By Nishthar Idroos –
President Joe Biden recently threatened the Kingdom of Saudi Arabia. He said there would be “consequences”. What kind of consequences he failed to elaborate. This is a developing story and it is likely more is bound to come from this. President Joe Biden is angry at Saudi Arabia for its decision to slash oil production along with its OPEC allies against U.S. wishes.
The current impasse is the decision in early October by OPEC Plus under Saudi leadership to turn down the oil spigot by a staggering 2 million barrels a day. This has created a instability, elevating the risk of global recession. Aside from its impact on American politics, the move is also seen as aiding the Russian war in Ukraine. Europeans are already suffering from fuel shortages and price hikes. As the weather gets colder, the Saudi-led cutback in oil production feels like a hostile act.
Despite tensions all round, new economic initiatives, directives are rapidly being mooted in Saudi Arabia and elsewhere for a quick economic rebound in the post pandemic environment. The wise ones seem to be moving with urgency to extend economic relief for their people and the world not so the foolish ones, the adamant ones. The foolish are those transfixed on hegemony, expansionism, exploitation and war mongering even if that means economic hardship for their people and the world, even if that means an apocalypse by way of a nuclear conflagration. This is patently clear.
The world citizenry are concerned, they’re optimistic and hopeful. They must necessarily extend all necessary support for those trying to change the economic situation for the better. This is a no brainer. Tensions must be deescalated and sanity instilled. This is extremely significant. There is much at stake, most revolving round the global economy. Its leader the United States of America must set the tone, extend the required leadership. Nothing rash or reckless should emanate from Uncle Sam. He will have to blame himself if such an eventuality comes into being.
Central banks globally have been raising interest rates this year with a degree of synchronicity not seen before, a trend likely to continue well into next year. “The outlook has darkened significantly since April,” said Pierre-Olivier Gourinchas, IMF Economic Counselor and Director of Research.“The world may soon be teetering on the edge of a global recession, only two years after the last one”.
Elsewhere the Crown prince Muhammad Ibn Salman seems to be a man on a mission. Saudi Arabia these days is in the news almost every day because what’s happening within the kingdom in terms of major economic development. Interestingly the kingdom wants to join the BRICS alliance, South African President Cyril Ramaphosa has stated, signaling a dramatic potential expansion of the bloc amid growing tensions with the US over the Russia-Ukraine crisis.
The sheer structural magnitude of BRICS is significant to the world economy. Just have a look at these vital numbers. Population (40%), GDP (25% nominal and US$ 16.039 trillion), land coverage (30%), world trade (18%), and global forex (US$ 4 trillion). Already there is major cooperation in many areas, namely science and technology, trade promotion and facilitation, energy, health, education, innovation, and fight against transnational crime. And now we have news that the Kingdom of Saudi Arabia and other members of the Gulf nations bound to join.
Also there are developing countries with relevant global economic performance and high potential. They are countries with systemic importance for the world economy; in this respect their national performances have profound implications both regionally and globally. They are able to exert influence on the governance of the global economy. All these features together with a number of common interests’ shows that BRIC countries have emerged as a major coalition.
These are significant developments that are shaping the socio economic milieu of the world. On the flip side these developments also pose major challenges for the US administration and the US economy. Two decades into the 21st century US credibility is in tatters, the values she was exporting being questioned by her own people. The US has had very few foreign policy successes in the 21st century and the American century seems like a thing of the past. Even Francis Fukiyama feels silly about his “end of history” remarks today.
In 2008, the US National Intelligence Council admitted for the first time that America’s global power was indeed on a declining trajectory. In one of its periodic futuristic reports, Global Trends 2025, the Council cited “the transfer of global wealth and economic power now under way, roughly from West to East” and “without precedent in modern history,” is the primary factor in the decline of the “United States’ relative strength even in the military realm.”
That is the conclusion reached by eminent and world renowned professor Michael Porter, the lead author in the Harvard Business School’s new report on U.S. competitiveness, which found that almost half of the school’s prominent alumni are increasingly pessimistic about the economic future for the country.“Our major political parties have turned the political system into a duopoly that serves the parties rather than the public,” Porter continued. “We need political reform that refocuses the system on the interests of the people.”Of the 5,713 business leaders polled, 48% said they expect U.S. competitiveness to drop in the next three years, while only 31% see it improving.
Presently, the United States is experiencing many issues, characterized by various significant domestic and international matters, including the impending global economic crisis, social protests, and post coronavirus pandemic consolidation. A coherent and valid strategy based on investigation of current problems and potential solutions is welcome. This is what prudent, sensible people, nations do. Sharing power with others is the way forward.
The SWOT analysis is a relevant instrument that allows viewing possible development prospects, exploring problematic areas requiring urgent and careful consideration, as well as considering internal and external threats. Its internal weaknesses are pretty major especially in the economic front. One specific word flashes all over the horizon and that is the word squander. The United States of America should not squander these precious moments to consult, consolidate and reach consensus with the rest of the world.
It deserves reiteration – the economic vulnerabilities for the US looks ominous, this requires rational, sensible people to provide solutions not neo-con oligarchs and war-mongers.
Today, the warmongers are trying to scuttle every accord, every pact. This poses a major danger. We all know Henry Kissinger an ardent hawk, he said the world as verging on a dangerous disequilibrium. “We are at the edge of war with Russia and China on issues which we partly created, without any concept of how this is going to end or what it’s supposed to lead to,” he says. Could the U.S. manage the two adversaries by triangulating between them, as during the Nixon years? He offers no simple prescription. “You can’t just now say we’re going to split them off and turn them against each other. All you can do is not to accelerate the tensions and to create options, and for that you have to have some purpose.”