Boycotting the dollar? Hmm

Let's face it. Those who are calling on the nation to switch to the euro in its international trade are essentially suggesting that we boycott the American greenback. Diplomatic niceties aside, the call is simply the latest in a campaign we have heard this past week, about how the nation should boycott anything that smacks of America in our opposition to the ongoing war in Iraq.

We have heard it all before, and were frustrated because we knew that these boycotts ultimately would hurt us, without creating so much as a tiny dent in the U.S. economy, let alone in Washington's military campaign.

Thanks to globalization, much of what have been regarded as American icons -- such as McDonald's, Coca-Cola and Kentucky Fried Chicken -- and have been singled out for boycott by antiwar protests here, involve large Indonesian interests: They use Indonesian money, employ Indonesian workers, and Indonesian suppliers. A boycott would be like shooting ourselves in the foot.

If, historically, an economic boycott is never effective, then what chance do we have of influencing the course of events in this mad war in Iraq? Zilch, of course.

There is, however, one very compelling reason why -- if we feel strongly about this war -- we should consider boycotting the U.S. dollar. The reason is not economics, and we would probably make little difference, either. It is more one of principle, especially given our opposition to the war.

Our continued use of the American greenback, whether as a medium of exchange or a store of value, inadvertently amounts to our contribution to the huge costs of America's war in Iraq.

It is not only American taxpayers who are paying the bill for President George W. Bush's military adventures in Iraq. The rest of the world -- those who continue to use and keep the American greenback -- are also paying for the costs of a war that we never supported in the first place.

The Bush administration is financing this war by printing more dollars, and thus heading for a massive budget deficit. This, in turn, will lead to higher inflation, a weaker U.S. economy and, ultimately, depreciation of the U.S. dollar.

Non-Americans who have U.S. dollars stashed in banks or under their pillows are already paying for Bush's war that they deplore so much. For every single dollar you hold, you have already contributed a cent or more toward the cost of the war, because the dollar's exchange rate has already gone down by that amount.

Since non-Americans hold the bulk of the dollar available in the world, this war is also being underwritten by the rest of the world. The difference between us and Americans is that we do not have voting rights. As much as we would like to, we cannot vote Bush out of office. That's the job of Americans: As long as the majority still support the war, then he will remain in office.

We can still vote with our money -- the crudest form of capitalism, a game that Americans know more than anyone else -- although how effective it would be remains in doubt.

One way to hurt America would be for the rest of the world to simply dump all of its dollar holdings. But even here, given America's economic dominance, such action would depress not only the U.S. economy but also lead to global recession. Our action would rebound to haunt us once again.

Ultimately, our action to boycott the U.S. dollar must be measured, without hurting our own national interest. Switching to the euro makes economic sense only in respect of the trade we do with other countries willing to use the euro.

The fact of the matter is that most of Indonesia's international trade is still denominated in dollars. Since the U.S. is one of our main trading partners, Americans will insist on using dollars. The greenback is also the preferred currency of most of our main Asian trading partners. Many of our foreign creditors also want to be paid in U.S. dollars.

This fact alone compels us to keep a sizable amount of U.S. dollars at all times. Economic circumstances dictate that Bank Indonesia, the central bank, as well as commercial banks and private companies and individuals, continue to hold some of their reserves in dollars.

As much as we oppose the war and hate admitting that we are also paying for it, economic interests and realities, rather than our principles, will dictate our actions.

That is a sad reality of this war.