Signs of the times, symbols of success

The Russian government's decision to give its currency a symbol is a step on the road to the respectability it craves. And while its introduction will not bring in the level of international trade and the financial controls and economic stability the majors rely on, this symbolism is important.

For a nation that aspires to regain the power and status it enjoyed in the Soviet era, having a hard currency with a globally recognised symbol is a move in the right direction. Certainly, Russia has many of the prerequisites of an economy that has a strong and heavily traded currency. It is a country that has huge reserves of natural resources and a large, well-educated work force.

However, to judge whether the rouble will turn into a latter-day yen, one would do well to look at how the Japanese currency became the global force it is today. Before the Breton Woods crisis in 1973, it had been seriously undervalued, and markets saw an economy that was stable, well ordered, innovative and highly efficient. From being a minor regional currency it quickly attained global status, and soon surpassed in importance the Canadian and Australian dollars.

Is the same likely to happen to Russia? Possibly, but there are other contenders for the title of global currency that are much better placed. The most obvious of these is China. The renminbi is the unit of what is arguably the world's most important economy. It benefits from a stable government that holds economic growth as its most important achievement.

It is likely that the renminbi will surpass the yen as the world's third unit well before the rouble, which is hindered by a government that has yet to put in place an effective market economy. Persistent spats with territories on its southern fringes also lend an aura of instability to the country that scares off potential investors.

However, none of this means Russia's symbol should not be taken seriously. Rather, other currencies such as the renminbi, the Thai baht, which has recently been put on Reuters, and the South African rand, which is now a respectable democracy with a strong commodity base, would do well to come up with their own symbols to promote their currencies.