Petersburg Economic Forum Discusses De-Dollarization, Blasts Sanctions

After over one year of the economic havoc wreaked by the pandemic, the Saint Petersburg International Economic Forum was record-breaking this year both in terms of the number of participants and of the total values of the economic deals signed. A leading topic of discussion in several of the many panels held from June 2 to 5 was the implicit – and in some cases very explicit –rejection of the West’s unilateralism, otherwise known as the “rules based order”. That emphatically includes the dictates of the Great Reset scheme designed to save the financial system (and not the planet…).

One of the more interesting panels held on June 3, chaired by the Valdai Discussion Club, dealt with the fact that the illegal use of unilateral sanctions by the US, the UK, and the EU has reached a point that several leading countries, and in particular Russia and China, are deep in discussions about breaking out of the US dollar-dominated ifinancial system.

Vladimir Kolychev, Russia’s Deputy Finance Minister, noted that as a result of these criminal sanctions, “a new global financial system is coming into being. It won’t come overnight, but it is inevitable. The sanctioned countries will do it.” There is an ongoing withdrawal from the existing structures, he said, since it is not safe to use US dollars (Washington’s claim to have the right to impose sanctions on countries, businesses, and individuals, is based simply on the fact that nearly all global trade transactions pass through the US dollar system, even when the trade has nothing to do with the US). Russia’s trade was 80% in dollars as recently as 2019, Kolychev noted, but is now less than 50%. Reserves in Russia are now only 20% in US dollars.

Criticism was also directed against the EU. According to the Russian Ambassador to the EU Vladimir Chizhov, who also spoke on this panel, Brussels now has sanctions against 32 countries. They claim they are only used as a “last resort,” Chizhov said, “but alas, this is not a fact, far from a fact – it is their first choice.” Only sanctions approved by the UN Security Council are legal under international law, he added, as did many other speakers. Chizhov also pointed out that EU- Russia relations have basically come to a standstill, as seen in the fact that almost no EU officials attended the SPIEF “for political reasons”.

Interesting in this context is that President Biden did decide not to impose sanctions on the Nord Stream 2 gas pipeline, although many in Europe still fear that his decision could be overturned at any point, if the geopolitical escalation against Russia warrants it.

While the move to get out of the dollar-dominated financial system is understandable, setting up rival systems and competing trade blocs is not the answer. What is needed is international cooperation around the principles laid out in Lyndon LaRouche’s Four Laws, which will be taken up at the June 26–27 Schiller Institute conference.