As the G-20 summit in St. Petersburg, Russia begins today, it is worthwhile to remember how the emerging economies have been feeling the heat and how the tapering off of the US-driven capital influx and short-term liquidity has caused havoc in the developing world’s financial circuits, sending shock waves and causing currency depreciation in not only India, but also in Brazil, Turkey, Argentina among others. In fact, as has been consistently advocated by powers such as Russia, China, Brazil and even India, we need to move away from dollar-dependent trade that is facilitated by the hold that the US still has on the global financial market, and even though it is the dollar that is the only reserve currency in the world. The scorching of the Indian economy in recent months, with the steep depreciation of the rupee, along with rising fuel prices, clearly point towards consolidation of alternative fora and routes for trade and commerce, precisely because the US-led Euro-American model has proved too volatile and risk-prone to achieve steady and sustainable growth over long periods of time. Moreover, bolstering already formulated economic blocs such as BRICS, ASEAN, etc, depends upon closer cooperation and ties between the emerging powers, thereby creating a formidable competition and opposition to the unilateralism of America’s dollar diplomacy. In fact, the current account deficit that is bogging the Indian economy down, because of the strategic withdrawal by the US Federal Reserve of its $85-billion-a-month liquidity support over the present fiscal, could have been avoided, or at least substantially minimised, had the alternative circuits of commerce, such as Japan, Indonesia, Turkey, BRICS, and even the Middle-Eastern and Latin American powers, the global ‘South’ that is, been sufficiently experimented and engaged with by the Indian corporate sector, particularly in the wake of the 2008 financial meltdown, which the Asian economies fought off better than their Euro-American counterparts.
However, the G-20 is an opportune platform to question such financial muscle flexing by the US, as well as flag issues such as its ‘unconventional monetary policies’ of the Western model, which has encouraged unsustainable fiscal methods such as pumping in freshly printed dollars to the tune of $2 trillion (quantitative easing) in three phases just to bail out their own credit crunch and to get back to the pre-crash job statistics. However, this inflating and deflating of the financial balloon has happened at the whims and fancies of the US, and has in fact contributed to rising prices of fuel and other commodities in the emerging markets, since they suddenly had excess liquidity in their systems. Evidently, what the G-20 needs to discuss is how to tackle the crests and troughs of fiscal flows that is dollar-driven and how to come out of the debt trap by fortifying other mercantile networks. This would also create pressure on the US and compel it to think before unleashing ‘foreign policy bombs’, the latest being the unilateral decision to attack Syria, even though it likely to send the fuel prices through the roof and endanger the well being of an entire people, who have already seen massive exodus of refugees, amounting to almost two million already. Obviously, it is now more than plain that the US is simply interested in its own economic recovery and has no qualms about following disastrous foreign policy measures in order to gain control over the world’s natural resources, and it is in the interest of the global community to steer the fiscal discourse away from its dollar diplomacy.