Global balance – Page 3

The dimensions of de-dollarization

Helena CobbanMay 5, 2023May 8, 2023China, Global balance, Global economy, U.S. policyLeave a comment

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.

Fairly good explanation of de-dollarization from Visual Capitalist. Click to enlarge

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.

1.

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.

The Arabian Peninsula at the Hinge of History

Helena CobbanApril 28, 2023April 29, 2023China, Global balance, Indian Ocean, Persian Gulf, Saudi Arabia, YemenLeave a comment

(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:

Global Shifts Update, April 14

Helena CobbanApril 14, 2023April 15, 2023China, Europe, Global balance, Iran, Persian Gulf, Syria, Ukraine crisis, West Asia2 Comments

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:

Fallout from Macron’s recent visit to Beijing

Global Shifts Update, April 7

Helena CobbanApril 8, 2023April 8, 2023China, Europe, Global balance, Syria, West AsiaLeave a comment

Globalities is shifting for a while to releasing its new content in audio format. What follows is the text of the podcast episode I released April 7. ~HC

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.

China’s rise and the changing nature of global power

Helena CobbanMarch 31, 2023April 28, 2023China, Europe, Global balance, Settler colonialism, U.S. policy, White empire1 Comment

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.

Tick, tock: The countdown to Washington’s strategic idiocy

Helena CobbanMarch 24, 2023March 25, 2023China, Global balance, Global governance, Nuclear terror, U.S. policy, U.S.-Russia relationsLeave a comment

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.

But no.