The Valdai Club’s report covers an issue of major importance to the international political economy and of particular importance to the realisation of national development within our emergent multipolar and polycentric contemporary conjuncture.
It establishes its point of departure as “… the widely recognized dysfunctionality of the dollar-centred system, a consequence of two distinct factors: a) the weaponization of the US dollar and of the Western cross border payment network; and b) the structural weaknesses of the economy of the United States, the country issuing the hegemonic international currency”.
It details BRICS+ engagements on de-dollarization and identifies a major trend: “In the last twenty years, the share of US dollar assets, while still dominant, has fallen from slightly more than 70% to less than 60%”. Recent IMF data confirms the Report's observed decline in the dollar's share of global reserves, stating, “The latest reserves data, once adjusted for exchange rate changes, suggest that the dollar share of central bank reserve holdings has not declined to the extent that unadjusted figures signal at first,” while still confirming that “…, by holding exchange rates constant, its share would have fallen only slightly to 57.67 percent”.
Notwithstanding this verified empirical trend, the Report reminds us that American power persists through political and other means. It notes that “All around the world, the US counts on its links, sometimes very strong, to powerful domestic constituencies in other nations. These internal allies can be mobilized in most countries regarded as unfriendly or uncooperative. Governments can be toppled or intimidated into compliance”. The Report further emphasizes that “another fundamental aspect of the current international system: the Washington-based multilateral financial institutions are not neutral or solely technical institutions but more often than not political instruments of the West”.
The Report argues that “The need to face up to the deficiencies of the Western-controlled monetary and financial system should lead the BRICS to better organize themselves going forward in order to remove at least in part the internal obstacles to change”. It further suggests that “… the group should continue to work towards providing practical alternatives not only for themselves but for developing countries as a whole”.
These are indeed laudable yet challenging tasks. Cooperative policy experimentation within BRICS+ can help reduce the impact of internal obstacles to change, while the shared learning for the world’s majority also contributes to widening the range of alternatives in the global battle of ideas.
This requires opening up the discourse and challenging the established, dominant, and sometimes fundamentalist narratives that underpin the declining hegemony and the hegemon. It is noteworthy that the Council on Foreign Relations indicated the need to re-examine the "direction of capital flows during the global financial crisis (which is probably better understood as the North Atlantic financial crisis, as its epicentre was in the United States and in European banks investing in the US mortgage market)”.
We need more ‘facts’ about the actual performance of global institutions and their various apparatuses, rather than just measuring their deviations from their expressed mandates. This raises a critical question: who constituted these mandates, given the historical exclusion of the world’s majority when these multilateral financial institutions and their apparatuses were established in 1944? We now acknowledge that between “1945 and 1960, three dozen new states in Asia and Africa achieved autonomy or outright independence from their European colonial rulers.”
While national liberation has afforded the peoples and territories of the semi-periphery and periphery of world systems experiences of post- and neo-colonial relations, policy sovereignty remains elusive for many. Ancillary to the question of origins of the international monetary and financial system are the mechanisms of maintenance and reproduction which includes the education and training institutions that serve to maintain the status quo, sometimes by defining what is considered ‘common sense’ in the public domain.
However, as noted in the Report, the moral authority of these institutions maintaining and reproducing such conditionalities is also in question: “Now, the macroeconomic fundamentals of the US economy are no longer what they used to be. Americans continue to preach but no longer practice solid economic policies”. It must be remembered that such ‘common sense’ assumptions remain premised upon hegemony and unilateralism, however cloaked and normalized among the G7 and the global minority.
The BRICS+ community is gaining confidence through mutual learning and is increasingly enabled to realize its own national developmental imperatives. Extending beyond BRICS+ and amplifying the critique of the real international political economy offers further transformative pathways for the world’s majority. Embedding multipolarity and ensuring polycentricism should remain goals of the BRICS+ community rather than repeatedly seeking to reform institutions and apparatuses whose actual performances have been objectively verified served to maintain combined, uneven, and unjust world systems.
