by Mauricio Metri, Strategic Culture:
On February 13, 2024, the United States Senate approved a U.S. $95 billion aid package for Ukraine, Taiwan, and Israel. According to IMF Data, this package represents a higher value than the international reserves of 165 countries. In other words, out of 194 countries with reserves recorded in dollars, only 29 have volumes more significant than the value of the U.S. Senate package. This fact gives an idea of the extravagance of this contribution.
This news, passed on almost ordinarily, reveals two important facts. First, one mentions the extraordinary and disproportionate financing and spending capacity of the United States, used, among other objectives, for the increasing armament of its allies on strategic boards, the promotion of proxy conflicts in regions marked by geopolitical fractures, and, from a longer perspective, the execution of an uninterrupted chronology of wars and military interventions since 1991. Furthermore, this financing and spending capacity also support a broad military structure of global reach with approximately 750 military bases outside its national territory [1].
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Regarding this disproportionate financing and spending capacity of the United States, below are some brief observations discussed in depth on other occasions [2]. The position of the U.S. dollar in the international monetary hierarchy and how the world economy began to function after the Cold War have allowed The United States to impose the burden of its violence on the world, mainly due to the role that its public debt plays in the global economic game. It is a system of extortion because, while the world accumulates, with no apparent limit, U.S. Treasuries, Washington carries out a broad agenda of wars and military actions. The current level of indebtedness of the United States federal government is only comparable to that of periods marked by significant war efforts since its federal public debt, measured as a percentage of GDP, has already reached, for example, levels similar to those of the Second World War.
These advantages occur because the absorption of securities issued by the United States has become a necessary policy for other states to act in the exchange markets in defense of their currencies and, thus, protect, at the limit, their autonomy over economic policy instruments. Everything is quite the same for private agents, as having U.S. Treasuries in their portfolios is imperative to deal with the high risks of an intrinsically unstable system. This situation is the core of the United States’ monetary power, much more strategic than the power of financial sanctions itself, whose bases are also the dollar’s position in the international system and widely used by Washington against the targets of its foreign policy.
The second fact related to the news about an aid package for Ukraine, Taiwan, and Israel concerns the objectives of the United States. The priority is not exactly Kyiv, Taipei, or Tel Aviv per se but the role they play for Washington in the regions where they are. The extraordinary contribution of resources reveals, in practice, the White House’s priority targets, namely Moscow, Beijing, and Tehran. These have long been present in different formulations of the National Security Strategy and Washington’s foreign policy documents.
The central point is that the North Atlantic, particularly the United States, has already been surpassed by Russia in developing strategic weapons, especially hypersonic ones. This new development represented a revolution in the art of war, and an essential part of the West has not yet understood it completely. On the other hand, from an economic point of view, China is already the largest economy in the world, corresponding, in 2023, to 18.82% of world GDP based on purchasing power parity (PPP), while the United States, 15.42%. To make matters worse for the West, for more than two decades, Beijing and Moscow have been developing and deepening strategic partnerships in several sensitive fields of international relations: weapons, technology, energy, currency, finance, etc.
On the Southwest Asian board, the scenario is also not very favorable to the United States. Iran, its main regional adversary, has assumed, over the last decade, a key position in articulating a series of forces of resistance to U.S. policy on this board. Furthermore, Iran has been able to resist heavy financial sanctions and develop an essential capacity for strategic initiative. Moreover, Tehran’s relations with Beijing and Moscow are advancing significantly. Three recent events set the tone for the transformations. In July 2023, fifteen years after its first request, Iran officially joined the Shanghai Cooperation Organization. A month later, in August 2023, its invitation to join the BRICS was formalized, effectively occurring at the beginning of 2024. To make the Southwest Asian region even more complex, Saudi Arabia followed Iran, joining the BRICS. Associated with this, diplomatic relations between Riyadh and Tehran, severed since 2016, were resumed in March 2023 and officially formalized on September 6, 2023, a month before the outbreak of the conflict in Gaza. To Washington’s concern, Beijing mediated this process.
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