Tomorrow, leaders and representatives from most of the world’s most powerful states, 20 to be exact, will convene in Washington DC to see what they can do to stop the present economic bleeding and protect against future breakdowns. These leaders face quite the challenge, as the Economist has pointed out in great depth, and I for one am not expecting Bretton Woods II. However, a lot of good can come out of this summit, stronger international financial systems with a greater mandate for action, a greater shared understanding of domestic problems, and a renewed sense of global cooperation that can be transferred to other problems with global reach, aka climate change, terrorism, poverty. According to the Economist, this summit at the very least provides a bull market for new schemes for global economic governance.
Browsing through the American newspapers and television news channels, I could not find much coverage about this weekend’s summit to my chagrin, they were too busy speculating on Hillary Clinton’s role in Obama’s administration. An important subject undoubtedly, but the current economic crisis and its affects spanning the entire globe take precedence. Here is a telling quote from Kevin Warsh, a Federal Reserve governor:
“We are witnessing a fundamental reassessment of the value of every asset everywhere in the world. The establishment of a new financial architecture, thus, is the essential policy response to the greatest economic challenge of our time.”
Now, the issues to be covered at the conference, the regulation and restructuring of international and domestic financial and banking systems, is mostly beyond my expertise for me to comment further, but what I do know is geopolitics, and oh baby does this economic downturn have some consequences in the world of interstate and intrastate conflict.
A world facing a shrinking global economy or one barely growing is a world with a greater amount of dissatisfied states and citizens. In other words, there is less of the pie to pass around within and among states. In some ways, this may lead to more measured and cautious policies, as is the hope with Iran and Russia, with their dwindling energy supply returns, but this is no guarantee. When it comes to China, the world should definitely be concerned of a dramatic domestic economic crisis as its government’s legitimacy is tightly tied to economic progress. All of a sudden, internal unrest may foment to ever greater degrees, destabilizing the country, East Asia, and the rest of the globe.
WR Mead, a primo expert on US foreign policy, argued in his book ‘God and Gold‘ that the greatest fear for world security was not the rise of China or India, but in fact the failure of one. This would mean that East and Southeast Asia would be an off-balanced region, which may be prone to conflict, a la Europe in the early 20th century. Of course any conflict in East and Southeast Asia would involve the US, which is the guarantor of security for several key states in the region.
This short list of possible conflicts exacerbated or brought on by the economic crisis, is just that short, and unfortunately it is more likely that smaller, but still quite deadly and destructive conflicts, could occur in Africa, Central Asia, etc.
So let us hope that the leaders of the DC Summit can get to work and mitigate the effects of this crisis.
(Photo Source: The Economist’s Bill Butcher)
Update: The Washington Post wrote and excellent piece detailing some of the US intelligence communities strongest security concerns related to the economic downturn. Examples are fears that China’s gaining geopolitical leverage and that Al Qaeda may use security holes created by governments facing budget difficulties, on border security for instance. Check it out: Experts See Security Risks in Downturn: Global Financial Crisis May Fuel Instability and Weaken U.S. Defenses
Tags: China, conflict, India, Russia, summit, war