The Kazakh president opened Ataturk Monument in
the Kazakh capital on Thursday. “Ataturk was the biggest leader brought up by the Turkish nation,” Kazakh
President Nursultan Nazarbayev said during the inaugural ceremony in capital
Astana.The Ataturk Monument was constructed on the bank of River Ishim (Esil) in
Astana.Turkey’s State Minister Faruk Celik was to participate in the inauguration,
however he cancelled his trip to Kazakhstan. Undersecretary Ismet Yilmaz of the Ministry of Culture and Tourism represented Turkey in the ceremony.
You can date the end of dollar hegemony from China’s decision last month to sell its first batch of sovereign bonds in Chinese yuan to foreigners.
By Ambrose Evans-Pritchard
06 Oct 2009
The Chinese yuan: friends take a photo in front of a sculpture of a one-hundred yuan banknote in Beijing
Beijing does not need to raise money abroad since it has $2 trillion (£1.26 trillion) in reserves. The sole purpose is to prepare the way for the emergence of the yuan as a full-fledged global currency.
“It’s the tolling of the bell,” said Michael Power from Investec Asset Management. “We are only beginning to grasp the enormity and historical significance of what has happened.”
It is this shift in China and other parts of rising Asia and Latin America that threatens dollar domination, not the pricing of oil contracts. The markets were rattled yesterday by reports – since denied – that China, France, Japan, Russia, and Gulf states were plotting to replace the Greenback as the currency for commodity sales, but it makes little difference whether crude is sold in dollars, euros, or Venetian Ducats.
What matters is where OPEC oil producers and rising export powers choose to invest their surpluses. If they cease to rotate this wealth into US Treasuries, mortgage bonds, and other US assets, the dollar must weaken over time.
“Everybody in the world is massively overweight the US dollar,” said David Bloom, currency chief at HSBC. “As they invest a little here and little there in other currencies, or gold, it slowly erodes the dollar. It is like sterling after World War One. Everybody can see it’s happening.”
“In the US they have near zero rates, external deficits, and public debt sky-rocketing to 100pc of GDP, and on top of that they are printing money. It is the perfect storm for the dollar,” he said.
“The dollar rallied last year because we had a global liquidity crisis, but we think the rules have changed and that it will be very different this time [if there is another market sell-off]” he said.
The self-correcting mechanism in the global currency system has been jammed until now because China and other Asian powers have been holding down their currencies to promote exports. The Gulf oil states are mostly pegged to the dollar, for different reasons.
This strategy has become untenable. It is causing them to import a US monetary policy that is too loose for their economies and likely to fuel unstable bubbles as the global economy recovers.
Lorenzo Bini Smaghi, a board member of the European Central Bank, said China for one needs to bite bullet. “I think the best way is that China starts adopting its own monetary policy and detach itself from the Fed’s policy.”
Beijing has been schizophrenic, grumbling about the eroding value of its estimated $1.6 trillion of reserves held in dollar assets while at the same time perpetuating the structure that causes them to accumulate US assets in the first place – that is to say, by refusing to let the yuan rise at any more than a glacial pace.
For all its talk, China bought a further $25bn of US Treasuries in June and $25bn in July. The weak yuan has helped to keep China’s factories open – and to preserve social order – during the economic crisis, though exports were still down 23pc in August. But this policy is on borrowed time. Reformers in Beijing are already orchestrating a profound shift in China’s economy from export reliance (38pc of GDP) to domestic demand, and they know that keeping the dollar peg too long will ultimately cause them to lose export edge anyway – via the more damaging route of inflation.
For the time being, Europe is bearing the full brunt of Asia’s currency policy. The dollar peg has caused the yuan to slide against the euro, even as China’s trade surplus with the EU grows. It reached €169bn (£156bn) last year. This is starting to provoke protectionist rumblings in Europe, where unemployment is nearing double digits.
ECB governor Guy Quaden said patience is running thin. “The problem is not the exchange rate of the dollar against the euro, but rather the relationship between the dollar and certain Asian currencies, to mention one, the Chinese Yuan. I say no more.”
France’s finance minister Christine Lagarde said at the G7 meeting that the euro had been pushed too high. “We need a rebalancing so that one currency doesn’t take the flak for the others.”
Clearly this is more than a dollar problem. It is a mismatch between the old guard – US, Europe, Japan – and the new powers that require stronger currencies to reflect their dynamism and growing wealth. The longer this goes on, the more havoc it will cause to the global economy.
The new order may look like the 1920s, with four or five global currencies as regional anchors – the yuan, rupee, euro, real – and the dollar first among equals but not hegemon. The US will be better for it.
Police in Turkey have used tear gas and water cannon to break up protests against a meeting of the World Bank and the International Monetary Fund.
Several hundred protesters shattered the windows of banks and a fast-food restaurant in Istanbul, reports say.
Dozens of arrests were made, and many shops in the city centre remain closed.
Delegates of the two organisations are holding their annual meetings, with co-operation in international finance reportedly high on the agenda.
“Long live freedom,” chanted crowds of protesters, some of whom covered their faces with red scarves. “IMF get out of our city.”
Shield-wielding riot police wearing gas masks erected barriers around the convention centre where finance ministers, central bankers and economists were meeting.
Police helicopters hovered above the protests, which were organised by several Turkish trade unions.
A student was arrested last week for throwing a shoe at Dominique Strauss-Kahn, the IMF managing director, during a speech he gave at an Istanbul university.
The IMF is urgently discussing ways to make itself more representative of the new world order where developing countries make up nearly half of the world economy, but only have about one-third of the votes in the IMF.
Israeli minister and former military chief Moshe Yaalon
Mr Yaalon was military chief of staff at the time of the Shehadeh attack
cancelled a UK visit because of fears of arrest for alleged war crimes, his office says.
Pro-Palestinian groups in Britain want Mr Yaalon to face trial over the 2002 killing of a Gaza militant, in which 14 others also died.
Mr Yaalon took legal advice and wanted “to avoid playing into the hands of anti-Israel propaganda”, an aide said.
A similar attempt last week failed to get Israel’s defence minister arrested.
Mr Yaalon, who is vice prime minister and strategic affairs minister, had been invited to attend a charity dinner held by the Jewish National Fund’s UK branch.
But his spokesman, Alon Ofek-Arnon, confirmed that the foreign ministry’s legal team had advised against it.
Israeli media reported that the advisers believed Mr Yaalon would not be accorded diplomatic immunity – in contrast to Defence Minister Ehud Barak who visited the Labour Party Conference in Brighton without interference.
“This is a campaign whose goal is to de-legitimise the state,” Mr Yaalon said in remarks quoted by Haaretz newspaper.
Allegations against Mr Yaalon date back to July 2002, when an Israel Air force jet dropped a one-tonne bomb in a densely populated area of Gaza to assassinate senior Hamas figure Salah Shehada.
The attack was part of Israel’s policy of “targeted killings” of Palestinian militants it blamed for plotting attacks against it.
At the time, the army expressed regret about the deaths of the 14 civilians, at least eight of them children. in addition to Mr Shehada and said they had come about as the result of faulty intelligence.
Britain has adopted the legal principle of “universal jurisdiction”, under which domestic courts in countries around the world can try war crimes suspects, even if the crime took place outside the country and the suspect is not a citizen.
Palestinian campaigners sought Mr Barak’s arrest last week, in connection with Israel’s controversial military operation in Gaza in December 2008 and January 2009, but judges declined to hear the case.
A UN report by international prosecutor Richard Goldstone accused both Israel and Hamas of war crimes. Israel rejected its findings.
World Bank Group President, Robert Zoellick,
said Tuesday the new global order should be “responsible globalization”.
Speaking at the inauguration of the annual meetings of IMF and World Bank in Istanbul, Zoellick said that international institutions and countries should work for a globalization that is accountable. As a result of the global crisis, more than 59 million individuals will lose jobs. Up to 50,000 babies may die in the least developed regions of Africa, Zoellick stressed.
The whole humanity calls on us not to permit a global crisis again in the
future, Zoellick said.
Turkish Prime Minister Recep Tayyip Erdogan said Tuesday Istanbul was a bridge not only between continents but also between civilizations, cultures, economies and commercial regions.Speaking at the inauguration of the annual meetings of IMF and World Bank in Istanbul, Erdogan said that he welcomed all to Turkey and Istanbul with warm regards. Turkey and Istanbul hosted the annual meetings of IMF and World Bank in
1955. Turkey hosts the meetings again after 54 years. I would like to express the happiness of my people and myself over welcoming you, the distinguished guests, to Istanbul one more time, Erdogan said.
I hope that the meetings in Istanbul would be beneficial at a time when we
are going through a critical process as far as global economy is concerned,
Erdogan underlined. You are now on lands that invented the first currency in history. I would like to use this opportunity to remind you that you are also in a city that spreads on two continents, Erdogan said. The Bosphorus Strait connects Asia to Europe. I am confident that the city
of Istanbul, a city which unites civilizations, cultures and economies, will be
the host for a meeting that will leave a mark on the global economy and will help us bring together our strengths and experiences, Erdogan said.Erdogan stressed that strong policy measures have yielded positive results
in the world. This is a pleasing development. However, we must not let go precautions in our economies, Erdogan said.There is a need to re-evaluate the distribution of roles and responsibilities in the global economy, Erdogan noted.
I, once again, want to welcome you all to Turkey and Istanbul and hope that
you will enjoy the beauties of an unique city Istanbul, Erdogan also said.
The Kazakh president opened Ataturk Monument in
