THE American dollar has started losing its influence over the global economy as rival powers, like China, Russia and, to some extent, India, are encouraging other countries to sign trade agreements in their mutually agreed currencies.
Strutting on the world economic landscape as the bully on the block, the United States tries to use the power of the purse through international lending agencies, like the International Monetary Fund (IMF) and the World Bank, to hamstring vulnerable countries.
For instance, Iran, Russia and a few others have been excluded from dollar-based systems, like the Society for Worldwide Interbank Financial Telecommunications (SWIFT). Counterproductively, it has left these countries with no option but to devise some contingency plan to counter the hegemony of the dollar.
At present, China is well poised to challenge the American hegemony over developing countries as the greenback is being nudged away by yuan in international trade agreements. Recently, China has entered into agreement with resource-rich Brazil to transact trade in each other’s currencies. China has also executed a test trade for natural gas with France in a bid to establish its currency internationally and to weaken the dollar’s grip on world trade.
Similarly, India and Malaysia have set up their respective banks to allow international trade between the countries in Indian rupee. India intends to use the G20 platform to pave the way for its currency to be conscripted in international trade warfare.
The world’s largest oil exporter, Saudi Arabia, has also indicated about open trade in currencies other than the US dollar. During President Xi Jinping’s visit to Saudi Arabia last year, both the countries agreed to conduct oil trade in the yuan.
Though some rightist intellectuals do not buy the idea of de-dollarisation of world economy in the near future, they are equally apprehensive of decentralisation of economic power away from the US because of the latter’s neo-colonialist strategies across the world, particularly in the Muslim world and Latin American states.
However, the reasons for this onsetting of de-dollarisation require a little speculation to locate them. American imperialistic escapades into Iraq, Afghanistan and Libya, and paranoid antagonism against Iran, China, Russia, North Korea and Venezuela belie its adventures to ensure world peace.
Noam Chomsky says that one cannot find the phrase ‘US invasion of Iraq or South Vietnam’ in the whole US media. He quotes Barrack Obama, the opponent of the US invasion of Iraq, admitting that the invasion was just a strategic blunder, and that the US is not going to get away with it, alluding to anti-US feelings in the form of world’s careening towards decentralisation of economic power and de-dollarisation.
The world is already rife with anti-US sentiments. In our context, when the American embassy in Islamabad backs the demand of beverage companies, predictably of American origin, for the waiver of proposed seven per cent increase in federal excise duty, as was reported in the national media recently, it is but natural for us to question why the US has not asked our government to reduce tax on basic commodities, like flour, sugar and oil. Does it not reek of its imperialistic designs like that of the British East India Company?
As a knock-on effect, the status of English as the global lingua franca will be marred as Mandarin is flexing its muscles due to the growing Chinese dominance on the world economic horizon. The history of world nations tells us there is inevitable concurrence between economic status of a nation and its language.
It is time to introduce Mandarin in our education system to prepare our students for the not-too-distant future by giving them exposure to Chinese language, culture and industrial development. To have strong ties with the emerging economic superpower is bound to be good for the country.
M. Nadeem Nadir
Kot Ali Garh
Published in Dawn, May 24th, 2023