Eastern Vector of Transformation of the World Monetary System

DOI: 10.20542/0131-2227-2023-67-7-22-32
Financial University under the Government of the Russian Federation, 49, Leningradskii Prosp., Moscow, 125993, Russian Federation.

Received 09.03.2023. Revised 27.03.2023. Accepted 28.04.2023.

Acknowledgements. The article was prepared based on the results of studies carried out at the expense of budgetary funds on the state assignment of the Financial University for fundamental research work “Transformation of the world monetary and financial system in modern conditions”.

Abstract. The article discusses the crisis-prone nature of the functioning of the modern monetary system, which is manifested by the low efficiency of large-scale financial measures aimed at stabilizing international economic and financial relations. Based on the analysis of the historical and modern role of the countries of the East in the world economy, the objective reasons for the transformation of the world monetary system are revealed. It is shown that the potential dominance of the countries of the East in the world economy is largely determined by the dependence on the previous development. The significant size of wealth, territory and population allowed the eastern monarchies until the middle of the 19th century to develop their economies in a relatively isolated mode from the outside world. However, the voluntary rejection of the introduction of their own technological achievements and neglect to conduct foreign trade has made the countries of the East chronically dependent on the countries of the West. The inability of Great Britain (as the outgoing hegemonic country) to abandon in the first quarter of the 20th century the use of its national currency as world money and to transfer this privilege to the United States (as the new leader of the world economy) led to the destruction of the world economic order. The subsequent period of coexistence of two parallel monetary systems, independently serving alternative socio-economic models in the conditions of a bipolar world order, once again proved the possibility of making a high-quality scientific, technological and economic breakthrough without large-scale direct interaction between West and East in the international economic and financial arena. On the contrary, the return to the unipolar model of economic and financial globalization has led to another destruction of the rule-based world economic order. At present time, in order to stabilize international economic and financial relations, it is objectively necessary to form a new international monetary standard, taking into account the enduring world significance and global interests of the most dynamically developing countries of the East. The inclusion of the countries of the East in the management of global economic and financial processes seems quite natural, given the growing size of their GDP, exports and financial assets. The problem, however, is that, despite their undeniable economic power, the countries of the East are not yet able to offer the world a unique (different from the Western) development model shared by most other countries of the world. This increases the risks of their joint drift towards the adoption of a universal Western (Anglo-Saxon) economic model as a simulacrum of their institutional interaction.

Keywords: world monetary system, global imbalances, world economy, path dependence, East and West, international order, international financial institutions, Russia–India–China (RIC), socio-economic model, international monetary standard


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For citation:
Kuznetsov A. Eastern Vector of Transformation of the World Monetary System. World Eonomy and International Relations, 2023, vol. 67, no. 7, pp. 22-32. https://doi.org/10.20542/0131-2227-2023-67-7-22-32 EDN: IYZETZ

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