How Brazil and China are resisting the US economic weapon of mass destruction

Geopolitical Economy, April 13, 2023 —

Today, Latin America is the weakest link in the imperialist chain. And the largest country in the region, Brazil, is challenging the US economic weapon of mass destruction, the dollar, in cooperation with China.

Immense changes are happening in the world today.

This April, Brazilian President Lula da Silva took a historic trip to China. The two countries plan to de-dollarize their trade, directly challenging the hegemony of the US currency.

This is happening in the midst of many other profound developments.

To understand the scope of these events, it is important to study history.

Võ Nguyên Giáp, commander of the guerrilla armies that defeated imperialism in Vietnam, was asked about the reason for his victory over what was called “the most powerful army in the world”. He answered that it was the “intelligence” – or, rather, lack thereof – of the US generals. This same lack of “intelligence” had already led imperialism to its defeat in the Korean War, from 1950 to 1953.

But in the 1991, the US did claim victory in the Cold War against the Soviet Union, and many observers claimed that this demonstrated that history was on the side of Washington.

Even then, however, there were a few exceptions who said the opposite, already pointing out the limits of power and the weaknesses of North American society. Among them was a prominent member of the Chinese high leadership, Wang Huning, who wrote a book precisely about this in 1991 called “America Against America”.

Beginning in the 1990s, the United States succeeded in exporting neoliberal financialization as the new standard of global accumulation. But today, that system is demonstrating its limits, and taking capitalism itself to the brink of collapse, while transforming the US into an exporter of far-right politics.

A series of disastrous political decisions taken in the last 20 years make this lack of US “intelligence” clear.

A series of massive and highly costly military interventions put the US in a dead end, from the wars on Iraq and Afghanistan; to the destruction of one of the most stable countries in Africa, Libya; from support for Islamist extremist militias in an attempt to overthrow Bashar al-Assad in Syria; to the expansion of NATO right up to Russia’s borders.

There were several other battle fronts where the fingerprints of imperialism were clear as well, including coups in Honduras, Paraguay, Brazil, and Bolivia and coup attempts in Venezuela in Nicaragua.

But the 2008 financial crisis and the emergence of alternative blocs around the world, especially the BRICS, made the US double its bet in the attempt to impose what is essentially a fascist dictatorship on a global scale.

In terms of Brazil, our country was a laboratory for so-called fifth generation warfare. This included a brutal information war, support for criminal organizations, the financing of paramilitary organizations, NGOs with dubious interests, and the co-option of sectors of the public service, primarily the judicial power.

The intention of this hybrid war was clear: to destroy the popular project that was emerging with force since the victory of Lula da Silva and Dilma Rousseff.

To do so, a large operation was sponsored by the US Departments of State and Justice, with the goal of destroying our national industry, arresting Lula, weakening the BRICS, and removing Dilma from the leadership of the Brazilian state.

Since the 2016 coup against Dilma, Brazil went through a process of self-destruction – one that Lula is now trying to stop.

At the international level, since US President Barack Obama, another movement was under way: the full transformation of the dollar into a weapon of mass destruction.

Most egregious of all are the US financial blockades suffered by Cuba, People’s Korea, Iran, Venezuela, and other targets of imperialism.

Today, about a third of the world’s countries endure some form of illegal commercial or financial sanction by the United States.

But there are limits to everything in life, including a power that was thought to be invincible.

Imperialism has reached its limit by forcing Russia into a conflict in Ukraine, and then trying to “drive Russia out of the world”, through the use of aggressive financial sanctions and dollar asset freezes.

Nobody tries to oust a country the size of Russia, with its immense natural and industrial resources, with impunity.

It is in moments like these in history that one day can be worth more than decades of struggle.

All of this was happening while China had already become the biggest trading partner of 140 countries, and while the Belt and Road Initiative was responsible for around 3000 infrastructure projects in all corners of the world.

The historical analogy is irresistible: It was precisely with the use of the dollar to finance works in Europe in the 1920s that the United States began the project of transforming its currency into the international reserve currency.

Now, the illegal freezing of Russian financial assets denominated in dollars has demonstrated the undeniable: The United States has never been a reliable country – and it is not motivated by concerns for “democracy and human rights”.

Washington’s urge to maintain total power in the world demands the complete destabilization of the international order.

The conflict in Ukraine is one more expression of this process of “world disorder” sponsored by imperialism.

As for Brazil, in 2018, then-former President Lula da Silva was convicted and imprisoned in the “Lava Jato” operation, as part of a lawfare (legal warfare) process that was later denounced as the biggest farce in the history of the Brazilian justice system.

The Brazilian left was subjected to a relentless information war by the mainstream press, and the extreme right led by Jair Bolsonaro became the hegemonic force in the national political scene.

Along with Bolsonaro came the complete submission of Brazil to the government of Donald Trump, an ultra-liberal economic policy, and a trail of fascism that almost destroyed Brazilian society.

Anti-communist and openly against China, Bolsonaro was the saddest page in Brazilian history. And he continues to have a lot of political strength even after his defeat in the 2022 general elections.

What nobody imagined is that, after being freed from jail, Lula would lead a broad anti-fascist front to beat Bolsonaro in those elections.

On the external front, Lula signaled the return of a foreign policy in favor of multipolarity, moving Brazil closer to China and the Global South.

This is a significant turn in the history of our country.

The largest country in Latin America is once again ruled by progressive forces.

But the price of the attacks on our country has been very high.

Under Bolsonaro, Brazil quickly deindustrialized, with its industrial capital destroyed.

Around 100 million Brazilians live in a state of food insecurity. Precarious work was institutionalized. Hatred became part of our society.

As much as Lula signals for a more active participation of Brazil in the world, the reality is that our country is not the same as it was previously under his leadership, when we reached the position of sixth-largest economy in the world.

Meanwhile, the rise of China has ignited widespread alarm in the so-called “West”.

Brazil has been under a lot of pressure in all international forums to take the West’s position, for example, in relation to the conflict in Ukraine.

US authorities already publicly state that Chinese investments in Latin America should be treated as a national security problem.

It is in this world in transition that our country is called to rebuild.

While Brazil was undergoing a major existential test, China inaugurated the “Laos/Cambodia” paradigm – in stark juxtaposition to the North American “Iraq/Afghanistan” paradigm.

China built railroads and other advanced infrastructure in Laos and Cambodia, while the United States destroyed Iraq and Afghanistan with bombs.

Socialism returned to guide international relations in opposition to imperialism.

This socialist strategy is not like in the days of the Soviet Union, which bet on directly financing anti-imperialist fighters around the world. Rather, it seeks to build a socialist gravitational point – as Marx had imagined for the socialism that he thought would emerge first in England, France, and Germany – in which the periphery of the system would become socialist by economic gravitation.

Socialist China is that point today.

With the conflict in Ukraine and the demoralization of imperialism in the Middle East, new paradigms in terms of international relations are being inaugurated by China.

The motto of “building a community with a shared future” is an objective fact, not just empty words.

A key part of this project is de-dollarization.

The conflict in Ukraine has accelerated the process of unifying the economic and financial territory of Russia and China. This will have impacts on the world similar to the historical moment in which the United States, in the last quarter of the 19th century, unified its economic territory and formed an immense continental economy.

These are major milestones of the new times we live in: Russia and China, united by the yuan and huge infrastructure projects; plus India’s use of the ruble to buy oil from Russia; plus Saudi Arabia and United Arab Emirates giving up the dollar to do business with China.

The complete demoralization of imperialism in the Middle East was symbolically completed with a historic agreement in March, mediated by China, between Iran and Saudi Arabia. Now there are peace talks that may end another war, sponsored by imperialism, in Yemen.

But the construction of this historical process will only be complete with the total inclusion of Latin America, and its largest country, Brazil, as a fundamental part of this changing world.

A big and bold step in this direction was taken with the deal signed in March between the two countries, providing for the use of their own currencies in trade, dispensing with the dollar.

The voices of imperialism did not take long to appear. Far-right US Congressman Marco Rubio got straight to the point: The real-yuan deal will prevent unilateral sanctions from the West, he complained.

Rubio made it very clear that the United States, and the dollar in particular, has become a real threat to human progress, synonymous with civilizational setbacks.

The United States continues aggressively provoking Beijing in the Taiwan Strait, attempting to destroy Russia, attacking socialism in China, and sponsoring fascist groups around the world.

Lenin elaborated on the real possibilities of socialism based on what he called “weak links in the imperialist chain”.

For a long time this weak link was present in Asia, where relations between center and periphery had become explosive.

The Chinese, Korean, and Vietnamese revolutions proved that the Russian revolutionary was right.

Today, Latin America is the weakest link in the imperialist chain – perhaps the last refuge of imperialism’s power in the world.

With their monetary agreement, Brazil and China took a big step toward reorganizing the interests of the Global South, in a new historical moment that we are experiencing.

The consolidation of socialism on a world scale depends greatly on the multiplication of agreements like these.

A socialist center of gravity (China) giving rise to immense financial, monetary, investment, and trade flows is fundamental to the cause of national liberation for peoples on the periphery of the system.

There is already a Chinese-led alternative form of globalization underway, through the Belt and Road Initiative.  Peripheral countries should draw more consequences from this project, and Brazil itself should negotiate membership.

Brazil and China can together rewrite the history of Latin America and the Global South.

In the case of Brazil, immense internal political challenges still have to be faced and overcome.

Our country does not have much time to lose, in the face of internal dramas and an extreme right-wing opposition ready to use every possible means to destroy the left and seize power in Brazil.

Brazil, and the world, is living in very interesting times. But I am sure of humanity’s victory.

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