Western financial imperialism: A new way of colonisation—III

The United States exploits the status of US dollar as reference currency and a major source of trade invoicing. It uses this status to export burden of its irresponsible policies and actions to the poor, developing and even to allied countries. The US prints money without obligation and transfer the burden to other countries through trade and economic transaction. For example, it prints dollar (termed as fake money, because it is not backed by solid commodities or supported by any economic rational) to buy real products and commodities. The most recent episode started with printing of trillions of dollars after Covid-19.

The US used this money to dole out packages to its business community. Simultaneously, the US increased interest rates to transfer the burden to poor countries. It initiated a global cycle of inflations which has budged down economies of poor countries. The US also helps its friends and allies to print fake money by extending swap lines. It is one of the key instruments to attract allies and keep them on its side. This strategy badly impacts non-allies and poor countries. Fourth, the US uses dollar to punish countries which come up with better idea or programme of economic growth and development like Belt and Road Initiative (BRI). Since the launch of BRI, the US has unleashed an economic, trade and technology war against China. The United States has launched different initiatives like Better Utilisation of Investment Leading to Development, B3W etc to counter BRI. However, it could not substantiate these initiatives with funding. For example, since the launch of B3W by US and allies, only $6 million are allocated. Besides, the US is pushing countries to leave BRI or be ready to face economic sanctions or other punitive measures. Fifth, the US rewards countries which follow its policy. For example, the US and allies changed the rules and regulations of IMF to provide a loan of $15.6 billion to Ukraine.

The Fund never provides funding to a country which is home of major conflict. But, the US and allies used their voting power to change the rules. It happened as Ukraine is toeing policy of the US and allies. On the other hand, Pakistan is struggling to secure $1 billion from IMF. The Fund is putting a long list of conditions, some of which are really cruel. Unjust and biased nature of the system has wobbled the economic and financial basis of the world. These crises have become regular visitors. The world is still struggling to deal with aftershocks of 2008 crisis, and a new one is looming. It is all because of widespread banking crisis in the US and Western countries. We have seen during the last few weeks banks trembling in the West. One of the biggest banks, Deutsche Bank, is facing very severe crisis. The US monetary policy is aggravating the situation. Developing countries are the worst victim of this policy.

It is feared financial crisis will lead to economic crisis if world fails to check it. It compelled China, emerging economies and developing world to look for better alternatives. They want fair and balanced financial system to protect rights of every country, irrespective of their economic might. China is at the forefront to find a better solution. It has started pitching Yuan as a better alternative and assuring the world China has no intention to weaponise Yuan. Yuan is emerging as new currency of trade and economic transactions. China has signed several important agreements which promote use of Yuan for trade and economic purposes. Now, Saudi Arabia and other countries are also looking to use Yuan for trade and economic transactions. Owning to these agreements and use of Yuan for different purposes, the value of Yuan is improving against US dollar. On the institutional level, China founded Asian Infrastructure and Investment Bank. It has 105 members and is second largest bank after the World Bank. There are no restrictions on membership. Any nation can join the Bank. Now, China is working closely with BRICS countries to strengthen New Development Bank. Russia and Brazil are vocal about enhanced role of the Bank. They are hoping NDB will help world get rid of hegemony of US dollar.

China also launched BRI to meet the investment and development needs of countries, especially developing nations. It is helping countries to bridge the investment gap by offering financial resources and investment opportunities. Malaysia recently proposed establishment of a new fund to promote local currencies for trade among ASEAN countries. It seems Malaysia has drawn lessons from the late 1990s financial crisis. Iran is also enthusiastic about using local currency. India has started following the idea and has put local currency as alternative to US dollar for bilateral trade.These initiatives are weakening the financial empire of the West. They should rethink about their policy and mend it according to new realities and needs. West must get rid of hegemonic and imperialistic mindset. It is feared this mindset will give birth to conflict which will be beyond capacity of world to tackle. Let’s hope sanity will prevail and all major powers join hands to ensure welfare and prosperity of common people, irrespective of their nation, ethnicity, colour, race, gender or religion. —Concluded