Dickson C. Igwe. Photo: VINO/File

OK. It is without doubt that underdevelopment in the South is driven by corruption and poor governance. However, there is strong evidence that the Dollar monopoly managed by the Federal Reserve and the huge deficits and imbalances of Dollar hegemony, is hampering development in the global south and forcing  ‘’ developing countries’’  to trade at a disadvantage with the USA and its western allies. This takes place for a simple reason: the man in control of the source decides the outcome. The Dollar monopoly forces countries to ‘’ conform’’ as part of the global hegemony called the USA.

The Dollar decides the what, where, when, how and who in the South. Every policy decision by governments and business has to factor in the Dollar and its associated influences. Think of a dollar ruled jurisdiction such as the Virgin Islands. International banks decide access to credit, the local cost of borrowing, and the type and quality of business and private transactions, not the government. Virgin Islands Government can only regulate these beasts from the west with severe limitations. It is the same elsewhere.

When prices rise in the USA, the Virgin Islands experiences even steeper rises. The Federal Reserve indirectly decides the form of business and personal transactions, the cost of borrowing, and the velocity of money, in the Virgin Islands: men in dark suits in Washington DC pull the levers of the global economy. The Dollar rules, and is the most powerful tool of US hegemony.  

The Dollar hegemony is a top down culture that is a ‘’my way or the highway.’’ One reason the IMF is increasingly unpopular in Africa and the developing world is that the bank is a tool of Dollar hegemony. The welfare of client states is a simple fairytale. The strategic interest of the USA and the welfare of investors in US debt and securities is the IMF’s main purpose and intent, not altruistic virtue in wanting to assist poor and needy Africans.

The IMF created at Bretton Woods, funded by its member states, is a tool of American power. It could not exist without the Federal Reserve and the USA. The same for the World Bank. Without the Dollar, and Federal Reserve currency management, these banks would not exist. Both institutions are a conduit for the Federal Reserve and its Dollar hegemony. Member states of the IMF much like member states of the UN are in a take it or leave it culture. The board members appointed by the USA run the show.

This is where BRICS appears as a threat to the Dollar. Western outsourcing and greed is a double-edged sword. A great deal of western capital, technology, and knowhow has migrated to the East over the past decades. Capital flows to where it will receive returns at the cheapest cost especially cheap labor.

The delight of capitalists in past years to move their businesses to China has driven up China’s economic power. This transfer of capital from west to east has lifted hundreds of millions of people out of poverty in China and Asia. It has contributed to unemployment among the western working classes and driven inequality with the evolution of a class of super wealthy billionaires. These families own the largest and most powerful corporations, and are essentially a hegemony in their own right.

Today, BRICS combined GDP surpasses the Group of Seven countries, and its growth annually surpasses the anemic growth of most western countries. China and Asia has surpassed the USA and the west as leading trading nations.

In short, BRICS countries – the South- are winning the productivity war and possess demographic advantages in terms of population growth, natural resources, and geography, that spells the end of western domination.