Russia Seeks Assistance from ASEAN Countries to Undermine US Dominance - What's Behind It?


Russia Seeks Assistance from ASEAN Countries to Undermine US Dominance - What's Behind It?

Russia has been intensifying efforts to persuade ASEAN countries to abandon the use of the US dollar as the payment currency. This move comes in response to Western sanctions imposed on President Vladimir Putin's government due to the conflict with Ukraine.


According to Russia Today (RT), the trade between Russia and ASEAN countries decreased by 4.4% in 2022 due to the Western sanctions. Consequently, Russia is looking for a new currency to address this issue. "To improve the situation, Russia is working on launching consultations to introduce national currencies in joint settlements," said the Russian Ministry of Foreign Affairs, citing a statement by Sergei Lavrov during the ASEAN meeting, as reported on Sunday (July 23, 2023).


The ASEAN foreign ministers' meeting recently took place in Jakarta, and Russia was one of the invited guests, along with the US and China. However, there has been no official comment from ASEAN governments regarding dedollarization. Nonetheless, Indonesia has been reducing its dependence on the dollar since 2018 through local currency settlement (LCS) in bilateral trade transactions with partner countries, as implemented by Bank Indonesia.


Previously, Russia also advocated dedollarization within the BRICS alliance. The alliance, composed of Brazil, Russia, India, China, and South Africa, represents 50% of global wheat and rice producers and holds 15% of the world's gold reserves. To facilitate this, Moscow proposed a new currency based on gold. The agreement is expected to be approved during the upcoming BRICS meeting on August 22.


This move was followed by data from the People's Bank of China, which revealed an addition of 23 tons of gold reserves in June. With this addition, China's central bank currently holds up to 2,330 tons of gold.


James Rickards, a former CIA advisor and investment banker, pointed out an intriguing fact about the date of the upcoming BRICS meeting on August 22. He mentioned that the same date in 1971 was the day the US abandoned the gold standard. "This involves the launch of a new major currency that could weaken the role of the US dollar in global payments and ultimately replace the US dollar as the dominant reserve currency," he said.


Meanwhile, US Treasury Secretary Janet Yellen also voiced her stance on dedollarization. She stated that while some countries may pursue this maneuver, the US still hopes that the dollar will remain the dominant currency in global trade.


It's worth noting that renowned US historian Alfred McCoy once predicted that the American "empire" would collapse in 2017, and this prediction was related to the US dollar. "By 2030, the US dollar will lose its status as the world's dominant reserve currency, marking the decline of imperial influence," stated the author of "The Politics of Heroin," as featured in Big Think.

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