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Is the global economic crisis which was sparked by the U.S. housing slump the beginning of the “Post-American World” Fareed Zakaria is talking about? Are we seeing a shift of power to other parts of the world? Who’s on the rise?

These are questions that might be bothering some Americans these days, but by examining what’s really going on out there in these turbulent economic times, one thing stands out: there’s no other country that could threaten the role of the United States as the #1 global superpower. Not in the medium term and not even in the long term. (read Capitalism will survive: Why America will remain the #1 global superpower) WarrenBuffett, the world’s richest man and probably most respected investor - also called the “Oracle of Omaha” - has written on Newsweek that ” America’s best days lie ahead”.

There’s hardly any nation that is not affected seriously by the global downturn. Countries that have not been affected directly by the financial crisis like China and Japan are being hit hard by falling export rates. Oil-exporters like the United Arab Emirates, Venezuela, Saudi Arabia and Russia are struggling to balance their budgets because of the oil price slump. The USA, Canada, Germany, France, Italy, the UK, Spain, Poland, Hungary, (I could continue …) are all being confronted with negative growth rates, rising unemployment and huge budget deficits. Consumer confidence in all of these countries is down considerably.

Last year, many wondered whether China’s robust growth could stabilize the world and avoid a global recession. Though China has certainly a very positive impact on the global economy, the emerging superpower’s contribution to the global GDP is still small compared to the United States’:

 [download this table]

In recent years, China has surpassed the UK, France and Germany and is now the world’s third-largest economy. While it’s only a matter of time until China will surpass Japan, the United States will remain the number one for the much of this century. If China and the United States of America become close partners, this will stabilize the world and drive future growth. Given the magnitude of the current crisis, this is probably the best point in time to cooperate and establish a long-lasting partnership. To get us out of this mess, international cooperation is decisive. While China is America’s largest creditor, it was the American consumers that have fueled China’s growth. As international trade is the lifeblood of the world economy and the foundation of our prosperity, it’s important that Americans, Europeans and Chinese fight protectionism.

The world’s economic recovery will begin when Chinese growth rates pick up and the U.S. and European countries find their way out of the recession. Other emerging countries are unable to help themselves because their financial systems are the most fragile. When you take a look at the table with the 15 largest economies, you’ll see the reason why this crisis is unprecedented. Countries all over the world are in deep trouble right now while the few exceptions which still have positive growth rates are unable to absorb the losses of the rest.

 [download]

You might also be interested in How do you feel about globalization?

Here’s an assessment of the current situation and an encouraging message from Warren Buffett. (‘Our Country Has Faced Far Worse Travails’)

“America has had no shortage of challenges.”

Obama leads the world into the Post-American age…

This entry was posted on Friday, March 6th, 2009 at 7:42 PM and is filed under Economy, Globalization. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.