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OPINION

The rise of national currencies against dollar hegemony

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Within the political, diplomatic, and ideological change and transformation in the global system, a monetary process is also taking place. For a long time under the US-centered Western hegemony, Western currencies were the most widely used money and reserves in the world. After the Second World War, the US dollar completely dominated the global economic and financial system. While the beginning of dollar hegemony in the world brought incredible privileges for the US, for the non-Western world it was a master-slave relationship. However, with the 2000s, a non-Western change and transformation on all fronts began to manifest itself in the monetary and financial sphere as well. While the dollar accounted for 72% of international reserves before 2000, it fell below 59 percent in 2023. With the Russia-Ukraine war, the rate of decline of the dollar in reserves increased 10 times more. The dollar in world reserves is now at its lowest level in 27 years. Again, while nearly 70 percent of global trade was carried out in dollars in the early 2000s, today it has declined to around 40%. Although the dollar is still the most widely used currency and reserve in the world, today it is in an indisputable decline. With this decline, the US, the only country in the world with the privilege of printing money, is today the most indebted country and nation in the world.

Especially with the Russia-Ukraine war, the dollar hegemony and the financial system built by the US entered a rapid breakdown process. Because the seizure of the currency reserves of non-Western countries by the US and Europe, the seizure of money, houses, cars, ships and airplanes of private enterprise, as well as the seizure of these reserves despite court rulings, created a great shock. At the same time, the exclusion of non-Western countries from the US-centered financial system was one of the developments that frightened the whole world. This is why the dollar and the Western financial system came to be seen as a dangerous and aggressive tool in the non-Western world. In fact, the use of the dollar as a weapon by American power was the most common type of attack on non-Western actors. In other words, this could happen to anyone who disagreed with Western actors. The rules-based liberal international order established by Western actors was, as usual, violated by the West. What happened showed that free capital and free finance, in other words liberal values, were pushed into a corner. This frightening scenario could happen at any time to all non-Western nations and states. As a result of these events, a new process has begun, especially in the non-Western world. It became a trend again for states to trade in their national currencies.

The yuan, the national currency of China, the world’s largest creditor and second largest economy, has taken the lead in this regard. The yuan became the most traded currency in Russia, while the dollar declined. China and Russia have managed to reach 80% of their trade payments in yuan and rubles. Israel, an indispensable ally of the United States, has added the Chinese yuan to its reserves while reducing the US dollar and the European Union euro. France became the first European country to use the yuan in its trade with China. The yuan was also used in trade between China and the United Arab Emirates. Moreover, it is foreseen that payments in the energy exchange between Russia and Pakistan will most likely be paid in yuan. In addition, Brazil and China started to trade in their national currencies. As a global breakthrough, the petroyuan alternative to petrodollars in Saudi Arabia could be activated at any moment. Even petroruble and petrorupee discussions are on the agenda. With this agenda, Saudi Arabia’s first action was to decide to sell oil in local currencies. Thus, Saudi Arabia signed an agreement to sell oil to Kenya in Kenyan shillings instead of dollars.

The Russian currency, the ruble, is now the dominant currency of the Eurasian Economic Union. Turkey, among many other countries, has started to use rubles in its trade. On the contrary, the trend towards the Turkish lira is on the rise on the Moscow stock exchange. It should not be forgotten that Turkey has also started using the yuan in its trade alongside the ruble. The Indian currency, the rupee, is quietly rising. India has signed agreements with 20 countries, including the UK, Germany, Israel, Russia and Singapore, to use rupees in trade. Bangladesh has also decided to use the national currency instead of the dollar with India. Finally, India announced an agreement with the United Arab Emirates to use rupees in trade.

Brazil, the giant power of Latin America, called for a transition to a national and common currency instead of the dollar in Latin America. Brazil and Argentina are working on a common currency. In addition, the Bank of Brazil became the first Latin American bank to join the Chinese payment system CIPS, one of the alternatives to the Western payment system. At the same time, the Brazilian Central Bank announced that the yuan has overtaken the euro to become the country’s second largest international reserve currency. Even Iran and Indonesia agreed to use their national currencies for trade. Let’s not forget that Iran is being paid for oil by India and China in rupees and yuan.

Non-Western global and regional organizations are also making critical moves in this regard. The Association of Southeast Asian Nations (ASEAN) has begun preparations to switch from dollars, euros and sterling to national currencies in financial transactions. Malaysia has also proposed an Asian Monetary Fund. The BRICS organization has also accelerated its efforts for a common currency. The Shanghai Cooperation Organization brought the use of national currencies to the agenda at its last summit. In fact, the total economic size of Asia, Latin America and Africa has surpassed North America and Europe. This has naturally increased interest in the national currencies of the emerging economies of these countries.

As you can see, the process of de-dollarization, or abandoning the dollar, is being followed with interest around the world and is highly accepted. Today, more than 60 countries and nations trade in their national currencies. While there is no doubt that this will increase day by day, it has become clear that we can no longer speak of the hegemony of a single currency. Autarkic and hierarchical American monetary policies have been a burden for non-Western nations and are no longer valid. Instead of a single Western monetary reserve dominating the world, a multi-currency reserve is desired. Therefore, the decline of the dollar hegemony is not only the rise of the yuan, but also the globalization of non-Western currencies, that is, the establishment of a non-Western multi-currency order, is the basic reality of the future. Of course, this process will be long and arduous.

Twitter: @umur_tugay

OPINION

Ukraine’s new $60 billion is ready: What changed Trump’s mind?

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7 months have passed… The phrase “as much as necessary” used by American officials has been replaced by “as much as we can”… American Congressmen, who would have rushed to the Congressional benches in the morning to vote for the aid package if Netanyahu had been allergic to spring, were no longer able to show the same enthusiasm when it came to Ukraine. At least some of the Republicans…

Over time, this particular group started to get in the good graces of the rest of the Congress. They said, “You’re throwing Putin a lifeline.” “You’re siding with the enemies of the United States,” they said. They probably also said “the arms industry is hungry”, but they said it quietly. But this conservative faction did not say “Noah says Noah”. They even sacked Kevin McCarthy, their own Speaker, who had hinted that he would make a deal with Biden for future packages, without blinking an eye. Meanwhile, time was running out. Ukraine was running out of ammunition and was retreating a little further on the ground every day.

CIA director Burns issued a grim prescription: “If this package is not passed now, Ukraine will not live to see 2025”.

As you know, the leader of this group was Donald J. Trump. The populist leader argued that the unconditional money given to Ukraine should be spent on issues of direct concern to Americans, such as border security and infrastructure needs, and many thought this stubbornness would be short-lived. “After the first of the year, Ukraine will begin to feel the lack of ammunition,” the Pentagon said. Then it would be resolved somehow in December, wouldn’t it?

The meetings in Congress were very heated. The Republicans wanted extra money for border security and tax cuts for the rich. Both were unacceptable to the Democrats. Mike Johnson, the new Republican spokesman, who had arrived after a lot of fighting within his party, was stamping rejection on Biden’s monthly packages before he even opened his eyes.

By December, there was no sound from the package. By February, Johnson was still calling the new proposals “stillborn”. Ukrainian President Zelenski had already raised the tone of his complaint. At this rate, a Russian summer offensive could lead to a serious disaster.

Persuasion tours

If the four years of Trump’s rule have taught his opponents anything, it is that he is not a man of principle. If the conditions were right, the former president could be convinced of anything. They started with Israel. They put support for Israel and Ukraine in the same package. But who were they fooling? How many brave Democrats could there be who would say no to aid for Israel? Of course, this could not be an offer that would “scare” the Republicans in return for support for Ukraine. And it didn’t. Support for Israel reached the White House without much fuss at the Congressional tables.

The border security issue was a dangerous adventure for the Democrats. Caving in to the Republicans would have alienated their own voters. The Muslim vote had already been lost on the Israel issue, and Biden could not risk more.

The picture that now emerged was grave for Biden’s plans for Ukraine. Obviously, Trump’s intention was to prevent the approval of this package until after the elections. Thus, Biden would go into the elections with the Ukraine disaster on his back and would surely be defeated.

Then something happened. First, Mike Johnson’s language changed. Suddenly he started talking about “what would happen if we left Ukraine in the middle”. When Marjorie Taylor Greene (MTG), known as the radical Trumpist of Parliament, smelled “betrayal”, she gave Johnson an ultimatum: “Don’t forget McCarthy, don’t you dare!”.

But unlike MTG, Trump thought differently this time.

The former president said: “We’re tired of giving gifts.We might consider lending money to Ukraine”. Although this comment suggests that Trump was somehow persuaded, it still sounded odd. As the war entered its third year, Ukraine’s economy was in shambles. To pay its soldiers, it had to receive $8 billion a month from the West. If the war ended today, it would take $500 billion to rebuild the country. If I went to a bank in my situation and asked for a loan, I would probably be laughed at. But Donald Trump, the author of The Art of the Deal, is obviously convinced.

Who am I kidding, of course he wasn’t convinced. But he must have got something out of it. But what was it?

What does Trump want?

We are in a period where Biden and the Republicans, who were in favour of supporting Ukraine, have realised that nothing can be done despite Trump. Whether they like him or not, there is a populist figure they have to convince. To understand what Trump might want, we need to go back five years, to the Ukraine issue that started the debate about Trump’s impeachment in 2019.

While there was talk of Biden running in the 2020 election, Trump started going through old notebooks.Remember the famous Biden son laptop incident? Hunter Biden was working for an oligarch’s energy company in Ukraine and used the power of his father, who was Vice President at the time (i.e. the whole of the US), to get rid of the prosecutor who was after the company’s owner. Trump was aware of this at the time and made plans to beat Biden in the election.

Meanwhile, just like today, aid packages for Ukraine were waiting in Congress. The amount of aid was much smaller and the public did not focus on it. But the package was not approved simply because Trump did not want it.

He called Zelenski. “You had a very fair prosecutor.It’s a shame,” he said.He asked Zelenski to appoint a prosecutor to go after Biden. It was the only way he could get the aid he was holding up in Congress released. The incident escalated.Because of that speech, the question of Trump’s impeachment erupted.But it told us what Trump could demand in such a position.

Fast forward to today. The Wall Street Journal reports that Trump has had two important visits in a month. One was, of course, Johnson, the Speaker of the House, and the other was Andrzej Duda, the former President of Poland. Duda, a leader known as a Trumpite, was also a good friend of Trump’s. They must have thought that a right-wing populist would understand the language of the right-wing populist, so they organised such a meeting. Duda explained the gravity of the situation to Trump. Johnson found a more effective vein.

In fact, Trump said: “If I am elected, I will bring peace in one day”. How would he do that if Ukraine were defeated today? Ukraine had to hold out at least until Trump took office. For some reason, CIA director William Burns said the package would keep Ukraine alive until 2025. If Trump wins, his inauguration will be in January.

Before we forget, there are also Trump’s ongoing lawsuits. It is rumoured that the money he has earmarked for his campaign could run out as a result of these lawsuits. Trump may have made a deal over Ukraine in order to avoid both financial damage and the blockage of his electoral path.

In conclusion, although Trump is popular today because of his isolationist and “America First” ideology, his policies are based on his personal interests. While 101 Republicans supported the package that Trump did not oppose, 112 voted against it. So despite everything, the isolationist wing does not even listen to Trump when it needs to. The former president’s order of importance is as follows: Trump first, then America, and Israel can squeeze in depending on the situation. Ironically, even in this equation, America is ahead compared to Biden’s order of importance.

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OPINION

Grassroots Democracy in China: A Field Study

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China is often portrayed as an “evil” communist dictatorship where allegedly no one can freely express their opinions. But is this really the case? How does democracy function in China? After all, China describes itself as a democratic state. A thorough on-site investigation is necessary to clarify these questions. – Christian Wagner (Beijing)

Expertise Instead of Activism: Democracy in Beijing’s Subdistricts

In March 2024, an investigation took place in subdistricts of Beijing (Haidian). Participants included local residents, lawyers, janitors, property management, sales representatives of the property, and a party representative who chaired the discussion. The topic was the introduction of mechanical speed limits to slow down cars, a discussion at the grassroots level in the neighborhoods. I had the opportunity to participate in the discussion and examine grassroots democracy in China.

In the Kongjia Community of the Haidian subdistrict of Beijing (Zhongguancunjiedao), the viewpoints of all participants were thoroughly discussed democratically. The party leadership only took on the role of facilitating the discussion and summarizing the results. It was interesting that it was not a classic debate aimed at overriding opinions. Rather, each participant sought to empathize with the perspective of others, including absentees such as children, the elderly, or drivers themselves. Both inclusive and psychological factors were considered, and a proportionality assessment took place. In the end, a solution was found that was in the best interest of all parties involved.

During a personal conversation with an elderly neighbor, it was strongly emphasized to me how crucial it is to involve experts. He said that “in China, every democratic discussion is characterized by an academic approach in which experts play a central role with their expertise. Political representatives who lack expertise in relevant areas face too great a challenge in analyzing complex issues adequately. Instead, they tend to argue purely based on their emotions, which ultimately serves no one. Therefore, it is of enormous importance that the party incorporates experts and acts as a mediator between the various sides. In this sense, the party acts almost like a wise father who gathers his children around a table to promote a factual and constructive discussion.”

In another small subdistrict with several tens of thousands of residents in the million-strong city of Beijing, called Huaqinyuan Community, there was a discussion on how local businesses and residents can live together in harmony. In China, companies also have local “citizen duties”. The Communist Party of China supported the organization, so a local research institute for the aerospace industry supported the construction of a small kiosk and a children’s playground.

I was able to attend the opening ceremony, where subsidized food was sold to retirees. In addition, employees of the research institute supported the repair of bicycles or other small tasks for the neighborhood population. In general, all neighborhoods have a shared office where both party members and neighborhood residents or members of other parties sit and take care of administrative tasks, order, coordination, bureaucracy, local development, or opinion formation.

At the opening, I asked a representative of the office about the current challenges in the community. He mentioned that the biggest problem was that fewer and fewer young people were interested in getting involved in the neighborhood, as they increasingly sit at home in their virtual world. I pointed out to him that similar challenges also exist in the West. However, he explained that the role of the party is crucial. Through its networks, it can help, and especially students from various social platforms volunteer.

 

Businesses and “citizen duties”: Investigation of the entire Haidian District

This was one of the numerous events in Beijing where representatives of local businesses and the seven democratic parties, under the organization of the Communist Party of China, came together from all subdistricts in Haidian (about 3 million inhabitants). Companies like Microsoft were also represented. Some companies presented how they want to improve the lives of everyone in the entire district together with the local government and citizens.

Presentations were also shown on how better cooperation between local businesses can be achieved. Topics such as the construction of a “Smart Infrastructure City”, an “Artificial Intelligence City”, and an “Intelligent Production and Supply Chain” were discussed in particular. Companies compete to demonstrate outstanding achievements in improving the local living conditions of the people and thereby receive special support from the government and party. It’s a win-win situation.

Exposed Illusions: Western Misconceptions about Communism and Democracy in China

There are still widespread misconceptions in the West about communism, often leading to the belief that it is supposed to take from the rich and redistribute to the poor, similar to Robin Hood. In reality, however, this notion is more of an extremism, which Lenin himself referred to as the “infantile disorder of communism”.

Mao Zedong emphasized in his work “On the Correct Handling of Contradictions Among the People” that it is naive to believe that contradictions between people can simply be eliminated. Rather, it is about finding ways for everyone to pull together. The Chinese concept of win-win cooperation stems from this idea. At the grassroots democracy level in China, this means that companies, the local population, the government, individuals, and all democratic parties work together to address issues of public interest. Public interest especially means that local people find work, are adequately supplied with affordable food, and have housing.

China has often struggled with poverty and hunger in the past, similar to many other developing countries. Therefore, it is of the utmost importance to stabilize this basic supply. Through these efforts, the People’s Republic has been able to lift over 800 million people out of poverty. It is a mistake to assume that companies are forced to do so. In fact, companies benefit greatly from their own investments and can test their own products in practice and conduct experiments, invest in the education of young people locally, or even improve their own structures, instead of just paying taxes.

China’s democratic system has two levels. On the one hand, there is the central government, which sets framework guidelines and laws from top to bottom. On the other hand, there is the “collective” or “inclusive” democracy on a horizontal level, where all participants of public space are involved in debates, especially experts. Therefore, activism is also frowned upon because activism is often associated with people arguing based on their feelings without considering the profound overall circumstances. Activism therefore takes place, among other places, in universities in the form of professional debates.

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OPINION

Iranian retaliation: Moving through conspiracy theories

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Iran’s retaliation against Israel has once again revealed the wonderful products of our conspiracy theory industry. I have no doubt that we will be in the top three in the world without having played a game, and if we are on form we will be playing either a Middle Eastern or Balkan country in the final. If conspiracy theories were an exportable product, we would certainly be in the top five in the world in terms of per capita income.

In fact, the tensions between Iran and Israel are literally a game of chicken. In reality, the Iranian regime is just one of Israel’s puppets. The government in Tehran pretends to be against Israel, but behind the scenes it is working with it. If it can mobilise hundreds of drones, why doesn’t it hit important Israeli targets? Or why has no one been killed in Israel?

Of course, I know that there is no point in trying to refute them; but it is impossible not to regret that these conspiracy theories can be voiced uncontrollably in a significant part of the media, as an indicator of the intellectual level of our country. Listening to them, I feel like saying: ‘Hitler was also a Soviet agent. Stalin recruited him early on. The Second World War was already a central piece. Hitler’s aim was to ensure Germany’s defeat and to take control of the Soviet Union’s vast Eastern European territories’. Incidentally, the fact that the Soviet Union alone suffered 27 million deaths (one and a half times the population of Turkey, which was eighteen million in 1945) is a minor detail. It is not likely to disprove my conspiracy theory. Besides, there is no one around to ask these questions.

Codes of Iranian retaliation

In essence, Iran responded to the Israeli attack on its embassy in Damascus with more than adequate retaliation. More than adequate because Iran could have hit some Israeli targets outside Israeli territory. In fact, in recent months it had hit some sites in northern Iraq allegedly used by Israeli intelligence. But this time it targeted Israeli territory directly. And it should be underlined immediately that this is the most comprehensive attack on the entire territory of Israel since its establishment, taking its place in military-political history.

As for the claim that Iran did not or could not use weapons that could have inflicted greater damage on Israel, the answer to the first question is directly related to Tehran’s aversion to a regional war. From the Iranian point of view, the clock is ticking in its favour because Iran’s influence has grown enormously in Iraq and Syria – supposed democracies that Washington, with not very clever calculations, destroyed simply because they were anti-Israeli. In these two countries, groups known to be pro-Iranian and calling themselves the Axis of Resistance have gained power, while the Hezbollah movement, which was born in Lebanon as a result of Israel’s policy of nothing but violence, has established full contact with Iran through Syria. Add to this the strengthening of the Ansarullah movement in Yemen and the gradual Hezbollahisation of Hamas, i.e. its transformation into an effective resistance organisation, and Iran seems to have placed Israel under a serious siege in the region.

As multipolarity irreversibly restructures the world balance, Israel’s main supporters, the US and Europe, calculate that they will suffer a serious loss of power and sphere of influence, and they are not wrong in their calculations. There is no doubt that the decline in the power of the US and the collective West will reduce Israel’s room for manoeuvre in the Middle East. Moreover, Iran, which is said to have reached the final stage in its efforts to build nuclear weapons, has no reason to want a regional war. On the contrary, it is Netanyahu and Israel that want a regional war and are trying to drag America into it, because the Tel Aviv government, having achieved nothing that could be considered a success (the rescue of hostages, the capture/killing of prominent Hamas leaders, etc.) in its genocidal ethnic cleansing operation in Gaza, which for the first time has been strongly criticised even by Western public opinion, sees its salvation in dragging Iran into the war. This is why he is carrying out his provocations against both Hezbollah and Iran.

Netanyahu is also using provocations against Iran in order to draw the American administration, which does not want a war with Iran, into the conflict. The recent bombing of the consulate in Damascus was designed to do just that. Iran has therefore had to build up its strike capability on nuances (an area in which conspiracy theorists are very poor). In other words, it had to respond, but it had to do so in coordination with the United States in a way that would not lead to a major war. That is exactly what Iran did over the weekend. Hundreds of drones and Hezbollah’s rapid fire, which began as they approached Israeli airspace, must have been designed to keep Israel’s so-called Iron Dome air defence system busy with more targets than it could handle. Taking advantage of the vacuum created by this saturation, ballistic missiles apparently caused serious damage to critical Israeli airfields (Nevatim and Ramon).

Moreover, it appears that Iran did not hit these airfields with hypersonic missiles, because if it had, the details of an important weapon in Tehran’s inventory would have been revealed and Israel, on the one hand, and the United States, the United Kingdom and their allies, on the other, would have begun a feverish study of what could be done against this weapon. In other words, Iran seems to have applied the most important rule of strategy and retaliated without showing all its cards. It has shown Tel Aviv that it can strike anywhere in Israel without using hypersonic missiles.

CNN ezzle

It is also clear that there is nothing serious in Iran’s claims that the attention of anti-Israel or Israel-critical public opinion or Western states, which was focused on Gaza, has suddenly turned to the Iran-Israel conflict and that Gaza has been forgotten. Such rhetoric is based on the assumption that Israel has stopped or will stop its operations in Gaza. But after this retaliation, in which Iran has shown Israel what it can do, eyes will turn back to Gaza. On the one hand, if the Israeli offensive in Gaza is suspended or stopped, this would be a serious point in Iran’s favour because it would put it in the position of being the country that protects/rescues the people of Gaza from Netanyahu’s genocide. On the other hand, if the Israeli offensive continues, all eyes will turn there again.

There is also a contradictory situation in Western countries between public opinion, which is increasingly critical of Israel, and the governments that support Israel, and this situation is likely to continue. In other words, we are talking about a Western world that will not/cannot stop supporting Israel, whether Iran retaliates or not. From this point of view, we can conclude that Iran has given a nuanced response when balancing this issue with the demands of its own public opinion for retaliation. The retaliation was both sufficient and did not lead to a regional war. So Netanyahu did not win.

The repercussions of Iran’s retaliation in regional politics showed once again that it has not received, and is unlikely to receive, political support from the Arab countries. While Jordan actively defended its airspace against Iran directly with Israel and the United States, the rest of the Arab countries, with the exception of Syria, did not allow the passage of Iranian drones and missiles. This shows that the Arab countries are in favour of treating the Palestinian issue as their own family problem. These Arab countries, which are negotiating and struggling with Israel and America on the Palestinian issue, consider the attempts of non-Arab Muslim states to take a central role in the Palestinian issue with political Islamist slogans and religious justifications such as Islamic brotherhood as an intrusion of others into their legitimate sphere, and there is no doubt that there are lessons to be learned from the Turkish government, which has shown its willingness to be active on this issue on every occasion.

For the time being, the possibility of a regional war seems to have been averted, but it is almost impossible to predict what provocations Netanyahu or any other Israeli government might resort to if it wants to launch an all-out war against Iran, dragging America into it. There is no Israeli political formation/government on the horizon that would internalise a two-state solution by taking serious steps backwards in Palestine, taking into account the possibility of diminishing American aid in a multipolar world. On the other hand, while those in Gaza are being subjected to genocidal ethnic cleansing, the Palestinians in the West Bank, whose homes and lands are being confiscated, who are constantly oppressed and persecuted, have no choice but to resist. The region is likely to remain a hot zone of conflict in a multipolar world until the US presidential election. If Trump is elected and translates his ideas into foreign policy, the regional equation could change significantly.

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