{"id":112890,"date":"2021-03-22T01:24:39","date_gmt":"2021-03-22T07:24:39","guid":{"rendered":"http:\/\/www.lankaweb.com\/news\/items\/?p=112890"},"modified":"2021-03-21T18:21:58","modified_gmt":"2021-03-22T01:21:58","slug":"the-epidemic-of-currency-depreciation-can-asian-region-control-the-epidemic-by-united-accomplishment-part-1","status":"publish","type":"post","link":"https:\/\/www.lankaweb.com\/news\/items\/2021\/03\/22\/the-epidemic-of-currency-depreciation-can-asian-region-control-the-epidemic-by-united-accomplishment-part-1\/","title":{"rendered":"THE EPIDEMIC OF CURRENCY DEPRECIATION: CAN ASIAN REGION CONTROL THE EPIDEMIC BY UNITED ACCOMPLISHMENT? PART 1"},"content":{"rendered":"

BY EDWARD THEOPHILUS<\/strong><\/em><\/span><\/h2>\n\n\n

The\ncurrency devaluation by developed countries (Especially France) had been an\nepidemic since the early 1900s until the establishment of the International\nMonetary Fund, and many western economies looked at this issue with a bias\ntoward hard currencies of America and European counterparts. Fifty Economics\nclassics edited by Tom Butler-Bowdon (2017) has noted the following point about\nJohn Maynard Keynes After world war two, Keynes played an important role in\nestablishing the Bretton woods system, a flexible regime that would stop the\nepidemic of currency devaluations which had caused so much animosity before the\nwar.   Keynes also helped establish\nInternational Monetary Fund and the World Bank\u201d (Page 137).<\/p>\n\n\n\n

The\nepidemic of currency depreciation than devaluation in many countries has been\nconverted to a vicious pandemic since the Covid 19, and this situation is not a\ndevaluation-related issue, but it is an automated process by an autonomous mode\nof the market economic system. The American dollar appears to be gone out of\nits superiority during the COVID-19 pandemic period which experiences a\nnegative impact on international trade and financial movements. The unseen\naspect of this problem is America determines the price of products against the\nwishes of producing countries, it seems that lower prices for imports from\ndeveloping countries.  Whether America\nconsumes such products and services or not it is not an issue, but it can\ncontrol the prices of developing countries, and such authority always would not\nwork in connection with friendly countries of America in Europe. America and\nEuropean countries advise developing countries not to restrict imports, e.g.,\nGermany advised Sri Lanka not to stop the import of vehicles. <\/p>\n\n\n\n

The\nepidemic of foreign value depreciation of currency units of developing\ncountries resulted from the depreciation of the American dollar, many times in\nhistory, abundant monetary units of developing countries had a direct link to\nthe American dollar, however, when the value of the American dollar increases,\nthe product and service prices of developing countries would not increase in\nline with the change of the American dollar, and developing countries have\nbloated the crisis and relegated poor people of such countries to obscurities.\nThe nature of the comportment of the American dollar seems to be identical to\nthe situation had in the early 1970s by gold prices, the oil crisis, and the\nVietnam war. Now, no one talks about Euro Dollars and Peto Dollars. <\/p>\n\n\n\n

The\nview of Keynes, a flexible regime of International Finance Management or the\nBriton Wood system has a disproportionate impact on the currency values of\nAsian developing countries, especially, in the Indian region and the Southeast\ncountries of Asia. The situation displays that it requires a quick regime\nchange in international financial management to protect developing countries in\nthe Indian region. The Chinese region also needs to associate with the Indian\nregion and the animosity between China and India should be consigned to\noblivion with effective negotiations between two countries on account of people\nin the region, who are suffering lots from the pandemic of currency\ndepreciation, no doubt that the current regime of the IMF pushes poor people to\nnever-ending economic and social difficulties. <\/p>\n\n\n\n

It\nis difficult to observe that Indian people and Chinese people except foreign\npolicymakers have animosity or radical differences either in economic\nactivities and cultural countenance, and religious practices.  Attitudes of Indians and Chinese are analogs\nconcerning many aspects of life, but the animosity has been created by politics\nagainst the common wishes of people, and international media is setting fires\nand putting strows to the small fire creating a massive fire. Indian and China\npolitical and economic policymakers have never introduced symbolic policy\nmeasures to display the unity of people in both countries.<\/p>\n\n\n\n

Recently,\nMr. Ajith Nivard Cabral, the State Minister of Finance in Sri Lanka talked\nabout Geo-Economics instead of Geo-Politics as he wanted to strengthen economic\ncooperation in the Indian region, and South and South-East Asian countries need\nto take firm policy actions to get out of the issue of currency depreciation\npandemic. This issue is less debated by people and economic experts in both\nregions as the understanding of international finance-related issues of people\nare little, and many economists and politicians in the region have an interest\nin political, social, cultural, and ethnic issues that quickly attract people\ndespite finance management regime related issues, and many people in both\nregions, Indian and Southeast Asian have no clear understanding of how currency\ndepreciation harms on the day-to-day life. It is a complicated macroeconomic\nissue that feels people when they go to the marketplace.  <\/p>\n\n\n\n

The\nmanner of people in this region is highly concerned with social, cultural, and\nethnic issues, and economic difficulties of people in Indian and the South East\nAsian region (Total population in the region is more than half of the world)\nare willing to stripe as a result of metempsychosis. Mr. Ajith Nivard Cabral\npointed to Geo-Economics focusing on trade and economic relations and no doubt\nthat trade and economic relationships are concerned with the depreciation of\ncurrency value. It can make statistical analysis and could find the positive\nco-relationship with the pandemic of currency depreciation, and regression\nanalysis may find the factors related to the slope of regression with\nquantitative values, however, direct negotiation, action planning, and\ndeveloping a voice urging politicians in the region would be a successful\neffort that will open the eyes of the Breton Woods regime relating secular\ndepreciation of foreign and local values of currency units  Originally, the Central Bank of Sri Lanka had\nthese objectives, later these objectives reflected a failure or it changed,\npeople have no idea.<\/p>\n\n\n\n

Generally,\nthe foreign value of a currency subject to variation of the volume of foreign\nreserves and the export power or the volume of the positive trade balance. It\nseems that Sri Lanka\u2019s policy action is to find a solution for these two areas\nby borrowing than productive actions to enhance foreign reserves and export\nrevenue than import costs.  Mr. Ajith\nNivard Cabral was appointed to the position by the president to make effective\npolicies, however, he has gone beyond the role to make political talks.<\/p>\n\n\n\n

When\nSri Lanka\u2019s monetary unit commenced quick depreciation with the COVID 19\npandemic I published an article in Lankaweb on 11.04.2020 expressing that the\nSARC region needs to take collective policy action to prevent currency unit\ndepreciation.  The International Monetary\nFund and other international financial institutions such as the World Bank,\nAsian Development Bank, and others, focused policy actions mainly based on\nproviding small financial supports and the policy action them was no other than\nrelegating to the indebtedness of developing countries, and it needed more than\nsupporting for them to get away from the issue. \nThe regime change of international financial management was not the\nIMF\u2019s action plan, and it needs to continue its regime showing that it has been\ntaken action to help those countries. The regime of the IMF needs to look at\nthe issue with a more humanistic approach considering people in developed and\ndeveloping countries are humans with similar values.    <\/p>\n\n\n\n

Think\nabout the Euro Zone that commenced in the early in the late 1960s as the\nEuropean Economic Commission, and originally, the UK was not interested in the\nunion, but in 1972, the UK entered the EURO union disregarding the Interest of\nAustralia and New Zealand on the economic relationships with the UK. The UK\nfully Brexited in 2020 from the EU. The Geo-politics of EU built a strong union\nand a common currency called EURO that issued in the year 2000 and secured the\nlocal and foreign value of the currency unit, and the Geopolitics of the European\nregion was able to create its currency unit with dignity despite the\nexpectations and objectives of the Briton Wood regime, in the year 2000,  stabilize the foreign value of the countries\nof the European region. The wonderful aspect of the European region was they\nhave positively responded at currency value of EURO, even after the Brexit, the\ncurrency value of the Euro region maintains as expected by the union, and they\nhave no firmed idea to regime change of within currency management in the\nregion.<\/p>\n","protected":false},"excerpt":{"rendered":"

BY EDWARD THEOPHILUS The currency devaluation by developed countries (Especially France) had been an epidemic since the early 1900s until the establishment of the International Monetary Fund, and many western economies looked at this issue with a bias toward hard currencies of America and European counterparts. Fifty Economics classics edited by Tom Butler-Bowdon (2017) has […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[124],"tags":[],"class_list":["post-112890","post","type-post","status-publish","format-standard","hentry","category-edward-theophilus"],"_links":{"self":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/112890","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/comments?post=112890"}],"version-history":[{"count":0,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/posts\/112890\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/media?parent=112890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/categories?post=112890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lankaweb.com\/news\/items\/wp-json\/wp\/v2\/tags?post=112890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}