Is a new system emerging in the global economy?
Developments in the international arena remind the unforgettable words of British Prime Minister Churchill; “Americans always do the right thing, after the wrong one has exhausted all other options.”
The world experienced the opposite in the first year of President Biden, who started his duty with the slogan “The USA is back” and promised to coordinate all the steps he will take with his allies. Tensions arose with France over the AUKUS project in Far Asia, and NATO ally Turkey and Hungary were excluded from the “democracy summit”. The disagreement with Germany and many European countries over how to approach Russia does not end.
In particular, the Biden administration’s approach to the Ukraine problem alienates many of its allies. Scenario reminiscent of the invasion of Iraq… The current administration’s discourse on the Ukraine crisis reminds one of the former US President George W Bush’s, approach to Saddam’s regime in Iraq. Everyone remembers that the story of “Saddam’s production of nuclear and chemical weapons” was used as a justification for the Second Gulf War through the Western-based international press. Now, again through the international press, the rhetoric that “Russia will invade Ukraine in the spring” is being pumped over a leaked CIA report. The reason for this is the weapons and military build-up of Russia on the Ukrainian border. Moscow, on the other hand, argues that it has no intention of invading Ukraine, and that it is an issue that no one can interfere with, within its national sovereignty, where it will deploy troops and weapons within its own borders.
In the Ukraine crisis – just as in the invasion of Iraq – Anglo-Saxon countries such as England and Canada sided with Washington and even encouraged Biden to put more pressure on Moscow, while countries such as Germany and France prefer to stay behind on this issue. . Turkey, which has brought its relations with Ukraine to the point of joint production of weapons, is also in pursuit of pacifying the crisis and reaching reconciliation due to its intricate economic ties with Russia. Moreover, the problem is not limited to not being able to convince the allies, the American policy on Ukraine paves the way for the rival front, Russia and China, to “tighten the ranks”.
Russia and China are creating an alternative to the “swift” system Indeed, the cooperation between China and Russia seems to have reached the point of creating an alternative to the American-controlled international financial system. After the video conference between Russian Leader Putin and his Chinese counterpart Xi Jinping last week, there are traces of this in the statement of Yury Ushakov, one of Putin’s aides.
Ushakov said the two countries “agreed to accelerate work on establishing a new independent trade network that would reduce reliance on the US-led international financial system.” In his statement, Putin emphasized that the cooperation between the two countries is a “new model” and laid out the parameters; “The new model of cooperation between China and Russia is based on non-interference in internal affairs, respect for each other’s interests, and transforming our common borders into a zone of lasting peace and good neighborliness.”
Biden threatened to ‘pull Russia out of the swift system’
Add to this the failure to come to an agreement on the Ukraine crisis, which brought the two countries against each other, after Putin’s meeting with Biden a week before the Putin-Shi meeting, and the US President’s threat of “exclusion from the swift system” against Russia after the meeting. It is obvious that China, again under American sanctions, came to the rescue of Russia in the face of increasing pressure from the USA and its allies in Ukraine; While the Americans want to stop China, which they have declared as the “main enemy”, they are gradually strengthening the Sino-Russian front against them. It would not be wrong to think that the alternative trade system to be established by China and Russia will create satisfaction in other countries that are exposed to the sanctions imposed by the USA unilaterally.
It is possible that Iran, Venezuela, Cuba -even Turkey under CAATSA sanctions- will feel more comfortable in establishing commercial relations with Russia and China in this new system. It should be noted that Turkey’s state-owned bank Halkbank was also brought into court in New York on charges of violating the US sanctions on Iran. The case is based on the thesis that the commercial relationship between Iran and Turkey is based on the American banking system, and therefore the USA has the “right to judge Halkbank”.
Even the “solid” allies of the USA in Europe are likely to be involved in such a system in some way, both because of their natural gas dependence on Russia and their intense trade relations with China. As the USA struggles to consolidate its global power, it faces losing its influence in the international financial system.
