The Duran Podcast - Oil, food, trade and people; BRICS play long game

Episode Date: August 26, 2023

Oil, food, trade and people; BRICS play long game

All right, Alexander, let's talk about the BRICS summit. In South Africa, we have six new countries entering BRICS. The name will stay the same, from what I understand. Yes. We'll have six countries, Argentina, Ethiopia. That was a surprise. Ethiopia. Egypt, UAE, Saudi Arabia, and Iran.

What do you make of the makeup of these countries, the geography of these countries? and then of course the energy resources of these countries that are enhancing bricks. Yeah, there's been some trading off between the various brick states. So the Chinese wanted to expand bricks. The other countries, the Brazilians and the Indians were less keen. The Russians sat a bit on the fence, but they eventually came round. So what has happened is that the various BRICS leaders came. together and they came to agreements. So I think the priority for the BRIC states, for the Chinese,

was to bring Saudi Arabia, the UAE and Iran into the BRICs. I think that was perhaps what the Chinese were most keen on. But the Russians wanted their friend, Egypt, which is a good friend to Russia. They wanted Egypt in. The South Africans, wanted another African country, so they got Ethiopia, and the Brazilians wanted another Latin American country, so they got Argentina. Now, that basically rounds it up. Now, all of these countries, it must be said, have potentials to add significantly to the Briggs. Now, Iran, Saudi Arabia and the UAE, they're big oil producers. They're big oil producers. big commodity produces. Iran is an enormously, potentially an enormously rich and powerful country

if it gets organised properly. It's anxious to get out of the sanctions systems that have been imposed upon it by the United States. Joining the bricks provides that opportunity. It can now establish trade links. It can take steps to stabilise its financial system. This is a big bonus for Iran. Saudi Arabia and the UAE are the two key players in the Gulf. They are major oil producers. They are also, by the way, very close friends. We've discussed Saudi Arabia's realignment with the Chinese and the Russians and its move away from the United States. We see that the Biden effort to win over the Saudis by giving them the green light to develop nuclear weapons, but that's failed.

The Saudis are going to go ahead and join the BRICS. Now, Iran, Saudi Arabia, the UAE, that adds a real core benefit to the BRICs because the BRICs are also

moving forward with their financial reform. There's going to be more announcements about that, apparently, shortly, but it's clear that this is now been taken forward, very fast. Oil, as we've discussed many times, remains the world's most widely traded commodity. It is the indispensable commodity. You cannot run a modern economy without oil. And with all of the major oil exporters, now joining the bricks, Russia, Saudi Arabia, the UAE and Iran, the bricks are now very

strategically placed to back their new financial system with oil and say you know that if you trade in this fund if you if you trade in oil you can do it through our financial system before long if you want to buy oil you have to do it through this financial system so you can see you can see what these countries add to the briggs now if we look at the other three countries that Egypt is the biggest country in the Arab world. It's also part of the African continent. It controls the Suez Canal, which is one of the major sea routes. It's got a very large population.

It's keen to industrialize, has a strong relationship with Russia. Russia's been taking a big role trying to promote industrialization. in Egypt. It's got, it's planning to create an industrial park there. Egypt has many, many, many problems. It would potentially

benefit hugely from joining the bricks, associating itself with the country, with, you know, the world's biggest food exporter, which is now gradually becoming Russia. You can see that it benefits both the Russians and the

Egyptians for Egypt to join the bricks. It takes the whole process forward from there. It also, by the way, means that another key US ally in the Middle East, which is Egypt, is now starting to move towards China and Russia. Ethiopia is a very interesting country. It's big, it's potentially a very rich country. until recently it had a very rapidly growing economy. It's got many educated people, as I know for myself.

It's rich in raw materials. Despite its many food problems, its famines and things, that kind. If its agriculture is organized properly, it could be agriculturally rich as well. It has the most ancient history as a state of any of the African states. It's had a historically very strong relationship with Russia, going all the way back to the 19th century. And Ethiopia, potentially, if it stabilizes with a economy with just a few years ago, was achieving double-digit growth, it could also become a major player in bricks. And again, it balances out South Africa.

and Argentina is going through a massive economic crisis. The political situation there is potentially very unstable. There could be big changes in Argentina as well. But ultimately, if Argentina ever does manage to get its problems behind it, perhaps joining the bricks might be the way to do it. Well, Argentina is also potentially an enormous. It's a huge food producer. It's got other mineral riches.

It's got a highly educated population. It's a country with a huge cultural history. And it's got, by the way, a significant industrial base. And it complements Brazil, which has been keen to bring it into bricks. So we get all of the big commodities producers, Argentina, Brazil, Russia, all big food producers. Brazil is also big oil producers as well, by the way. They're all joining bricks. Ethiopia, potentially big food producer also.

We get the big oil producers and exporters, Russia, Iran, Saudi Arabia, the UAE joining bricks. We get the Arab world's biggest country, Egypt, joined bricks. We get the Arab world's biggest country. Egypt, joining Bricks, strategically located country, joining Bricks. And of course, Ethiopia, Africa's oldest state, also joining Briggs with this enormous backstory, going back all the way to the Roman Empire. So it's an interesting combination of countries. You can see how it's come about. As we said, in our program, last program, Bricks is evolving from a club, into, an organization, it's taken a big step in that direction. It's going to retain the name

Bricks for the moment, but I can't believe that one day it won't change that name, and it will be interesting to see what name adopts. Yeah, I was going to say the same thing about the countries that are entering Bricks. It seems like the initial founders of Bricks, Brazil, Russia, India, China, South Africa, they're taking a different approach than say the G7 countries, where the G7 countries seem to be much more focused on services and financing, financial tools, markets. The BRICS countries and the enlargement of BRICS seems to be focused on commodities,

oil, gas, of agriculture, food, minerals, or countries that have the potential to develop into large commodity players. It seems like we're taking, we're seeing two different approaches in how these two different organizations are either in existence or how they're going to grow. So, I mean, this kind of falls in line with many of the speeches that Putin has given about, you know, what makes a real economy. And Putin is very focused on resources and commodities. things like this instead of focusing so much on financial instruments and banking and stuff like that.

So it's, I think after this meeting, we're getting a clear picture as to what Bricks wants to be and what Bricks is going to control in this multipolar world. Absolutely. They want to create a trading system, which is where the commodities are important and where the financial system is important. And they're also keen to pursue industrialization. I mean, Russia is developing its industry. And manufacturing in Russia grew by 11% year on year in the second quarter of this year. So, you know, there's a big industrial surge, manufacturing surge in Russia. And all of these countries, Ethiopia and Egypt, are keen on promoting industrialization.

Egypt, of course, has a significant industrial base already. and Iran and Brazil also have significant industrial bases that they clearly want to expand. So you can see what they're trying to do is that they're trying to create an actual trading system, a real trading system, trading in real goods, commodities and industrial goods, as opposed to what you correctly said was the G7,

which is the G7, It's about principally about finance and services. It's not quite so much about trade anymore. So it's an industrial commodities-based block. The bricks versus a more services-oriented finance block, which is the G7. Because there is another very important difference, which is, of course, the G7 is a very narrowly constituted block. It's the United States, it's European friends plus Japan.

In other words, it's the core countries built around the US system as it has existed since the 1940s. All the countries that are members of the G7 have been US allies going all the way back to the 1940s. BRICS, by contrast, is an expanding group. They're bringing in more countries around the world as they're setting out to expand, not just into a trading system between themselves, but ultimately a global trading system, bringing in as many countries around the world as possible. Yeah.

Okay, so let's wrap up the video. What's next in? the development of Bricks, in your opinion, the summit's going to wrap up and all the world leaders are going to go back home? What do you think is next in the evolution? Right. The first thing to say is that I've never known a Brick summit, which has come under so much pressure from the West. There's been relentless attempts to sabotage it. There was the ICC warrant against Putin, which is clearly intended to prevent his, in part intended to prevent his presence in South Africa. He was able to participate. He's made lots of contributions via video links.

You can find them all on his website. So there was that. There were constant attempts to create tensions between the Indians and the Chinese. There were reports that Modi wasn't even going to go. And of course he did. There was claims that Modi was opposed to Brick's expansion. Turns out that he wasn't. It turned out there were also. of claims that the Indians weren't particularly keen on developing bricks's financial architecture. It turns out that they are. They seem to be taking a leading role in this. So, India is fully on board.

I think two things are going to happen. Firstly, the bricks are going to work on working up their financial architecture. We've had a lot of statements about this. They're not going to move immediately towards setting up a reserve currency. they accept that this isn't ready, but we've now got banking systems being built, accounting systems we've sorted out. We'll get an awful lot more, I suspect, over the next couple of hours as to how that's going to be taken forward. But the other thing that I suspect is going to happen is that over the next few months, or perhaps years, we're going to see

a sustained attempt between India and China to sort out their issues with each other. because just as Saudi Arabia has looked at the whole situation, listened to what the Americans are offering, it's nonetheless decided to press forward with the bricks. I think the Indians have made the same decision. Saudi Arabia and Iran in the same organization working together, India and China, working together, it's pretty amazing stuff, huh? Well, you know, I mean, you've got to say this about Joe Bar,

I mean, he's the great conciliator and peacemaker. He's acted since he became president to forge reconciliations between great nations, China and India, Saudi Arabia and Iran. I mean, you know, another man in the White House pursuing different policies, for all you know, those countries might still have been at odds with each other. I think he deserves a Nobel Prize. They might give him one, probably not for the reasons that you outlined just now. All right, we'll lend it there. That derad.com. We are on Robleaudacity Bichute Telegram and Rockfin and go to Duran Shop.

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