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Dedollarization is here, like it or not

A major driver is Washington’s weaponization of its currency via sanctions, covering 29 percent of the global economy. (Video)

Analysis | Africa

Dedollarization appears to be an unstoppable trend as countries around the world look to reduce their dependence on U.S. currency.

Countries, particularly those in the Global South, are reducing their U.S. dollar reserves, settling cross border transactions in non-dollar currencies, and exploring the formation of new multilateral settlement mechanisms.

A major driver of this trend is Washington’s weaponization of the dollar via expansive sanctions that currently cover 29 percent of the global economy and 40 percent of global oil reserves.

Two recent Responsible Statecraft articles, one authored by International Crisis Group co-chair Frank Giustra and another by Quincy Institute Non-Resident Fellow Amir Handjani, began the process of explaining the drivers of this economic trend, as well as the geopolitical pitfalls facing the U.S. as much of the world reduces its dependence on the dollar, especially if the U.S. fails to engage other countries in the process of forming a multilateral monetary system.

In this video, Giustra and Handjani make the case for the U.S. acknowledging the trend of dedollarization and for Washington to address the national security dangers, as well as global economic and political instability, associated with this unmanaged decline of U.S. economic hegemony.


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Analysis | Africa
CAMP LEMONNIER, Djibouti
Top image credit: CAMP LEMONNIER, Djibouti (Feb. 9, 2023) Senior military leaders met with Djiboutian Sous-Préfet de Damerjog, Abdi-Chaib Nour Youssouf, and his distinguished guests for a ceremony at Camp Lemonnier’s Islamic cemetery (U.S. Navy photo by Mass Communication Specialist 1st Class Maria A. Olvera Tristán).

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Africa

Project 2025, the alleged blueprint for President Trump, focuses only one African country: Djibouti. Smaller than West Virginia, Djibouti has a population of one million people and few natural resources. Nevertheless, Project 2025’s authors fret about “the U.S.’s deteriorating position in Djibouti.” Likewise, Secretary of State Marco Rubio has stressed the need to work on “countering Chinese influence in Djibouti.”

Djibouti is critical because of its location. Situated near the Gulf of Aden, around one third of ship traffic passes by on its way to the Suez Canal. To protect these ships, Djibouti hosts military bases from China, France, Italy, Japan, Saudi Arabia and the United States. Until recently, Djibouti-American relations were good. But when Djibouti refused to let the United States attack the Houthis from their territory, the foreign policy establishment lost its temper and blamed Chinese influence.

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Top photo credit: Pete Hegseth in Senate hearings, January 14, 2025. (Shutterstock/
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As a brand new Congress and administration settles in, the groundwork is being laid for a historic increase in military spending that could lead to catastrophic implications for the federal budget.

Senator Roger Wicker (R-MS), the new head of the Senate Armed Services Committee, is calling for a $120 billion hike over the next two years, and other key Republicans are calling for an increase of up to $200 billion. This follows a rise of some $160 billion over the four years of the Biden Administration.

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Trump transition

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