Saturday, October 11, 2008

Time to Share the Top Spot, America
By Bashir Goth

There is no doubt that this financial meltdown marks a defining moment for America's global influence. My guess is that America will weather this crisis, partly due to the government rescue plan and partly due to the ingenuity of the American people. But it is also my guess that the rest of the world may not be ready to undergo the same fear again and may opt to build shock absorbers against any similar future eventualities.

It is natural for a country to reassess its socio-economic situation and draw plans to guarantee healthy future trade with the outside world. We have precedents in the Great Depression and how it brought in big government role into the U.S. economy, the Marshall Plan after WWII and how it created a new world economic order and the 1973 Oil Shock that brought the issue of energy security to the fore.

It was in the aftermath of the Oil Shock that US created the strategic Petroleum Reserve in 1975, and the Organization for Economic Cooperation and Development (OECD) founded the International Energy Agency (IEA) in 1974, and launched a vigorous push for the search of alternative energy.

In the same way, it is obvious that the U.S. financial crisis will herald a kind of a "New Deal" for world economic cooperation. Many African, Caribbean and Pacific leaders currently meeting in Ghana have realized that their trade with the so-called emerging economies such as China, India, Brazil and South Africa as well as Australia has cushioned their economies against the impact of the U.S. financial crisis. That's an indication that the U.S. is losing its world trade dominance. That should invigorate trade between regional blocks such as Africa, Asia and Europe.

Yes, with its economic and military might, America will continue to have a great influence on world affairs. But one may wonder whether America will still dictate the terms as usual, or whether it will find itself in a new territory. The U.S. may need to readjust its bearings, sharing space and influence with newcomers.


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