BRICs
On June 16, 2009, the heads of state of Brazil, Russia, India and China (the so-called BRIC countries) held their first summit in Yekaterinburg, Russia, to discuss their role in global politics as major emerging economies. The financial crisis was the chief focus of the summit. Russian President Dmitri Medvedev proposed a gradual move toward a “more diverse” currency system, rather than exclusively depending on the U.S. dollar.
RUSSIA
In response to deteriorating economic conditions in Russia, Prime Minister Vladimir Putin announced an adjusted 2009 budget for the country in April. The revised budget included economic stimulus measures costing three trillion rubles ($90 billion dollars), with the aim of mitigating domestic economic problems such as rising unemployment and declining oil prices in the first months of 2009. Putin referenced the disadvantages of Russia's economic dependence on oil by stating “There's no point hoping for high oil revenues in the near future that would solve all of our problems at once.” Despite signs of improvement tied to a turnaround in oil prices, the World Bank predicted that the Russian economy would contract by 7.9% this year and would not return to precrisis levels until the end of 2012. On July 6, 2009, during his first presidential visit to Russia, President Barack Obama signed a preliminary agreement with Russian President Medvedev to reduce each country's respective nuclear arsenals by up to one third. This new treaty, if ratified by the U.S. Senate and the Russian Duma, will replace the 1991 Strategic Arms Reduction Treaty (start I) that is set to expire in December 2009. The U.S. also agreed to reactivate military relations with Russia, while Russia in turn agreed to allow the U.S. to ship weapons and other lethal supplies across Russian territory to Afghanistan.
NATO and RUSSIA
At the beginning of April, the North Atlantic Treaty Organization (NATO) held its 60th anniversary summit, in Strasbourg, France, and Kehl, Germany. After the summit, leaders from the NATO member states issued a new Declaration on Alliance Security, detailing a revised vision for the future and strategic role for NATO that stresses the continued relevance of the organization for global security. The document identifies new challenges such as terrorism and nuclear proliferation and also includes a brief reference to a “strong, cooperative partnership between NATO and Russia.” However, relations between NATO and Russia cooled later in April after Russia withdrew from a meeting with NATO military commanders to protest the organization's plans to conduct two military exercises in Georgia in May and June 2009. On Apr. 29, 2009, NATO expelled two Russian diplomats from its headquarters in Brussels on charges of spying, prompting Russia to expel two NATO officials from Moscow a week later.
CHINA
A week before the G-20 (created in 1999 by finance ministers and central bankers of 19 member countries plus the European Union, EU) summit in April 2009, Zhou Xiaochuan, governor of the People's Bank of China, proposed switching the global reserve currency from the U.S. dollar to a currency value system independent of any one state. (As the largest foreign holder of U.S. Treasury securities—approximately $800 billion—the Chinese government has been expressing concern about the value of the U.S. dollar during the global recession.) On July 16, 2009, China's National Bureau of Statistics announced that the country's economic growth rate had increased from 6.1% in the first quarter of 2009 to 7.9% between April and June. Many analysts attributed the growth to China's near $600 billion stimulus plan. However, this economic improvement in China is not without its critics; China's trade partners question whether the stimulus relies too heavily on protectionist policies that promote exports while curbing imports. In June 2009, the U.S. and the EU filed a complaint with the World Trade Organization about such policies.
Going beyond the treasury and trade platform, the U.S. and China held multiple meetings to discuss climate change and renewable energy. In June, Chinese Vice Premier Li Keqiang met with the U.S. special envoy on climate change, Todd Stern, to initiate work on a joint agreement about greenhouse-gas emissions prior to the Copenhagen Climate Change Conference in December 2009. However,during the G-8 (top eight leading industrialized countries) meetings in early July 2009, developing countries, led by India and China, refused to acquiesce to precise targets for greenhouse-gas-emission cuts. In mid-July, both U.S. Commerce Secretary Gary Locke and Energy Secretary Steven Chu were in China to help initiate cooperative measures on energy and environmental issues.
The U.S. Department of Defense published a report in March entitled “Military Power of the People's Republic of China 2009,” which called for increased dialogue on and transparency in China's military modernization efforts, given that “much uncertainty surrounds China's future course, particularly regarding how its expanding military power might be used.” The report details the modernization procedures within the Chinese military and the status of China-Taiwan relations, as well as China's recent involvement with international relief missions.
In June, military officials from the U.S. and China met for the first time since China had broken off military contact with the U.S. in October 2008 to protest American arms sales to Taiwan. The chief topics of discussion were the recent confrontations between American and Chinese naval vessels, as well as the North Korean nuclear threat. Both sides agreed to resume talks in the coming months and to support sanctions against North Korea. Another bilateral meeting of high-level officials, the U.S.-China Strategic and Economic Dialogue (S&ED), began on July 27, 2009, with Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner serving as joint hosts. The talks focused on the necessity of cooperation across a wide range of issues, including strategies for sustainable economic growth, climate change and nuclear nonproliferation.
INDIA
On May 16, 2009, parliamentary elections in India concluded with a decisive victory for Prime Minister Manmohan Singh's ruling Congress party. On July 6, India announced its new budget, which focused on stimulating demand at the domestic level through tax breaks and government spending, rather than delivering financial and market-oriented reforms as expected by investors. India's finance minister, Pranab Mukherjee, stated that the new budget aims to eventually return India's economic growth back to 9%. It had slowed to 6.7% in the fiscal year that ended on Mar. 31, 2009.
On July 17, 2009, Secretary of State Clinton visited India in an effort to expand dialogue between the U.S. and India on matters ranging from business to security and climate change. Security- and business-related partnerships announced at the time of Secretary Clinton's visit included agreements for military sales from the U.S. to India and Indian plans to contract American companies to build nuclear power plants. In addition to meeting with business leaders and students, Secretary Clinton also met with Jairam Ramesh, India's minister for the environment and forests. Echoing China's reservations about complying with greenhouse-gas-emission limits, Ramesh stated “we are simply not in the position to take legally binding emissions targets,” but also reiterated India's intentions to reach an agreement at the Copenhagen Climate Change Conference in December.