people are looking now or think that the strategic value of these bases has diminished for the u.s. . but with china growing stronger as a geo political force in the region and the instability of north korea still a concern it is likely that the united states won't be leaving okinawa any time soon sean thomas r.t. okinawa japan. and europe today to stay tuned for peter crosstalk from the russian city of gasland where political leaders have been meeting to discuss democracy and these officials say that after the headlines here nazi.

culture is that so much i was about the feeling that i do know and like to give a real commitment for geopolitics to fall towards we often talk about the emerging markets in terms of economic power now it is being translated into international geo political power wealthy british style. that's not on my mind. market why not. why don't what's really happening to the global economy

with my stronger for a no holds barred look at the global financial headlines tune in to conjure reports on our. game has been to do our hang. for the first russian fleet was going. to go to the area which holds talks to normal english resources. where the biggest russian someone can be our processing factories located. where unique species of former can be found. should close up. again this is all see our account holder stories that shaped the week as russia's

republican moves office says day set aside ball which killed seventeen and injured a one hundred sixty vocal police are accused of negligence and failing to stop the boma. as commemorations mugs in the inside of us or of the nine eleven terrorist attack there were clashes to other plans for months. to facing all the koran. americal on the tiger pilot safely land a passenger plane in the forest up about communication and navigation systems failed on the route to most folks from russia just. brainstorming for a brighter future talk winds gather for the global policy forum to discuss a formula for better peace and democracy. and coming up next it's cost talk with debate show which today also on leading countries should cooperate with new emerging nations to tackle global challenges that seconds away when elsie. hungry for the full story we've gone to. the biggest issues get

a human voice face to face with the news makers. every month we give you the future we help you understand how. to bring the best in science and technology from across russia and around the world. hello and welcome to cross talk i'm peter lavelle geopolitics and. we often talk about the emerging markets in terms of economic power is being translated into international geopolitical.

discuss the evolving international order and new shareholders i'm joined by richard berke he's managing director of make larky associates we also have lord robert skidelsky of the institute of new economic thinking he's also a professor at warwick university and we have evans he's a professor at the university of melbourne and also a former foreign minister of australia robert to you first. oh do you see the future we see the countries regions the united states the eurozone in a lot of trouble and a lot of it a lot of people say it's going to stay in trouble for a long time what a long time is i don't know but the rest of the world is absorbing the shocks of the last few years how is the international order going to absorb them if they say look we're doing pretty well the system that you created after the second world war isn't doing very well we want more seats on the united nations. security council

for example. the dollar the fate of the dollar so much of it is still controlled by western institutions western ideas that if i may but the west is not up to scratch the rest of the world is moving on how does the world how does how do how does the west respond to that with those kind of things coming from like china and the other bric countries including russia to distinguish between the long term trend happening the last two or three is. the west's in relative decline against these because these is just growing and there are more people and more people being added but in the short of course there's been a great shock to the world economy which which again america and europe have felt more. so. i think the long term trend will be accentuated by the short term shock first because there's less confidence in the model of.

confidence confidence in the institutions that were made after the second world war we are still with us right now but the world has changed so very much in the world isn't eurocentric anymore you really have to start thinking about what the indians and the chinese have to say on a lot of things and a lot of things in the world can't be done but is india and china willing to step up to the plate and take those kind of global responsibilities nonproliferation. you name it climate change are they willing to do it or they still want the west to you know hide on the back you know take the benefits but it is well we're in a transitional period right now which the feeling of the water feeling the strength doing a little bit of chest bearing and beating along the way enjoying the extra pair of authority that goes with the didn't join being able to get up there on the g. twenty stage of the major world's policy is absolutely entitled to enjoy all those things and to be want to be part of it. consequences there is

a downside to it there's a corollary to that and that is that that additional authority has to be accompanied by responsibility and we've got a bit of distance to go i think before we see that but if we the risks of the willed recognise that reality recognise that dynamic of knowledge the reality that these guys got to be part of the public the making up rod is recognise that they've got to be part of the executive decision making up brought us on the great issues of peace and security in the security council and get used to that idea then if that accommodation is made i think we will get to a which is in much better balance than the one we're working our way through at the moment richard i'm going to i mean that i think we can all agree with in the long term but what about democracy you know in looking at china you know they say if you want to be part of the club you want to sit in the adult table you have to accept our values and there's a big what people call the values gap you're how do you how do you do that i mean you say the chinese say look you know we like the economic system because we've benefited greatly from it they like capitalism wild wild capitalism now but they

don't want to have the political reforms there in the west we demand that they have to be in sync i don't think the west and the united states in particular especially during the obama presidency has been trying to ram its political values down the throats of china or even in term in the well i think the key question here and there's a there's sort of a kind of debate going on between people who say you need political reform first and then you can then you can grow economically but i think it's probably more the reverse if you look at the countries since the end of world war two particularly in asia but also in latin america that have successfully developed their economies and transition to democracy usually economic reform and the creation of a middle class preceded the development of democracy and i think that's a really key. the importance of creating

a large sustainable middle class now why do i say that because the middle class has an interest in the system and it wants to be heard good to schools for its children it once it doesn't like corruption it wants it wants to be dealt with by governments and businesses fairly it wants to protect its property and so if you look at south korea for example if you look at taiwan if you look at chile and latin america it's been economic growth that's preceded democratization and so i think if we do see sort of gradual liberalization and it was asian if you are an ally of the united states this is geopolitically interesting for the for the united states. there is a high correlation between the two very hard. our relations in the coals i think you can you can make the you can run the argument the other way. it's not a general rule that economic growth produces democratization it goes that way in

some cases democratize ation may be actually a condition of economic growth where you have a system who's the chief variable of which is hire a lawyer and so on energy and commodity. economy there's no incentive for the elite to to modernize the economy they're very happy living off the rents so that then has to be another impulse a political impulse and i think that's true of russia today unless there is some democratization of the political system i think the russians will remain fairly stagnant that's a very important point to make because we've just before this discussion i mean again what is democracy and what does it delivered during the first decade of independent russian democracy delivered them nothing zero well if you. actually got to have an. i don't know if it's fair to call the nine hundred ninety s.

as a period of real democracy in russia oh i mean fact was that the fact of the matter is is that you know countries don't transition right away or overnight i think we in the west and the united states in particular was was was naive about the notion in the ninety's that somehow russia after the fall of the soviet union was going to become a kind of jeffersonian democracy that. this point about the russian economy is really critical because now what we've seen here is that ten years of fairly healthy economic growth in russia you are beginning to see a middle class but the critical question is whether russia is going to remain essentially dependent on extractive industries oil and gas and minerals or whether president medvedev and his colleagues are going to succeed in this process of what they like to call modernization and what you know what i really argue is really diversifying the russian a couple this is but this is something they've talked about

a lot i mean they're paid fully aware of it ok there and then and then you get to economic turndown that really i call it made bed of interrupt it ok because if you look on the record he's talked in enormously about diversification getting away from oil and gas and other minerals that are exported their painfully aware of it and then you get the cart turned upside down everybody has to redo their budgets they don't know what their future is the ruble gets wobbly everybody gets wobbly and then you know you rely upon how you balance the budget while we still can sell oil and gas it's a vicious circle here so they've actually been set back here but you come from a country that could have fallen into the same situation with export we would be resourced opinion but we were able to ride to china and escape through the whole financial crisis but that was combined with a bit of political management as well in the system good banking system doing a lot of structural reforms as well at the micro level as well at the big macro level so i think destroyed is a little. a special case i think the hardest test case for all of this prosperity

breeds democracy and liberalism theory is obviously china and i think rick is absolutely right about the taiwan south korea experience but we're going to be waiting i think rather a long for that dynamic to flow through into china not least because there's so much anxiety bought into the instability and the so much willingness on the part of that bludgeoning new middle class which is enjoying its prosperity to let the government be able to keep the place. and i think that's what so many countries that are emerging to be whatever democratic stripes they have people want to keep the wealth that they have and we have a new middle class that's all over the world now i mean who would have thought you'd be droves of chinese tourists coming to russia i mean that was also goes to the heart i think makes a very important point here this goes to the heart of your question to one are these countries going to step up and take on greater international responsibility and from points we look at china years their economy is growing so rapidly they've just passed and in terms of the aggregate size of their economy they've got

a growing military where with all you know when are they going to start exercising a greater role in world affairs if you look at it from the position of the chinese leadership the communist party internally they are set with a range of very serious domestic problems they don't have a lot of time to think about their role internationally given the fact that they have to sort of run just to stay even. and it's the values gaffigan they say they don't want to get involved in that they think you know you know you have your country the way you want to say they want to go to africa and they want to be they want the minerals ok if they have to deal with this government or that government whatever their record is you know whatever ok i mean because they've taken a good part of the the the the formula democracy is about maybe democratization but modernisation ok. but i think china is

a lot more sensitive to international reaction to what is doing and it's often taken to be i've spent a lot of time talking to chinese policymakers over a very long time and i've noticed a gradual extent to which they do they are much more stable when you look at the iran issue i mean what do they want what are they saying about this you know if we want the oil ok you guys are all oh well. first i just voting for the sanctions look china china is going to draw a big red line just as rusher is around on weaponization and they going to let iran have an awful lot of rope as long as it's playing games up to the point of acquiring nuclear weapons but once you get challenged with an actual real life prospect of having weapons so you have to push them china will try to rush into other was very very strongly on our agenda is different from the panel and we're going to want to abstain or a gentle way to cut to a short break and we'll continue our discussion a discussion on new shareholders in the international system stay with r.t. . if.

you want.

welcome back to crossfire we're discussing the break gentlemen we're talking about international responsibility and modernization democratization and when to step up i mean. you can finish up your point there it's the chinese want to be they want a free ride this they want to take advantages of all the perks in the international system that they have but they want they want more influenced national interest not

for the greater good of the international order because it tends to think in terms of order the world order the way it should be and maybe has some kind of messianic view of what going to achieve it the chinese are torn of one of them wants to just get on with the domestic prosperity issue to mystic stability not make any decisions not make any waves just go with it internationally for them says we are rising we've got we've got some real issues associated with a lot more people looking to us we can't hide as much as we used to so we've seen a change in their voting pattern in the united states nation security council they used to abstain on all the really tough stuff now they take positions and they have to argue it out and this is i think a very healthy sign of china coming into the game sometimes they take positions that upset the rest of us because it's a little bit too much just beating going on but i think this is part of the process of we accommodate recognize that reality i think we'll have a responsible player on the i think there's

a long way to go before someone begins to talk about china taking. responsibility for world order first of all i think language is important the chinese don't talk about the rise of china they talk about the restoration of china they think in terms of preexisting. which was dissed by western intrusion and western imperialism . and i think also the chinese don't necessarily think of a single world. in which they have stakes proportional to their weight i think they all talk about think about regional or does they think about world the world the purposes of. keeping order in all parts of the world they subsidize the americans to do that and they're perfectly happy for that arrangement to continue so that that is that is so mercenary armies around that is why they're willing to do it to give america dollars so cheaply because i mean you know that the americans are doing

a job which they say they realize needs to be done but they're not doing little to it to some but i mean honestly i mean it is ok it sounds it's very i have never heard any single reason he's publicly and let him say able that strategy even if robert's right you know of course of course your course you're right it's not i was going to make a kind of different point you kind of began talking about how you know we still have this post world war two framework but what's interesting in the last eighteen months or so that framework has been transformed and sometimes we don't recognize that one is the g. twenty which in fact is really a group of about twenty seven or g. twenty eight the kind of essential structure for making these large macro economic geoeconomic questions has moved from a g seven g eight framework to a much larger group of countries and the new and the new players and you certainly see that in terms of how the united states make its makes its economic decisions it sees it in this broader framework that includes these new bric players secondly

though and that's what's important for china is not that you know they're they're buying u.s. bonds is there really is a kind of to neither china or the united states like to talk about it but they understand that the united states i think is willing to consult more closely with china than any other country in the world yet. it's realized it's not because united states is being a good guy and the chinese recognize that they need to work with the united states and a little history is important here the transformation of germany's role in the european system in the late nineteenth century was mishandled by by by britain in particular and by the germans and it led to over time world war one we are seeing that kind of change in international pecking order and how we manage the a burgeoning of the new bric countries with china in particular and the us chinese relationship evolves really be critical in terms of long term international

stability that's very true but i think i greet there is a g two and it's a very important but it's. quite limited range of subjects and the g twenty is useless more represent you know also very active decision making no no i really don't i international financial reform which is really a long way would not have happened without the g twenty i agree with i'm not sure i mean that i don't think that started in london and then continued in pittsburgh and went to toronto. in a more representative. of the world to say there's you know communist china saved international capitalism ok i mean really is what happened here is that the the west did one thing with its economic policies but told everybody else to do what they did they didn't follow their own good advice and they told everybody else how to run things they also australians came out through it with through this basically like a rose in comparison because they had a real banking system canada had

a real banking system the united states britain all through the euro zone oh my goodness ok living way beyond your means and this brings me to another the only five pows that have to actually have to know all this and they say they they salvaged the world economy the other fifteen were not important in the salvage operation i mean you know the g. twenty is very. facade it's very good gives people the feeling that they're involved but then no real stakeholders in this because they haven't got the economic clout. well i you know i really i really disagree with that because i think what we're doing is really kind of creating you make the same argument at the end of world war two in the early post-war period there were only a few countries that were important but but what we're seeing i think is really a kind of structural change in how these issues are going to be addressed you can't make these decisions anymore in london. washington and

paris and berlin they got to bring in a bigger group of players and i think that's that's a very radical shift and it's gone without very much comment in my judgment than what it what about the dollar then i mean if we g twenty it's the beginning of something we don't know really what certainly i would say it's good to have more voices if they really listen to i don't really know but you know you have the kind of the stranglehold here of the dollar i mean you know i used to be in finance and i can tell you that the world is. a strangle hold well you can it is a stranglehold i mean the euro is doing very badly the future of it i mean for goodness sakes some people were saying that we should be thrown out of the year ok it was an operation that we really don't know if it's going to succeed who's got their fingers on the throat of the fed in the u.s. was that the chinese bondholders i mean if it was the it's equal strength. that's what i was going to get to this analogy is blinking i mean nobody wants to blink the chinese don't want to lose so much of their wealth by the dollar crashing right

now but there is the smell of blood in the air i mean they cannot continue the united states is broke it's bankrupt. there's got to be international monetary reform i mean that is obviously very important and the key to that international monetary reform of the long run is to remove the reserve function and reserve currency function from. single currency which is the dollar because the dollar is the safest of the safe haze build the safe and that means following up on the chinese suggestion of a super solver in reserve currency which is also being made by russia it's been made by us will go for not at the moment i mean the problem and no one will quite go for the moment because the ground hasn't been fully late you know it's not a question of whether the united states government goes for the issue is whether the markets would go for it and i think what you'll probably see over time is the is the sort of creation of

a kind of basket of currencies where you know the dollar is becomes a smaller element in that overall that overall mix but it's what the markets it's what the currency markets the people who invest and buy and sell currency decides not a government is not a decision by the u.s. government or the fed the u.s. government with its comfortable position with the dollar it makes the enormous profits from it and with exchanges and things like that and plus you know having a trade dominated in dollars it's a very good reasoning about what you're saying is that the market sentiment comes from no you suddenly the markets feel this the currency markets and they decide and i think one doesn't want to actually. promote that view because it tends to suggest that politics. impotence and face. i don't know if you grant that politics often drives markets sentiments the things politicians and columnists say pompton

determine the way markets feel because markets haven't got great a lot of political intelligence on the whole when politicians say this is this is a safe this is unsafe. economy is going down markets tend to buy i don't disagree i think the most crucial question on the fate. the dollar is whether or not the political gridlock in the united states over the issue of deficit spending can be resolved because right now we have a situation where the republican solution is lower taxes and cut the size of government spending and then the democratic solution is higher taxes to balance the budget in till we can work a compromise between those two positions you know the basic problem is that you know the americans want more government than they're prepared to pay for and that's what if you can resolve that if somehow the obama administration can work out after

maybe this republican after this november congressional election when the republicans are likely to come back in the majority in the house where there's real day blog maybe and then if that means then i think then there are the dollar is going to be very very i think under threat but if you can if you could possibly work out a solution they could then lead to subsist staind economic growth this issue would the question of the u.s. dollar would vanish i think in a matter of years but i don't want to i don't think it will vanish because america has a structural structural current account deficit and it's shrink trunk a bit during the crisis but it's growing again america simply spends more than it would have but the last hour of the clinton administration a surplus certainly is they did they had a surplus and because but of course the reason why they spend more and that has been popular because of in the way internal policy.