The Dragon and the Elephant: A dance of dollars and distrust

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As reported by Mint, Singapore’s Lee Kuan Yew said: when elephants make love, the grass also gets crushed—just like a Kenyan saying that when elephants fight, the grass suffers.

When India and China agreed to work together at the SCO summit in Tianjin, it was compared to an elephant and dragon preparing to dance.

If this change in India-China ties happens, it could benefit businesses in both countries.

The two leaders used warm words, but differences remain, mainly on the border issue. Xi Jinping said we should not wait for disputes to end before working together on big challenges like trade uncertainty.

PM Narendra Modi agreed partly but said an unsettled border will always affect joint efforts.

Another difference is on terror. Modi said the SCO must fight terror clearly, but China’s support for Pakistan looks like a lack of commitment from Beijing.

India, China and the world can gain a lot if the two Asian giants work together, not only with each other but also with other BRICS members.

If there is stability at the border, both New Delhi and Beijing could relax rules for trade and investment.

Even if economic gains look attractive, we must protect our interests and not let them get hurt or ignored.

We cannot risk sabotage by using Chinese equipment and software in power, finance, health, data systems, traffic, railways, airports and water controls.

Trump’s policies have weakened trust in the US dollar as a global currency.

Though the dollar may stay strong, BRICS could create a stablecoin linked to the IMF’s SDR, backed by dollar, euro, yen and other assets, to meet US digital currency rules.This could first be used for settlements within BRICS countries.

● SDR (Special Drawing Rights) is an international reserve asset created by the IMF, based on a basket of major currencies, used to support global financial stability and provide liquidity to member countries.

● US digital currency rules are new laws and regulations made to control the use of cryptocurrencies and digital assets. They ensure transparency, security, anti-money laundering checks, and compliance with financial systems before such currencies can be widely accepted.

With a BRICS reinsurance arm and clearing house, this system could be a useful option. Even if the West doubts China, proposals backed by India may attract the Global South and even US allies upset with Washington’s lack of cooperation.

● A BRICS reinsurance arm would mean a common insurance support system where member countries share risks, so businesses are better protected against losses.

(Disclaimer: The views expressed above are the author’s own and do not reflect those of DNA)

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