Koon Yew Yin 21 April 2020
When Coronavirus started in Wuhan in Mid-December last year, the US President said that Coronavirus was made in China. Currently the US has the most Covid 19 cases in the world. Both the number of cases and deaths are increasing at an alarming rate.
More than 5.2m Americans filed new claims for unemployment insurance last week, pushing the total in one month to more than 22 million, in the latest sign of the staggering job losses from the coronavirus shutdowns. Covid 19 is hurting the US economy. Moreover, due to the lockdown in many countries, the demand oil is greatly reduced and oil price is dropping rapidly which will hurt the US, as an oil producer. Under the circumstances, the US Government will have to print more US$ to prop up its economy.
Now China, Russia, Pakistan and other nations have decided not to use US $ to trade. As a result, the value of US$ will depreciate in value. Americans will have to pay more for all the imported goods. Moreover, the US will gain less from all its exports. The Covid 19 and the US$ depreciation will hurt the US Economy so much that a US recession is inevitable. China will emerge the winner.
The eight-member countries of the Shanghai Cooperation Organization (SCO), including China, Russia, and Pakistan, have made the principle decision to conduct bilateral trade and investment and issue bonds in local and national currencies instead of US dollars.
As per details, a road map will be finalized and signed at SCO’s Finance Ministers’ meeting in Moscow on March 18th. Russia, as chairman of the Shanghai Cooperation Organization, has called for suggestions from all member states for trade and investment in local currencies. After a detailed review of these proposals in Moscow’s meeting, a system of mutual settlement of national currencies will be introduced for the member countries of the SCO.
All member states will sign a roadmap for trade and investment in national currencies between member states. Russia has issued the agenda for the SCO’s Finance Ministers’ meeting summoned in Moscow on March 18.
Representatives from the finance ministries and central banks of China, India, Russia, Pakistan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan will attend the SCO conference in Moscow.
In addition, Iran, Afghanistan, Belarus, and Mongolia are the observer countries of the SCO who wish to become a regular member of the organization.
Reports say that if the trade and investment between the member states of the SCO begin in national currencies instead of dollars and pounds, it will be a big breakthrough. It will also strengthen the national currencies of the member countries and promote mutual trade and investment.