The worldwide financial institutions are keenly watching Beijing’s agenda to replace the American dollar with yuan in the exchange of goods and services among the member countries of the SCO or Shanghai Cooperation Organization.
Interestingly, some of the important members of the SCO, such as Iran, Russia and a number of central Asian countries are already using yuan. India, perhaps, is the major economy which has so far refused to be trapped in the ongoing currency politics from focusing on the US dollar.
The hesitancy on the part of the Indian Prime Minister Narendra Modi on the issue of attending the forthcoming summit of the Shanghai Cooperation Organization, SCO on July three-four could have been attributed to this issue. The issue of Modi’s participation, however, has finally ended with India’s External Minister S.Jaishanker finally deputed to lead the Indian delegation at Astana, Kazakhstan.
Woolfish Diplomacy : It is for Beijing to realize that its current aggressive approach towards India, popularly called Woolfish diplomacy, has its limitations. Dragon has to remember that the Indians have elephantine memory. Most Indians, including a number of strategic affairs experts believe that it was the cowardice of the then PM Jawaharlal Nehru, that he accepted the ceasefire announced unilaterally during the October aggression of China under Mao Zedong, in 1962. He should have mobilized the nation to oust the Chinese. He, perhaps, genuinely believed in the invincibility of the People’s Liberation Army or PLA being propagated worldwide by communists. The myth, however, has already been shattered by the Vietnamese, when the PLA attacked their country.
It appears that despite being given adequate thrashing at the Nathu-La, the PLA created a standoff at the Sumdorong Valley in Arunachal. In spite of Modi’s friendly overtures, China challenged Indian forces at Doklam in 2017 and three years later in 2020, the PLA attacked Indian forces at the Galwan Valley in eastern Ladakh. The standoff has entered in the fifth year, but the Modi Government couldn’t lower its guard.
It will be difficult for Beijing to ignore Modi’s absence, who has been the main architect of growing economic cooperation in the region, especially with China’s communist regime, perhaps more exploitative and corrupt than any capitalist system.
It is high time that Beijing must realize that Modi cannot be humiliated like Nehru. It also cannot afford to ignore India and her leadership for achieving its geo-political agenda, especially its determined bid to replace the US dollar by the Chinese currency, yuan.
China has already made agreements with most of the SCO members comprising Iran, the Central Asian countries and Pakistan. The resource -starved Russia is expected to concede to the pressure of Dragon.
With its worldwide trade surplus, it is natural for Beijing to assert its position as an economic superpower. However, at the Summit scheduled on July four, the relevance of the Chinese currency in world trade is expected to be finally asserted before the top leaders of the region as well as in the presence of the Russian President Vladimir Putin, Iran’s Mohammad Mokher and Pakistani PM Shahbaz Sharif.
India has not opposed exploring the options for trading in other currencies, but she is not prepared to concede the replacement of yuan by dollar. It may be recalled that India-USSR trade was being conducted in rupees. Even after the collapse of the USSR, India had maintained the previous rouble -rupee exchange rates, thus enabling the successor state Russia to obtain the essentials from India. Therefore, India would be supporting a multi currency platform for regional trade, but the trust deficit regarding China continues to haunt the region.
Tackling Terrorism : Apart from being a vibrant forum for promoting trade and financial cooperation, the SCO also endorses joint action against the terrorists. It is unlikely that countries like Pakistan and Iran would be agreeing for joint actions against terrorists, separatists and extremists. However, it depends upon Beijing to restrain its close allies Iran and Pakistan to dissociate from these state sponsored violence. It, however, goes to the credit of the Chinese President Xi Jinping that he helped two estranged neighbors, Saudi Arabia and Iran to restore their diplomatic ties.
It is believed that Iran’s top diplomatic representatives would be together with their counterparts in Saudi Arabia.
Indian Initiative : It goes to the credit of Modi that during the past 25 years, including his innings in Gujarat as its chief minister, he has diligently been working for closer economic cooperation with India’s northern neighbor, China.
It will be a great disservice to the millions of impoverished Asians, if China repeats its 1962 mistake. The Indians are in no mood to surrender to the Chinese mischief or even aggression. Meanwhile, the strategic affairs experts hope in New Delhi that instead of imitating Mao Zedong, Xi Jinping, who has successfully manipulated his country’s domestic politics to remain in power, may not for the all inclusive and friendly policies of Deng Xiaoping, who scripted China’s spectacular march to become the economic superpower.
Gopal Misra has been associated with national and international media. His books on journalism and geo-politics have been well-appreciated. Views are personal.
