(3) Multipolar World Order: Economics Vs. Politics

http://www.strategic-culture.org/news/2016/08/20/multipolar-world-order-economics-vs-politics.html

Multipolar World Order: Economics Vs. Politics

Currently the international financial system, as I have written many times before, is an American affair. The dollar stands as the dominant currency in relation to other financial institutions, and the whole global economic system is mainly conducted through the American currency. But the paradigm is changing, especially in recent years, thanks to supra-national entities like the AIIB and BRICS. Inevitably the IMF's currency basket will have to incorporate the yuan, starting the process of the slow erosion of the dollar's dominance. The IMF, after years of wasting time trying to delay this event, will welcome from the October 1st, 2016, Beijing as an integral part of the reserve-currency system. Of course one of the most critical aspects is still the private banking sector and how the SWIFT payment system will work, given that it currently lies within the Euro-American orbit. Altogether this blend of public and private sector produces a situation where it is easy to see that the global economic system and its rules are often decided in Washington (IMF, World Bank), New York (Wall Street, FED), London (LSE), Basel (BIS) and Frankfurt (ECB), excluding all the other nations. The financial system is dominated by central banks, international bodies and the huge conglomerate of private banks, all strictly of a North Atlantic orientation.When confronting geopolitical and economic interests, it is hard not to mention the two giants such as China and Russia. Both countries, as global superpowers, necessarily need to constantly balance strategic objectives, often geopolitical, with international economic cooperation. The Ukrainian coup, with the reunification of Crimea, or the construction on the "Spratly Islands" in the South China Sea, are two forward-looking examples of how geopolitical interests have become a main priority for Beijing and Moscow. The power that China has accumulated in economic terms gives it a great advantage: Western nations are unable to apply economic aggression. This leaves China free to pursue its main political objectives, such as establishing security on its maritime boundaries, enforcing national integrity, and expanding its influence and commercial facilities across the continent, without fear of incurring economic punishment. The West is already unable to sanction China let alone apply any vetoes from the private banking sector, or even worse, a possible embargo. China is the factory of the world, and any economic pressure would end up producing unacceptable losses for the West.