Queen Elizabeth’s passing signals opening for Caribbean integration and a currency

Do you really want the Queen’s face on your dollar?

The passing of Queen Elizabeth last Friday was like a scab ripped from a wound as members of the Caribbean Diaspora took to Twitter to share their less than favorable view of Elizabeth in particular and the monarchy in general. I spent some of my childhood living in St. Kitts during the 1960s and remember the old EC (Eastern Caribbean dollar) with the Queen’s face emblazoned on it. Her face on that bill was the only white face I remember seeing anywhere on the island. Today I appreciate how ridiculous it is to have a white face on a currency where the majority of the jurisdiction’s inhabitants are black.

For the past few years I have also wondered why resource rich countries such as Brazil, Venezuela, Trinidad and Tobago, and Nigeria have had their political economies dictated by Western Europe. Shouldn’t the source countries of the food we eat, the material we make our clothes from, the organics that comprise our vitamins, and the fuel that drives our cars play a bigger role if not the primary role in determining what currencies are primarily used for trade?

I won’t go into the racial politics of back then or today, but I do view the Queen’s passing as symbolic of the de-globalization or multi-polarization spoken about by analysts today. That she ruled for almost all of the Bretton Woods period and the period that saw a decoupling of major currencies from gold only adds to the realization that Western economic hegemony may be passing along into the sunset with her.

Splitting the world back into two, or three, or four ….

The invasion of Ukraine by the Russian Federation has, for most, been an awakening to the possibility that Western European dominance of world trade may be coming to an end. The invasion has brought to surface the possibility of Eastern Europe and Asia turning its back on the American dollar (USD) and paying for its resources in Chinese yuan (CNY) or Russian roubles (RUB).

Alasdair Macleod, in a piece for King World News, discusses how Russia could use its store of gold to stage what he terms as an “Asian Bretton Woods.” Mr Macleod writes that:

“Russia has progressed her power over Asian nations, including populous India and Iran. She has persuaded Middle Eastern oil and gas producers that their future lie with Asian markets and not Europe. She is subsidizing Asia’s industrial revolution with discounted energy. There is one piece in Putin’s jigsaw yet to be put in place: a new currency system to protect Russia and her allies from an approaching western monetary crisis.”

Russia, according to Mr Macleod, prefers to stay out of America’s correspondent banking system. Using USD to settle cross-border transactions puts Russia in the US’ legal jurisdiction, something Russia will not tolerate.

Back in the western hemisphere, the idea of an alternative currency for trade has not been lost on at least one Latin American leader. Last May, Lula da Silva, former president of Brazil and campaigning for his old job, proposed that the South American nation lead the efforts to integrate the Latin American region by introducing a new currency, the SUR. “We don’t have to depend on the dollar”, says Mr da Silva. “We are going to restore our relationship with Latin America. God willing, we are going to create a Latin American currency.”

Mr da Silva’s proposal seems centered on Latin America for now anyway. He will have to first win the elections this October before making good on his promise.

And closer to home, in the Caribbean, currency integration has been a backburner discussion since the old days of the West Indian Federation. Digital technology has breathed new life into the idea of currency accepted by the entire Caribbean. This month, a digital payment system that readily converts one national currency for another anywhere in the Caribbean is set to launch this month.

CARIB$ intent is to address the de-risking problem, where correspondent banks, primarily in the United States and the United Kingdom, have been severing their relationships with banks in the Caribbean as a way to reduce money laundering and know-your-customer risks. De-risking has made it harder for a region that relies heavily on remittances to move capital without onerous fee expenses.

A bi-polar western hemisphere …..

Politically, I see initiatives like CARIB$ and da Silva’s proposed SUR as pathways to delinking from an Anglo-sphere now represented by Charles III. As the Queen is laid to rest, I hope that the false notion of reliance on the Anglo-sphere goes with her.

Alton Drew

10 September 2022

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