Financial Crisis May Diminish American Sway
The financial crisis could further undermine the U.S.'s role as the world's only superpower and affect the reshaping of international institutions such as the United Nations Security Council that have defined the post-World War II era, officials say.
America's historic economic shock in the past month came as its ability to project influence globally was already being challenged by emerging powers such as China and India, as well as oil-producing Russia and Iran.
The limits to U.S. power have become apparent in the Bush administration's final year, as it has struggled to end Tehran's nuclear program and failed to safeguard Georgian sovereignty during the Russian incursion in August.
Secretary of State Condoleezza Rice canceled a trip to a democracy forum in Abu Dhabi this week to gauge the geopolitical impact of the financial crisis and help to fashion an American response, her aides said.
U.S. intelligence agencies are fine-tuning a governmentwide assessment looking at America's position in the world in the coming decades. The report is planned for public release after the November election, but the government's top intelligence analyst, Tom Fingar, previewed it in a recent speech. Intelligence analysts expect that 'the U.S. will remain the pre-eminent power, but that American dominance will be much diminished' between now and 2025, he said.
The most immediate impact of the financial woes may be to tighten U.S. purse strings for foreign needs. The Palestinian Authority received $150 million in U.S. assistance in March, its largest single allotment, and is set to receive another $150 million. But Palestinian leaders fear Congress will hesitate to authorize more in coming years.
'People now talk about aid potentially being affected by this. I think this would be a huge mistake,' said Palestinian Prime Minister Salam Fayyad in an interview. 'That's really the wrong place to look for cuts and savings.'
Arab diplomats say they have already detected a falloff in American influence in their region over the past year. Israel and Syria started peace talks this year and the Lebanese government concluded power-sharing negotiations with the militant group Hezbollah, without any direct U.S. role in either case.
The U.S.-brokered peace talks between Israel and the Palestinians, meanwhile, are unlikely to conclude this year as Washington has hoped.
One question is whether major powers such as China and Russia will take advantage of the U.S. crisis to adopt more aggressive foreign policies. Georgian President Mikheil Saakashvili said in an interview that Moscow could use a perceived power vacuum to expand its influence across Central and Eastern Europe.
However, for some of the nations on Washington's worry list, the financial crisis has also inflicted heavy damage. Oil's fall below $70 a barrel Thursday is likely to hit Russia, Iran and Venezuela and lessen the funds available for policies that threaten U.S. interests, such as Venezuela's aid program for left-leaning Latin American governments.
A global recession is seen as weakening already struggling nations such as Pakistan and Afghanistan. It could also provide a morale boost to al Qaeda leaders. 'For them, I think our economic travails are the equivalent of a shark sensing blood in the water,' said Bruce Hoffman, a professor at Georgetown University's School of Foreign Service who has written extensively about al Qaeda.
Even before the current crisis, U.S. intelligence agencies had begun projecting a significant diminution of U.S. power over the next 15 years. That is a key assumption in the long-range assessment of global trends -- known as the 2025 Project -- that the Office of the Director of National Intelligence has been preparing for the next administration.
Mr. Fingar, the intelligence analyst, said in his speech that the post-Cold War period of overwhelming U.S. dominance was 'anomalous.' America's elevated status on the military, political, economic and possibly cultural fronts 'will erode at an accelerating pace, with the partial exception of the military,' he said.
That will affect the restructuring of institutions such as the U.N., World Bank and International Monetary Fund. U.N. diplomats are discussing expanding the Security Council, whose five permanent members were set after World War II, to incorporate emerging powers. There is also talk of creating regional institutions to supplant the IMF.
Still, many American and European officials say that the U.S. remains the best-positioned to shape global events, particularly if its measures to prop up the financial system allow it to pull out of the mess fairly quickly.
The U.S. spends roughly as much on its military as all the other powers combined. And despite the shock to the U.S. economy in recent weeks, the U.S. dollar and Treasury bonds have actually strengthened, which some say is a sign America's continued haven status.
Many nations, from Japan to Israel to European allies, continue to rely on Washington's power to guarantee regional stability. Asked Wednesday night if the U.S. was in decline, Defense Secretary Robert Gates responded after a recent tour of allied nations: 'No. . . . Every one of the countries wants to have better relations with the United States. They still see the country as the last, best hope.' |
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