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Tuesday, 19.04.2011
Medvedev in Hainan: Dollars, BRICs and BRICS
Thomas Fasbender, Moscow. It is official since last week, the buzz word BRICs (Building Better Global Economic), used by Fond managers and Business editors since Jim O'Neill published it a decade ago, is no longer used ...
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...at least not in it's short, singular form. The concise term has been put into plural during the Organisation's annual summit on the holiday island of Hainan in the Chinese Ocean.
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In future it will be called BRICS, as South Africa is joining as a member and that only after one year of becoming a possible candidate. A brave move, and it confirms the urgency that China is displaying at the opeing up of the continent (reading recommendation, Henning Mankell's "The Chinese".
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BRICS are primarily the result of successful development policies, transfer of technology and know how, opening of markets and investments. It is not unusual, that at some point the painstakingly trained successor fights the predecessor for its rank.
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In hard times, the Eskimos put their elderly on ice floes and let them drift towards death.
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Blocking off old debt
The alliance is based on nothing else than pure opportunities. Thus, the four, or five define their common points first of all with boundaries - especially blocking off old debt from the so called Industrialised Countries; the enormous debt by the governments of Europe, Japan and the USA that had accumulated during the economic boom and the social promises that the Governments made during the same period.
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As the Old World for half a century has proven how best not to stage the end of capitalism, so BRICS will give now the example of how not to handle the rare resources of our planet.
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Political tremors of four continents Political tremors are already happening beneath the surface. China is pressing for influence in Africa and Australia, Russia pushes back US influence in the Ukraine an Georgia and the remaining three BRICS members are working on conflict solutions in each of their subcontinents.
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There will be a big clash should a problem arise with the dollar as trade currency. But China is not King yet and the world is still trading precious raw materials for green paper with the Americans.
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But at one point Washington will have to turn on the printing press, only the actual date is not clear yet. However, before this will happen China will insist on trade in RMB only.
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A small step towards phasing out of the dollar
In any case, the BRICS members worked on crisis prevention by agreeing among themselves on handling credits on local currencies only. Part of this is prevention but it drives the dollar deeper into crisis.
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The situation unfolds erratically in an irregular series of crises of economic and military nature. The 21st century won't be a century of conquests and armed battles, but we cannot expect peaceful times that are safe and full of harmony.
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Groaning retreat
The financial crisis in 2008/2009, the rebellion in North Africa and the Middle East at the beginning of 2011, the refugee problem in Europe - with a groan the old order is retreating.
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The BRICS members are still spectators. Iran, the driving force in the Muslim world, is alien to them, unpredictable but also useful.
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It is the barometer of the remaining influence Americas on the world and it keeps the attention of the West in the area around the eastern Mediterranean, where BRICS has little to gain and even less to lose.
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Germany and the Northern Union
And Germany? Some foreign commentators suggest that we should restrain our own continent, with its proven financial discipline. Others fear exactly that.
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In the long run, a European Northern Union might the the smartest, perhaps with a referendum for our brothers and sisters south of the river Main. Looking back at the last 500 years, the possibilities are far from exhausted.
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And in one or two generations, after finally overcoming the legacy of the 20th century, the Russian brick might even turn into a stone that can be built upon.
The German original text is here >>>
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