Tuesday December 07, 2021

Power shift

December 27, 2017

The Russo-Chinese joint venture of introducing petro-gold instead of the petro-dollar has ushered in a multipolar order of economic configuration. Dollarisation, which was disguised as a form of reconstruction in the post-WW 11 devastated Europe morphed into an instrument of economic exploitation. The introduction of the dollar as international trading currency led to a form of neo-imperialism that affected the political and economic resources of developing countries. However, in the wake of the postmodern era, the Thucydides Trap – when a rising power causes fear in an established power – is inevitable and justified.

The Chinese government’s announcement to replace the US dollar with the Yuan for Pak-China trade is a clear indication of America’s declining monetary hegemony and exploitation. Brics and AIID are alternatives to the Bretton Woods system of monetary management. China’s plans to include 11 countries into Brics will further pave the way for regional economic integration and connectivity. The Ruble-Yuan swap deal has transformed Brics into an anti-dollar alliance. The Brics Central Bank’s currency swaps will bypass the dollar, which will turn out to be a defective replacement of the capitalist-dominated IMF. This could be a watershed in structuring and expanding multilateral institutions from regionalism to globalism. Trump’s withdrawal from the Paris Climate Change Agreement and the Trans-Pacific Partnership along with the drastic cut of $185 million to the UN fund will result in the decline of its global leadership role. As nature abhors a vacuum, China and her allies will fill it.

Saeed Ullah Khan Wazir ( Islamabad )