By LAU SIU-KAI
Whenever the United States takes actions against another nation, be it an invasion, an attempt to engineer regime change, wage a trade war or impose sanctions, the rationale it offers for the public is it seeks to safeguard the rules-based international order (IO) created by it after World War II. Ironically, the US itself is the major culprit in undermining the IO, particularly after the end of the Cold War. By frequently and flagrantly breaking the rules of the IO ostensibly under its charge, the US has damaged its reputation, credibility and value to other nations debilitating the postwar order it established. Today, the IO is no longer able to foster world peace, economic globalization and international cooperation. The ensuing world disorder will in turn redound to the detriment of the US itself.
Some of the draconian sanctions, such as seizing the assets of the wealthiest individuals close to Russian President Vladimir Putin, that the US and its loyal allies have slapped on Russia in retaliation for its "special military operation" in Ukraine are blatant and brutal infringements of the private property rights of individuals. Yet private property is extolled as sacrosanct in the IO. Such harsh punitive measures imposed on civilians signify that the West is no longer a haven for a person's assets and properties, as no one can be sure that one will not run afoul of the West someday. In the years ahead, given the unremitting conflict of interests and beliefs between the West and the non-West, capital outflows from the West will become an irrevocable long-term trend.
Even more harmful to the IO is the freezing of the reserve assets of Russia's central bank, expelling Russia from the SWIFT financial payments system, and ejecting it from the crucial institutions of international finance. Previously, Iran, which had courted the wrath of the US, had already been punished similarly in 2019. Not long ago, the reserve assets of Afghanistan were also confiscated by the US and could not be used by this poor country to help its long-suffering people. Unavoidably, in the eyes of many non-Western countries, the US and its allies have breached contracts and defaulted on debt payments solely for their parochial interests.
Yet the US dollar has been promoted as a public good lubricating international trade and serving as a safe reserve currency. Because of its irresponsible fiscal and monetary policies, its political instability, its anemic governance, its huge debt burden, as well as its arbitrary resort to extraterritorial legal actions, more and more countries, and people have qualms about the reliability and appropriateness of the US dollar as the preponderant "international currency". Against this backdrop, the strangulating sanctions imposed on Russia will certainly be seen around the world as the egregious, illegitimate and unscrupulous "weaponization" of the US dollar and the international financial system underpinned by it. Though for a while, given the lack of a viable "alternative", as gloated about by many US economists, nations and people have perforce to continue to use the US dollar, an unrelenting and creeping process of "de-dollarization" however is underway and will accelerate unstoppably in the years ahead. The rise of China's renminbi, particularly its digital form, the increasing importance of gold, commodities, and natural resources as storages of value and media of exchange, the mounting use of currency swaps between trading economies, the willingness of oil-exporting countries to be paid in currencies other than the US dollar, and the emergence of innovative forms of "barter trades" portend an international economy where the role of the US dollar in the international economy will be eroded gradually and ineluctably in the long haul. The diminution of the dollar as the prime international currency will inevitably aggravate the debt burden, inflation, economic inequality, and declining standard of living of ordinary people in the US.
More importantly, since the US hegemony is undergirded preponderantly by the hegemony of the US dollar, the descent of the latter will irrevocably diminish the status and capacity of the US as a world power.
The sanctions imposed by the US and its allies on Russia and other countries reflect a long-term and unmistakable trajectory of ceaselessly undercutting the basic rules of the IO that was devised by the US to serve its interests. During the Cold War, despite its evident unfairness to many allies and friends of the US, the fact that the Western values embedded in the IO were shared or at least not repulsed by most of its members has enabled it to function relatively smoothly for more than half a century. The end of the Cold War has seen the entry into the IO of non-Western countries, primarily China, Russia and India, which do not completely agree with the political and economic values of the IO, although they, out of pragmatic calculations, are still interested in participating in it while continuing to advocate reforms to make it more compatible with the interests of non-Western nations. Nevertheless, the US, though willing to expand the span of the IO by adding new members, is reluctant to make significant reforms. In the case of the eastern expansion of NATO, a process inaugurated to enlarge the IO, the core security concerns of Russia have been not only arrogantly ignored but also trampled upon. The way the IO has been enlarged by the US will eventually prompt many non-Western nations to lessen their commitments to the IO, look for other alternatives, or in the case of Russia and some other countries, construct a parallel and competitive IO in Eurasia with an embedded parallel financial ecosystem. All these happenings will weaken the US-led IO ultimately.
The United Nations has been trumpeted by the US as the capstone of the IO. Over the years, with the growing influence of China and other emerging nations in the UN, the US has taken steps to gradually downgrade its importance, and occasionally even subject it to ridicule and abuse. Payments to the UN have been cut or delayed. The presence of the US in the UN's affiliated bodies has shrunk appreciably. What is most glaring is that the US has taken unilateral military actions against other nations without the mandate of the UN, as seen in the Iraqi War in 2003. The declining influence of the UN in an increasingly turbulent world will inevitably further undermine and fracture the IO.
Respect for the sovereignty and territorial integrity of each independent nation is upheld as a sacred principle in the IO. Unfortunately, this principle has been violated blatantly and repeatedly, particularly after the end of the Cold War when US power became unsurpassed and uncontainable in the so-called unipolar moment. Suddenly, regime change, nation-building, "color revolutions", anti-authoritarianism, R2P(Responsibility to Protect), and the exporting of Western democracy have become the new noble goals of US foreign and military policies. Invasion and interference in the internal affairs of other countries have become ordinary affairs. Detaching a part of the territory of another sovereign nation and recognizing it as an independent country (as in Kosovo) are billed as a laudable endeavor.
Economic globalization featuring free trade is applauded as an integral and inalienable component of the IO. Free trade is deemed to be beneficial to all nations. The rise of protectionism, populism and the "America first "ethos however have made free trade a bugbear to many US people. International trade has been much "weaponized" by the US in the recent past, particularly under former president Donald Trump, and the "weaponization" of trade has continued unabated even without Trump. China, as the largest trading country in the world, has been the major target of the US' weaponized trade. The heavy tariffs imposed on Chinese exports to the US are a prime example of the US declaring a trade war against another country. It is easy to see that if international trade is not only no longer free but also has instead become a lethal weapon in the arsenal of the US in pursuing geoeconomics ends, the IO would have difficulty continuing indefinitely. Along with the growing restrictions on free trade will be the inexorable process of deglobalization. More and more countries will have no choice but to pursue autarkic policies of one sort or another, or to form exclusive trading blocs with other friendly countries. At the end of the day, everybody is going to suffer.
The US has excoriated other countries, China especially, alleging it is balefully and provocatively undermining the IO by selectively abiding by its rules while flouting many others. China is tagged as a "revisionist" power by many US politicians and academics. It is however an undeniable fact that the success of China's reform and opening-up strategy is contingent on becoming a responsible member of the IO. With the continual rise of China and its ever-broadening national interests, it is not illegitimate or unreasonable for China to call for reforms of the IO to reflect the changing balance of power among nations in the world. By advocating for reforms of the IO, China also serves as the champion of the interests of most developing countries that harbor grudges against the IO for its discrimination against non-Western countries. Both China and other non-Western countries are right to accuse the US of unilaterally breaking the rules of the IO to advance its own interests at the expense of other countries, and therefore the US itself is the real "revisionist" power which, more ominously, has betrayed its own rules, institutions, and promises.
The decline and disruption of the IO have already produced international disorder and hampered international cooperation in tackling the COVID-19 pandemic and environmental degeneration. If the US is serious about upholding the IO and pulling the world back from the precipice of international disorder, it should at least set an example to the world as the faithful and trusted follower of the rules of the IO originally made by itself.
The author is emeritus professor of sociology at The Chinese University of Hong Kong and vice-president of the Chinese Association of Hong Kong & Macao Studies. The views do not necessarily reflect those of Bauhinia Magazine.