BRICs and SCOs

You have to hand it to Russia, even though their economy has taken a beating in the global recession, they're still pushing forward with their efforts to emerge as a counterpoint to American power in the world.

In the past week Russia has played host to not one but two major regional summits - the meetings of the Shanghai Cooperation Organization and the BRIC Group (that's Brazil, Russia, India and China, the four fastest developing economies in the world). The subtext was clear, that the idea of a "unipolar" world, with the United States as the sole superpower, hasn't worked and needs to be replaced by a "multipolar" world, where global affairs are dominated by several powers, thus better representing the interests of humanity and preventing one powerful nation from imposing their will upon the rest of the world (at least that’s the theory). Of course Russia wants to be one of those "poles".

And both the SCO and BRIC are part of that strategy - powerful organizations where the US doesn't have a seat at the table. One common headline emerged from the dual summits - that the US dollar needs to be replaced as the world's sole reserve currency. Right now, nations tend to value their currency against the dollar (they will exchange their currency for Euros or Yen or whatever, but it’s the currency’s worth against the dollar that remains the important benchmark), many trade deals (like oil sales) are valued in dollars no matter where they occur, and for countries with failing economies buying and selling in dollars is always a safe option (see what happened in Zimbabwe as their currency became worthless last year).

But Russian President Dmitry Medvedev said that this is bad for the global economy because it makes the world too vulnerable to fluctuations in the American system - like how last fall's Wall Street credit crunch sparked a global recession. His solution, which he pushed to both the SCO and BRIC, is to have additional reserve currencies. The SCO even backed a Russian idea for a common currency for the SCO - like the European Currency Unit, the forerunner to the Euro.

This sparked some hysterical declarations, like this one from journalist Chris Hedges where he states, "the American Empire is Bankrupt". That's a bit of an overstatement (ok, more than a bit...)

The SCO and BRIC meetings are important, but you have to understand the nature of both bodies, they're not really policy-making groups, in fact this was the first BRIC summit ever. Their talk about other reserve and common currencies was, at this point, just talk. And while Russia would like both groups to become powerful international organizations, right now they're not. Competing interests between Russia and China (both look to dominate Central Asia and the other four current SCO members - Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan) could likely keep the SCO from becoming anything more than it already is - an organization that meets to discuss security concerns (mostly terrorism related) in Asia.

But you do have to hand it to Russia for trying to shake up the geopolitical stage.