CS June 2022 | Page 6

Dollar Domination- A Tool of Exploitation of Imperialist Forces

In the context of war between Russia and Ukraine , the US imposed unprecedented sanctions against Russia to pull out it from war . This triggered the growing dissent against domination of dollar for the past one and half decade . In fact , the decision of US in relation to the membership of Ukraine into NATO is the true cause for the emergence of present war in February 2022 . Neither any country dare to question it , nor US ready to mention it . Many countries in the world including the US and European countries import oil , gas , other valuable minerals as well as agricultural produce from Russia . Now , the US imposed sanctions against these imports and forcing other countries to follow / obey it . The resultant shortage of oil and gas lead to the excessive rise in the prices which became a big challenge to the countries which are already suffering from post - Covid effects . Therefore , the countries resistance against US sanctions intensified .
In addition , US freeze $ 630 billions Russians ’ deposits in US banks . Further , it could freeze the deposits and financial assets in the form of US dollars of close friends and relatives of Russian President Putin including his daughters , top level officers , political leaders , billionaires and Russian organisations / entities . In fact , global rich used to deposit their wealth in US banks , hoping that it will be safe in terms of US dollars as it is already strengthened as global currency . They purchase US bonds and security also . Therefore , the dictatorial imposition of individual sanctions by US as a means to express its domination making the global rich insecure and panic . This creates serious doubts among them that if the same trend continues , it may not be possible for them to utilise their wealth in future as per their wish , which is in terms of US dollars . 6
Thus , the emerged dissatisfaction of Western imperialist countries as well as global billionaires is now , seriously questioning the domination of dollar and therefore demanding alternative global currency . However , US dollar , as global currency is an instrument of exploitation of imperialist forces , even if it is replaced by some other currency , no any benefit accrue either to third world countries or to oppressed class .
What are the indicators that show US dollar as global financial super power ? What is the process that made US dollar as global currency ? And how is it strengthened ? What is its effect on the economic structures of third world countries ? What is indicated by the sanctions imposed by US ? Will the end of dollar domination results in the emergence of global economic structure based on equality ? All these issues are to be discussed seriously . US Dollar as Global Financial Super Power
The value of all the global transactions like Exports , Imports , Investments , Loans Repayments etc are being measured in US dollars . Moreover , the exchange rate of all the currencies of individual countries is expressed in terms of US dollar . The International Standards Organisation says that all the 185 countries in the world will have their own individual currencies & it is confined to the respective countries . While , US dollar will have no boundaries , it is strengthened as global currency . Therefore , it is called dollarisation of globe .
All the countries in the world , Central banks , business organisations prefer to hold their reserves in US dollars . As per IMF report 2020 , the percentage share of US dollar in the global reserve currency is as high as 61 . The share of Euro , which is in the second place has only 20.5 percent .
This clearly shows the abnormal level of domination of the US Dollar . It is astonishing to note that fast growing China also prefers US dollars . It owns as high as one trillion US dollar reserves .
The global financial network is dominated and controlled by US . As large as 90 percent in Forex business and 40 percent of SWIFT payments are in US dollars only . Moreover , the SWIFT financial network is in the strong control of US . Further , as high as 80 percent global trade is in US dollars . In addition , the share of US dollars in the foreign exchange reserves of world ’ s Central banks is to the tune of 65 percent . All this clearly shows the commanding dominance of US / USD in global financial sector .
As the entire international transactions are done in US dollar , the demand for dollar will rise continuously . Further , it is mandatory that all the 189 member- countries of IMF must deposit part of their quota in terms of dollar . This further , raises the demand for dollar . The Supremacy of USD has been firmly established owing to its powerful domination on the emerging economies with strong spread of imperialist globalisation . The powerful International organisations like IMF and World Bank are in the control of US and have been transformed into strong instruments of imperialist exploitation .
These organisations will provide loans and funds to third world countries in US dollars and the repayment will be demanded in dollars only . All this strengthens continuous and commanding domination of dollar .
It is to be noted that as high as 65 percent supply of USD is used outside , other than US . Therefore , US can print dollars in huge quantity which neither raises their domestic prices nor creates problems related to Balance of Payments . In this regard ,
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