Iran presses ahead with dollar attack

The Telegraph
Garry White

Last week, the Tehran Times noted that the Iranian oil bourse will start trading oil in currencies other than the dollar from March 20. This long-planned move is part of President Mahmoud Ahmadinejad’s vision of economic war with the west. 

“The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the 'reserve currency’ status of the dollar,” the newspaper, which calls itself the voice of the Islamic Revolution, said.

“Recall that Saddam [Hussein] announced Iraq would no longer accept dollars for oil purchases in November 2000 and the US-Anglo invasion occurred in March 2003,” the Times continued. “Similarly, Iran opened its oil bourse in 2008, so it is a credit to Iranian negotiating ability that the 'crisis’ has not come to a head long before now.”

Iran has the third-largest oil reserves in the world and pricing oil in currencies other than dollars is a provocative move aimed at Washington. If Iran switches to the non-dollar terms for its oil payments, there could be a new oil price that would be denominated in euro, yen or even the yuan or rupee.

India is already in talks with Iran over how it can pay for its oil in rupees.

Even more surprisingly, reports have suggested that India is even considering paying for its oil in gold bullion. However, it is more likely that the country will pay in rupees, a currency that is not freely convertible.

US pushes India on nuclear liability

Editor's note: If no private company can get insurance for for liability for 80 years after any accident in a nuclear power plant, than even the international markets are indicating the need to abandon nuclear power.

New Delhi:  The recent serial blasts in Mumbai and counter-terrorism dominated the agenda this morning as Foreign Affairs Minister SM Krishna met with US Secretary of State Hillary Clinton. These talks form Round 2 of the India-US strategic partnership dialogue; the first was held two years ago.

However, both countries have major differences on the civilian nuclear deal.

Mr Krishna and Ms Clinton spoke at length about Pakistan. Ms Clinton said that America has repeatedly told Pakistan that the perpetrators of 26/11 have to be brought to justice. "We have made it forcefully clear to Pakistan that it has a special obligation to act transparently, fully and urgently." She added, "There is a limit to what the US and India can do. But we will press as hard as possible."

Mr Krishna, for his part, mentioned "the importance of elimination of terror sanctuaries in Pakistan for regional stability and Pakistan's future."

In a reference to the US raid that found and killed Osama Bin Laden in Abbottabad, Ms Clinton said, "We want mutual recognition that we cannot tolerate a safe haven for terrorists anywhere. When we know the location of terrorists whose intentions are clear, we need to work together. We do not believe there are any terrorists who should be given a safe haven or free pass by any government."

Clinton also met Prime Minister Manmohan Singh and assured him that the phased withdrawal of 33,000 US troops from Afghanistan by 2012, will not lead to the country's takeover by the Taliban.

While India and America seemed to share common ground in key areas like counter-terrorism and the sharing of intelligence, it was clear that serious differences continue to plague the civilian nuclear deal.  India has been concerned about new guidelines issued by the Nuclear Suppliers Group which make off-limits technology for enrichment and reprocessing (ENR) to countries like India who have not signed the Nuclear Non-Proliferation Treaty.  India wants America to commit that these technologies will be shared as part of the nuclear deal with Washington.

BRICS Rails at Financial Status Quo

Dmitry Medvedev

Moscow Times

President Dmitry Medvedev and other BRICS leaders called for sweeping reforms of international financial mechanisms, hinted at displacing the U.S. dollar as the world's major trade currency and condemned the NATO bombing of Libya at a summit of leading emerging economies in China on Thursday, but there were few actions to match the words.

Speaking at the summit of Brazil, Russia, India, China and South Africa in Sanya, China, Medvedev said he and his Chinese counterpart Hu Jintao had "agreed to intensify work on the eastern and western gas supply routes before the end of the year" during a bilateral meeting earlier in the day.

"We are talking about this year, I mean the basic conditions for approval. Naturally, the deliveries will begin later," he told reporters, adding that, although each side would push its own business interests in price negotiations, positions had generally moved closer.

China is a growing foreign policy priority for Russia. It is the world's biggest energy consumer and became Russia's main trading partner last year.

Medvedev promised during a visit to Beijing in September to supply China with all the gas it needs for economic development.

In 2009, China extended a $25 billion preferential-rate loan to Rosneft and Transneft in exchange for a 20-year oil supply contract.

Medvedev will go on an extended visit to China, following the BRICS meeting, with an appearance at China's Boao Forum and a visit to Hong Kong on Saturday.

Although the BRICS forum had criticized the world's reliance on the U.S. dollar, Medvedev played down speculation that the five countries might adopt the Chinese yuan as a trade currency.

"Of course, the Chinese economy is huge, and in this sense the role of the yuan is growing, but we haven't made any special decisions regarding the yuan, nor are they being discussed," he told reporters.
Earlier Thursday, the five countries signed a memorandum on cooperation among their national financial development institutions that paves the way for the countries to grant one another loans in their national currencies.

Vladimir Dmitriyev, head of Vneshekonombank, told Interfax that the document marked "the first practical step toward using national currencies in economic cooperation between these countries."
China Development Bank was the first institution to take advantage of the new measures, saying it was ready to extend 10 billion yuan in loans to Brazil, Russia, India and South Africa.

The loans are expected to focus on large oil and natural gas projects. China Development Bank chief Chen Yuan cited deepening cooperation with Brazil's Petro Bas when asked for specifics, Reuters reported.

No specific deals relating to Russian companies have emerged so far.

Medvedev also held bilateral meetings with Hu, Brazilian President Dilma Rousseff, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma during the meeting.

Thursday's was the first summit since South Africa joined the club of emerging economies, prompting Medvedev to make a flat joke.

"I don't know who came up with the BRIC abbreviation … but we've come up with a different acronym, and it has already become quite popular."

"After the accession of South Africa, the Russian abbreviation BRYuKI emerged," Medvedev told reporters in Sanya, China. Bryuki means "pants" in Russian.

It may have been a weak joke, but he was right to say the group has changed.

BRIC — Brazil, Russia, India and China — was born as an acronym thought up by Goldman Sachs economist Jim O'Neill as shorthand for the world's leading emerging markets.

But it has become a club for countries — including now South Africa — with a common interest in turning their growing economic strength into political clout on the world stage.

All five are currently members of the UN Security Council.

In this spirit, the five issued a joint statement calling for an overhaul of the international financial system and reform of the International Monetary Fund, criticizing dependence on traditional reserve currencies like the U.S. dollar and condemning NATO-led air strikes against Libya.

"This is not a format where countries decide things; it is much more about showing the emergence of new structures as opposed to old organizations," said Fyodor Lukyanov, editor-in-chief of Russia in Global Affairs.

Nonetheless, there are differences in the group.

In the March 17 Security Council vote authorizing military action in Libya, Brazil, Russia, India and China abstained. South Africa voted in favor, along with other African Union countries.