The end of Western dominance and de-dollarisation

I am not, and do not consider myself, a political expert, nor a politician. However, over the past 4 decades, I have noticed a rather uncomfortable realisation. Most of the West operates in global affairs, as if they are in a self-made utopia. This utopia thrives towards comforting beliefs, such as moral superiority, political power, and that Western logic and democracy will ultimately triumph overall. This worldview has had a place for decades unopposed. However, the warfare in Ukraine has unmasked this worldview. What Western elites once believed to be immutable truths have become unchallenged assumptions. Many politicians and policymakers who shape and analyse world events prefer to stay in the world as it was 1990, instead of accepting the new realities that are emerging in current time. The collapse of the Soviet Union and the narrative that went with it was triumphal for Western powers. It was a narrative celebrating the ‘end of history,’ the victorious liberalism, and the marginalisation of a weakened, wounded, and directionless Russia. With the war in Ukraine now at a 4-year mark, the assumption that accompanied the narrative of a Ukrainian victory has withered. Russia has not fallen. The West has not achieved any of the goals it set to accomplish. The global system is no longer constructed solely with the West in mind.

History has no linear expectations. It has curves, retreats, and resets, frequently. It does this precisely when a civilisation thinks its course is set in stone. We are currently experiencing one of these large resets in history. The world is in the process of rebalancing; control is no longer centralised. The self-constructed narratives of the West are being rewritten by history, beyond its control. I see that current global dynamics are changing rapidly and the long-standing Western dominance is facing significant challenges. In my view, there are number of changes will be taking place in the coming years as a result of Western miscalculation about the true power of Russia, its economic and foreign policies. At the same time, the impact of unprecedented level of sanctions on Russia and Tariff policies on other countries made this situation worse. These are major geo-political and economic shifts that anyone willing to look beyond the comforting boundaries of Western narratives and observe the world as it can see. I am certain these changes are going to happen very soon. One of the most important changes is the collapse or limitations of Western dominance.

Since the second world war, the United States of America succeeded  endowing the world with global international Institutions based on the European values, in particular United Nations, World bank and International Monetary Funds (IMF), all three established in the USA. The world has witnessed over a 4 decades of cold war rivalry but also of bipolar stability. Since then, the History has witnessed sea changes in the world. Fo many decades the EU and other developed nations have assumed the unprecedented level of economic sanctions to compel other nations to do what they wanted. Since the cessation of Crimea in 2014 and after the special military operation in Ukraine in 2022 Western nations imposed heavy sanctions on Russia. But West never understood Russia. They always thought Russia like any other smaller and weaker nations. West expected to harm Russia and its ability to finance special military operation in Ukraine. Instead, Russia was able to divert the flow of energy to other countries, restructure supply chains, and increase the trade of the wartime economy with countries in Asia including India and China. This drove Russia’s economy to recession by the beginning of 2022 and to subsequent economic recovery and growth which have now outpaced most Western countries.

While it is true that Russia is not completely insulated from the influence of economic sanctions placed against it, the assumption by Western powers that they have complete geopolitical control over a given situation by the simple imposition of economic sanctions is misguided and untrue. The geopolitical and economic power balance of the World's energy resources is not in the West. The West’s control is not as absolute as it was once believed to be. Western nations are currently feeling the impact of sanctions, impact that has resulted in an inflation and energy crisis, a weakened Europe, an erosion of geopolitical and economic European Hegemony, a European political crisis, and civil and political unrest. Ultimately, it is the EU and North America that are the main beneficiaries of these sanctions: the sanctions are truly a European economic and political “boomerang.”

Another most important shifts in Global-geopolitics are the gradual progress on demand for De-dollarisation. The U.S. dollar is recognised as the world’s dominant reserve currency. However, the dollar's monopoly is beginning to change. Countries, especially non-Western nations, are beginning to trade in their local currencies. Central banks in Asia, Africa, and Latin America are decreasing the percentage of dollar currency that constitutes their reserves. While the dollar is unlikely to vanish anytime soon, the current situation does indicate some degree of gradual change in the dollar and the global financial system, which is currently dominated by a single currency. This is not a currency that various countries would like to rely on due to their concerns that it can be weaponised. Such a change is the result of a complex of geopolitical realignments and the desire to not rely on a single, weaponisable currency. The slow rate of the change does not reflect the obviousness of the situation. The situation has given rise to foreign and economic policies which coerce other nations in ways that border on the bullying many modern nations would like to avoid.

BRICS will surpass Western blocs in influence: From an economically marginal alliance, BRICS has the capabilities to affect the global economy, trade, and diplomacy. Newly added members from Africa, Asia, and the Middle East not only expand BRICS, but also strengthen the united front of these countries seeking alternatives to the Global North. Demographically, the group represents about 2 billion more people than the G7, but their economic strength is disproportionate in terms of purchasing power parity within the economy. As active participants of the global economy, the group holds a greater share of global resources. As primary producers of energy, food and structural minerals, the group of developing members holds more structural power than do the members of G7, thereby holding greater economic dominance on the global market through manipulation of the price of oil, currencies, investments, and controlling market supply chains. With the expansion of trade, new financial innovations, and new diplomatic relations, the BRICS group is furthering the world order beyond its initial unipolarity. The international system is on the brink of consolidating the multi-polar feature as international hegemony is dissipating. The increasing importance of BRICS, signals that the world shift is not merely to the previously closed economies. It is reshaping global systems, contesting existing socioeconomic orders, and indicating a myriad of new participants in the shaping of world trajectories.

Western exceptionalism may be over, but the West is not falling, either. The world`s rotation is not the same, but they still have Washington, London, Paris and Brussels. The centre of the globe is to be New Imperials. New power is minted. The old system in the centre of the old is gone. New Imperials have created a coordinate system in which they all have direct influence. It is not bipolar, nor is it unipolar, it is multi-polar, and mosaic. New order will not be dictated. In this system, all excuses for decline have been dissolved from the Western chariot. The Ukraine war, the rise of confident non-Western blocs, and the changes in economic currents have all pointed to the fact that the globe is changing in fundamental ways. What changing looked like in the past is now permanent. The reality of a multipolar world is there to see, and Western policymakers have to come to terms with that or remain stuck to a worldview that has lost legitimacy and is no longer acceptable. History is forward-moving, and in the process of doing so, it leaves behind those beholden to the certainties of the past. The world that is coming will only be shaped by those with the vision to see it as it is, and not as it was.