This presentation discusses the historical perspective of world peace and security order post World war II, the rise of US dollar as International payment instruments and challenge to its domination - triggered by Russia - NATO Conflict. As the concluding remarks are : 1. Geopolitics – Geostrategy – Geo economy are dynamics 2. New Equilibrium in Global Politics and Economy Power Sharing, might shock the global order temporarily 3. Money is the blood of modern global economy. You control the money circulation, meaning you already control more than half of the POWER 4. While Pact sunt servanda is the credo of Civic Society, at the end of a day it is the NATIONAL INTEREST to govern the State Political Behaviour

1. Geopolitics –
Geoeconomy and
Payment System
Sampe L. Purba
April 2022
Lesson learned from Historical and Contemporary European –
Russian Conflict
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2. Issues
1) Historical Perspective of World Peace
and Security Order post World Word II
2) The rise of US dollar as International
Payment Instruments
3) Challenge to domination of US dollars
4) Concluding take out points
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3. From Geopolitics to Payment System
• Geopolitics: Application of the influence of political and economy
geography international relations [economy, politics, foreign policy,
power, etc]
• Geostrategy : A decisive points with spatial consideration, by taking
into account the driving forces of demography, culture, technology,
resources and its mobility to meet national objectives
• Geoeconomics : Capitalizing Economy to pursue geopolitical
objectives  Territory, Resources or Influence
Instruments : Trade policy, investment policy, Financial and
monetary, energy and commodities, aid and cyber
 Payment System : Any system used to settle financial transaction
through the transfer of monetary value. Involving : Institutions,
instruments, people, rules, procedures, standards and technology
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4. European POST WW II Geopolitics MAP
Yalta Conference (Pebr 1945) – Soviet –
UK – US to redesign European and
World Security and Economy Order Post
WW II
Postdam Conference (July 1945), Berlin
divided, Soviet insists to hold Poland as
critical corridor to its NATIONAL
SECURITY
1947 Truman Doctrine to ignite and formalize COLD
WAR
1949 NATO established
1955 Pact Warsaw established
1991 Pact Warsaw dissolved
1991 onward … NATO to expand its
membership to ex Pact Warsaw and ex
USSR Countries ….
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5. The Winners (NOT) take all
 When history record not in favor of Russia
Event Description Point to note
Yalta Conference Pebr
1945 (Soviet, US,
British)
Post War European Rearrangement
Basic Principles on UNITED NATION
 Countries liberated by Soviet Army
as its buffer zone to its NATIONAL
SECURITY now join NATO and EU
UN established To promote global security and prosperity
Have 5 permanent UNSC with veto power
 France Gov’t was once lost to Axis,
form Govt in exile, and liberated by
Allies
Bretton woods
Monetary
System
Foundation
IMF and IBRD was established
Adjustable foreign exchange rate to a pegged
basket capital in Gold
Promote worldwide free flow trade
 Soviet oppose and not ratify IMF
and IBRD, due to the inclusion of
US Dolar along side the gold ($35
per oz)
The collapse of
Bretton Wood
system
1971 – Nixon halt currency pegged to USD (overvalued
of USD to finance its war in Vietnam
World Free floating currency
1973 : Oil Crisis – IMF to lend difficult countries under
Structural Adjustment Facilities
 Kau yang mulai, kau yang akhiri
 LESSON LEARNED – OIL and ENERGY
IN GENERAL – actually can RESHAPE
the PAYMENT SYSTEM
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6. Geoeconomy : The Power of Number – Playing your cards well
@Rystard Energy, 2022
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7. Evolution of Payment System
Payment
System
Description Forms and Instruments
required
Barter System Mutual direct meet of the needs Goods and services hand over
Commodity based Agreed extrinsic value Precious, Divisible, Durable, small space,
 Precious metal, gold
Money – gold
standard based
 Money issued is backed and guaranteed
by gold as per face value
Central Bank Physical gold
Fiat money  Only intrinsic value. The government
to guarantee its legal tender basis
Paper money, banking cheques,
travellers, credit cards, wire transfer etc.
 Policy Instruments to keep the value
Platform based Technology based, no need government or
banking system as intermediary
Crypto money, to disrupt the macro
economy payment system, may lead to
collapse the conventional payment system
IN ANY SYSTEM : SUPPLY and DEMAND LAW to determine the PRICE APPLY 7
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8. Global Trade Interconnection
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www.bcg.com/publications/2020/redrawing-the-map-of-global-trade
 Expedite by the advancement of Technology, Communications and Payment System
 May hampered by tariff and non tariff barrier
 A disruptive events such as political and security tensions may add to worsen
 Covid 19 enforces tighten control of medical and agricultural products, and also
travelling

9. More than half US currency circulated overseas
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 US Money in
circulation, kept
climbed since its
officially determined
under Bretton Woods
Conference, 1945
 The stability of the
Currency, the
international trade
law, and the
domination of US in
Geopolitics and
Geoeconomics add
ammunition of trust to
the greenback

10. PRICE as the Function of Law of Supply and Demand
• Globalization – Standardization –
Dictation
 WTO Principles
- Non discriminatory vs MFN
- Free trade no barrier vs trade block
- Standardization and Transparency
Central Banks Principles
- Interest rate
- Inflation rate
- Money in circulation
- Prudential Standards
Q
P
O
S2
S2
S1
S1
D1
D1
D2
D2
Q1 Q2 Q3
P2
P1 E1
1
2
3
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11. The Power of Long trusted Currency
Overall Deficit is financed through
 Printing of US dollar and/ or
 Issuing Bonds
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12. Interdependence and imbalances of Global Trading
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13. Value of Goods and Services Traded
 Exchange value of Natural Resources related Products (Oil, Gas, Coal, Petrochemicals and Farming related Products)
are below those of Manufacturing and Industrial
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14. Share of Global Export
It’s time to watch out : changing of Guard
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15. Global Growth is projected to decelerate
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@Worldbank, 2021 Statistica, 2021

16. Top Countries Oil and Gas Players
Top Exports Gas and LNG, 2020
Source, Statistica 2022 BP Statistical Review, 2021
1. Countries do depend on World Trading
2. Gas Reserves do expand
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18. International Trade Law
• Lex Mercatoria
-> Custom, Industry Practice,
General Principle of international
business community – in
transborder commerce, trade,
finance. Good faith
 GATT, WTO
• UNCITRAL
• ICSID
• Dispute Settlement Procedures
- conciliation, arbitration etc
Long Term Contract :
Terms :  Volume, Timing, Price,
Currency, Transfer of title,
Governing Laws, Dispute
Resolution Mechanism
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The POWER of POWER

19. 1) Geopolitics – Geostrategy – Geo economy are dynamics
2) New Equilibrium in Global Politics and Economy Power
Sharing, might shock the global order temporarily
3) Money is the blood of modern global economy. You
control the money circulation, meaning you already
control more than half of the POWER
4) While Pact in servanda is the credo of Civic Society, at the
end of a day it is the NATIONAL INTEREST to govern the
State Political Behaviour
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Concluding Remarks
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20. Terima Kasih – Thank You – URA
• Sampe L. Purba
Scholar : Universitas Pertahanan
LEMHANNAS RI
Background Knowledges
EKONOMI, HUKUM, DIPLOMASI
Medsos :
Mail : sampepurba@gmail.com
IG : sampe.purba
Twitter : @sampepurba
Linkedin : Sampe Purba
Web : sampepurba.wordpress.com
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