Observer: US will finally hurt itself by weaponizing its economy
By Zhong Sheng
People's Daily app
1649296834000

Countries are in a tough situation today, having to cope with COVID-19 while ensuring economic development and livelihood.

However, ignoring global stability and livelihood concerns, the US has imposed a series of unilateral sanctions against Russia and forced other countries to obey them through the threat of secondary sanctions. Its practices of weaponizing its economy, economic hegemony and financial terrorism have triggered widespread concerns of the international society, and are condemned by many countries.

Since the outbreak of the Ukraine-Russia conflict, the US has made every effort to avoid direct military engagement. However, by providing massive military assistance for Ukraine and imposing sanctions, it has launched hybrid warfare against Russia.

The US not only imposed sanctions on Russian government officials, but also excluded a number of Russian banks from the SWIFT (Society for Worldwide Interbank Financial Telecommunication) messaging system, the main system underpinning global financial transactions. Besides, it has frozen the assets of Russia's central bank, placed new debt and equity limitations on Russian enterprises and entities, imposed bans on the exports of over half of its high-tech products to Russia, and prohibited the purchase of petroleum and natural gas from Russia.

The facts demonstrate that the target of these unprecedented sanctions is not a truce, but rather the militaristic and economic annihilation of Russia. Even after positive signals were released from the new round of negotiations between Russia and Ukraine held on March 29, the US and its allies still said they would keep intensifying sanctions on Russia. It's fair to say that the Ukraine crisis once again revealed the true colors of the "sanctions superpower" - to safeguard its hegemony by fair means or foul and at the expense of the interests of all the people in the world.

Driven by economic hegemonism, the US implemented comprehensive and indiscriminate sanctions, which impeded global economy and hurt the people.

Kristalina Georgieva, managing director of the International Monetary Fund (IMF) noted that the war in Ukraine and massive sanctions against Russia have triggered a contraction in global trade, driving up food and energy costs and forcing the IMF to lower its global growth forecast. According to Oxford Economics, the sanctions against Russia may bring down the GDP in the Eurozone by 0.5 percentage points before the end of 2023.

It is obvious that if the US further escalates its sanctions, a major crisis may hit global trade, finance, energy, food, and industrial and supply chains, wreaking havoc on the already slow global economy.

Plundering the world with financial terrorism, the US has exacerbated global poverty and inequality. The middle-income trap in Latin American countries, Japanese economic crisis and Southeast Asian economic crisis were all related to American financial hegemony. The number of sanctions imposed by the US has surged tenfold during the past 2 decades. Economic and financial sanctions are what the country constantly resorts to.

Recently, the White House unfroze and embezzled $7 billion in Afghan funds in US banks, sparking protests in many places across Afghanistan. Such practice was called a bare robbery. Today, freezing the assets of Russia's central bank, the US is once again making the rules of international finance a tool for it to plunder others.

The US will definitely hurt itself upholding economic hegemonism and financial terrorism. Chief Economist of Euro Pacific Capital Peter Schiff believes that the US would suffer a long-term consequence of turning the US dollars into a weapon with sanctions, which will cause countries to worry about whether this weapon would be used against them one day. IMF Chief Economist Gita Gopinath said the world would reevaluate the security of taking US dollars as foreign exchanges. Zoltan Pozsar, a senior adviser at the US Department of the Treasury noted the US and other Western countries have shaken the foundation of the existing international monetary system by freezing the assets of Russia's central bank.

Even the allies of the US are trying to mitigate the damaging consequences of US sanctions. An expert pointed out that a crack is appearing in the monetary system from which the US has long benefited, and the Ukraine crisis will hasten the process.

It is neither responsible nor ethically justifiable for the US, under the disguise of the so-called "rules," to undermine international order and provoke confrontations with economic and financial hegemony.

The US should immediately discard the Cold War mentality. It needs to see farther and pursue common interests, rather than hegemony and private gains, so as to work with all relevant parties to safeguard the long-term stability and sustainable development of the world.