Global Proposal against the Economic Blockade

Pasqualina Curcio / Ultimas Noticias & Progreso Weekly

(April 5, 2021) — A score of countries are the victims of US imposed sanctions. Since 1992, within the United Nations General Assembly, all countries except the US and Israel have voted against the unilateral coercive measures imposed on Cuba. And in spite of the obvious majority, the US has ignored it. Good intentions, denunciations and calls to lift blockades have not been enough to prevent these genocidal actions against entire peoples.

Ending these practices of interference require making up for two serious mistakes committed in 1944 and 1971. For this, it is necessary to know, first, how these ‘sanctions’ work. Let’s take a look at an example.

When food company ‘X’ from, for example Mexico, wants to trade with company ‘Y’ from Venezuela (sanctioned country), the US government, through the Office of Foreign Assets Control (OFAC), sends it a message stating: “If you sell food to Venezuela we will freeze all bank accounts that you have in the world financial system. Therefore, if Venezuelan company ‘Y’ pays you for the food, you will not be able to access the money, not even with money already in your accounts.

Don’t even bother transferring it to another bank account because we will also block that. Oh, and if they place it in the name of another person or company, we will block that as well.”

The government of the United States can block financial resources because it owns the checkpoints of all financial transactions that are carried out in dollars in the world. Through the Swift (Society for Worldwide Interbank Financial Telecommunication, a global payment clearing system) the US has the power to decide which financial transactions are carried out, as well as when and under what conditions. With that power it instills fear, and it threatens, blackmails, ‘sanctions’ and blocks.

Taking that power away from the US is the strategy to follow to combat criminal blockades, which involves suspending the Bretton Woods Agreement (1944) and the petro-dollar (1971).

In 1944, in the midst of World War II, 44 countries met at Bretton Woods [in New Hampshire] to decide on the new commercial, monetary and financial order that governs to this day. At that moment, when Europe had been destroyed and ruined by war, the United States prevailed taking advantage of its condition as, not only the country that controlled 50 percent of the world’s total production with a surplus trade balance, but most importantly, the world’s great lender.

They decided that the US dollar would be the world’s reference currency. In other words, exclusivity and power was granted to the US since all the world’s currencies would be referenced to the dollar, and in turn backed by gold. That was the first big mistake. In the process, the IMF was created, which granted the largest participation quota of 31.1 percent to the United States, and with it the greater voting and control power in that body.

Then, in 1971, humanity made the second great mistake by allowing the United States, unilaterally, to disassociate itself from gold as the standard to set the price of its currency. President Richard Nixon announced to the world that from that moment on the price of the dollar, to which all world currencies would continue to be referenced, would depend on confidence in the US economy. An announcement that was accompanied, not incidentally, by the creation of the petro-dollar.

From that moment on, all oil bought around the world had to be traded in dollars, and since there is no country that does not buy hydrocarbons, everyone would need the US currency, which would be available in sufficient quantities because it could be issued without the restriction placed by the amount of gold in the vaults of the US Federal Reserve.

They then flooded the planet with dollars and in order to trade them they created the SWIFT payment compensation system, also unilaterally winning the monopoly of the global financial fortune. It was a masterful move by the northern country.

Today, 80 years after Bretton Woods and half a century after the petro-dollar, the world has taken many turns.

The US went from being the world’s largest lender in 1944, to the most indebted country on the planet; it literally owes the whole world — its debt amounts to $25 trillion. The situation worsens when their international reserves do not cover even 2 percent of their foreign debt.

In contrast, China tops the list with the largest international reserves that also cover 153 percent of its external debt. Not taking into account that the US has had a negative trade balance for half a century, it imports more than it exports. The Chinese have had a surplus for five decades. US production no longer represents 50 percent of the world total, it fell to 24 percent, while China went from 1 percent to 16 percent.

Proposal Against the Economic Blockade

In this context, what must be submitted for debate and decided within the United Nations General Assembly is not only whether countries are for or against the ‘sanctions’ and blockades imposed by the US. The debate should also focus on the democratic construction of a new commercial, monetary and financial system.

The questions brought up for consultation in the United Nations Assembly should be:
•  Are you in favor of the US dollar not being the only world reference currency? 
•  Are you in favor of having many world reference currencies and not granting exclusivity, and therefore economic power, to a single country? 
•  Are you in favor of countries being able to buy oil and its derivatives in any currency and not exclusively in dollars?
•  Are you in favor of all currencies being considered international reserve assets and not just the dollar, the euro, the British pound, the yen or the yuan?
•  Do you agree that countries are free to trade their goods in any currency?
•  Do you agree that there are several (many) payment clearing systems in the world and not just the SWIFT, including the exchange of goods itself?
•  Do you agree that, within the framework of regional integrations, currencies are created for exchange in that region that also serve for transactions with other regions or countries?
•  Do you agree to democratize the decisions in the IMF and, therefore allow each country the right to vote by eliminating the quotas that govern there?

The coalition of countries against the blockade that has recently been formed by Venezuela, China, Russia, Iran, Cuba, among others, should, in addition to continuing to add nations and denouncing the criminal US sanctions, should insist that the United States comply with the UN Charter.

To do that, they should include a stipulation that the United Nations General Assembly create a new commercial, monetary and financial system that allows progress towards a multi-polar, multi-centric, truly democratic world in which sovereignty and self-determination of the peoples are respected. In the process and in the face of the imminent decline of the most genocidal empire that history has known, they would give it the final push for it to fall.

Translation to English by Progreso Weekly.

Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.