Financial power and global governance

World War-II was coming to an end. The US was architecting new global financial, economic and political systems. Bretton Wood Institutes and United Nations were erected to consolidate power. International Monetary Fund, World Bank and associated institutions were crafted for American hegemony. Things were organised in such a manner that the supremacy of US could not be challenged. Voting rights of World Bank and IMF were crafted on the model of veto and used to ensure strict control.

Simultaneously, United Kingdom, the declining empire, was struggling to sustain its share if not the influence. John Keynes was negotiating UK’s interests with Mr White. John Keynes was rejecting proposal after proposal put forward by US. Mr White had to close the proposal cycle by saying, “we will try to produce something which Your Highness can understand”. It was a polite no to further accommodate the demands of UK.

So, John Keynes could not secure what his declining kingdom was asking him. It pushed UK to look for alternatives to sustain some parts of its lost glory.

The ruling elite of UK came up with an idea of financial control to rule the world. It was put forward as an alternative to physical colonisation.

It was suggested that financial control will guarantee new way to colonise the countries. City of London (small city within London) drafted the plan and executed in a systematic way to ensure success of the plan. First, the autonomy of the City of London was safeguarded. Second, Bank of England, which is situated in City of London, invited banks, bankers and accountants to house in the city.

They were assured that they will enjoy complete immunity for their actions. Third, secrecy laws were drafted to protect the interests of ruling elite, business community and banks. Secrecy laws were considered a key to attract the accountants and money.

Fourth, Virgin Islands and other places were selected to implement the secrecy laws and keep it out of territory of City of London and UK. New institutions were created and banks of City of London started to open their branches in these places. Islands started to act conduit of money transfer from world to City of London.

Bretton Wood Institutes, US and UK financial systems forged partnership to govern the world. It was disclosed in 2010 that UK and US control 25 percent and 19 percent world transactions respectively.

Further analysis exposed that secrecy laws of Virgin and Cayman Islands are helping illegal money to move freely. These are favourite places for corrupt elite of poor countries. They have become hub of corruption money. Multinational companies deal and bribe elite of poor countries through these banks.

These Islands have also become tax avoidance heavens. It is depriving countries of required financial resources to run the country. These places are also facilitating money-laundering. It is unfortunate that illegal money is channeled to City of London or US through these banks.

Panama Papers, Paradise Leaks, FinCEN leaks etc. all indicated the involvement of big Western banks like JP Morgan, HSBC, Standard Charted Bank, Deutsche Bank and Barclays Bank etc. in money-laundering. These are only a few examples. There are many other institutes.

To further strengthen control, the US in collaboration with UK and Western allies kept on reforming IMF and World Bank. IMF, which was established to help countries to manage their balance of payment, turned into a dictating body to control economies by weaving debt trap.

IMF strengthened its role through central banks. The central banks are being used to steer the decision-making process and bring desired economic, social and political changes. That’s why IMF and West focus on the autonomy of state banks and major appointments. The recent episode in Pakistan can be stated as an example.

The US and UK also use financial power to punish countries which refuse to bow by imposing economic sanctions. Financial system dominance helps to squeeze the flow of transactions and financial resources.

It encourages world to limit trade and economic linkages with targeted country which eventually leads to drying up foreign reserves. It compels countries to bow down to West.

Economic sanction has emerged as one of the most sophisticated tools to punish and bend countries. West is using it quite frequently against poor, resource-rich and rival countries. It has emerged as a new tool of colonisation, sucking resources and destruction of rival countries. Iraq, Libya, Iran, North Korea etc. are prominent examples. Russia is the latest victim on this front. Russia is an interesting case study. Although, economic sanctions have been imposed, the interests of West are protected by allowing energy trade.

From the above discussion, it can be inferred the real tool of global governance is financial control which has been designed by US and UK. It is widely used to control world and any threat to system has been eliminated. It led to many conflicts and wars.

Therefore, it is considered a permanent threat to peace and sustainable development of world. The dream of sustainable peace and development can only be achieved by eliminating this system.