By Alfredo Jalife-Rahme, English translation by Gerardo Alejos.
In my recent lectures –at the international conference of the Partido del Trabajo [Mexico’s Labor Party] in Mexico City, on March 21, and at the Lebanese American University in Beirut, on April 3 (at the invitation of doctor Imad Salamah)– I have detailed the existence of a hybrid three-dimensionality in the “new multipolar order”, an order that has both bipolar and unipolar factors:
1) in regard to geostrategy, the US and Russia are on equal nuclear terms after the Russian response to the agression of Georgia toward South Ossetia –China is a distant third place given its satellite launch and its immense growth–; in this scenario, unless a third world war breaks out, as coveted by the Anglo-Saxon banking system, the world will be a relatively peaceful place provided that none of the top players suffer from an internal dislocation;
2) in terms of geoeconomics, the trends are very clear: the G-7 will slope down and the BRIC countries (Brazil, Russia, India and China) will move upward along with the oil nations of the Persian Gulf, among which Iran stands out –in this regard, we should also mention the Barack Obama-led strengthening of Turkey, in order to replace a weakened Israel as the US stronghold in the Middle East, and to counteract the Russian redeployment along the Black Sea–, and
3) in regard to geofinance (a term coined by Under the Magnifyng Glass, reproduced by the Anglo-Saxon press without referencing the source), the dollar hegemony refuses to give up its undeniable power: this makes it the most unstable and dangerous component of the hybrid tridimensional world order.
In geostrategic terms, this “new multipolar world order” came about in August 2008, when Russia repelled Georgia’s agression in South Ossetia (which was instigated by the US and Israel). In the geoeconomics sphere, it could be argued that it started in the Spring of 2004, when the Anglo-Saxon couple [the US and the UK] evidenced its powerlessness to control Irak’s oil production which, in a certain way, gave rise to the serendipitous and irresistible positioning of the BRIC economies.
Only the geofinancial aspect remains freestanding; whether we like it or not, the hegemony –so as not to say the unipolarity– of the US dollar prevails in spite of the global financial tsunami caused by the US, itself a former unipolar superpower.
The prevalence of the dollar-centrism, furtively underpinned by the G-20 summit in London, could be the biggest tragedy of the 21st century: a currency with no economic guarantees, which is only functional because it can’t be replaced in the short term. The US nuclear bombs will now protect the dollar.
No BRIC country has a currency that could replace the dollar in the short term: the Russian ruble and the Brazilian real, two “convertible” currencies, are far from competitive against the dollar, while the Chinese yuan and the Indian rupee are not still “convertible” and do not pose any threat for the US, a country whose currency still is –against all odds– the basis of the world’s monetary reserves, and a country that still prints bills at an irresponsible and hyper-inflationary pace.
The decrepit, 65-year old geofinancial world order stands still. As we have suggested (Under the Magnifying Glass, 03/25/09), the “new global geofinancial order” must be multipolar and it must reflect the new correlation of forces in the geostrategic and geoeconomic spheres. Easier said than done, though.
One of the imponderable weaknesses of the BRIC countries is their financial underdevelopment against the Anglo-Saxon predominance, while the main markets of the latter (Wall Street and the City) still hold the first two places in the financial development index of the World Economic Forum in Davos, that also ranks the G-7 countries and their tax havens in the top positions.
Whoever wins a world war gets to impose a financial order that works in their best interest –such as the trans-Atlantic invasion carried out since the XVII century by Holland, Great Britain and the US–, as proved by Giovanni Arrighi and Beverly J. Silver in Chaos and Governance in the Modern World System (1999), a book we strongly recommend in order to understand the dynamics of the old (now dollar-centric) Anglo-Saxon financial world order.
Adam Posen, deputy director of the influential Peterson Institute for International Economics and former economist of the Fed, shamelessly states that “the role of the dollar is a geostrategic (super sic!) and monetary matter” (Le Monde, 03/30/09). He discards the Chinese proposal –championed by Russia– of the creation of “a global reserve currency” in order to replace the US dollar: “the US government has every reason to believe that the dollar must remain as the reference currency in international trade. It is a geostrategic and monetary matter. It offers greater security (sic) in the global economy to the US.” He also deplores that neither Joseph Stiglitz –Nobel prize of Economy and a supporter of the revamping of the international monetary system– “or anyone else (sic)” have presented “a clear alternative for the current system,” and concludes that “neither the Americans or the Europeans (sic) are willing to give up any share of their control (super sic!) over the international financial institutions.”
It is clear that the last bastion of the geofinancial unipolarity of the US is the dollar, and that none of the BRIC countries is willing to undergo a third world war in order to impose a monetary cosmogony. It seems as if the BRIC countries were just waiting for the entropy of the dollar on account of the military and economic decadence of the US, a former unipolar superpower, so they are only proposing watered-down adjustments to the old international monetary order instead of creating a new one.
From a geostrategic perspective, it seems that the world –instead of becoming multipolar– has returned to a nuclear bipolarity between the US and Russia, while the new players –such as China and India– are still far from the top.
Strictly speaking, the only true “multipolarity” is taking place in the geoeconomic arena: emerging countries hold 32% of global GDP (of these, the BRIC countries produce 13% of global GDP), the European Union has 31% and the US retains 25%. This geoeconomic aspect represents the operational matrix of the new world order, which maintains its old character in the geofinancial field, given that the dollar prevails over the rest of the currencies, amounting to 66.5% of the world's reserves and commercial exchanges, vis-a-vis the Euro’s 24.4%, the sterling pound’s 3.7%, the Japanese yen’s 3.6% and the 1.7% shared by the remaining currencies. To be honest, the British pound and the Japanese yen are appendages of the dollar-centrism. And according to a severe charge published by the European think tank LEAP/Europe 20/20 (GEAB bulletin no. 33, 03/15/09), the Anglo-Saxon axis seems to be trying to Balkanise and vulcanize the Euro.
The world is now sailing in a hybrid three-dimensionality with a unipolar dollar-centrism that may well cause a shipwreck.
- Originally published in the column Bajo la Lupa of the newspaper La Jornada, April 12, 2009 , Mexico City.
