Don961: Will attempts by China and Shanghai countries to abandon the dollar succeed?
US President Donald Trump has long insisted that Corona be called the “Chinese virus” despite the widespread criticism leveled at him, and finally he revealed that he might seek compensation from Beijing after the epidemic that started from Wuhan injured one million people, killing more than 61,000 In American cities, he said he is “considering imposing punitive customs duties on China.”
Trump’s statements sparked an angry response in Beijing, raising the level of tension between the two largest economic powers in the world in an unprecedented manner, and therefore the question has become how will China respond to the American accusations that may open the door to the compensation that the United States gets from this Asian country that could reach hundreds of billions of dollars And other countries such as the United Kingdom, Spain and Italy may claim similar compensation for the lives lost by the Corona epidemic, which in total have so far exceeded 248 thousand deaths in addition to 3.5 million confirmed cases in the world.
China is heading towards divorce the US dollar from the Shanghai Cooperation Organization portal, which might be the weapon that it will use to respond to Washington’s threats, especially since Beijing is pushing the eight member states of the organization to abandon the dollar, as the organization has taken a decision, including Russia, China and India to conduct trade and investments Dualism and issuance of bonds in local and national currencies in place of the US dollar, which was the news that was published by “Independent Arabia” last March, and received a great following from the newspaper’s readers.
Russia hosts the organization’s summit in 2020
It is noteworthy that Russia, which will assume the rotating presidency of the Shanghai Cooperation Organization, is scheduled to host the work of the 20th summit in Chelyabinsk, Russia, on July 22 and 23, but with the spread of Corona virus worldwide, it is not certain that the summit will be held as scheduled. . Bishkek, the capital of Kyrgyzstan, hosted the 19th session, and the most prominent outcome of the summit was the pledge of member states to promote the lifting of the “share of national currencies in mutual financial transactions and settlements, instead of the dollar.”
In the statement made by the Bishkek Summit, six members of the group, including Russia, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan and Uzbekistan, confirmed the support of the Chinese Belt and Road Initiative, while India did not mention this list, especially as it sees in China a fierce competitor and fears From her ambition in Asia.
The Shanghai Cooperation Organization is an inter-governmental organization established in Shanghai on June 15, 2001. It currently consists of eight member states: Uzbekistan, Pakistan, Russia, China, Tajikistan, Kyrgyzstan, Kazakhstan, India and four observer countries that have expressed the desire to have The full membership includes Afghanistan, Iran, Belarus, Mongolia and six dialogue partners (Armenia, Azerbaijan, Turkey, Sri Lanka, Cambodia and Nepal).
Last year, the organization began expanding cooperation to India and Pakistan, making it now a strong and strategic regional group, representing 40 percent of the world’s population, about 20 percent of gross domestic product and 22 percent of the world’s land mass.
For its part, the consultant of the Russian Institute for Strategic Studies, Alina Suponina, said in a call to “Independent Arabia”, “There are efforts to promote trade and investment between the member states of the Shanghai Organization by using the local currencies of those countries, and there are bilateral agreements between the countries of the organization in this regard, but this is The approach, in my view, will not deal a strong blow to the dollar, and it is too early to abandon the American currency in trade and investment transactions. ”
And she explains that “abandoning the dollar also has a political split, as there are many countries that want to divorce from the dollar, and get out from the cloak of American hegemony that dominates all areas of life, and directs the Shanghai countries towards using their national currencies is an attempt by these countries to form a system Multipolar, not unipolar, which is what is happening today and what Russia has always sought.
Supunina noted the United States’ concern about the trends of multi-polarization, and said that America understands that many aspects of trade and economics are still linked to the dollar, and do not like to see any independent trends or go beyond their hegemony.
As for Russia hosting the summit, it is not certain, if it will be held on schedule in next July, and the reason is the Corona crisis that is sweeping the world.
Attempts to annex Iran
With the accusations of the international community led by the United States of Iran, of supporting terrorism and supporting the wars of its proxies in Syria, Yemen, Iraq, Lebanon and many other countries torn by internal wars with an Iranian footprint, it became unclear how the organization would accept membership of Iran, which is developing a nuclear program and military satellites, and if it is an acceptance of this The genre paves the way for the birth of new military alliances in the world led by Russia, China and perhaps India, especially after the war of the American-Indian commercial fees.
The consultant explains, “There are no US-Iranian understandings regarding Europe. She believes that it is necessary to deal with Iran as it is an important regional country, so that some Gulf countries deal with it and have commercial relations, but for Europe there is an understanding of what the Shanghai Organization is doing in this.” The matter, while the United States has its own position, and it differs a lot towards dealing with Tehran, but this will not place many obstacles in front of the Shanghai Organization and its dealings with Iran.
The real problem is international and unilateral sanctions against Tehran, and the organization will demand the easing of sanctions imposed on this country, especially in light of the continued spread of the Corona virus.
The peremptory dollar
On the future of the dollar’s hegemony, Kuwaiti businessman and economist Ali Abbas Al-Naqi said, “The American currency dominates most of the world’s economies and their budgets since the end of the Second World War, until the dollar (the final order) has become a strong demand for it, as it is closely related to oil and gold sales. And many global commodities. ”
He added that many countries have linked their local currency to the American currency, and do not print them unless the dollar is in exchange for them, as well as their monetary reserves, and established the financial infrastructure on it and the SWIFT system for bank transfers and transactions, and that it is among the secrets of the United States that it has deviated from the old rule (printing money for Its value in gold), and it succeeded in exporting inflation abroad and printing its currency based on the issuance of treasury bonds or the creation of a future debt, which if other countries made it, its currency would collapse, which gave it influence and control and a “whip” against the economic systems opposing it.
Attempts to disengage from the dollar
Al-Naqi continues, “Multiple attempts and moves were made to disengage from the dollar. Russia adopted a long-term strategy in its international trade and export contracts, although it has not yet severed the link with the American currency holding the reins of the global economy, so the Russian Central Bank reduced the dollar’s share of the monetary reserve.
The foreigner, and increased the shares of foreign currencies to protect the reserve from external risks and US sanctions such as those approved against it in the Crimea case, and the oil and gas companies have systematically abandoned the implementation of their deals in dollars and diverted their transactions to the euro and the Russian ruble. Li held a bilateral alliance with China to dispense with them and adopt the yuan and the ruble, and the idea of creating a digital currency linked to gold or local currencies was raised, as it adopted with Turkey its currencies in payments and settlements, and it was decided to link Turkish banks and companies to the Russian version of the Swift system and to use the Mir cards as an alternative to Master and Visa , And agreed with India to adopt
He added, “On a parallel line, China also maintains important papers if it sells its holdings of American treasury bonds, which could lead to a drop in the value of the dollar, and that it pegged its currency (the yuan) to it to maintain a low value in front of it, thus controlling to provide low prices for its exports. To the United States, and if this option is deemed unlikely by the fact that the damage will affect China itself as its largest commercial customer, it is not in its interest to do so, and any tension and tension between them will not only affect the fundamental interests of the two countries, but rather the stability and growth of the global economy.
He said, “Trade and inter-investment in the currencies of the member states instead of the dollar is not the only decision taken by the eight member states of the Shanghai Organization, as these countries signed a document related to cooperation between members in the field of digitization and information and communication technology.
Independent Arabic LINK
Samson: The Iraqi Stock Exchange closed on the rise in light of the contraction of the economy
5th May, 2020
The Iraqi Stock Exchange closed, today, Tuesday, an increase of 2.43 % after the index closed at point 415.74, although the Iraqi economy is facing deflation due to the financial crisis it is suffering after the drop in oil prices and partial closure of the economy for fear of the spread of the Corona virus
The traded shares reached 1.2 billion shares, while the traded value amounted to 655.1 million dinars
Today 448 transactions were concluded on the shares of 28 companies, of which 15 companies rose, while 8 companies decreased shares LINK
Coco: Donald J. Trump 19 mins · Well run States should not be bailing out poorly run States, using CoronaVirus as the excuse! The elimination of Sanctuary Cities, Payroll Taxes, and perhaps Capital Gains Taxes, must be put on the table. Also lawsuit indemnification & business deductions for restaurants & ent.
I like that the President is now suggesting eliminating Capital Gains Taxes. That would be great for us if it happens.