Organizing to rebuild the international economic system during World War II, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference, from July 1 to 22, 1944.They signed agreements to regulate the international monetary system. These established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group.
The United States of America (US), which controlled two thirds of the world’s gold, ensured that the Bretton Woods system rest on both gold and the US dollar. Soviet representatives attended the conference but later declined to sanction the final agreements, asserting that the institutions they had created were “branches of Wall Street.”
During the initial stage of the Bretton Wood agreement, the US produced half the manufactured goods and 67% of the gold reserves, but today the US accounts for about 19 % of Gross World Product while China accounts for about 16%. Although the US has the largest gold reserves in the world it is not enough to peg its currency to the gold it has. The US dollar is not backed by gold as was agreed to by the Bretton Woods agreement.
According to the International Monetary Fund, China has the world’s largest economy: China makes up 16.48% of the world’s purchasing-power adjusted GDP (or $17.632 trillion), and the US makes up just 16.28% (or $17.416 trillion). The US is a net importer and net borrower so how much longer will the US dollar be the world global currency? If you have the largest debt in the world ($17.4 trillion), which is 100% of your GDP, do you have the world’s most reliable currency? 71 years ago it was the British Pound.
After September 11, 2001 the US declared its war on terrorism. First time in recorded history a country declared war on a tactic. Since the US was the only world super power and has military presence in over a 150 countries, it was the declaration of the Third World War. A series of wars were declared officially in Iraq and Afghanistan and unofficially in countries such as Yemen, Somalia, Pakistan, and Syria, etc. with drones (automated weapons) strikes. Back then Al-Qaida was the main target; today it’s ISIS (Islamic State of Iraq and Syria). According to the US, ISIS has members from of at least 88 countries fighting in Iraq and Syria, so it is a de facto world war although not officially recognized as such.
Using mainly the vehicle of NATO, the US has many nations engaged in its global war on terrorism. Some say it is a global war with non-state actors, while others says it is asymmetrical global war. It is a 21st century war with innovative tactics and weapons on both sides.
My view of the US war on terrorism is akin to my view on its war on drugs – costly and ineffective. What is being done to prevent people from joining organizations such as ISIS and Al-Qaida? Killing insurgents has bred revenge and has consequentially induced others to join rather than intimidated the adversary to surrender. In 1971 President Nixon declared the US war on drugs, and the US has spent over 1 trillion on this war, yet drugs have spread to most countries and hundreds of thousands of tons of illegal drugs are smuggled into the US annually. Hundreds of thousands of people have died and drugs have proliferated in the world instead of decreased as a consequence of the US war on drugs.
Since the US war on terrorism was declared the US has spent over 5 trillion and counting. Terrorism has increased because there was no ISIS and Al-Qaida is still active globally. Thousands have died from more than 50 countries due to this global war on terrorism.
In Sun Tzu’s The Art of War, he says when people no longer fear your power it is a sign that a greater power is coming. It seems to me a lot of countries are challenging the US: Iran, North Korea, Venezuela, Russia, China, Cuba, Argentina, etc. Antigua and Barbuda won a case against the US in April 2005 at WTO but the US has not compensated our Caribbean brothers yet. We in Latin America and the Caribbean are locked into the US global hegemony. After the 1823 Monroe Doctrine we generally complied with the directives from Washington whether out of persuasive inducement, fear, force, and duress, or due to incentives. We in Belize went the extra mile and pegged our dollar to the US dollar, effectively giving Washington influence over our monetary policy. This peg has benefited Belize and has helped to keep our economy stable.
I advise that the peg be kept but we must not be so US and Euro-centric in doing business but become a more global player. BRICS (Brazil, Russia, India, China, and South Africa) are the future of geopolitics and we do very little business with them. This is ill advised. We never envision one day we will become economically independent.
In my view the parade will soon be over. We must start to prepare to survive and flourish in the global change of the decline of the US as world super power within the century being diminished to an important world player. This natural order has happened to Egypt, Carthage, Greece, Rome, Spain, Britain, Russia, and preliminarily the US. We either adapt or become a victim of the tidal wave of history.
Mr. Brian E. Plummer