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14 May, 2010 10:56

Strategic partnership measured in roubles and reais

Russia and Brazil have agreed to start moving toward using their own national currencies in trade between the two countries instead of using the dollar or the euro.

The statement came at a news conference held by Dmitry Medvedev and his Brazilian counterpart, Lula da Silva, following talks in Moscow.

The issue of economic cooperation was the main focus of the discussions.

President Medvedev said he believes trade volumes between the two states can reach as much as $10 billion a year, even despite the economic downturn.

High technology, space, aviation, peaceful nuclear program and communications are the main spheres of collaboration between Russia and Brazil.

Russian gas companies participate in a lot of energy projects in the South American country. The leaders discussed how that kind cooperation can be improved.

With the crisis showing that dollar and euro are not reliable, the two presidents discussed the possibility of switching to national currencies.

“Mr. President and I have agreed that we would create a work group, which will promote the subject of using national currencies in trade,” Medvedev said. “It is very important for the economic stability of our countries and a better balance of the world financial system. Recent events proved that neither the dollar nor the euro, nor any other currency, could be universal and able to protect all states.”

Russia and Brazil are both members of the BRIC group of “emerging economies” – Brazil, Russia, India and China – as well as the UN and G20. Medvedev and his Brazilian counterpart discussed the idea of G20 being institutionalized and provided with enough tools to be able to influence the global economy.

Journalist Pepe Escobar says the trade in national currencies is the key to improving trade relations between the two nations.

“In fact they need to improve the trade relations and there are many ways of doing it. They are going to sign a lot of technological agreements, scientific cooperation agreements. And also they are going to discuss something very important – improving trade means making it easier for both sides and this means not trading US dollars any more – trading their own currencies. This means the [Russian] rouble and the [Brazilian] real,” the journalist noted.

“This is a significant step further [in relations]. This is an economically important trip and a politically important trip as well in terms of closer cooperation within the BRIC and attacking the unilateral framework which is still defined by the US and the big European powers,” Escobar concluded.

Apart from economic issues, the two leaders also discussed “top international issues, which concern security on a regional and global scale."

Peace in the Middle East and the Iranian nuclear program were among the topics on the table.

The president of Brazil will head to Tehran to try to persuade Iran to cooperate with the international community.

Medvedev said he thinks it might be the last chance for Iran to be change the situation before the UN Security Council decision.

President Lula da Silva said he’s optimistic about the upcoming visit. However, the Russian leader has judged his chances of persuading Iran to be quite moderate.

Anna Protsenko from the Latin American Institute at the Russian Academy of Sciences believes that the Brazilian position concerning Iran is very healthy and useful.

“We all know that president Medvedev called Lula da Silva very optimistic,” Protsenko told RT. “I think that there are strong grassroots behind this optimism, or, I would call it, positivism, because, in the Brazilian opinion, more sanctions won’t prevent Iran from developing this program, it just will push them forward.”

“[There have been] some moody reactions of some US congressmen or senators, [because] there is a very strong and very realistic policy of the US in the region,” she added, speaking about the US response to the talks between the Russian and Brazilian presidents. “I think everything is just going fine and we do not have to look for a negative reaction.”

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