- De-radicalization in Iran: Masoud Pezeshkian’s presidency marks a shift towards moderate leadership, aiming for stability and improved international relations.
- De-dollarization Movement: Countries, especially BRICS members, are reducing reliance on the U.S. dollar, advocating for diversified global monetary systems.
- Impact on Global Trade and Investments: The trends of de-radicalization, de-dollarization, and de-colonialism are reshaping international trade, investments, and monetary policies, emphasizing local currencies and regional cooperation.
- Future of Global Financial Systems: The rise of alternative currencies, digital cryptocurrencies, and regional economic integration is challenging the dominance of the U.S. dollar, indicating significant shifts in the global financial landscape.
The retreat from the unwanted patterns and paradigms that have emerged on a global scale involves de-dollarization due to a variety of factors, including the desire for the autonomous management of the dollar surplus and de-colonization as a sign of the rejection of the colonial legacy worldwide. De-radicalization processes are also a part of this process. During such a transition, people learn about other forms of payment, the decline in the US dollar’s hegemony, and the growing vulnerability of the current global monetary system. The following trends will be discussed in this article, with an emphasis on their key takeaways and how they affect international trade, investments, and monetary policy.
De-radicalization: Of Good Governance for the New Era of Peace and Stability
The term de-radicalization is generally used to refer to processes that are intended to restrict the impact of radical opinions and behaviours and to encourage people to act together in harmony. Such a direction is especially felt in the recent changes in Iran’s political process that brought Reform supporter Masoud Pezeshkian to power. Perhaps, the individual actions of Pezeshkian will signal a shift in the Iranian political process towards the center of the political scale; in other words, Iran will have a moderate leader. The prospects for his presidency are stability and cooperation, so the global neighbours will cease threatening, and the world will become safer. Like what Iran did when Abdel Salaam was overthrown in Yemen, it had to support Masoud Pezeshkian for the position.
On the political scene in Iran, Masoud Pezeshkian remains a key political figure who talks about the need for transformation and moderation. He has been elected the President of Iran, and his political standards are more liberal and moderate compared to other presidents of Iran. Thus, Pezeshkian’s presidency should bring a more effective and stable political climate for Iran; it will shift the position of the country in the region and the world.
Implications for International Relations
It is a notion that a diplomatic person heading the executive branch of Iran, namely Pezeshkian, is likely to usher in a more cordial foreign policy. Regarding external relations, it could lead to even warmer relations with Western countries, especially with the USA, hence concentrating its energy and power on economic growth and cooperation. Also, expectantly in the administration led by Pezeshkian, domestic reforms focusing on human rights and social justice would enhance Iran’s image in the international systems.
De-dollarization: Moving from Dollar Pioneer to Dollar Isolator?
De-dollarization is the process through which countries begin to diversify and seek other reserve currencies rather than using the U.S. dollar. This imperative is often due to political and economic changes, reorganization, and strategies among others. The trend of de-dollarization is based on the strengthening of the use of other assets like the Chinese yuan along with the increased acknowledgement of the requirement for a diversified global monetary system.
The Demise of the Dollar’s Supremacy
The U.S. dollar has been established in the forex market as the cornerstone for many years, where countries stock their foreign exchange accounts. But, in recent years, the tendencies of foreign exchange reserves of dollars have decreased drastically at the global level. These phenomena are related to such factors as the reckless monetary policies of the U.S., emerging geopolitical risks, and the emergence of new foreign currencies.
India’s Role in De-dollarization
India, being part of the BRICS – a gathering of Brazil, Russia, India, China, and South Africa – has been a keen advocate of de-dollarization. Many countries have been operating rupee trade with India such as the UAE and Russia to close or eliminate their dependence on dollars. This is alongside other efforts meant to help mitigate its foreign exchange reserves and more so avert a heightened risk in the dollar.
The BRICS Initiative
The BRICS bloc has for a long time now been among the leaders in the de-dollarization process. The group has been promoting the circulation of local currencies for business and investments, hence eradicating the use of the dollar. This drive is especially directed at establishing a solid and varied scale of international money that would not constitute the ability of one major currency. As a result, China is more actively accepting the new role of an active member of the structural change and becoming one of the players setting up the new characteristics of the future structure of the world economy and financial system.
The U.S. dollar’s performance has been quite instrumental in the conflict, especially in the Afghan war and invasion by the U.S. Because the dollar is a base currency hegemonized by the U.S., Afghanistan was denied unfair economic sanctions that crippled its external trade. One of the factors that led to insecurity and the humanitarian situation in Afghanistan was this measure of economic isolation.
The Future of the Dollar
However, the following are the pros of the U.S. dollar which has lost its earlier strength following the change of supremacy: Nevertheless, when social media plays the role of informal currency, when such brilliant inventions appeared as cryptocurrencies, and when local currencies started to spread, it becomes obvious that the dollar is gradually weakening in the foreign exchange markets. Hence the future trend in the position of the dollar and the U.S. economy shall be dictated by how they shall be able to meet up to changes and remain the world’s reserve currency.
De-colonialism: New Opportunities for Sovereign Economic Development
De-colonialism is a concept that describes the process of getting rid of colonial masters’ economic as well as financial control by the independent states. As for this trend, Southwest Asia is observed to be constantly transitioning to the usage of local currency and supporting the growth of the regional economic society. The occurrence of de-colonialism is the outcome of people’s need for financial liberty and the realization that the acceptance of a solitary currency means their submission to economic imperialism.
The Euro’s Role
The euro itself as a currency of the European Union may have grown as an option to the dollar. Better conversion rates and the euro’s usage in the international marketplace are other aspects in its favour. Nonetheless, the limited economic and political stability witnessed in the EU makes it an Achilles heel for the euro.
The Future of De-colonialism
The future of de-colonialism, however, depends on most countries’ capability to sustain their economic sovereignty and lessen their dependence on dominant currencies. De-colonialism is on the horizon with the freedom of regional economic integration and the use of local currencies for business and investment purposes. Thus, as countries seek to diversify the contents of their foreign exchange reserves, and intensify the scope of economic relations, the international monetary system is likely to see shifts of major importance.
Conclusion
People are de-radicalizing, de-dollarizing, and de-colonizing owing to various factors, including political, economic, and security strategic realms. Such trends include the increased usage of other digital or cryptocurrencies, the debonding of the USA from the global economy and financial systems, and the increasing realization of the need for a stronger and more diverse financial system. The current change of power where Masoud Pezeshkian has emerged as the President of Iran presents a new picture of stability towards the recognition of cooperation, communication, and collaboration. At the same time, one can see a new emerging trend of economic independence where countries are looking for new opportunities away from the dominance of the US dollar on the world stage: India’s de-dollarization of the Indian economy and the BRICS initiative. Thus, the future of the dollar and the whole global financial system will depend on the capacity to manage and cope with these changes and at the same time sustain stability and economic growth.
(Parag is pursuing his Bachelor’s Degree in Global Affairs at OP Jindal Global University. His interests lie in Sports and Economic Diplomacy. He writes on International Relations in English and Marathi. Views expressed are the author’s own)
Citations and References:
- J.P. Morgan, “De-dollarization: The end of dollar dominance?” https://www.jpmorgan.com/insights/global-research/currencies/de-dollarization- [1
- Economic Times, “The de-dollarization trend is accelerating: How it will impact your investments”- https://economictimes.indiatimes.com/wealth/invest/the-de-dollarization-trend-is-accelerating-how-it-will-impact-your-investments/articleshow/100206309.cms
- Aranca, “Shifting Tides: The Silent Rise of De-Dollarization”- https://www.aranca.com/knowledge-library/articles/business-research/shifting-tides-the-silent-rise-of-de-dollarization [3]
- YouTube, “Dr Ankit Shah | #sangamtalks” – https://www.youtube.com/watch?v=HxsrvgDUns0
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