Sajid Ali Naich
The United States of America using its massive economy and dollar as vehicle currency, easily sanctions her rival countries. For instance in 2012, Iran was proscribed by approbation of international trade by the USA due to its nuclear program. The same issue continues with North Korea as well as the latter Russian-Ukraine conflict. Russia has been sanctioned by the European Union and the West, although this proves US hegemony and geo-political influence that leans other countries to help out the US in approval of its personal gains at global level. However, US made decisions have never proved beneficial as history is full of such incidence i.e Syria, Afghanistan etc. Like China and Russia, some other countries are trying to find an alternative to the dollar. An alternative that will provide a life line escape from the US sanctions in any international dispute. According to the IMF’s ‘the stealth erosion of Dollar Dominance’ report,”The biggest source of Dollar erosion is Chinese currency Yuan”. Whilst, America’s prominent and highly known successful investor Jim Rogers says,”the dollar may have ruled the world for decades but today it through its sanctions and its monetary policy is shooting at its own feet”. One night imagine,the fall of the dollar is yet far, but it has begun already. In 2002, the Dollar’s share in global Central Banks, which used to be 71%, dropped to 59%. The Dollar share was at a 25 years low mark on Global Foreign Exchange Reserves in the 4th quarter of 2020. The biggest credit for this is the rise of other currencies such as Euro and Renminbi o.r Yuan. Due to the Ukraine war;several top billionaires’, from Russia, money was trapped as it had to circulate through New York’s Central bank. Therefore, China and Russia collectively have made a system called SPFS( the system for transfer of financial messages). In 2015, the Chinese Central bank launched the cross border interbank payment system in which 600 banks have already participated. Among above all, there are few other concerns that indicate a quick sink of the dollar. The USA is a consumer based country with a GDP of 23 trillion dollars, with debt of 30 trillion dollars, it is the largest debtor nation in the World. Even though the US printed dollars in surplus which is the core issue of immediate inflation. 40% of existing dollars have been printed during the Covid Pandemic. India’s trade in the Rubble with Russia and Saudi’s acceptance of Chinese payment for oil in Yuan clearly signifies the advent of another hegemonic currency; probably Yuan. In the Great game of world Geopolitics, every blessed favor is linked with some futurely based profit. Pakistan’s highly organized institutions should relate these concerns as they will ultimately leave a crucial impact. The country has to ensure a diplomatic and neutralist stance in the Geopolitical arena. Each decision should be made in national interest so the fallen economy of Pakistan could survive well and balance its existence.
