Dickson C. Igwe. Photo: VINO/File

The BRICS countries: Brazil, Russia, India, China and South Africa together with new partners such as Turkey, Iran, and Saudi Arabia – are determined to create an alternative currency and financial infrastructure to rival the Dollar and Dollar based institutions. It will not happen any time soon, though it is clearly the direction of the Global South. The Dollar is a key tool of US economic and logistics power.

With the Dollar, the adage is appropriate that asserts that power corrupts, and that absolute power corrupts absolutely. The USA has used its hegemony in global cash and debt management to punish a number of countries with sanctions, even seizing their assets to the tune of hundreds of billions of dollars. Russia and Iran are prime examples. Countries around the world watch with fear and concern for their own hides. This is financial imperialism. The world worships at the altar of the Dollar: it has no choice. For the world’s consumers the Dollar is oxygen for all transactions whether paper or digital.

The Dollar is a key, in addition to US media, corporations, Intelligence Services, and the US Military, to dominate the globe. The USA is an enormously powerful empire. In exercising power, the USA exerts its monopoly over global capital transactions with impunity and unapologetically. Organizations worldwide fear the power the Dollar and related agencies possess.  With the advent of the internet, US super corporations and billionaires rule the west and even Europe has become essentially a vassal of the USA. With the return of Donald Trump European, leaders line up to kiss his butt.

However, the problem for the USA is that the Global South – non-western countries- is increasingly aware of this imperial Dollar culture. The Dollar, instead of being a boon to countries that are underdeveloped, the tendency has been for the Dollar to become a cudgel forcing countries to adopt policies that are in the interests of the USA and its allies in the west mainly. This, to the detriment of developing countries in the South such as countries in Africa, Latin America and Asia. 

Dollar jurisdiction is a pyramid with institutions at the top such as the Federal Reserve and associated agencies, mainly central and commercial banks. Those at the top of the pyramid decide how those at the middle and bottom subsist. In a sense, Dollar jurisdiction is trickledown economics. Bankers control payment systems, transactions, and therefore markets. Bankers may be understated and keep a low profile, which is always wise, but they are very powerful.

The Dollar offers huge trading privileges and advantages for the USA while inflicting the South with limits on its development through various measures and devices that ensure western economic dominance. That dominance is a form of neo-colonialism. Trading in Dollars offers great convenience to most consumers, but there are hidden costs. Probably, the greatest is the monopoly of power in the hands of the USA and related agencies to decide outcomes in trade.

It is monopoly power that allows the USA and allies to obtain natural resources on the cheap from the South and keep businesses everywhere on a leash- albeit subtly. The Dollar has been the most effective tool of economic domination in world history. The Dollar offers the USA huge advantages as the global reserve currency, other jurisdictions can only dream. That is why China et al are pushing back. The South is pursuing an alternative to the Dollar hegemony. Will it succeed in creating an alternative monetary infrastructure? Time will tell.