and ask them to repay in USD . The printing machine of US dollar is so powerful to push all the developing countries into powerful debt trap . This is really a bitter fact .
The US will have a high share in the deposits of IMF and World Bank . They are controlled by US . These International Institutions provide loan to emerging economies in US dollars and repayment will be in USD only . In the process of providing loan , it makes compulsory for emerging economies to implement neoliberal policies . The entire exercise raises the demand for USD and strengthen control over emerging economies . By printing more USD , America will give loans at zero rate of interest to its big corporates . On the other , the emerging economies which are trapped into the vicious circle of neoliberal policies always bothered to attract foreign investment by offering continuous concessions and incentives . This results in the crowding out of domestic investment and consequently , domestic savings will be seized by foreign investment which strengthens finance capital further . The self-reliance of emerging economies confines to their respective constitutions . Dependency is strengthened .
The indebted emerging economies are forced to implement exportoriented development policy . They will have only option to reduce their currencies exchange rate so as to increase exports . For the same amount of USD , they should export more quantum of domestic goods . As the exports are primarily labour - intensive goods , labour exploitation increases . Thus , the USD directly seizes labour power on the name of raising exports . This clearly proves the statement of Marxists that imperialism is the main enemy of working class . The devaluation of exchange rate increases the domestic prices of imports . The prices in the emerging economies are not in the purview of their monetary policy but decided by USD . Moreover , foreign investments in emerging economies 8 are not at all stable but volatile and moves between US and UDCs based on the interest rate fluctuations in US . This will affect the economies of emerging countries severely . They are always in the grip of imperialist exploitative forces of US and its allies . All the imperialist nations accept US leadership . They follow its foot steps . The main reason for their collusion is to eradicate socialism and socialist policies from the globe . Therefore , they collide for the continuation of the imperialist exploitation .
The analysis of Ranjeet Sah states that IMF and World Bank determines the exchange rate on the basis of purchasing power parity ( PPP ). This process will under estimate the exchange rate of backward countries and conversely overestimates the exchange rate of developed countries . Therefore , the foreign investment in backward nations get profits not only from production and trade but also from unequal exchange . Moreover , due to over estimation of exchange rate of developed nations , its turnover will be high as an asset . Thus , dollar domination will continue .
C . T . Kurien ’ s study states that the dimension of global economy is drastically changed owing to the strengthening of Finance Capital by 1990 . It is significant to note that as high as 90 percent of financial transactions are not at all related to real economy and the production of goods and services . The financial speculation market has grown rapidly on the estimations of changes in the rate of interest and exchange rate . All these transactions are in USD only . The foreign banks earned more than Rs . 1000 crores as profits in 1991- 92 in India with these transactions . The share of value of US securities with foreigners in the GDP is 3 percent in 1970 and has increased to 93 percent by 1990 .
According to Trinnial Central Bank Survey of FX and OTC Derivatives Market , the daily transactions of Forex market in 2019 is as high as $ 6.6 trillions . Thus , it exceeded stock market in the financial market . The value of global Forex market value in 2021 is $ 2409 quadrillion . Lenin estimated as early as in 1916 in his book on “ Imperialism is the Highest Stage of Capitalism ” as to how does the finance capital exercise enormous control over the systems are clearly proved . US Sanctions
US started imposing sanctions on any country which declines to accept the decisions of US for the interests of its Imperialist exploitation . US ban exports and imports , freezes deposits in US banks and will not allow to utilise securities in terms of USD . In certain cases , instead of entire country , US started imposing sanctions on individuals , entities and business organisations . For the past five years US sanctions must be adopted by third party countries . Imposing sanctions increased excessively since 1990 onwards . It is wonder to notice that World Trade Organisation , which always talks about rules for free trade will not question US sanctions rather accept them as they are due to non - economic reasons . Since 1993 US impose 40 sanctions on 36 countries . On the name of violation of human rights US imposed sanctions on North Korea in 1950 , Cuba in 1958 , Iran in 1979 , Syria in 1986 , Venezuela in 2019 and now on Russia . It is really ridiculous to observe that US , which always commands third world countries as a dictator talks about democracy and human rights . UNO General Assembly took resolution unanimously 29 times for the abolition of US sanctions on Cuba . Nom Chomsky has also been demanding on this issue . Moreover , Cuba stood as a powerful ideal model in front of world in combating covid-19 with its strong public health system .
At present , US imposed sanctions on Russia , it ’ s billionaires and 1000 big organisation and banned 7 major Russian banks from SWIFT which makes them difficult for international transactions . The EU countries and some other countries are supporting contd . in page 03
Class Struggle