The whole structure of the world’s financial system — where every day, trillions of dollars, euros and yuan zip from bank to bank, from individuals to companies, to and from all sorts of institutions — still reflects the domination of the U.S. dollar.
According to the World Bank, 50 percent of all bonds and loans issued throughout the world are valued in U.S. dollars, and the share of world commerce valued in dollars is four times the amount of world commerce coming from the U.S. Also, 60 percent of the countries in the world, which produce 70 percent of the world’s output, rely on the U.S. dollar to value their currency.
Put another way, most of the world’s trade is in U.S. dollars, even between entities outside the U.S.
The 32 U.S. actively enforced sanctioned regimes, which include not just sanctioned countries and organizations such as the “Transnational Criminal Organizations,” but also countries which do business with these sanctioned entities, change frequently. Some, like the sanctions against Cuba, have remained in force for decades. Other countries with a significant number of neocolonies, such as France, have their own sanctions policies.
Germany, whose economy produces much more per worker than does the U.S. economy, has nevertheless had to follow the U.S. decree of strict sanctions against Iran. German banks, stock markets and trading companies need access to the capital that is locked behind the U.S. dollar.
After powerful Germany folded before the might of the dollar, weaker European powers like Belgium, France and Italy fell into line on the sanctions, even though their governments complained.
It wasn’t the first time German imperialism felt the power of the U.S. dollar and sanctions. After the November 1918 armistice ended the fighting in World War I, it took eight months before the peace treaty was signed in June 1919. The Allies maintained their sanctions on German ports for those eight months, while 100,000 Germans died of starvation and preventable diseases.
Sanctions let U.S. hide its role
Tanks, bombs, explosives, bullets and napalm leave a clear trace. Children missing limbs because they played with the mines and bomblets that the Pentagon has dropped in great abundance can be photographed and interviewed. When the U.S. Armed Forces shoots at people and occupies a country, the people often shoot back.
This popular resistance can arouse opposition in the U.S. to supporting such military measures.
On the other hand, if children die from lack of vaccines or their parents die from lack of money for blood pressure medicine, the political impact is less. And the governments in sanctioned countries can be blamed, instead of the country which imposes the sanctions. An example is media coverage of Zimbabwe.
Countries use tightly networked relationships to make trades, and many trades are monitored by computer servers located in New York City. This makes it hard for countries facing sanctions to hide their trades.
The U.S. and French governments impose sanctions on Mali, a poor landlocked West African nation of 20 million people, which has a large migrant community in France. Sanctions prevent the migrants from simply wiring money home. According to a 2015 study by the World Bank, the way most Malians in France send money home is by courier: Somebody puts the money in a belt and takes a plane.
Sanctions are not the only financial weapon Washington has in its arsenal.
For five countries — Kyrgyzstan and Tajikistan in Central Asia, Haiti, Liberia and Nepal — remittances from abroad are equivalent to a quarter or more of each country’s economic output, which is traditionally measured as gross domestic product.
In 2018, remittances to Haiti were slightly over 30 percent of GDP. In 2016 and 2017, the percentage of remittances was also very close to 30 percent. In absolute terms, this works out to approximately $60 million a week.
Over the past three years, hundreds of thousands of Haitians have taken to the streets to demand significant changes in government policies: lower fuel prices, higher minimum wages, support for farmers. If the Haitian government tried to make political changes that Washington opposes, the U.S. could slow down the money flow or even stop the remittances. This punishment would mean immediate, substantial damage to Haiti’s economy.
The Trump administration has tried to end Temporary Protective Status for 50,000 Haitians currently living and working in the U.S. Ending TPS would not only be a disaster for the individuals protected by it, but also a major blow to Haiti’s economy.
International Days of Action Against Sanctions & Economic War will be held March 13-15. The organizers say: “Sanctions kill! Sanctions are war! End sanctions now!” For more information: sanctionskill.org.