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Economic Implication of Combined BRICS and SCO

By

Ronnie Higuchi Rusli



Press TV reports on 22 November 2014) stated that President Putin, when speaking at a forum of the ‘All-Russia Peoples Front’ in Moscow on 17 November, said “The US want to subdue us, want to solve their problems at Russia expense. He made it clear that no one in history ever managed to do this to Russia, and no one ever will.”

By this statement it is certainly no exaggeration that Russia has not only have a solid trade and monetary alliance with China which already today bypasses the western dollar dominated western system, nonetheless that Russia is also one of the key members of the BRICS and the Shanghai Cooperation Organization (SCO) a collosal collection group of countries with GDB, demographic and land mass bigger that others countries combined. The group met last September in Dushanbe, Tajikistan with intention to expands its current membership (China, Russia, Kazakhstan, Tajikistan Kyrgyzstan and Uzbekistan) by including India, Pakistan, Iran and likely also Mongolia.

Turkey, hosting a strategically crucial NATO base, wavering between east and west, has wanted to become an SCO member for quite a while. Turkish-speaking SCO governments would likely to support their petition. This would clearly be a huge conflict and blow to the western powers, and a possible departure from NATO membership and dollar dictating economic world particularly Washington – and may not go ‘unpunished’.

The expanded SCO would control some 20 percent of the world’s oil and half of all global gas reserves. On top of that, the bloc would represent about half of the world’s population. The SCO and BRICS together would cover more than half the world’s population and control about a third of the globe’s GDP.

The issuance of a joint new global currency either by these countries at once or step by step is almost a certainty. The question is when. Given the disastrous course of western economies, such a new basket currencies and monetary system like SWIFT is not far off. It certaintly would gradually replace the (petro) dollar for world trading as well as a reserve currency. The latter has already started. Ten years ago about 90% of world reserves consisted of dollar denominated securities. Today this proportion has shrunk to 60% - and – to the ignorance of most of the world – is steadily declining. According to the IMF, reserves in other currencies in emerging markets have shot up by 400% since 2003. From August 2013 to February 2014, South Korea increased its yuan holdings 25-fold.

Mr. Putin’s seemingly made it clear and ‘bold’ statement is very much supported by facts. He meant that the western predatory economic system is decaying fast. Russia and China are already today prepared with an alternative. They are working actively with the other BRICS and SCO countries to prepare a solid larger scale alternative currency and monetary system, free from the FED, Wall Street, the IMF and the BIS (Bank for International Settlements


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