I recently participated in a discussion unpacking why de-dollarization was important for BRICS+ and the Shanghai Cooperation Organization (SCO), and why it might be ineffective as a fulcrum for addressing the occupation and genocide in Palestine. The conversation concluded with the observation that dollarization significantly undermines the ability to develop concrete strategies for Palestine’s security and reconstruction, effectively eliminating the feasibility of providing substantial military support to defend Palestinian sovereignty.
The idea that the BRICS efforts toward de-dollarization could influence the security and sovereignty of Palestine offers a compelling entry point into the broader questions of global economic governance, structural inequality, and geopolitical justice. For decades, the hegemony of the U.S. dollar has shaped not only global trade but also the political realities of states and regions enmeshed in conflict. Palestine, as an enduring symbol of dispossession and resistance, occupies a critical space in this global matrix, where financial structures and political realities are inextricably linked.
A Structural Context for Oppression
The dominance of the U.S. dollar is more than a monetary phenomenon. It reflects a deep entrenchment of political and economic power, allowing the United States to exercise disproportionate influence over global financial systems, institutions, and trade flows. This dominance facilitates practices that perpetuate inequality, including the capacity to impose unilateral sanctions, restrict financial access, and enable the free flow of military aid to allies, most notably Israel. In this context, the state of Palestine is rendered not only politically vulnerable but also economically dependent, its sovereignty undermined by systems that prioritize geopolitical alignments over human dignity.
Israel, as the largest recipient of U.S. military aid, benefits directly from this structure. The consistent flow of financial resources bolsters the infrastructure of occupation—military operations, settlement expansion, and the systemic dismantling of Palestinian livelihoods. Conversely, the Palestinian economy, fragmented and deprived of access to its natural resources, remains heavily reliant on aid that often comes with restrictive political conditions, further entrenching dependency.
De-dollarization as a Structural Realignment
The project of de-dollarization seeks to recalibrate this structural imbalance by reducing reliance on the dollar in global trade and finance. This process is not merely technical or monetary; it challenges the political conditions under which the U.S. exercises global economic control. For Palestine, the implications are profound. A world less reliant on the dollar would also be less susceptible to the unilateral coercive measures that often dictate the terms of sovereignty and resistance. Financial independence from dollar-based systems could provide Palestine with a critical opening to establish diversified economic relationships, particularly with states and blocs outside the orbit of U.S. influence.
BRICS nations have historically expressed support for Palestinian self-determination, and their focus on de-dollarization aligns with a broader vision of multipolarity that seeks to decentralize global power. Through this lens, de-dollarization is not an isolated monetary reform but a foundational effort to create pathways for states like Palestine to engage with global systems on terms that are less conditioned by hegemonic interests.
Multipolarity is Financial Resilience
A multipolar financial system opens opportunities for Palestine and other countries to engage directly with emerging economic powers. This includes accessing trade, investment, and development finance that is not contingent on alignment with Western geopolitical agendas. For example, BRICS-led institutions such as the New Development Bank or bilateral trade agreements denominated in non-dollar currencies offer the Global South the means of financing reconstruction and development without succumbing to the restrictive frameworks of traditional donors.
Moreover, de-dollarization disrupts the circuits of capital that sustain militarized economies. The Israeli military-industrial complex, deeply integrated into the global dollar economy, is indirectly weakened when the systems underpinning its financial flows are recalibrated. This recalibration extends to reducing the economic viability of settlements and occupation, which are underwritten by global investments and trade conditioned on dollar liquidity.
Solidarity Beyond the Dollar
De-dollarization also reflects a political ethos that is essential to understanding its relevance for Palestine. BRICS nations, through their critique of Western neo-imperialism, provide a platform for solidarity with struggles against occupation and dispossession. This solidarity is not rhetorical but material, as it redefines the parameters within which international alliances and support systems operate. Palestine’s inclusion in this framework has the potential to amplify its claims to sovereignty, not as a supplicant in the current order but as a participant in a newly emerging one.
The implications extend to international diplomacy, where the weakening of dollar dominance reduces the capacity of the United States to wield its veto power in support of Israel’s policies. In a multipolar world, the terms of negotiation, recognition, and accountability will shift, providing Palestine with greater leverage in its pursuit of justice and security.
Recognizing Justice and Resistance
When the International Court of Justice (ICJ) recognized the systemic occupation and the deliberate targeting of civilians, including children, hospitals, and schools, as evidence of genocide, it ignited an international moral imperative that could no longer be dismissed or obscured by corporate media directives. This determination marked a watershed moment, stripping away the veneer of media narratives that continues to mask these structural atrocities, underscoring the urgency that demands immediate and unequivocal global action. De-dollarization, in this context, offers more than an economic alternative; it provides a means to disrupt the material conditions that sustain this oppression. By recalibrating global flows of finance, trade, and political influence, BRICS nations can contribute to dismantling the systems that perpetuate inequality and dispossession in Palestine.
This recalibration is not a panacea. The challenges of state-building, economic sovereignty, and political resilience are deeply rooted and complex. Yet, de-dollarization marks a necessary first step in aligning global economic systems with principles of equity and justice. For Palestine, it represents the possibility of engaging the world on terms that acknowledge its agency, its history, and its right to exist as a free and secure state.
The Historical Materialist Lens
To understand the implications of de-dollarization, it is necessary to situate the dollar’s evolution within the broader context of global conflicts and U.S. hegemony. The role of the dollar in shaping geopolitical strategies—from its consolidation as a global reserve currency during the Bretton Woods era to its dominance in the unipolar world following the Cold War—illustrates how financial systems have been weaponized to sustain U.S. imperialism. This trajectory also reveals key inflection points where the use of the dollar has shifted, often corresponding to the outcomes and lessons of military conflicts.
The Dollar, Bretton Woods, and the Cold War: From the Korean War to Vietnam
The Bretton Woods Conference of 1944 is often cited as the moment the U.S. dollar became the cornerstone of international trade. This is just a bold-faced over-simplication and untruth. While the conference eventually led to the dollar’s gold peg and its role in global finance, this narrative obscures the gross opportunism and geopolitical maneuvering that cemented its dominance. In reality, the dollar’s ascendancy as the global trade currency was not formalized at Bretton Woods but nearly a decade later, through the Mutual Security Act of 1953, an extension of the Marshall Plan under the 1948 Economic Cooperation Act (ECA). These policies tied post-war reconstruction aid to the use of the dollar, creating financial dependencies that entrenched U.S. hegemony.
Far from being a consensual arrangement, this framework was coercive. Reconstruction aid under the Marshall Plan and its extensions required European nations to deposit their gold reserves into the U.S. Treasury. These deposits effectively removed these nations’ ability to back their currencies with gold, making them dependent on the dollar for international liquidity. The U.S. leveraged its gold holdings and the promise of reconstruction aid to institutionalize the dollar’s dominance, sidelining Keynes’s proposed Bancor—a neutral international currency—at Bretton Woods.
In 1955, the ideological consolidation of this monetary hegemony was further reinforced when President Dwight D. Eisenhower mandated the inclusion of the phrase “In God We Trust” on U.S. currency. First minted in 1957, this act symbolized the fusion of economic imperialism with Christian nationalism, reflecting Cold War rhetoric that juxtaposed “God-fearing” capitalist democracies with “atheistic” communism. The new currency branding projected U.S. dominance as not just economic but ideological, linking faith, capitalism, and global leadership in a unified narrative of supremacy.
Counterpart Funds and the Erosion of Sovereignty
The Marshall Plan’s counterpart funds, ostensibly designed to facilitate local reconstruction projects, further entrenched U.S. control. These funds, heavily influenced by U.S.-aligned administrators, tied aid to procurement policies that benefited American corporations, ensuring that European recovery deepened dependency on the dollar. This system transformed gold-backed dollar convertibility into the foundation of international liquidity—not due to the dollar’s inherent superiority, but because recipient nations had been coerced into surrendering their gold and, with it, their monetary sovereignty.
By 1958, when the Bretton Woods system became fully operational and global currencies became convertible to dollars, the monetary independence of U.S. allies had already been eroded. Gold deposits amassed through reconstruction agreements were centralized in the U.S. Treasury, leaving other nations incapable of offering gold-backed convertibility. This dynamic positioned the dollar as the global reserve currency, not as a reflection of U.S. economic strength alone, but as the product of deliberate policies designed to create structural dependencies.
The “Exorbitant Privilege” and Collapse of Bretton Woods
This arrangement allowed the U.S. to benefit disproportionately from its status as the issuer of the world’s reserve currency. French finance minister Valéry Giscard d’Estaing aptly described this as the “exorbitant privilege” of running trade deficits without immediate consequences, as global demand for dollars sustained its economic dominance. However, by the 1960s, these privileges came under strain. U.S. trade imbalances prompted nations like France to convert their dollar holdings back into gold, exposing the structural weaknesses of a system that relied on global confidence in the dollar’s stability.
The pressure culminated in 1971 when President Nixon suspended the dollar’s convertibility to gold, effectively ending the Bretton Woods system. The centralization of gold reserves in the U.S., achieved through coercive reconstruction policies, had created a system that could not endure once the imbalance of trade and the erosion of trust in the dollar became too severe.
Legacy of Dollar Hegemony
The interplay between post-war reconstruction policies and the Bretton Woods framework reveals the dollar’s dominance not as a natural outcome of economic strength, but as the result of strategic decisions that subordinated global monetary sovereignty to U.S. interests. The requirement for Marshall Plan recipients to deposit gold into the U.S. Treasury exemplifies how financial dependency was institutionalized under the guise of mutual aid and recovery. These policies not only entrenched U.S. economic supremacy but also set a precedent for using financial systems as tools of imperial control—a legacy that continues to define global power dynamics today.
Warfare 2.0
The Korean and Vietnam wars were fought within this Marshall Plan architecture. In both cases, U.S. intervention aimed to contain communism, a geopolitical strategy closely tied to maintaining the dollar’s centrality in global trade. These wars highlighted the contradictions of the U.S.-led order: while military expenditures were financed by the global confidence in the dollar, the economic strain of protracted conflicts began to erode that confidence. The Vietnam War, in particular, exposed the limits of dollar hegemony under the gold standard. Mounting U.S. deficits, exacerbated by the war, forced President Nixon to abandon the gold standard in 1971, severing the dollar’s link to a tangible store of value.
The significance of the Vietnam War cannot be overstated. It was not just a military defeat but a moment when the ideological and economic underpinnings of U.S. power were destabilized. The abandonment of the gold standard marked the beginning of the dollar’s transition into a purely fiat currency, reliant on the trust and coercion of U.S. dominance rather than material backing. This shift allowed the U.S. to print money freely, but it also necessitated new strategies to sustain dollar hegemony in a more volatile and competitive global system.
Wars Without Victory: Central America and the Post-Gold Standard Dollar
Following Vietnam, the U.S. largely avoided direct large-scale wars, instead engaging in proxy conflicts and covert operations, particularly in Central America. The interventions across Latin America and the Caribbean as a whole, were emblematic of the broader strategy to suppress leftist uprisings and maintain the capitalist status quo in the Western Hemisphere. Generally speaking, these conflicts, while devastating for the regions involved, lacked the commitment of Cold War battlegrounds like Vietnam and Korea, where the old suzerain relations with China provided support for their independence. These were not wars fought to maintain global confidence in the dollar but to prevent the emergence of alternatives to U.S. economic and political dominance in its immediate sphere of influence.
The U.S. strategy during this period was shaped by its post-gold standard reality. The dollar’s value was increasingly tied to oil, particularly through the petrodollar system established in the 1970s, which ensured that global oil trade remained denominated in dollars. This arrangement reinforced U.S. economic dominance but also underscored the limits of military intervention as a tool for sustaining hegemony. Proxy wars and economic coercion became the preferred methods, reflecting a recognition that direct military engagements like Vietnam were unsustainable.
The Washington Consensus and Unipolar Wars: The Dollar as a Weapon
The collapse of the Soviet Union in 1991 marked the beginning of the unipolar moment, during which the U.S. emerged as the global hegemon. This period saw the articulation of the Washington Consensus, a set of neoliberal policies that promoted privatization, deregulation, and the liberalization of trade and capital flows. The dollar became the central tool for enforcing this agenda, with institutions like the International Monetary Fund (IMF) and World Bank acting as mechanisms of compliance. Unlike during the Cold War, when economic assistance was often offered to win allies in a bipolar world, the post-Cold War era weaponized economic dependency to consolidate U.S. dominance.
Warfare 3.0
Conflicts during this era—including the NATO bombing of Yugoslavia, the Gulf War, the invasions of Afghanistan and Iraq, the wars in Libya, Syria, Yemen, and Ukraine, and the ongoing genocide in Palestine—reflect a distinct shift in global strategy. These were deliberate efforts to secure control over strategic resources while reinforcing the dollar’s dominance in global trade. The Iraq War, for instance, was as much about safeguarding the petrodollar system as it was about removing Saddam Hussein. Similarly, the execution of Muammar Qaddafi, who sought to introduce an all-African currency as a tool for economic liberation, highlights how resistance to dollar hegemony is met with coercive force. These wars marked a departure from Cold War-era alliances, emphasizing unilateral action and a strategy of coercive dominance, where the dollar served as a primary instrument of global control.
The consequences of this strategy are vicious. While the U.S. maintained military and financial dominance, it alienated many allies and created fertile spaces for resistance. The financial crises of the late 1990s up until the collapse of the Wall Street banks in 2008, precipitated by the neoliberal policies of the Washington Consensus, deepened global discontent and sowed the seeds for alternative frameworks like BRICS.
The Role of De-dollarization in a Post-Unipolar World
The emergence of BRICS and the push for de-dollarization must be understood as a response to the historical trajectory outlined above. The failures of U.S. military interventions post-Vietnam, the destabilizing effects of the fiat dollar system, and the coercive policies of the Washington Consensus have all contributed to a growing desire among nations to escape the constraints of dollar hegemony.
De-dollarization, in this context, is not merely a rejection of U.S. economic dominance but also an attempt to address the structural inequities embedded in the global financial system. By creating alternative trade and payment systems, BRICS nations aim to reduce their vulnerability to the economic weaponry that defines U.S. strategy in the unipolar era. This includes sanctions, currency manipulation, and the use of global institutions to enforce neoliberal orthodoxy.
De-dollarize for Palestine’s Future
For Palestine and other nations marginalized by the current order, de-dollarization represents an opportunity to attain sovereignty in economic and political terms. It offers a framework for resisting the coercive strategies that have undermined self-determination, creating space for multipolar alliances that prioritize balance, equity, and justice over dominance.
The historical materialist analysis of the dollar’s evolution reveals a pattern of shifting strategies that correspond to the changing dynamics of global power. From the Korean and Vietnam wars under the Bretton Woods system to the unipolar conflicts of the post-Cold War era, the dollar has been both a tool and a symbol of U.S. hegemony. De-dollarization, as championed by BRICS, seeks to disrupt this trajectory, offering a pathway toward a more equitable and multipolar world. By challenging the systems that sustain economic dependency and geopolitical subjugation, BRICS lays the groundwork for a new order in which states like Palestine might achieve not only security but also true sovereignty and equitable justice.