The image above shows Saudi Arabia’s King Faisal and Pres. Nixon, on the White House lawn in 1971, the year Nixon unpegged the dollar from the gold standard
De-dollarization — that is, the choice that countries in the Global South have been making to conduct their trade in currencies other than the U.S. dollar — is a growing global phenomenon. It has profound implications for the economic situation in not just countries of the Global South but also Europe and (especially) the United States. It is a trend that strikes at the heart of the hegemonic, dollar-dominated “world order” that has existed since 1945, and is a key marker of the ongoing shift toward multipolarity.
De-dollarization is intimately linked to developments in the world hydrocarbons business, including the decision U.S. elites made more than a decade ago to increase domestic shale-oil drilling, which over the years transformed the United States from a net importer to a net exporter of oil and gas products. That shift acted as a key catalyst spurring countries in and far beyond West Asia to base their trading relationships on currencies other than the greenback. The shift also upended Washington’s relationships with key oil producers in West Asia, which then provided a significant opening for the expansion of China’s influence in that vital region.
Those trends were all discernible before 2022. But when Washington (responding to Russia’s invasion of Ukraine) slapped harsh sanctions onto Russia, it boosted all of them into an overdrive that now looks poised to radically transform not just the global economy but also the global power-balance as we have known it since 1945. In this essay, I’ll quickly pull together what some key thinkers from North America, Europe, West Asia, and elsewhere have been writing about the current push toward de-dollarization and its impact on world affairs.
One of the latest pundits to weigh in on the impact of de-dollarization has been Frank Giustra, co-chair of the influential, West-dominated Crisis Group think-tank. In a May 3 article at Responsible Statecraft, Giustra made the powerful argument that the United States’ true strength in international affairs lies not in its military but in the role of the dollar.
(An early 17th century Chinese map of part of the Indian Ocean, using data gathered by Zheng He’s voyages of 200 years earlier. The Arabian Peninsula is at the left. Source.)
Over the past couple of months, in my essays here at Globalities I’ve been tracking the current crumbling of the decades-old system of Washington’s global hegemony and its gradual replacement by a China- and BRICS -led system of multipolarity—and also some of the effects of that shift, in West Asia and elsewhere. Most recently, we’ve seen China’s President Xi Jinping pushing forward his previously announced readiness to help resolve the conflict in Ukraine. If successful, this initiative could bring about a further large diminution of U.S. power in the world.
We should all continue watching the progress of the China-led peace initiative for Ukraine very closely. In today’s essay, however, I want to explore some of the impact that this “West to the Rest” shift has already been having in West Asia (the region formerly known as “the Middle East”), and especially in and around the Arabian Peninsula.
Until recently, all the states of the Peninsula, with the exception of some substantial quasi-state actors in mountain-haven Yemen, have been unambiguously pro-American. The other states on the Peninsula are all wealthy petro-states. They have long maintained strong relationships with Washington under an arrangement whereby the United States promised to give them military protection provided they would continue to underwrite the U.S. military-industrial complex by buying large (and often quite unusable) inventories of U.S. weapons, and to support the role of the U.S. dollar in the global economy.
But in recent years, and even more rapidly since last year’s start of the big conflict in Ukraine,that “devil’s bargain” has started to fall apart. As Jon Alterman wrote recently about the region in Defense One:
The above photo is of Saudi Foreign Minister Prince Faisal bin Farhan bin Abdullah during his meeting with Pres. Bashar al-Asad in Damascus.
Suddenly, within the past few weeks, there has been a flurry of diplomatic activity that provides real hope that the civil war that’s devastated Syria for 12 years may be headed toward a negotiated peace and a chance for rebuilding. These moves have involved a number of key West Asian governments though there’s a potent global underpinning to them, too.
The past week has seen reciprocal visits by Syria’s foreign Minister to Saudi Arabia, and by the Saudi foreign minister to Damascus, where he met Pres. Bashar al-Asad. Last month, too, Pres. Asad made a state visit to the United Arab Emirates where he was greeted with a 21-gun salute and held talks with UAE president Sheikh Muhammad bin Zayed. Given that Saudi Arabia and the UAE were for many years—along with Qatar, Türkiye, and the United States—the main financiers and strident advocates of the regime-change push in Syria, these visits signal that the war may finally be winding down.
Lovers of peace and justice from around the world should welcome this trend, and should also unreservedly support calls for all three of the foreign governments that still maintain hostile military forces within Syria to withdraw them immediately. These three are:
Israel, which has occupied Golan since 1967;
Türkiye, which has occupied parts of northwest Syria since 2011-12; and
the United States, which has occupied parts of northeast Syria since 2014.
The map above, showing UAE military bases in and around Yemen, is from The Cradle, an excellent news source on West Asian diplomacy.
I have long had a lot of respect for the work of Washington Post columnist David Ignatius, whom I first came across, briefly, when we both working as journos in Beirut in the early 1980s and whom at a personal level I like. His work is generally pretty smart and well-informed. And though he has long been eager to be close to the centers of power, especially at the highest echelons of the U.S. military and intel agencies, many of the opinion pieces he has written over the years that explicitly or implicitly conveyed the views of those officials did two helpful things: (1) They provided an informative view into the thinking of those officials. (2) They put the snippets of info he provided about those officials’ views into a generally smart and sometimes slightly critical context. (Though never quite critical enough for him to lose his access?)
Today, he had a piece in the WaPo that had neither of those qualities and that instead just seemed to be full of hyper-defensive and deeply misleading analytical blather. Lest anyone be tempted to think he is still a smart analyst and thinker, I thought I should comment on some of what he wrote, point-by-point.
Globalities is currently releasing its new content in audio format. What follows is the text of the podcast episode I released April 14. Seen above: Brazil’s Pres. Lula Da Silva and China’s Pres. Xi Jinping, in Beijing yesterday. ~HC
Today is April 14, 2023. In today’s episode I’m going to, first of all, present a quick review of some of the key developments this past week has seen in international affairs and what some of them might mean. Then, I’m going to reflect a little on the longer-term historical significance of the seemingly rapid shifts we are currently seeing in the global balance…
But first: My survey of the major developments this balance has seen over the past week, and what they might mean more immediately:
Today is April 7, 2023. In today’s episode I’m going to present my review of the key shifts in the global balance that we’ve seen over the past week:
NATO-Russia contest in Ukraine
If we start by looking at the ongoing contest between NATO and Russia over Ukraine, there have been two main developments there: Finland was finally admitted to NATO, which brought to an end a lengthy period in which there has been increasingly close military cooperation between Finland and NATO and then, the year-long process of Finland’s accession to the alliance. The big change with its final admission to NATO is that Finland now receives protection under Article 5 of NATO’s charter which states that an attack on any full member of NATO is considered an attack on all of NATO, and that other NATO states will then assist it to repel the attack using any means deemed necessary, including the use of force.
This schematic from CSIS traces the 2018 rail links between China, Russia, and the rest of Europe.
In the United States, relations between China and “the West” are viewed as a trans-oceanic affair, with the Asia-Pacific region forming its main arena of cooperation or competition. Viewed from Europe or West Asia (the area formerly known as the Middle East), relations with China look different: in recent decades the many land routes that crisscross Eurasia in all directions have been growing fast in length, connectivity, and capacity.
This could mark a big historical turning-point—or rather, a return after a 600-year hiatus to the kind of world in which, in the late 13th century CE, Marco Polo and his uncle traveled overland to, and through, large portions of China, as shown here.
In the intervening centuries, it was the lethal naval power of a handful of small West European states and their American offspring that came to dominate the destinies of all of humankind.
Everywhere they sailed in 15th through 20th centuries, those European-origined naval empires crushed the power of the large land-based polities they encountered. The Aztecs, Incas, Mughals, Ottoman, Ming and Qing Chinese, and numerous other empires and local confederations were all wiped out.
So now, 600 years after Portugal’s Prince Henry the Navigator first started to build his network of heavily armed trading posts along the coasts of Africa, it looks as if land empires and the ties that bind them are about to make a comeback.
First, a quick disclosure: As someone extremely fond of the young people in my family, I am deeply concerned about the effect of all social media apps on the lives and psyches of tweens and teens. Not just TikTok, but all of them…
So now, on to TikTok and the outrageous spectacle of the hearing the House of Representatives Energy and Commerce Committee held yesterday into alleged harms that it accused the Chinese-owned company of inflicting on Americans. And no, the spectacle there lay not just in the stunning ignorance some committee members displayed about the basics of the technology they were allegedly investigating… It lay even more in the sad parade of unthinking, anti-China prejudice that they modeled and amplified in their remarks.
Few of these elected representatives showed any interest in actually listening to, or learning from, the answers that TikTok’s ever-patient (and by the way, Singaporean) CEO, Shou Zi Chew, gave to their often baffling questions. The reps were too busy grandstanding for the cameras and for the national audiences that they assumed would just love to see them strut on the big Sinophobic stage that this five-hour hearing afforded them. (Big kudos to NY Rep. Jamaal Bowman, who was the only member of Congress prepared to stick up for TikTok and to question the anti-China nature of the hearings.)
Within the broader “blob” of today’s Washington political elite, anti-China agitation is now, all too often, a quite bipartisan affair. But why? I don’t necessarily expect every member of the House Energy and Commerce Committee to be conversant with the writings of Clausewitz, Sun Tzu, Bernard Brodie, Henry Kissinger, or other great strategic thinkers. But I would hope that the relevant leaders of our national-security apparatus might have given serious thought to such matters… especially in the age of possible nuclear annihilation that we’ve been living in for 78 years now.
The history of U.S. foreign policy since the end of the Cold War can be seen as a litany of forceful regime-change projects undertaken in other countries around the world, with the force used being sometimes military, sometimes economic, sometimes both. Among these projects, the invasion of Iraq launched twenty years ago, on March 19, 2023, stands out for several reasons. These include the scale of the military operations involved, the level of the destruction inflicted on Iraq, and the jaw-dropping effrontery of the decision Pres. George W. Bush had taken to launch the war without any authorization from the United Nations.
Throughout the post-Cold War era, government officials and members of the (often fawningly compliant) U.S. punditocracy have cloaked most of Washington’s regime-change projects in some form of “humanitarian” or “international law” justification. The invasions of Afghanistan and Iraq were, in their initial inception, different. The main driver of the decision to invade Afghanistan was angry revenge for the attacks of 9/11. The excuse used for invading Iraq was the (quite unsubstantiated) allegation that Pres. Saddam Hussein was manufacturing chemical or biological weapons. In both those cases, though, the original “reason” for the invasion was soon adorned with all kinds of other gauzy, feel-good justifications, usually lumped together under the rubric of “nation-building.” In the case of Iraq, after Pres. Hussein was removed by force of U.S. arms, his ruling Baath Party would be speedily disbanded and a democracy would magically be planted in Iraq featuring a new Constitution; a court system capable of conducting war-crimes trials; a decentralized political system; a flourishing free-market economy; and even—as many of the invasion’s most ardent proponents hoped—peace with Israel. The template that many of the war’s planners seemed to be using for their post-war planning was that of the Allied occupations of Germany or Japan in 1945.
As we know, almost none of those oft-touted goals were achieved—or, when they were, they proved of little or no value to Iraq’s people. Iraq did, at a formal level, get a new Constitution; but the version adopted foisted onto the country a “muhasasa” system of divvying up the top posts along sectarian lines, such as had already, for many decades prior, proven deeply dysfunctional in Lebanon. Iraq did get some political decentralization (as foisted onto it by numerous DC politicians including then-Senator Joe Biden, who had earlier voted enthusiastically for the invasion itself.) But Iraq’s decentralization did not prevent the intrusion into its political sphere of numerous powerful militias or, in 2014, the explosive arrival of the completely new and disruptive political force IS, the Islamic State.
Today, Iraq is a country broken in many, many ways. More than 600,000 Iraqis died as a result of an invasion and occupation that also cost U.S. taxpayers $2 trillion. And the U.S. military is still deployed today in large parts of the country (and in neighboring parts of Syria), in areas to which it rushed to after the eruption of IS, and where it has still stayed.
In 2004, UN Secretary General Kofi Annan admitted that the U.S. invasion of Iraq was a completely unauthorized use of force and therefore in violation of international law. But no serious attempt was ever made at the United Nations (or within U.S. domestic politics) to hold the Bush administration accountable for that violation.
Washington “got away with it” in 2003. Pres. Bush and his top officials invaded Iraq because they could. And they got away with their aggression completely unpunished.
Eight years later, in March 2011, the Obama administration was a little more careful when it worked with NATO to use military force to effect regime change in Libya. It pushed the British and French militaries to take the lead and it expended a little energy to get a force-permitting resolution at the Security Council. But when it did get one (Resolution 1973, authorizing creation of a no-fly zone around Benghazi), it immediately worked with the NATO allies to exceed the terms of that resolution and to chase Pres. Muammar Qadhafi and his government to a cruel and deadly finish.
Libya’s shattered society still feels the disastrous effects of that upheaval, today.
Later in 2011, seeing what they had gotten away with in Libya, Pres. Obama, Sec. of State Clinton, and their coterie of regime-changers made a plan to similarly stir up, and then exploit, anti-government demonstrations in Syria. They had the help of key anti-Asad governments in the region, including Türkiye, Jordan, Qatar, and the UAE. But in Syria they could not topple Pres. Asad. Instead, their destabilization campaign left the country locked until today into a debilitating series of interlocking conflicts with no end in sight.
Twelve years after 2011, Libya and Syria are still badly broken countries… And so are Iraq, Afghanistan, Somalia, Venezuela, and numerous other countries that have been the targets of U.S. regime-change projects since the 1990s.
Small wonder that the Sri Lankan commentator on international affairs Indi Samarajiva recently wrote,
If Westerners start talking about ‘liberating’ your country and start waving your flag, fucking run… Flooding a warzone with more weapons, more propaganda, more conflict, all under the guise of ‘helping’. Like they helped Afghanistan, like they helped Iraq, like they helped Vietnam, in truth like they wrecked countless nations for countless years. If a Westerner tries to help you, fucking run. Their arms dealers help themselves and leave your country in ruins.
This truly was “the handshake seen around the world.” Yesterday, China’s top negotiator, Wang Yi, concluded the diplomacy he and his colleagues have pursued for some months now by bringing together top negotiators from Saudi Arabia and Iran (Musaad bin Mohammed Al-Aiban and Ali Shamkhani) to conclude an agreement under which their two countries would resume their long-torn diplomatic relations within two months and start cooperation on a number of other matters.
Top officials from the United States, which has long seen itself as the overseer of all diplomatic matters in the strategically sensitive Persian Gulf and which has been maintaining tight sanctions on Iran for many years now, seemed to be taken by surprise. (One news report had a seemingly befuddled Pres. Joe Biden, on being asked about this diplomatic breakthrough, responding with boilerplate that didn’t even mention the three countries involved, but only “Israel and the Arab neighbours.”)