National Interest article: Has Russia's invasion of Ukraine wiped out the US dollar?

In an article published by the American magazine "The National Interest", it was stated that the crisis of the war on Ukraine has reformulated the international system and arranged the situation in the world.

It allowed countries to pursue their own interests without siding with a particular political camp.

Robert Rabil, a professor of political science at Florida Atlantic University, warned - in his article in the magazine - that the US dollar has begun to lose some of its luster, due to the consideration of some US allies in using alternative currencies for it.

He pointed out that most countries in the world did not impose sanctions on Russia, "although many of them condemned the Russian invasion of Ukraine."

Although the West has been portraying the Ukrainian crisis as a confrontation between democracy and tyranny, those countries believe that the crisis goes beyond the dualism of authoritarian democracy, which may affect their national security as well as global sustainability and peace.

Three camps

The writer believes that the Ukrainian crisis divided the world into 3 camps: one led by the United States and the North Atlantic Treaty Organization (NATO), another led by Russia and China, and a third located between the two camps, which is the camp whose countries have preferred neutrality.

According to the article, many of these "neutral" countries are friends or allies of the United States, but they are neither enemies nor opponents of Russia and China because of the Ukrainian crisis or their authoritarian political regimes.

These countries realize that they cannot punish Russia or stand against it at a time when competition between countries for scarce resources is fierce, especially since Russia is the largest country in the world with the largest amount of resources, and China is the country with the second largest economy and the largest owner of foreign reserves in the world.

Based on these facts, it is the self-interests of those neutral countries in the Russian-Ukrainian conflict that dictate their policies, away from the duality of democracy and tyranny.

In other words, the policies of these countries do not and will not necessarily intersect with those of the United States.

In the writer's opinion, many of those countries were not comfortable with the one pole that was unique to America since the end of the post-Cold War era, and they welcomed the dawn of a new era characterized by multipolarity and parties.

Multipolarity means a system in which some countries have the greatest influence on the international level in order to achieve their own interests, while multilateralism in international relations refers to an alliance between several countries seeking a common goal.

weakening America's standing

The professor of political science explains - in his article - that there is a common perception that American power is in decline after its failures in Iraq and Afghanistan.

He goes on to point out that China is ahead of other countries by supporting international organizations, such as the Shanghai Cooperation Organization - the largest regional political, economic and security organization in the world - and the BRICS group (which includes 5 leading emerging economies such as Brazil, Russia, India and South Africa).

These two organizations are seeking to find alternatives to the International Monetary Fund and the World Bank - which are dominated by the West - through institutions such as the New Development Bank.

They are also working to enhance its influence by accepting new countries, such as Algeria, Egypt, Turkey, Saudi Arabia, Argentina and Iran.

Perhaps the pivotal element in these developments - according to the National Interest article - is the attempt to weaken the US dollar, as a prelude to weakening the US position in the world in general.

And the writer goes on to explain that many countries - some of them stimulated by China and Russia - have begun to reconsider the use of the dollar as their main trading currency.

In this context, since 2000, China has been trying to internationalize the use of its currency, the yuan.

Its attempts have recently gained momentum with the outbreak of the Ukrainian crisis.

The writer gave examples of attempts by some countries to find alternatives to the US dollar in their international transactions, as Russia adopted the yuan as a reserve currency, and Iran followed it by using the ruble in its trade with Russia.

The UAE has begun issuing bonds in dirhams, and Egypt is conducting bilateral currency swaps with China.

The Bank of Israel added 4 new currencies (Canadian dollars, Australian dollars, Japanese yen and Chinese yuan) to its holdings.

More importantly - says the university professor - China and Saudi Arabia have engaged in active talks about Riyadh pricing some of its oil sales to Beijing in yuan.

Undoubtedly, if Saudi Arabia starts trading oil in yuan, the dominance of the US dollar in the global oil market will suffer.

According to the writer, the global attractiveness of the US dollar lies in part in the geopolitical and economic strength of the United States, and its dynamism, but this attraction has begun to lose some of its luster.

It is logical - in this regard - that the yuan would become an alternative to the US dollar in a "multipolar" world within years, and not in decades or centuries, as the author expects, who concludes his article by warning that such a development will deal a "harsh blow" to the US economy. From which Washington may not be able to recover.