An Interview with Şaban Palabıyık

The global economy is undergoing significant transformations. Since World War II, the U.S. dollar has been the dominant currency in international trade and finance. However, in recent years, countries like China, Russia, and the broader BRICS bloc (Brazil, Russia, India, China, and South Africa) have been taking steps to reduce their reliance on the dollar. With the rise of alternative currencies, digital financial technologies, and new economic alliances, could the dollar’s supremacy be challenged?

To discuss this crucial topic, we spoke with Şaban Palabıyık, a renowned Turkish business leader in the construction industry who is currently based in Germany. With extensive experience in international markets and large-scale infrastructure projects, Palabıyık closely follows global economic trends and shares his insights on the shifting financial landscape.

Question 1: What are the main reasons behind the dominance of the U.S. dollar in the global economy?

Şaban Palabıyık:
The U.S. dollar has remained at the center of global trade for decades, primarily due to the size and strength of the American economy. Additionally, the dollar’s status as the world’s reserve currency means that central banks worldwide hold vast amounts of it.

Following the Bretton Woods Agreement in 1944, the dollar was pegged to gold, making it the primary currency in global transactions. Even after the U.S. abandoned the gold standard in 1971, the dollar’s dominance continued because key commodities like oil and gold are still priced in dollars. Today, approximately 60% of global trade is conducted in dollars.

Question 2: BRICS nations and other emerging economies are working to develop alternatives to the dollar. Do you think these efforts can succeed?

Şaban Palabıyık:
BRICS nations are taking serious steps to reduce dollar dependency. China and Russia, for example, have started using the yuan and ruble in bilateral trade. Additionally, BRICS has discussed the possibility of creating a common currency.

However, whether these efforts will succeed depends on several key factors. Any alternative currency must have a robust financial infrastructure and widespread global acceptance. While China and Russia are strong economies, their currencies are not yet as liquid or trusted as the dollar.

Currently, the yuan appears to be the strongest candidate to challenge the dollar. However, China’s financial system remains under tight government control, which raises concerns about transparency and stability. For now, BRICS initiatives alone are unlikely to dethrone the dollar in the short term.

Question 3: How do you assess China’s push to internationalize the yuan?

Şaban Palabıyık:
China is making a determined effort to establish the yuan as a global reserve currency. Through its Belt and Road Initiative, China encourages countries to conduct transactions in yuan, and it has also secured agreements with oil-producing nations to trade in yuan instead of dollars.

However, for the yuan to truly replace the dollar, China must further liberalize its financial markets and reform its legal system to gain the full trust of international investors. As of now, many global investors still see the dollar as a safer and more reliable option.

Question 4: How do U.S. sanctions and control over the financial system impact the global economic order?

Şaban Palabıyık:
The U.S. wields significant influence over the global financial system due to the dollar’s dominance. This allows the U.S. to impose economic sanctions that can severely impact countries like Iran and Russia, limiting their ability to participate in international trade.

As a result, many countries are seeking alternative payment systems and currencies. For example, Russia and China have developed their own financial transaction networks to bypass the SWIFT system. However, since the dollar still dominates global trade, these alternatives face challenges in gaining widespread acceptance.

Question 5: Do cryptocurrencies and central bank digital currencies (CBDCs) have the potential to replace the dollar?

Şaban Palabıyık:
Cryptocurrencies and digital currencies issued by central banks could significantly alter the global financial landscape. Bitcoin and other decentralized digital assets have emerged as potential alternatives to traditional currencies, particularly in regions affected by economic instability. However, their widespread adoption is hindered by regulatory uncertainty and high price volatility.

Meanwhile, some countries, including China, are developing their own central bank digital currencies (CBDCs) to facilitate trade without relying on the dollar. The digital yuan is a prime example of this strategy. While such innovations have the potential to reduce dollar dependence, achieving global acceptance will take time and trust.

Question 6: How do you see the global economic power balance shifting in the next 10-20 years?

Şaban Palabıyık:
Over the next 10 to 20 years, we will likely see a significant rebalancing of global economic power. Fast-growing economies like China and India are strengthening their positions, and the U.S. may no longer hold the same level of dominance as it does today.

That said, while the dollar’s influence may gradually decline, it is unlikely to disappear completely. However, with the rise of BRICS nations and advancements in digital financial systems, the economic landscape will become more multipolar. More countries will trade using their own currencies, and new financial networks will emerge to challenge the traditional Western-led system.

Germany’s Role in the New Economic Order

One country that stands out in this evolving landscape is Germany. As the economic powerhouse of Europe, Germany has consistently demonstrated resilience, innovation, and stability in the face of global economic challenges. Unlike many other major economies, Germany maintains a strong industrial base, world-class infrastructure, and a commitment to sustainable economic policies.

Moreover, Germany’s banking system remains one of the most reliable in the world, making it a key financial hub for businesses and investors seeking security amid global uncertainties. While many countries face inflationary pressures and political instability, Germany continues to offer a model of economic discipline and long-term planning.

For business leaders and entrepreneurs like myself, Germany provides an excellent environment for investment and growth. The country’s commitment to technological advancement, skilled workforce, and well-regulated financial system makes it an attractive destination for global business expansion.

We thank Şaban Palabıyık for his insightful analysis on the future of the global economy. As economic power continues to shift, businesses, policymakers, and investors will need to adapt to an increasingly multipolar world.