Russia had proposed a new world reserve currency that would be issued by international financial institutions to reduce reliance on the U.S. dollar. (An idea since abandoned, according to the Russian finance ministry.)
But Liam Halligan, chief economist at Prosperity Capital Management, said the West does not need to be scared of the rise of Russia and the other BRIC nations*. Instead, the American-European nexus should learn to “cohabitate” and share the prosperity around the globe.
* (Brazil, Russia, India, China)
“The BRICs are interested in the stability of their own economies,” Halligan told CNBC.
“BRICs are interested in trading with the rest of the world and with each other [and] are interested in making sure the global financial architecture and the institutions which are supposed to regulate the global economy—which has done a terrible job in recent years—are more representative.”
Halligan said the BRIC economies account for almost 20 percent of the global GDP — up from 10 percent five to six years ago — while the U.S. also accounts for about 20 percent.
In five to 10 years, Halligan expects the BRIC will account for about 30 to 35 percent, while the U.S. will account for about 15 percent.
“These countries not only want to trade with us, but they’ve also adopted our forms, largely, of government and organizing our economy over 30 to 50 years,” he said.
“So we don’t have to see this as a scare. We just have to learn to cohabitate with these countries where one country isn’t top dog, but we share the prosperity around the globe more evenly.”
The leaders of the BRIC countries are due to meet in the Russian city of Yekaterinburg on June 16 for the first summit since the international downturn struck their economies.
No immediate information was available for Halligan or his firm. ______________________________
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