Geoeconomics of rules based system

Rules Based System is essentially a western tool that seeks to control geoeconomics where both allies and enemies are subjected to diktats by the USA to conform to her own desires, intents and purposes. Beginning with the end of WWII this system had a tight noose tied around countries in the globe. How it is operationalised?

At the conclusion of the WWII only one country remained economically sustainable that is America. Corralling the defeated and victorious Western bloc, America came out with an economic package that included aid with strings &, lend-lease schemes to put back the weakened satraps back in the form they began prior to the War. In addition, selected countries in Asia & Africa were showered with long term finance. Japan was one of the major recipient of the largesse as she suffered heavily due to being subjected to atomic weapons.

Rules based System (RBO) has octopus tentacles built in every activity of geoeconomics. Bretton Woods’ twin The International Monetary Fund & the World Bank are chief amongst the top rung lassos along with the Bank for International Settlements. The power and authority of America in Geoeconomics was sealed when she midwifed the United Nations to give birth to World Trade Organization (WTO) that admitted countries only on the recommendation of America.

Peoples Republic of China had to wait for almost 15 years to become a member in 2001 since the formation of WTO due to dragging of the feet by USA. Russia which was allowed to join the World Bank in 1992 after the Soviet Collapse had to face curtailment of her activity in March 2022 after the Ukraine Special Military Operations that began late February of that year.

Replacing Pound Sterling the US$ became the chief exchange and reserve currency by the Eighties. Almost all the countries in the globe were persuaded to have reserves in US$ that too to be held in Federal Reserve or in US Treasuries.

In 1971, President Nixon stopped the convertibility of the US$ to gold an arrangement that was in force as part of the Bretton Woods Agreement that also established that the USD as  the dominant reserve currency and fixed the rate of $35 per ounce of gold.

The SWIFT fund transmission system inaugurated in 1973 continues to be a geoeconomics tool in the hands of America. The cross border payment system has banned countries like Iran & Russia using her services.

In sum, unless and otherwise a country behaves according to the wishes of America its life is subjected to misery in the field of geoeconomics!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist