Eastern Vector of Transformation of the World Monetary System

50
DOI: 10.20542/0131-2227-2023-67-7-22-32
EDN: IYZETZ
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


REFERENCES

1. Eichengreen B. Globalizing Capital: A History of the International Monetary System. Princeton, Princeton University Press, 1998. 240 p.

2. Smirnov D.V. Prospects for International Monetary System Reform: Modern Approaches. Money and Credit, 2016, no. 10, pp. 20-32. (In Russ.)

3. Mirkin Ya.M. Transformation of the Economic and Financial Structures of the World: the Impact of Growing Shocks of Catastrophes. Outlines of Global Transformations: Politics, Economics, Law, 2020, vol. 13, no. 4, pp. 97-116. (In Russ.) Available at: https://doi.org/10.23932/2542-0240-2020-13-4-5 

4. Roubini N. Sleepwalking on Megathreat Mountain. Project Syndicate, 18.01.2023. Available at: https://www.project-syndicate.org/commentary/megathreats-and-polycrisis-descend-on-davos-by-nouriel-roubini-2023-01?utm_source=Project+Syndicate+Newsletter&utm_campaign=c2ad7aee98-sunday_newsletter_01_22_2023&utm_medium=email&utm_term=0_73bad5b7d8-c2ad7aee98-107392438&mc_cid=c2ad7aee98&mc_eid=e6e0564ab5 (accessed 09.03.2023).

5. Ivanchenko I.S. New Neomercantilism as a Challenge for a Globalized Economy. Voprosy Ekonomiki, 2021, no. 9, pp. 132-148. (In Russ.) Available at: https://doi.org/10.32609/0042-8736-2021-9-132-148 

6. Andronova N.E. Institutional Formation of the World Financial Architecture within the Framework of Trans-regionalism in the Light of Russia’s BRICS Chairmanship in 2020. Economic Systems, 2019, vol. 12, no. 3-4, pp. 122-129. (In Russ.) Available at: https://elibrary.ru/item.asp?id=41670370 (accessed 09.03.2023).

7. Degterev D.A., Ramich M.S., Tsvyk A.V. U.S.–China: “Power Transition” and the Outlines of “Conflict Bipolarity”. Vestnik RUDN. International Relations, 2021, vol. 21, no. 2, pp. 210-231. (In Russ.) Available at: https://doi.org/10.22363/2313-0660-2021-21-2-210-231  

8. Maddison A. Contours of the World Economy, 1–2030 AD. Essays in Macro-Economic History. Moscow, Gaidar Institute Publishing House., 2012. 584 p. (In Russ.)

9. Lin J.Y. Demystifying the Chinese Economy. Moscow, Mysl’, 2013. 384 p. (In Russ.)

10. Kissinger H. On China. Moscow, AST, 2014. 635 p. (In Russ.)

11. Nepomnin O.E. History of China: The Qing Dynasty. XVII – Beginning of XX Century. Moscow, Eastern Literature, 2005. 712 . (In Russ.)

12. Selishchev A.S., Selishchev N.A. Chinese Economy in the XXI Century. St. Petersburg, Piter, 2004. 240 . (In Russ.)

13. Kagarlitskii B.Yu. From Empires to Imperialism. State and Emergence of Bourgeois Civilization. Moscow, Higher School of Economics, 2010. 675 p. (In Russ.)

14. Rajan R.G. Fault Lines: How Hidden Fractures still Threaten the World Economy. Princeton, Princeton University Press, 2010. 260 p.

15. Stiglitz J. Globalization and Its Discontents. Moscow, Mysl’, 2003. 300 p. (In Russ.)

16. Greenspan A. The Age of Turbulence: Adventures in a New World. Moscow, Al’pina Busines Books, 2009. 520 p. (In Russ.)

17. Konstantinov Yu.A. International Monetary System of the CMEA Member Countries. Moscow, Finance and Statistics, 1982. 232 . (In Russ.)

18. Borisov S.M. The Ruble is the Currency of Russia. Moscow, Konsaltbankir, 2004. 422 p. (In Russ.)

19. Ioffe Ya.A. We and the Planet: Figures and Facts. Moscow, Publishing House of Political Literature, 1972. 272 p. (In Russ.)

20. Primakov E.M. Russia in the Modern World. Past, Present, Future. Moscow, Tsentropoligraf, 2018. 607 . (In Russ.)

21. Fukuyama F. The End of History and the Last Man. Moscow, Ermak, AST, 2005. 592 p. (In Russ.)

22. Navoi A.V. Transforming Russia’s Participation in the Global Financial Architecture in the Face of Geopolitical Challenges. National Interests: Priorities and Security, 2023, vol. 19, no. 1, pp. 128-145. (In Russ.) Available at: https://doi.org/10.24891/ni.19.1.128   

23. Kolganov A.I. The Evolution of Money as a Point of the Evolution of Financial Capital. Voprosy Ekonomiki, 2019, no. 8, pp. 67-84. (In Russ.) Available at: https://doi.org/10.32609/0042-8736-2019-8-67-84  

24. King S.D. Losing Control: The Emerging Threats to Western Prosperity. Moscow, Kar’era Press, 2015. 336 p. (In Russ.)

25. Kuznetsov A.V. The Influence of the Geopolitical Situation on the Formation of a New Global Financial Architecture: Challenges and Opportunities for Russia. Economics, Taxes & Law, 2022, vol. 15, no. 4, pp. 17-29. (In Russ.) Available at: https://elibrary.ru/item.asp?id=49428855&ysclid=lf12ebaouc880453631 (accessed 09.03.2023).

26. Potapov M.A., Kotlyarov N.N. China in Global Capital Markets. World Economy and International Relations, 2021, vol. 65, no. 8, pp. 81-89. (In Russ.) Available at: https://doi.org/10.20542/0131-2227-2021-65-8-81-89  

27. Zharikov M.V. On the Efficiency of the Hypothetical Collective Currency for the BRICS Countries. Problems of the Far East, 2019, no. 4, pp. 93-103. (In Russ.) Available at: https://doi.org/10.31857/S013128120006100-1  

28. Tayeb Z. Russia and Iran Plan a Gold-backed Stablecoin, while Brazil and Argentina Seek a Shared Currency. Here Are 5 Rising Threats to the Dollar’s Dominance of Global Trade. Business Insider, 29.01.2023. Available at: https://markets.businessinsider.com/news/currencies/dollar-dominance-russia-china-india-brazil-oil-trade-reserve-currency-2023-1 (accessed 07.03.2023).

29. Zvonova E.A., Pishchik V.Ya., Kuznetsov A.V. Actual Problems of Organizing and Reforming the Modern World Financial Market. Moscow, RU-SCIENCE, 2020. 269 p. (In Russ.)

30. Glaz’ev S.Yu. The Battle for Leadership in the 21st Century. Russia–USA–China. Seven Choices for the Foreseeable Future. oscow, Knizhnyi mir, 2017. 352 p. (In Russ.)


SOURCES

1. World Economic Outlook. Countering the Cost-of-Living Crisis. IMF, October 2022. Available at: https://www.imf.org/en/Publications/WEO/Issues/2022/10/11/world-economic-outlook-october-2022#:~:text=COUNTERING%20THE%20COST%2DOF%2DLIVING%20CRISIS,-OCTOBER%202022&text=This%20is%20the%20weak­est%20growth,to%204.1%20percent%20by%202024 (accessed 07.03.2023).

2. International Trade 89–90. GATT, 1990. Available at: https://www.wto.org/english/res_e/booksp_e/gatt_international_trade_89_90_volume_i.pdf (accessed 07.03.2023).

3. The Future of the Global Financial System: A Near-Term Outlook and Long-Term Scenarios. Cologny/Geneva, World Economic Forum, 2009. 88 p.

4. Global Monitoring Report on Non-Bank Financial Intermediation 2022. FSB, 20.12.2022. Available at: https://www.fsb.org/2022/12/global-monitoring-report-on-non-bank-financial-intermediation-2022/ (accessed 12.03.2023).

5. Key Facts about the UK as an International Financial Centre 2022. TheCityUK, 2023. Available at: https://www.thecityuk.com/our-work/key-facts-about-the-uk-as-an-international-financial-centre-2022/ (accessed 07.03.2023).

6. Estimated Foreign Holdings of U.S. Treasury Bills. Department of the Treasury, 2023. Available at: https://ticdata. treasury.gov/Publish/mfh.txt (accessed 07.03.2023).

7. World Investment Report 2022. UNCTAD, 2022. Available at: https://unctad.org/publication/world-investment-report-2022 (accessed 07.03.2023).

8. Triennial Central Bank Survey of Foreign Exchange and Over-the-Counter (OTC) Derivatives Markets in 2022. BIS, 2022. Available at: https://www.bis.org/statistics/rpfx22.htm (accessed 07.03.2023).

9. RMB Tracker January 2023. SWIFT, 2023. Available at: https://www.swift.com/our-solutions/compliance-and-shared-services/business-intelligence/renminbi/rmb-tracker/rmb-tracker-document-centre (accessed 07.03.2023).

10. Currency Composition of Official Foreign Exchange Reserves. IMF, 2022. Available at: https://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A4 (accessed 07.03.2023).

11. The International Role of the Euro. ECB, June 2022. Available at: https://www.ecb.europa.eu/pub/pdf/ire/ecb.ire202206~6f3ddeab26.en.pdf (accessed 07.03.2023).

12. Special Drawing Rights (SDRs). IMF, 2022. Available at: https://www.imf.org/en/Topics/special-drawing-right (accessed 07.03.2023).


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



Comments (0)

No comments

Add comment







Indexed

 

 

 

 

Dear authors! Please note that in the VAK List of peer-reviewed scientific journals, in which the main scientific results of dissertations for the degree of candidate and doctor of sciences should be published for the “MEMO Journal” the following specialties are recorded:
economic sciences:
5.2.5. World Economy.
5.2.1. Economic Theory
5.2.3. Regional and Branch Economics
political sciences:
5.5.4. International Relations
5.5.1. History and Theory of Politics
5.5.2. Political Institutions, Processes, Technologies

 

Current Issue
2024, vol. 68, No. 5
Topical Themes of the Issue:
  • Are There Any Ways to Break Through the Korean Nuclear Impasse?
  • Contemporary U.S. Taiwan Policy: Balancing on the Edge
  • The Gulf Monarchies’ Vision of the Global Order Transformations and the Russian Place in It
  • At Post-Soviet Space
Submit an Article
INVITATION FOR PUBLICATION
The Editorial Board invites authors to write analytical articles on the following topics:
  • changes in the processes of globalization in modern conditions
  • formation of the new world order
  • shifts in civilization at the stage of transition to a digital society

The editors are also interested in publishing synthesis articles / scientific reviews revealing the main trends in the development of certain regions of the world - Latin America, Africa, South Asia, etc.