Introduction –
Europe and other countries had to face a lot of economic crisis in World War II, but America has become the most powerful country in the world. The most important reason for this has been that the materials used for the war were made by the famous companies of America, due to which it suddenly started running rapidly during that world war and due to the increase in production manifold, America’s economy started growing.
Through this article, we will try to see how the accumulation of gold is important for an economy and how America has used this economic policy effectively. After ruling the whole world through dollar for the last 70 years, how Asian countries are looking for alternatives on the existence of this currency. Let us try to see how political diplomacy works in the economic system.
Gold and silver coins have been used in human civilization for thousands of years, which has been the most important stage of the development of global currency and today we are seeing that the central bank of every country buys gold on a large scale and sells itself to other countries. Trying to avoid being dependent. Therefore, in this article, developing countries are trying to make dollar synonymous with international currency.
What is De-Dollarization of World Economy ? –
For the past few days, there has been a massive accumulation of gold by the central banks of all the major countries and attempts are being made to end the dollar dominance. Worldwide, about 70% of international trade is in US dollars and it has to be stored for imports. The war between Ukraine and Russia has completely changed this economic situation. Russia’s international account was frozen by the World Bank, on which the influence of America is seen.
Economic sanctions This is seen through the United Nations, an important economic weapon of countries like Europe and America. The veto power of countries like England, France and America is seen on the main membership of the Security Committee, which is one more in number than Russia and China, its meaning is very important. Therefore, to protect its economic interests, this country has always been trying to impose economic policies on Asian and African countries.
Therefore, the major countries of Asia like China, India and Russia have started working on the alternative of US dollar in their international trade. Signs of changes in their political and economic policy by the countries of major oil reserves like Saudi Arabia are now seen for the last few days. America has been making a superpower through the international currency and security production industry of the dollar, but today efforts are being made to end it through many countries.
History of world economy of gold –
In the human civilization of thousands of years, after developing through barter, man started using gold and silver coins for trade. By the time of the Second World War, the importance of gold increased greatly in economic trade and it helped America’s economy a lot because the material used for the war was made by American industry in large quantities and a lot of profit was made, which was taken through gold. . Due to this, the economy of America was greatly strengthened, where the countries of Europe and the rest of the British colony got caught in the economic crisis due to this.
In 1944, through the UK Wood Agreement, the US dollar was recognized on the basis of US gold, which by the time of 1971 began to be opposed by European countries. So the US found its way, which through OPEC declared the dollar as the international currency. The dollar was again strengthened by the US by taking control of the world oil industry. So that through the United Nations and the World Bank, the economic system of the whole world can be controlled.
Due to this, any country which opposes the economic policy of Europe and especially America, has to face economic sanctions, in which countries like Iran, Turkey have seen its results. India and China have also been threatened several times through economic sanctions. All countries are dependent on each other due to globalization, so no country can develop itself without international trade, so today we see that by increasing gold purchases, all countries want to make their economy self-supporting.
Digital Currency & Dominance of SWIFT Code System –
After the revolution of the Internet and computer, changes are seen in the concept of currency around the world, in which in 1973 the major countries of the United Nations formed an organization through which digital transactions were facilitated. Today, almost all the countries of the world do their international dealings through SWIFT code and about 11000 banks and 200 countries are connected to it.
The technology of Europe and America is completely dominated by this system, through which its international accounts were frozen to impose economic sanctions on Russia. Whether this is right or wrong is a matter of political contemplation, but because of this, all the countries of the world have to follow the world policy, if they do not do this, then they have to face economic crisis at the international level, many experts believe.
Therefore, mainly Asian major countries are making themselves synonymous for this system, in which China and India are leading. No country can remain separate from the world due to the development of the world, but only some countries together cannot make the economic policy of the world, it is believed by the code of policyists. So we see this primary stage of de-dollarisation.
Cause & effects of de-dollarisation in the global economy
For the last five decades, we have seen continuous economic sanctions in which oil producing countries which we call Arab countries, where war and succession are seen continuously. Due to which this country is troubled by western political and economic policy and wants to get out of it. Countries like Iran, Iraq have faced the consequences of opposition to this western economic policy and monarchical countries like Saudi Arabia have been following it compulsively.
Over the past few days, Saudi Arabia, the major producer of OPEC’s oil production body, has indicated itself to get out of America’s influence. Its second meaning is that it is moving towards de-dollarisation. In the political diplomacy of America and Russia, Europe and other countries are grinding economically and they also want their economy to be independent. Therefore, not only do Asian African countries want to get rid of the dominance of the US dollar, but European countries are also giving this signal.
In the midst of the war between Ukraine and Russia, many European countries are dependent on commodities like gas, wheat and oil, which are badly affected. All the countries of the world are seen in the grip of economic recession, in which major European countries like England, France and Germany are there. Keeping US dollar reserves and making its economic policy dependent on Europe and America is looking risky for all countries. So the accumulation of gold in the old fashioned way seems to be the most accurate measure for the economy.
Consequences of de-dollarisation on America –
The economy of the whole world was devastated by World War II, non-European countries were dragged into this war through vassalism. There was a lot of use of war material, which benefited the companies producing war material of America. Anyway, America kept distance till the last time in this war and was supplying war material on both sides. The advantage of which, after the Second World War, America immediately emerged as an economic superpower and England’s crown of superpower was snatched.
In World War II, America started taking gold as currency in lieu of war material, as a result of which the accumulation of gold in their economy was established as the safest economy in the world. After the World War, the US dollar was chosen as the basis for international trade. But France and other European countries later started opposing it, in view of which America succeeded in making an agreement with an organization like OPEC of the Central Asia country of crude oil to keep the US dollar as the international currency.
After the digital revolution, he was successful in regaining supremacy over international trade through SWIFT code, and all countries began to understand America’s dual policy in economic sanctions and it would be right to keep their economy separate from the US dollar and keep it safe. Put. Therefore, for the last ten years, the rest of the post-US economy is trying to keep itself independent, in which the US dollar is seen as an alternative.
- The result of de-dollarisation on America will be the first result that can snatch the crown of superpower.
- Due to high labor cost, America industry is dependent on countries like China and India, whose price will increase.
- The rest of the countries of the world will stop storing US dollars, due to which the value of the dollar will decrease and this will increase the import expenditure of America.
- De-dollarisation can reduce US influence on financial institution like United Nations and SWIFT.
- De-dollarisation is likely to increase inflation and unemployment in the US.
De-Dollarization Cause & Effect on India –
India has taken decisions in opposition to America’s economic policy many times, due to which it has to face economic sanctions to some extent. Middle East Asian countries have suffered the most due to going against America’s policy. It is not that by completely blaming America’s policy, the rest of the country becomes clean, but the main reason for America’s prosperity has always been its political diplomacy.
So, talking about the economy of India, in 1991 we have adopted capitalist economy and in a way we have invited American companies to do business in India. Earlier, foreign companies were not in India, it is not such a thing, but government intervention was very much which was relaxed. Nevertheless, America preferred to invest in China instead of India, which did not get the benefit that India should have got by opening its economy.
Therefore, in view of the sanctions imposed on Russia, India has kept its stand neutral and has put its interest first, which has angered America. India has started its trade with Iran and Russia through digital currency. By which its results will be seen on India which is
- The money invested on the imports will be less, but there will be negative results on investment in India and America will start looking for different alternatives from China and India.
- The Reserve Bank of India has kept its focus on the purchase of gold, so that instead of the dollar, gold is replaced as a safe currency again.
- In terms of technology, we are heavily dependent on American companies, which may result from the policy of de-dollarisation.
- Whatever services and products go to America from India, it will result from de-dollarisation and income will work.
- India will have to end its dependence on America in technology and other areas while adopting the policy of de-dollarisation.
Conclusion –
Globalization, the devaluation of its own currency, it can be considered the primary rule of making the US dollar an international currency, and the establishment of the United Nations and its various institutions work under the influence of America. From time to time, economic sanctions confirm this dominance, in which the cold war between Russia and America has been doing a lot of results. In which it has been a struggle to adopt which model of democracy. In which America’s model of capitalist democracy has been adopted by almost every country today.
Russia and China have accepted the policy of liberalism by keeping their communist ideology alive, in which China has been successful. De-dollarisation: Many countries other than America have the ability to compete with America in the next future. The policy of globalization has been adopted by almost all the countries, but it also has some drawbacks, in which if there is an economic recession in one country, then its result is seen in the whole world.
The use of natural resources has been used more in the development of Europe and America till date and African and Asian countries are yet to see their development, but due to the policy made for the protection of the world of the United Nations, this developing country is protesting to some extent. are being. Therefore, de-dollarisation, this economic policy, which is mainly implemented by countries other than Europe and America, which are going to make big economy in future, seems to be implemented.