By Mathew Yakai in Changchun, China.
THE recent financial crises which started in the United States that had ripple effect throughout the world depict Washington’s declining hegemony in the world.
But the question of whether USA’s hegemony ending is subject to debate, but evidence reveals that USA’s hegemony was declining since the end of Second World War.
What is experienced in America recently that triggered a devastating financial crisis in this century reveals incompetency within USA when it comes to policy formulation to safeguard its financial environment.
Termed as “subprime mortgage crises” in USA, is an ongoing financial crises triggered by a significant decline in housing prices and related to mortgage payment delinquencies and foreclosure in USA.
This caused a ripple effect across the financial markets and global banking systems, as investments related to housing prices declined significantly in value, placing the health of key financial institutions and government-sponsored enterprises at risk.
Several lessons are learnt from this experience. First, America’s “domestic politics” can have global consequences.
The financial crisis started within USA, revealing political and financial incompetency within America.
Negligence or ignorance has caused within USA the “subprime mortgage crises”, that infested the Wall Street and eventually made the “normal streets” suffer.
Second, USA must learn from this experience that any issues of global significance require collective approach.
In other words, institutionalists would argue that multilateralism is required in such a situation when Washington knows very well its limitations.
Recent international events have depicted USA’s unilateral approach in situations like the Iraq war, neglecting the role the international forums such as United Nations, the United Nations Security Council and the collective view of other countries.
In Iraq, USA got stuck for ever. Former President Bush never made it, now leaving a huge task on the incumbent, Barack Obama.
Obama promised America and the world that he would withdraw the USA troops as soon as he gets elected. But the opposite happens.
The issue is this. If America had listened to the United Nations Nuclear Weapons inspection team that Sadam Hussan had no weapons of mass destruction then USA would not loose more of its troops, and the vulnerable children, women and the old would not suffer in Iraq as it is today.
Significantly, USA would save its “reputation”.
Now, Bush calls for a collective effort in this financial crisis as soon as hundreds of Americans lost their job, the normal people’s salary values have decreased dramatically, and the world financial headquarter was threatened.
Let me draw an interesting line between this financial crisis and the 1997 Asian Financial Crises.
When the Asian Financial Crises almost crippled the region, Americans, British, and other Westerners bashed and lectured the Asian countries telling them, “this was the end of Asia Rise”.
To Americans and Westerners, the so called rising Tigers and Dragon have suffocated and will take decades for them to get well or not at all. They blamed the Asian leaders for incompetency and corruption that allegedly caused the Asian Financial Crises.
World Bank and IMF controlled and manipulated by USA even took long to release the required fund to bail out the Asian economies. Their stringent conditionality’s could not be met by the crippled Asian countries at the time.
Given that situation, IMF and World Bank would have had some sense of wisdom prevailing to slacken the conditionality’s, at least for that moment to resuscitate the suffocating Dragon and Lions.
For Gods sake, the Asian leaders consumed all the criticism, tighten up their belts and slowly worked towards fixing their economy.
Japan took the leadership, supported by China to establish an Asian version of IMF or World Bank to help the regional economies incase similar experience knocks on their door in the future, after learning from IMF and World Banks snail approach.
America, which always wants to be the hegemony, went against the idea and it was abandoned.
What America should learn from Asian experiences is this. Asia Pacific region is so diverse. It has various religions from Muslim to Hinduism, Taoism to Confucius, and many more.
The region has a very diverse ethnicity, thousand tribes and languages, varying level of development, economy, and governance system.
But what remains so outstanding till today for America to learn is that the leaders of the region have managed and are managing this diversity since the financial crises till today.
Today, the region has grown so fast to a peak that is of unprecedented in the human history. China now is a leading economy, and a major trading partner of many countries in the region and world.
Many regional and international issues can not be solved without China’s leadership.
South Korea, Singapore, Taiwan, Hong Kong, Malaysia, Indonesia, and others have progressed tremendously in economic terms, despite the financial crises they faced, coupled with the diversity of the region.
If the Asia Pacific leaders have to be praised and applauded then one should look no further then the type of leadership they portray to adopt the region into the global world system that has resulted in the peaceful region, where no major wars have been fought, like in the case of the first and second world wars, both started in Europe.
Today, America is having its share of cake. But Asian leaders are not like their colleagues, who jump the gun starting to bash and lecture telling them that American empire is declining or ending.
From Beijing to Tokyo, Hanoi to New Delhi, Seoul to Jakarta, all know that liberal approach to any issues that affect humanity is of paramount importance in this century.
Chinese President Hu Jintao had a private telephone conversation with George Bush guaranteeing that China will make all efforts to help solve the financial crises.
Other developing and emerging economies followed suit with the recent G-20 Meeting. But should the emerging and developing economies clean the “rubbish” created by America?
Bush even appealed to the international community for a collective effort to minimize the devastating financial crises.
At last, Washington realizes that she can not operate unilaterally, but in today’s multi-polar world system, cooperation is required when interdependence is prevalent.
Academia Robert Koehane propagates a theory arguing that cooperation can exist amongst states without hegemony.
He further argues that when there is intense interdependence amongst states, cooperation is inevitable, and in this situation, the world system does not need hegemony to keep the pendulum swinging.
So, did we always think that the international system operates in the situation as it is today because of Pax-Americana? Robert things otherwise.
Robert believes that there are existing international organizations like the UN, which was created during the USA’s reign, and this institution can be used by states for common benefits as long as existing norms and values or the spirit of the organization is upheld.
China, which is tagged as a developing country with a rapid economic growth spells out in its foreign policy that it opposes hegemony, and believes that countries, despite their economic strength and size can play equally in the playing field.
That’s why Beijing today encourages multilateralism and institutionalism instead of unilateralism which is commonly prevalent in America.
China believes that any issues of common interest must be argued and agreed upon by all countries using the existing forums, instead of a “one man show”.
Given the current financial crises which started in America, can we conclude that America’s hegemony is either declining or ending?
Of course it has declined after the Second World War. There are several cases to demonstrate. One is the time when USA attempted to dominate Middle East oil field in the 1960s.
It has become more difficult by the late 1960s and early 1970s for the United States to intervene in the Middle East than when it had been during the 1950s.
Arab nationalism, the increasing sophistication of indigenous Middle Eastern armies, and the rise of Soviet political influence and ability to project military power in the area all made a difference.
The erosion of American hegemony accounts quite well for the sharp changes in international petroleum regimes over the past twenty years.
As American oil production capacity declined, so did its ability to implement the strategy of hegemonic – cooperation, supplying its allies with oil when necessary – that is followed so successfully during the 1950s.
Some can argue today that America is still the powerful country in the world given its modern military capability.
However, the attempt to penetrate the Torabora caves in Afghanistan to locate the long lasting Osama bin Laden was not successful, testing the capability of modern weaponry.
The Iraq war is still going on. In the Vietnam War, America had a devastating defeat. In the Korean War, the UN force played a pivotal role, not American soldiers alone.
America today can boast of its hegemony because of its modern military and “soft power”, but signs show that America’s hegemony is both declining and will eventually end.
If there is any way forward, then countries should not look further then China’s role, where humanity can live peacefully and co-exist with their environment harmoniously.
In order for this to happen, countries must respect each others sovereignty, respect the norms and values of existing international and regional forums, multilateralism and institutionalism must be upheld, interdependence and cooperation should be of importance in the global system, and hegemony should be discarded in the 21st century.
The world has changed so fast in the last three decades, for a better or worse.
But what remains true today is that America’s hegemony is declining and will eventually end, paving way for a new world order.