While China, keen to ward off US sanctions as long as possible, is lagging, its RIC partners Iran and Russia are doing the legwork to break the west’s global financial grip.
The first Eurasia Economic Forum, held last week in Bishkek, Kyrgyzstan, should be regarded as a milestone in setting the parameters for the geoeconomic integration of the Eurasian heartland.
Sergei Glazyev, Russia’s Minister in Charge of Integration and Macroeconomics of the Eurasia Economic Union (EAEU), is coordinating the drive to design an alternative monetary-financial system – a de facto post-Bretton Woods III – in cooperation with China.
According to Glazyev, the forum “discussed the model of a new global settlement currency pegged to baskets of national currencies and commodities. The introduction of this currency instrument in Eurasia will entail the collapse of the dollar system and the final undermining of the US military and political power. It is necessary to start negotiations on signing an appropriate international treaty within the framework of the SCO.”
Glazyev described the initiative to upend the western global financial system in more detail during an exclusive interview with The Cradle in April.
It’s particularly relevant to understand how Glazyev interconnects the EAEU’s drive with the increasing geopolitical and geoeconomic role of the Shanghai Cooperation Organization (SCO), which unites at the same table key Eurasian powers: China, Russia, India, Pakistan, Kazakhstan and Iran.
The EAEU, inaugurated in 2015 with five full members – Russia, Kazakhstan, Kyrgyzstan, Belarus and Armenia – represents a market of 184 million people and a collective GDP of over $5 trillion. The next step with Iran will be to implement a full free trade agreement, possibly before the end of the year, according to Iranian deputy trade minister Alireza Peymanpak. Egypt, Indonesia and the UAE are also candidates to strike deals with the EAEU.
Slowly but surely, the new RIC (Russia-Iran-China) – as opposed to the old RIC in BRICS (Russia-India-China) – is attempting to integrate their financial systems. Iran is a matter of national security strategy for China, as an energy provider and essential partner of the Belt and Road Initiative (BRI) in West Asia.
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