But enough breaking news and "old friend" stuff. It was also a big week for my favorite themes: currency imbalances and the new multilateralism. As usual, they are related. Along with a meeting of the Shanghai Cooperation Organization (the emerging anti-NATO), Russia hosted the first-ever summit of the BRICs - Brazil, Russia, India and China -- in Yekaterinburg, which President Medvedev described as "the epicenter of world politics." It wasn't covered much little in the American press, and then often as a pendant to the story of a brief meeting, on the sidelines of the summits, between President Asif Ali Zardari of Pakistan and his recently re-elected Indian counterpart, PM Manhmohan Singh. It was their first powwow since the Mumbai bombing, and not insignificant. Still, we have to remember that one of the reasons groups like the BRICs and the Shanghai Cooperation Organization come into existence - one of the reasons, indeed, why so many large and medium-sized countries continue to both advocate and undermine reform of the more global institutions like the UN and Bretton Woods bodies - is precisely the lack of attention and respect paid to them by the West and Japan. Teating the summits as footnotes to a handshake between Zardari and Singh is one more instance of this lack of respect. The Financial Times's editorialists at least recognized the significance of the Yekaterinburg meetings, even while taking the opportunity to make fun of Medvedev. Two steps forward, one step back... and the FT (with its weekly cousin, The Economist) is by far the most interested of the Anglophone opinion-makers in the new multilateralism.
In fairness, it is hard to judge just how significant these meetings are. Consider the key question of currency imbalances. Since late last year, as readers of this blog will know, the biggest macroeconomic story of our era - the China-US, or dollar-renminbi, relationship -- has expressed itself through the debate over how to reduce the dollar's role as the global reserve currency of choice. The lead voice in this debate has been China's, with Russia and Brazil (the latter with better manners) playing strong supporting roles. Yet the statements from these players in the past ten days or so have been less than crystal clear. Russia's finance minister, Alexei Kudrin, said days before the summit that it was "too early to speak of an alternative" to the dollar, which he described (sort of) as in "good shape"; whereas Medvedev said before the Yekaterinburg summit that the dollar is not "in a spectacular position, let's be frank," and followed up at the summit with remarks on the need for creation of new reserve currencies. China, meanwhile, whose officials have been in the intellectual vanguard on this issue, stayed rather silent at Yekaterinburg. So it is hard to argue that the Yekaterinburg meetings, taken all in all, advanced the debate at all.
Nonetheless, the issue was being aired, and part of Chinese politesse seems to involve not stealing the podium from summit hosts. Besides, I also suspect that Geithner's China meetings the other day involved reminding Beijing that attacks on the dollar do China no favors in Congress, which happened to be debating, simultaneous with the Yekaterinburg talks, whether to pass a huge military spending bill that included $5 billion for the IMF, as promised by the White House at the last Group of 20 summit, in London. That bill was a tough sell, and the White House spent a lot of political capital to muscle it through over very strong Republican opposition - an opposition that was tightly connected to Republican dislike of Obama's pro-IMF, and indeed pro-multilateralist, policies. That bill finally cleared both houses of Congress by Friday, rescuing, for now, the Obama administration's political credibility on the multilateral front.
A certain geopolitical pudeur, then, if my analysis is correct, was in order at Yekaterinburg, and it is exactly what was exercised. This is not an indication of the insignificance of the Yekaterinburg meeting but rather of the careful good sense of some of the major players there. Put differently, it showed their seriousness in moving ahead, step by step, with the displacement of the dollar.
The connections are there to be made. Certainly the IMF side of the story is developing apace - and, of course, it is closely related, both in terms of calls for greater IMF "surveillance" of American policies and with regard to debates on expanding the use of IMF Special Drawing Rights on the basis of more currencies than just the current "basket" of the dollar, euro, British pound and Japanese yen. Both the UK's indestructible political maestro Peter Mandelson (in the WSJ) and the IMF's chief economist, Olivier Blanchard, chose the moment to write at some length on the IMF. But neither had very much at all to say about Yekaterinburg. That is itself telling, and disappointing.
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All right, I do have one little thing to say about Iran, and it is again on the theme of lack of attention and respect. It is entirely possible that Mahmoud Ahmadinejad won the election, or at least a very significant proportion of the vote. What struck me most about the Iranian government's swift announcement of his victory was that it showed such a lack of calm restraint. They couldn't wait! This may well indicate some fear or insecurity on Tehran's part. But it also communicated arrogance. I think it was hard for many Iranians not to take it as a slap in the face - an indication that the regime does not respect some very sizable portion of the Iranian people. In Iran as in Yekaterinburg and elsewhere in world politics, respect matters, and a failure to show it has consequences.