHO joint report on the matter. The sides call on the global community to jointly promote a serious scientific approach to the study of the coronavirus origin.

The Russian side supports a successful hosting by the Chinese side of the Winter Olympic and Paralympic Games in Beijing in 2022.

The sides highly appreciate the level of bilateral cooperation in sports and the Olympic movement and express their readiness to contribute to its further progressive development.

III

The sides are gravely concerned about serious international security challenges and believe that the fates of all nations are interconnected. No State can or should ensure its own security separately from the security of the rest of the world and at the expense of the security of other States. The international community should actively engage in global governance to ensure universal, comprehensive, indivisible and lasting security.

The sides reaffirm their strong mutual support for the protection of their core interests, state sovereignty and territorial integrity, and oppose interference by external forces in their internal affairs.

The Russian side reaffirms its support for the One-China principle, confirms that Taiwan is an inalienable part of China, and opposes any forms of independence of Taiwan.

Russia and China stand against attempts by external forces to undermine security and stability in their common adjacent regions, intend to counter interference by outside forces in the internal affairs of sovereign countries under any pretext, oppose colour revolutions, and will increase cooperation in the aforementioned areas.

The sides condemn terrorism in all its manifestations, promote the idea of creating a single global anti-terrorism front, with the United Nations playing a central role, advocate stronger political coordination and constructive engagement in multilateral counterterrorism efforts. The sides oppose politicization of the issues of combating terrorism and their use as instruments of policy of double standards, condemn the practice of interference in the internal affairs of other States for geopolitical purposes through the use of terrorist and extremist groups as well as under the guise of combating international terrorism and extremism.

The sides believe that certain States, military and political alliances and coalitions seek to obtain, directly or indirectly, unilateral military advantages to the detriment of the security of others, including by employing unfair competition practices, intensify geopolitical rivalry, fuel antagonism and confrontation, and seriously undermine the international security order and global strategic stability. The sides oppose further enlargement of NATO and call on the North Atlantic Alliance to abandon its ideologized cold war approaches, to respect the sovereignty, security and interests of other countries, the diversity of their civilizational, cultural and historical backgrounds, and to exercise a fair and objective attitude towards the peaceful development of other States. The sides stand against the formation of closed bloc structures and opposing camps in the Asia-Pacific region and remain highly vigilant about the negative impact of the United States' Indo-Pacific strategy on peace and stability in the region. Russia and China have made consistent efforts to build an equitable, open and inclusive security system in the Asia-Pacific Region (APR) that is not directed against third countries and that promotes peace, stability and prosperity.

The sides welcome the Joint Statement of the Leaders of the Five Nuclear-Weapons States on Preventing Nuclear War and Avoiding Arms Races and believe that all nuclear-weapons States should abandon the cold war mentality and zero-sum games, reduce the role of nuclear weapons in their national security policies, withdraw nuclear weapons deployed abroad, eliminate the unrestricted development of global anti-ballistic missile defense (ABM) system, and take effective steps to reduce the risks of nuclear wars and any armed conflicts between countries with military nuclear capabilities.

The sides reaffirm that the Treaty on the Non-Proliferation of Nuclear Weapons is the cornerstone of the international disarmament and nuclear non-proliferation system, an important part of the post-war international security system, and plays an indispensable role in world peace and development. The international community should promote the balanced implementation of the three pillars of the Treaty and work together to protect the credibility, effectiveness and the universal nature of the instrument.

The sides are seriously concerned about the trilateral security partnership between Australia, the United States, and the United Kingdom (AUKUS), which provides for deeper cooperation between its members in areas involving strategic stability, in particular their decision to initiate cooperation in the field of nuclear-powered submarines. Russia and China believe that such actions are contrary to the objectives of security and sustainable development of the Asia-Pacific region, increase the danger of an arms race in the region, and pose serious risks of nuclear proliferation. The sides strongly condemn such moves and call on AUKUS participants to fulfil their nuclear and missile non-proliferation commitments in good faith and to work together to safeguard peace, stability, and development in the region.

Japan's plans to release nuclear contaminated water from the destroyed Fukushima nuclear plant into the ocean and the potential environmental impact of such actions are of deep concern to the sides. The sides emphasize that the disposal of nuclear contaminated water should be handled with responsibility and carried out in a proper manner based on arrangements between the Japanese side and neighbouring States, other interested parties, and relevant international agencies while ensuring transparency, scientific reasoning, and in accordance with international law.

The sides believe that the U.S. withdrawal from the Treaty on the Elimination of Intermediate-Range and Shorter-Range Missiles, the acceleration of research and the development of intermediate-range and shorter-range ground-based missiles and the desire to deploy them in the Asia-Pacific and European regions, as well as their transfer to the allies, entail an increase in tension and distrust, increase risks to international and regional security, lead to the weakening of international non-proliferation and arms control system, undermining global strategic stability. The sided call on the United States to respond positively to the Russian initiative and abandon its plans to deploy intermediate-range and shorter-range ground-based missiles in the Asia-Pacific region and Europe. The sides will continue to maintain contacts and strengthen coordination on this issue.

The Chinese side is sympathetic to and supports the proposals put forward by the Russian Federation to create long-term legally binding security guarantees in Europe.

The sides note that the denunciation by the United States of a number of important international arms control agreements has an extremely negative impact on international and regional security and stability. The sides express concern over the advancement of U.S. plans to develop global missile defence and deploy its elements in various regions of the world, combined with capacity building of high-precision non-nuclear weapons for disarming strikes and other strategic objectives. The sides stress the importance of the peaceful uses of outer space, strongly support the central role of the UN Committee on the Peaceful Uses of Outer Space in promoting international cooperation, maintaining and developing international space law and regulation in the field of space activities. Russia and China will continue to increase cooperation on such matters of mutual interest as the long-term sustainability of space activities and the development and use of space resources. The sides oppose attempts by some States to turn outer space into an arena of armed confrontation and reiterate their intention to make all necessary efforts to prevent the weaponization of space and an arms race in outer space. They will counteract activities aimed at achieving military superiority in space and using it for combat operations. The sides affirm the need for the early launch of negotiations to conclude a legally binding multilateral instrument based on the Russian-Chinese draft treaty on the prevention of placement of weapons in outer space and the use or threat of force against space objects that would provide fundamental and reliable guarantees against an arms race and the weaponization of outer space.

Russia and China emphasize that appropriate transparency and confidence-building measures, including an international initiative/political commitment not to be the first to place weapons in space, can also contribute to the goal of preventing an arms race in outer space, but such measures should complement and not substitute the effective legally binding regime governing space activities.

The sides reaffirm their belief that the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction (BWC) is an essential pillar of international peace and security. Russia and China underscore their determination to preserve the credibility and effectiveness of the Convention.

The sides affirm the need to fully respect and further strengthen the BWC, including by institutionalizing it, strengthening its mechanisms, and adopting a legally binding Protocol to the Convention with an effective verification mechanism, as well as through regular consultation and cooperation in addressing any issues related to the implementation of the Convention.

The sides emphasize that domestic and foreign bioweapons activities by the United States and its allies raise serious concerns and questions for the international community regarding their compliance with the BWC. The sides share the view that such activities pose a serious threat to the national security of the Russian Federation and China and are detrimental to the security of the respective regions. The sides call on the U.S. and its allies to act in an open, transparent, and responsible manner by properly reporting on their military biological activities conducted overseas and on their national territory, and by supporting the resumption of negotiations on a legally binding BWC Protocol with an effective verification mechanism.

The sides, reaffirming their commitment to the goal of a world free of chemical weapons, call upon all parties to the Chemical Weapons Convention to work together to uphold its credibility and effectiveness. Russia and China are deeply concerned about the politicization of the Organization for the Prohibition of Chemical Weapons and call on all of its members to strengthen solidarity and cooperation and protect the tradition of consensual decision-making. Russia and China insist that the United States, as the sole State Party to the Convention that has not yet completed the process of eliminating chemical weapons, accelerate the elimination of its stockpiles of chemical weapons. The sides emphasize the importance of balancing the non-proliferation obligations of states with the interests of legitimate international cooperation in the use of advanced technology and related materials and equipment for peaceful purposes. The sides note the resolution entitled ”Promoting international Cooperation on Peaceful Uses in the Context of International Security“ adopted at the 76th session of the UN General Assembly on the initiative of China and co‑sponsored by Russia, and look forward to its consistent implementation in accordance with the goals set forth therein.

The sides attach great importance to the issues of governance in the field of artificial intelligence. The sides are ready to strengthen dialogue and contacts on artificial intelligence.

The sides reiterate their readiness to deepen cooperation in the field of international information security and to contribute to building an open, secure, sustainable and accessible ICT environment. The sides emphasize that the principles of the non-use of force, respect for national sovereignty and fundamental human rights and freedoms, and non-interference in the internal affairs of other States, as enshrined in the UN Charter, are applicable to the information space. Russia and China reaffirm the key role of the UN in responding to threats to international information security and express their support for the Organization in developing new norms of conduct of states in this area.

The sides welcome the implementation of the global negotiation process on international information security within a single mechanism and support in this context the work of the UN Open-ended Working Group on security of and in the use of information and communication technologies (ICTs) 2021–2025 (OEWG) and express their willingness to speak with one voice within it. The sides consider it necessary to consolidate the efforts of the international community to develop new norms of responsible behaviour of States, including legal ones, as well as a universal international legal instrument regulating the activities of States in the field of ICT. The sides believe that the Global Initiative on Data Security, proposed by the Chinese side and supported, in principle, by the Russian side, provides a basis for the Working Group to discuss and elaborate responses to data security threats and other threats to international information security.

The sides reiterate their support of United Nations General Assembly resolutions 74/247 and 75/282, support the work of the relevant Ad Hoc Committee of Governmental Experts, facilitate the negotiations within the United Nations for the elaboration of an international convention on countering the use of ICTs for criminal purposes. The sides encourage constructive participation of all sides in the negotiations in order to agree as soon as possible on a credible, universal, and comprehensive convention and provide it to the United Nations General Assembly at its 78th session in strict compliance with resolution 75/282. For these purposes, Russia and China have presented a joint draft convention as a basis for negotiations.

The sides support the internationalization of Internet governance, advocate equal rights to its governance, believe that any attempts to limit their sovereign right to regulate national segments of the Internet and ensure their security are unacceptable, are interested in greater participation of the International Telecommunication Union in addressing these issues.

The sides intend to deepen bilateral cooperation in international information security on the basis of the relevant 2015 intergovernmental agreement. To this end, the sides have agreed to adopt in the near future a plan for cooperation between Russia and China in this area.

IV

The sides underline that Russia and China, as world powers and permanent members of the United Nations Security Council, intend to firmly adhere to moral principles and accept their responsibility, strongly advocate the international system with the central coordinating role of the United Nations in international affairs, defend the world order based on international law, including the purposes and principles of the Charter of the United Nations, advance multipolarity and promote the democratization of international relations, together create an even more prospering, stable, and just world, jointly build international relations of a new type.

The Russian side notes the significance of the concept of constructing a ”community of common destiny for mankind“ proposed by the Chinese side to ensure greater solidarity of the international community and consolidation of efforts in responding to common challenges. The Chinese side notes the significance of the efforts taken by the Russian side to establish a just multipolar system of international relations.

The sides intend to strongly uphold the outcomes of the Second World War and the existing post-war world order, defend the authority of the United Nations and justice in international relations, resist attempts to deny, distort, and falsify the history of the Second World War.

In order to prevent the recurrence of the tragedy of the world war, the sides will strongly condemn actions aimed at denying the responsibility for atrocities of Nazi aggressors, militarist invaders, and their accomplices, besmirch and tarnish the honour of the victorious countries.

The sides call for the establishment of a new kind of relationships between world powers on the basis of mutual respect, peaceful coexistence and mutually beneficial cooperation. They reaffirm that the new inter-State relations between Russia and China are superior to political and military alliances of the Cold War era. Friendship between the two States has no limits, there are no ”forbidden“ areas of cooperation, strengthening of bilateral strategic cooperation is neither aimed against third countries nor affected by the changing international environment and circumstantial changes in third countries.

The sides reiterate the need for consolidation, not division of the international community, the need for cooperation, not confrontation. The sides oppose the return of international relations to the state of confrontation between major powers, when the weak fall prey to the strong. The sides intend to resist attempts to substitute universally recognized formats and mechanisms that are consistent with international law for rules elaborated in private by certain nations or blocs of nations, and are against addressing international problems indirectly and without consensus, oppose power politics, bullying, unilateral sanctions, and extraterritorial application of jurisdiction, as well as the abuse of export control policies, and support trade facilitation in line with the rules of the World Trade Organization (WTO).

The sides reaffirmed their intention to strengthen foreign policy coordination, pursue true multilateralism, strengthen cooperation on multilateral platforms, defend common interests, support the international and regional balance of power, and improve global governance.

The sides support and defend the multilateral trade system based on the central role of the World Trade Organization (WTO), take an active part in the WTO reform, opposing unilateral approaches and protectionism. The sides are ready to strengthen dialogue between partners and coordinate positions on trade and economic issues of common concern, contribute to ensuring the sustainable and stable operation of global and regional value chains, promote a more open, inclusive, transparent, non-discriminatory system of international trade and economic rules.

The sides support the G20 format as an important forum for discussing international economic cooperation issues and anti-crisis response measures, jointly promote the invigorated spirit of solidarity and cooperation within the G20, support the leading role of the association in such areas as the international fight against epidemics, world economic recovery, inclusive sustainable development, improving the global economic governance system in a fair and rational manner to collectively address global challenges.

The sides support the deepened strategic partnership within BRICS, promote the expanded cooperation in three main areas: politics and security, economy and finance, and humanitarian exchanges. In particular, Russia and China intend to encourage interaction in the fields of public health, digital economy, science, innovation and technology, including artificial intelligence technologies, as well as the increased coordination between BRICS countries on international platforms. The sides strive to further strengthen the BRICS Plus/Outreach format as an effective mechanism of dialogue with regional integration associations and organizations of developing countries and States with emerging markets.

The Russian side will fully support the Chinese side chairing the association in 2022, and assist in the fruitful holding of the XIV BRICS summit.

Russia and China aim to comprehensively strengthen the Shanghai Cooperation Organization (SCO) and further enhance its role in shaping a polycentric world order based on the universally recognized principles of international law, multilateralism, equal, joint, indivisible, comprehensive and sustainable security.

They consider it important to consistently implement the agreements on improved mechanisms to counter challenges and threats to the security of SCO member states and, in the context of addressing this task, advocate expanded functionality of the SCO Regional Anti-Terrorist Structure.

The sides will contribute to imparting a new quality and dynamics to the economic interaction between the SCO member States in the fields of trade, manufacturing, transport, energy, finance, investment, agriculture, customs, telecommunications, innovation and other areas of mutual interest, including through the use of advanced, resource-saving, energy efficient and ”green“ technologies.

The sides note the fruitful interaction within the SCO under the 2009 Agreement between the Governments of the Shanghai Cooperation Organization member States on cooperation in the field of international information security, as well as within the specialized Group of Experts. In this context, they welcome the adoption of the SCO Joint Action Plan on Ensuring International Information Security for 2022–2023 by the Council of Heads of State of SCO Member States on September 17, 2021 in Dushanbe.

Russia and China proceed from the ever-increasing importance of cultural and humanitarian cooperation for the progressive development of the SCO. In order to strengthen mutual understanding between the people of the SCO member States, they will continue to effectively foster interaction in such areas as cultural ties, education, science and technology, healthcare, environmental protection, tourism, people-to-people contacts, sports.

Russia and China will continue to work to strengthen the role of APEC as the leading platform for multilateral dialogue on economic issues in the Asia-Pacific region. The sides intend to step up coordinated action to successfully implement the ”Putrajaya guidelines for the development of APEC until 2040“ with a focus on creating a free, open, fair, non-discriminatory, transparent and predictable trade and investment environment in the region. Particular emphasis will be placed on the fight against the novel coronavirus infection pandemic and economic recovery, digitalization of a wide range of different spheres of life, economic growth in remote territories and the establishment of interaction between APEC and other regional multilateral associations with a similar agenda.

The sides intend to develop cooperation within the ”Russia-India-China“ format, as well as to strengthen interaction on such venues as the East Asia Summit, ASEAN Regional Forum on Security, Meeting of Defense Ministers of the ASEAN Member States and Dialogue Partners. Russia and China support ASEAN's central role in developing cooperation in East Asia, continue to increase coordination on deepened cooperation with ASEAN, and jointly promote cooperation in the areas of public health, sustainable development, combating terrorism and countering transnational crime. The sides intend to continue to work in the interest of a strengthened role of ASEAN as a key element of the regional architecture.

 

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https://www.youtube.com/watch?v=KKTTgHeTDWw

BRICS GOLD-BACKED CURRENCY: Vivek Points Out Value In Gold Backed Currency, Supports Gold Standard

 

 

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A New BRICS Currency and the End of Dollar Hegemony

 

Abbas Hashemite

 

 

For decades, the US dollar has dominated the global trade. This became possible after the establishment of the liberal world order. The US dollar enjoyed unparalleled dominance as the leading reserve currency of the world. The US Federal Reserve holds that 96% of international trade invoicing into the Americas, 74% in the Asia-Pacific region, and 79% in other countries was done in the US dollar. Moreover, the Atlantic Council also highlighted the dominance of the dollar by stating that it is used in 88% of currency exchanges and 59% of all foreign currency reserves in central banks around the world. The petrodollar agreement, which made it mandatory to buy oil in US dollars, was one of the most significant steps in cementing the dominance of the US dollar and the US-led unipolar world order around the world. The United States has been using this dollar dominance to impose economic sanctions on its rivals under the pretense of violation of international law. However, in a rapid turn of events, the dollar dominance is facing serious threats due to the announcement of a new currency by the BRICS.

The BRICS, established in 2009, is now one of the major threats to the US-led liberal world order and its institutions. All the liberal institutions, including the United Nations, the World Bank, IMF, ICJ, ICC, and FATF have been observed benefiting the United States and its allies by targeting their opponents. This instilled a hostile feeling among the developing world against the so-called liberal world order in general and the United States in particular. They have long been looking for a new and inclusive superpower. The rise of multipolarity with the rise of Russia, China, and some middle powers has filled this vacuum. The United States has been targeting its opponents audaciously due to its dominance over the global financial system. The US sanctions on Russia after the latter’s conflict with Ukraine proved detrimental to the US dominance.

Russia is among the founding members of the BRICS. The organization was long attempting to adopt an alternative currency to the dollar for a slew of causes. Initially, the BRICS alliance only included Brazil, Russia, India, China, and South Africa. Recently, the BRICS founding members decided to expand the organization by admitting more members. Iran, Saudi Arabia, the UAE, Egypt, and Ethiopia were admitted into BRICS on 1st January 2024. De-dollarization is one of the key agendas of the alliance. Russian President Vladimir Putin hinted in 2022 about the creation of a new currency for global reserves and the consent of all the member states for its acceptance. Brazilian President Luiz Inácio Lula da Silva also showed his support for a new currency for BRICS nations in April 2023. However, various impediments stopped it from achieving this goal. Recently, the organization announced the creation and adoption of a common currency.

Yury Ushakov, a Kremlin aide, revealed in his interview with TASS that the BRICS nations will use a blockchain-based payment system, BRICS pay, for trade. He further stated that this payment system is imperative for the future of the world. He also maintained that this payment system will be predicated on modern technologies and will be free of politics. He also held that the goal of this year’s BRICS summit is to increase BRICS’ role in the international financial and monetary system. This news captivated analysts and observers around the world. Although there is no confirmation about the launching date of this currency, it is speculated that this currency could be launched at the upcoming BRICS summit which will be hosted in Russia in October 2024.

Three of the BRICS countries, Russia, Iran, and China, are already under US sanctions. The recent India-Iran Chabahar port agreement has also put India in a difficult situation, as the US officials have warned India of solemn consequences. Relations between the United States and the Kingdom of Saudi Arabia also struggled a bit under the Biden administration. South Africa and the United States don’t share significant cordial relations as well. Tensions between the US, Russia, and China are also surging over numerous issues. Therefore, this is the right time to announce a new and analogous payment system to the Society for Worldwide Interbank Financial Telecommunications (SWIFT). A new blockchain-based BRICS currency will have several benefits. First and foremost, it will increase financial inclusion, and cross-border transactions will be more efficient. Moreover, the use of modern technologies and digital currencies could revolutionize the international financial system. Economic integration and trade between the BRICS members will also be increased. It would also decrease US influence over the developing and under-developed world. It will provide a strong alternative to third-world countries for trade, saving them from the US sanctions. The launch of this currency will be a severe blow to the already waning US hegemony around the world.

 

https://journal-neo.su/2024/05/19/a-new-brics-currency-and-the-end-of-dollar-hegemony/

 

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