THE imposition of unilateral sanctions on sovereign states coupled with Washington’s abuse of the global reserve currency for hegemonic purposes has seen more countries drop the United States dollar, signalling the emergence of a new world order.

Since the end of the Second World War, the US dollar has been used as the global reserve currency and a standard for international trade after the establishment of the Bretton Woods system of monetary management by the US and its allies in 1944.

With it, the US had positioned itself as the nexus of the global financial system, making the greenback the lifeblood of the global economy.

However, the unending conflicts on the globe being financed by Washington have driven the international community to look at alternative trading routes and currencies.

In the fiscal year 2021, there were over 9 400 entities and individuals named on the US sanctions list, a startling 900 percent increase from the year 2000.

Analysts note that the US has unilaterally imposed economic sanctions on a range of countries and has sought to act as the global arbiter by overriding international law, moulding other nations and the world order according to its own purported values and political system.

The Russian Special Military Operation in Ukraine was the ultimate time bomb needed to pursue what Russian President Vladimir Putin termed a new world order.

A professor at China University of Political Science and Law, Huo Zhengxin and Development economist Paison Tazviringa concur that the U.S. has sought to unfairly capitalise on the dominance of the dollar on the global economy and as such de-dollarisation is set to create a new geo-political landscape.

Professor Huo noted, “I think the US has weaponised the American dollar together with their international payment system known as the SWIFT system. Therefore, any company in the world, if it is doing business using US dollars, actually it is under the supervision of American authorities.”

“The dominance of the US dollar has given the US immense power and de-dollarisation is going to weaken that power, and this is going to create a new geo-political landscape and will also create new power structures,” noted Mr Tazviringa.

The establishment of the Shanghai Cooperation Organisation (SCO) in 2001 and BRICS in 2009 has given developing economies the impetus to look for alternative trading partners that do not threaten or impose sanctions when challenged.

This comes at a time South Africa is preparing to host the BRICS summit for five leading emerging economies in August with expectations that more countries will join the body which comprises Brazil, Russia, India, China, and South Africa.

The issue has been given momentum by thawing relations between Saudi Arabia and Iran which is widely regarded as a blow to US influence in the Middle East.

Furthermore, China and Brazil have also secured a deal to conduct bilateral trade in their own respective currencies, eliminating the US dollar as an intermediary.

The decision by oil-producing nations to further slash their crude output in response to high volatility due to the ongoing banking crisis in the US and Europe has led to general global economic uncertainty, and unpredictable and short-sighted energy policy decisions.

Economic analyst Mr Kudakwashe Mugova said, “A number of countries have started diversifying the currencies they are using in international trade and the currencies they are holding as reserves. Currencies are opting to go into bilateral agreements such as the yuan.”

“We see the Chinese yuan has taken over as the largest trading currency over the US dollar in Russia, with China and Brazil opting to trade in their own currencies. This has been necessitated by the need to move away or reduce the risk of being sanctioned or having the US dollar being used as a weapon in the event that their countries do not have good relations with the US,” he noted.

The West is losing grip on global geopolitics in the wake of Russia’s Special Military Operation in Ukraine and the developing relations between Beijing and Moscow.- ZBC News