FORA Economy

Season 2010 Episode 0327

Geostrategic Consequences of the Economic Crisis

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Geostrategic Consequences of the Economic Crisis
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The global economic crisis has accelerated a relative shift of power from the West to the East and South. With high growth rates and newfound confidence, new emerging market players such as China are asserting themselves on the international scene, ranging from the conversations within the G20 to a stronger role in the WTO negotiations to climate talks in Copenhagen. The United States, stymied by the economic crisis and fiscal challenges, two theaters of combat operations, and insufficient political consensus at home on such issues as climate change and Doha, remains the sole superpower but finds it increasingly difficult to exercise leadership in a more fragmented, diffuse international system. Europe seems to be threatened by budgetary troubles in a number of its member states, and the EU seems to lack the confidence and sufficient cohesion to act as a single power.The G20 has eclipsed the G8 as the main forum for global economic decision-making, but a broader consensus on new global economic governance has not yet been deeply forged. Finally, it has become increasingly clear that the poor will suffer disproportionally from the impacts of the economic crisis. According to the World Bank, 100 million people were driven into poverty last year. Social tensions and geopolitical risks will be particularly acute in fragile states, impacting security and livelihoods in the Western world as well. The economic crisis might have marked an emergence of a new world order, but the new rules are not yet set and its nature is not yet clear.moreless
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