Formation of counter hegemonic order

As the Russia-Ukraine crisis and the Gaza invasion become increasingly protracted and complex, there has been a significant shift in the balance of power within the interpretive framework of international order. The differences in perspectives on the world order between the West, particularly the United States, and the Global South are widening.

After prolonged military conflicts, there will inevitably be catastrophic humanitarian tragedies, including food security crises and psychological panic. However, the United States, while arming Israel and supplying it with weapons, turns a blind eye to the plight of war-torn Palestinian people, while hypocritically condemning Israel for obstructing international aid to Gaza.

The two crises that have spilled over show the essence of the West's self-exceptionalism and the destructive nature of double standards in resolving the conflicts. The brutal dichotomy of the United States has greatly diminished the attractiveness of its formula for resolving the world's hotspot issues to the Global South.

The old world order constructed by the United States is collapsing. The image and reality of the United States as a global superpower largely depend on its ability to maintain its dominance in international trade and to set international rules, as well as the demonstration of this capacity. It includes the United States' maintenance of global trade security.

The Red Sea crisis has greatly challenged the United States' existing reputation. The US-led Operation Prosperity Guardians has a limited number of participants.

The maritime freedom advocated by the United States is a false maritime freedom. The United States continuously, selectively, and militarily defends its own and allied maritime freedom to maintain its military dominance and the freedom of US military forces to enter world maritime channels at will.

The United States once proclaimed itself as the “indispensable nation” of the world, with world peace under the rule of United States, maintaining the balance of power among nuclear superpowers.

The selective intervention of the United States in international conflicts and its biased behavior in wars has led to the Pax Americana becoming a thing of the past. Classical realism is returning and new mercantilism is rising.

The world no longer has faith in hegemony, and countries must bear more self-protection responsibility. The reluctance to actively participate in US-led joint military operations largely stems from the insecurity concern of the leadership regarding domestic stability.

The existing international order is suffering from dissatisfaction. The Global South is dissatisfied with the current international order because it feels it hasn't received the benefits it deserves. Western developed countries are also dissatisfied because their share of benefits has decreased. Additionally, Europe lacks sufficient sustained economic strength, coordinated diplomacy, and defense policy to continue exerting influence abroad.

National conservatism is forming a global trend. They abhor the ceding of sovereignty, suspect elite manipulation of the free market, despise immigrants and hate pluralism. The self-styled world police is unable to bear the heavy burden of intervening in all conflicts and crises worldwide.

The United States is declining more in its ability to lead the global order than its economic power.

The multilateralism pursued by the Biden administration is a mechanism for bilateral and multilateral coordination at the expense of the US ability to coordinate globally.

Paradoxically, looking back in history, the creation of the most important multilateral institutions after World War II all had the shadow of the United States. World politics is undergoing rapid change.

The existing global order continues to fragment, with countries becoming increasingly short-sighted, focusing solely on their own short-term economic gains or security interests. Without the establishment of a new order, both the developed countries and the Global South will lose out.

The Global South is rising and a New Order is being constructed

The Biden administration has ambitiously targeted so-called authoritarians, dictators and tyrants who challenge the Western order globally.

The United States is truly targeting those who challenge the democratic model of Western values.

The Biden administration has tried to portray rivalry between US with China as a confrontation of two values, a confrontation of democracy and authoritarianism. And the abysmal performance of the United States in stopping the Ukrainian and Gaza crises has made it increasingly difficult to solidly coalesce the external will of different nations on the basis of ideological favor, even for American allies and partners.

On the battlefield of public opinion and propaganda, where the American and Western media have long dominated, there is a growing aversion in the Global South to reports, commentaries and messages that exude the moral superiority of the Western world and imbued with Western values.

With Iran, Egypt, UAE, Saudi Arabia and Ethiopia becoming full members of BRICS on January 01, 2024, BRICS is becoming an organization that represents the Global South. The BRICS expansion is a movement of emerging economies fighting for self-determination of the international discourse on the global stage.

Countries of the Global South are collectively shaping a new multi polar order for a new era, unwilling either to be beholden to the Superpower or to return to a world divided into spheres of influence.

The new world multilevel order should avoid falling into the stereotypical mindset of arguing over who should fill the “power vacuum”. The concept of a power vacuum is a continuation of the hegemonic world view, a blind faith in, and blind obedience to an unchallenged leadership.

Pursuing dominance while remaining vigilant against countries of similar power may lead the powerful to overly prioritize building coercive capabilities at the expense of capacity enhancement for the well-being of the people.

The world order is changing, and US hegemony is no longer welcome. As the global economic growth slows down to prevent conflicts and wars from spilling over, major countries are more willing to take joint efforts to bring more stability and certainty.

Rather than counting on the United States to autonomously fulfill its share of international responsibility, the Global South prefers solidarity and mutual assistance among themselves. Cold-war and polarized mentalities would only exacerbate instability and uncertainty in the world.

China’s Global Development Initiative, Global Security Initiative and Global Civilization Initiative are Chinese wisdom and Chinese solutions for accommodating harmonious coexistence and common progress of all countries.

The destiny of developing countries should be in their own hands, mutually respecting each other’s concerns, and promoting common development in a new multilevel world order upholding equity and justice.

Courtesy: Tehran Times

What is the fate of US dollar?

The share of US dollar reserves held in central banks fell to 59% –its lowest level in 25 years – during the fourth quarter of 2020, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves (COFER) survey. Some analysts say this partly reflects the declining role of the US dollar in the global economy.

Economic analysts expect that the US dollar’s share of global reserves will continue to fall as emerging market and developing economy central banks seek further diversification of the currency composition of their reserves. A few countries, such as Russia, have already announced their intention to do so.

On July 01, 1944, as the Second World War raged in Europe and the Pacific, delegates from 44 countries met at the secluded Mount Washington Hotel in Bretton Woods, New Hampshire.

This gave birth to ‘Bretton Woods Agreement’ to create a new world order in the post-World War II era. The agreement instilled the dollar as the de facto global currency.

Under the agreement gold was the basis for the US dollar and other currencies were pegged to the US dollar value. By 1971, former US President Richard Nixon ended the dollar’s convertibility to gold as US balance of payments deficits led to foreign-held dollars exceeding the US gold stock, implying that the US could not fulfill its obligation to redeem dollars for gold any longer.

Although the Bretton Woods was short-lived, the dollar standard remained as the currency for international trade and the price of the commodity that made the global wheels run, price of crude oil was fixed in dollars.

Today the dollar reigns supreme. The world’s biggest economy can print greenbacks at will to save itself from budget deficits, can lower or hike federal reserve interest rates to control the price of global crude and other commodities, can manipulate interest rates to pressure emerging and poor economies that hold their foreign reserves in the Greenback.

Recent US Federal Reserve’s historic interest rate rises raised indebtedness of emerging economies. The Association of Southeast Asian Nations (ASEAN) members are exploring how to promote the use of local currencies in their bilateral trade.

According to the IMF the greenback’s share of global foreign-exchange reserves has extended a two-decade decline, but it’s still used more than all other currencies combined.

The dollar continues to play the role of number one global currency as the American economy has been producing a shrinking share of global output over the last two decades.

Chinese trade and lending have been expanding in recent years as the renminbi (also known as yuan) use has risen.

With China’s share of global goods trade now around 15 percent, the renminbi’s reach will expand. The world’s second largest economy and the largest consumer of crude is bound to challenge the dollar’s hegemony with renminbi.

Kicking off his first visit since taking office in January 2023 to China, Brazilian President Luiz Inacio Lula de Silva attacked the US dollar hegemony in international trade, asking “why can’t we do trade based on our own currencies?”

Lula called on developing nations to work towards replacing US dollar with their own currencies in international trade. He called on BRICS (acronym for five regional economies: Brazil, Russia, India, China and South Africa) to come up with their own alternative currency for use of trade.

Prior to Lula’s visit, China and Brazil agreed to settle trades in each other’s currencies. France also recently conducted its first liquefied natural gas sale in renminbi.

The rise of the Chinese currency will take some time as only three percent of central bank reserves are in renminbi. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) puts global transactions in renminbi at 2.5%, compared to 39.4% for the dollar and 35.89% for the euro.

The US economic sanctions on many nations have prompted them to use alternative currencies and even barter trade for exchange of goods.

After sanctions were applied to Russia following the Ukrainian conflict and simultaneously many Chinese companies were sanctioned by US and EU, transactions between the two neighbors shifted to renminbi.

Official data shows yuan became the most widely used currency for cross-border transactions in China overtaking the dollar for the first time.

Imports of Russian oil, piped-gas, coal and some metals from its neighbor were settled in renminbi. According to Reuters, the bilateral trade stands roughly at US$88 billion. This accelerates China’s efforts to internationalize its currency.

Iran and India established a rupee payment mechanism to eliminate dollar transactions. The state-owned United Commercial Bank (UCO) has been the primary payment settlement bank for India-Iran trade ties due to US sanctions on Iran.

The payment mechanism to import crude from Iran had provided the state-owned lender good chunk of interest-free floating fund, which helped it reduce its cost of funds.

Last year in a meeting between Iranian Foreign Minister Hossein Amir Abdollahian and his Indian counterpart Dr. Subrahmanyam Jaishankar, Abdollahian pointed out that there are existing mechanisms within the framework of international law which can help in reviving the banking and financial interaction, pointing out that Tehran has implemented such a mechanism with a dozen countries already.

A landmark agreement was signed by Jaishankar and visiting Russian deputy prime minister Denis Manturov on April 18, 2023 in New Delhi, where India agreed to adopt the Russian SPFS financial messaging system for making banking payments to Russia.

The deal also allows acceptance of Indian Ru-Pay cards and India’s Unified Payment Interface (UPI) in Russia, and the Russian MIR cards and Fast Payments Systems (FPS) in India.

In 2022 UCO Bank received the necessary approval from the regulator – the Reserve Bank of India – to open a special rupee account with Russia’s Gazprombank to facilitate trade between the two countries.

The British pound sterling, the oldest global currency still used today, anchored the global economy, until its fall in the early, mid and late 20th century.

The imminent sudden decline of the Greeenback is one of those things that can take every analyst by surprise.

The dollar’s share of global foreign exchange reserves fell from 70% in 1999 to below 59% in the last quarter of 2021, extending a two-decade decline according to IMF’s Currency Composition of Official Foreign Exchange Reserves data.

The greatest threat to dollar comes from central bank digital currencies, which can provide more efficient ways to settle transactions. The US is waking up to this danger, but should accelerate efforts on digitizing the dollar.

 

Iran hosting conference on new world order

Tehran will host an international conference on the emerging new world order on May 10-11, General Esmail Ahmadi Moqaddam announced on Monday. 

Moqaddam, the former police chief who is currently the head of Iran’s National Defense University, said Parliament Speaker Mohammad Bagher Qalibaf will deliver opening remarks at the conference. 

“In addition, General [Mohammad Hossein] Bagheri, Chief of General Staff of Armed Forces, and three other foreign speakers will be the keynote speakers of the ceremony. The closing ceremony speaker will be Admiral [Ali] Shamkhani, Secretary of the Supreme National Security Council,” General Ahmadi Moqaddam added. 

“Guests from 36 countries will participate in this conference, and bilateral meetings between Iranian officials and foreign guests, as well as between foreign guests, will be held on the sidelines of this conference,” he added.

The former police chief went on to say that Saudi Arabia does not have an official presence and its scholars are not participating in the conference, but in the coming years, if such conferences are held we will have a serious plan for the participation of our neighbors.

General Bagheri, who recently visited Oman, described the conference as significant. The general pointed out that Tehran would host a significant conference on the new international order, which will be attended by a number of nations, including Oman.

In recent years, Iran and Oman have conducted a number of joint naval exercises.

The Iranian Navy and the Royal Navy of Oman conducted a combined military exercise in the Strait of Hormuz and the Sea of Oman in December 2021. 

The military drill, which was the eighth of its type between the naval forces of Iran and Oman, was carried out in accordance with a decision made at meetings of the two nations’ joint military friendship commissions.

 

Ukraine war marks beginning of a new world order

Joe Biden, President of United States believes the Ukraine war will mark the start of a ‘new world order’. In the middle of the COVID global pandemic, Klaus Schwab and global elites likewise announced a ‘great reset’.

Accordingly, the nations of the world would have to surrender their sovereignty to an international body of experts. They would enlighten the governments on taxes, diversity, and green policies.

When former President Donald Trump got elected in 2016, marquee journalists announced partisan reporting would have to displace the old, supposedly disinterested approach to the news.

In normal times progressives worry that they do not have public support for their policies. Only in crises do they feel that the political left and media can merge to use apocalyptic times to ram through usually unpopular approaches to foreign and domestic problems.

We saw that last year, fleeing from Afghanistan, the embrace of critical race theory, trying to end the filibuster, pack the court, junk the Electoral College, and nationalize voting laws.

These ‘new orders’ and ‘resets’ always entail far bigger government and more unelected, powerful bureaucracies. Elites assume that their radical changes in energy use, media reporting, voting, sovereignty, and racial and ethnic quotas will never quite apply to themselves, the architects of such top-down changes.

They preach, common folk must quit fossil fuels, but not those who need to use corporate jets. Walls will not mar our borders but will protect the homes of Nancy Pelosi, Mark Zuckerberg, and Bill Gates.

Hunter Biden’s lost laptop will be declared, by fiat, not news. In contrast, the fake Alfa Bank ‘collusion’ narrative will be national headline news for weeks.

Middle class lifestyles will be curbed as they are instructed to strive for sustainability and transition to apartment living and mass transit. But the Obamas will still keep their three mansions, and Silicon Valley futurists will insist on exemptions for their yachts.

In truth, the world is about to see a radical reset—of the current reset. It will be a different sort of transformation than the elites are expecting and one that they should greatly fear.

The world and the United States are furious over hyperinflation that may soon exceed 10% per year. Ordinary people will be lucky if it ends only in recession or stagflation, rather than a global depression.

The mess was created by those who propagated modern monetary theory. That silly university idea claimed prosperity would follow vastly expanding the money supply, keeping interest rates at de facto zero levels, running huge annual deficits, piling up unsustainable national debt, and subsidizing workers to stay home.

Natural gas and oil costs are now soaring to unsustainable levels—and to the point where the middle class simply will not be able to travel, keep warm in winter, or cool in summer.

Both in Europe and the United States left-wing governments deliberately curbed drilling and non-Russian pipelines. They shut down nuclear power plants and subsidized costly, inefficient solar and wind projects.

They ended up not with utopia, but with fuel shortages, high prices, and energy dependency on the world’s most repressive regimes.

The woke revolution in the West was supposed to teach us that the white male-dominated Western world is toxic. Its origins, ascendance, and current leisure and affluence were supposedly due only to systemic exploitation, racism, and sexism.

Few asked how a supposedly noxious West of some 2,500 years duration became the number one destination of millions of global non-Western migrants and offered the greatest degree of global prosperity and freedom for its citizens.

So a reset reckoning is coming—in reaction to the ‘new orders’ championed by Biden and the Davos set.

In the November 2022 midterms, Americans are likely to see a historic “No!” to the orthodox left-wing agenda that has resulted in unsustainable inflation, unaffordable energy, war, and humiliation abroad, spiraling crime, racial hostility—as well as arrogant defiance from those who deliberately enacted these disastrous policies. What will replace it is a return to what until recently had worked.

Closed and secure borders with only legal and measured immigration will return. Americans will demand tough police enforcement and deterrent sentencing, and a return to integration and the primacy of individual character rather than separatist fixations on the ‘color of our skin’.

The public will continue to tune out of the partisan and mediocre ‘mainstream’ media. They will see greater increased production of oil and natural gas to transition us slowly to a wider variety of energy, strong national defense, and deterrent foreign policies.

The prophets of the new world order sowed the wind and they will soon reap the whirlwind of an angry public worn out by elite incompetence, arrogance, and ignorance.

Courtesy: The Epoch Times