Russia » Economics
Author`s name Ольга Савка

The Declining American Supremacy

The world is no longer separated into two ideologically hostile blocs
The United States of America attained the status of the only superpower after the collapse of the Soviet Union. The peak of American power happened in 1995-1999, following the computer revolution, which transformed business, raised industrial output and changed American people's lives. Creating favorable conditions for business undertakings and promoting national economic interests abroad has always been the first priority for any American administration. These factors put the States in first place in the fields of management, free trade and high technology, and eventually resulted in economic development. It seemed back in those years that no other country could catch up to America. However, the powerful economic growth became slower in the beginning of the next century. Nevertheless, the United States of America still remains the only superpower in the world, despite the weak economic growth in 2002 - only 2.4 percent.

America will inevitably have to face several obstacles in the nearest future. China's development, for example, will result in economic parity already in 2020. China's current GDP comes to six trillion dollars. The average economic growth rate in China over the latest decade was seven percent a year. In addition to this, the unification of Europe will also put an end to  absolute American supremacy too. Experts believe that the economy of the European Union will equal the American economy. The united European economy made up 8.5 trillion dollars in 2000.

The current growth of the Russian economy and the self-sufficiency of the Russian Federation bring about Russia's independence from external economic influence. The Russian economy is evaluated come to a sum of up to 1.4 trillion dollars, although Russia has inherited the huge scientific and technical potential of the Soviet Union, which lets Russia play one of the leading roles in the world China, the EU and Russia are the three potential rivals for the USA’s leadership.

The USA is still the leader of the global economy, but its leadership is getting more and more conditional at present. The American trade deficit reached a record level in 2002 - $503 billion. Future American generations will have to pay this money back. The fact of the trade balance deficit means that American assets are moving abroad, slowly but surely. The American state debt is also impressive. As of 2003, the USA's debt was some $6.5 trillion, and GDP was $10.68 trillion. It is getting more difficult for the world to believe in an American gigantic economic machine. America's need for loans to grow, but the world's ability to lend is not enough. Therefore, American opportunities for the continuation of economic growth are decreasing, while the American economy is falling a victim to its own success.

The latest powerful breakthrough in the American economy has added more economic troubles. Other countries have computerized their economies, and investments have rushed back from the States. The debt issue has been aggravated a great deal during the credit shortage period.

American dependence on foreign specialists developed in the 1990s. A great number of foreign specialists have made the American economic system dependent on foreign countries' economic well-being. An opportunity to attract first-class foreign specialists let America turn a blind eye to the decreasing quality of its own educational system, especially in the field of mathematics and other exact sciences.

The Bush administration insisted on the easiest way to solve American economic problems: They used the invincible combination of the American military and power of the dollar. Corrupt Iraqi officials provided a very quick victory in Iraq. The cost of the second war in Iraq came to $70-$100 billion, according to preliminary calculations. The USA has gained total control over the Iraqi crude – 112.5 billion barrels, according to OPEC. Crude reserves in Iran come to 99.08 billion barrels of oil, which equals two or three trillion dollars. Crude reserves in Saudi Arabia are the largest in the world – 262.697 billion barrels, which total up to seven trillion dollars. In comparison, Russian crude reserves are between 49 and 147 billion barrels. The majority of the Russian crude is probably located in the unexplored area of Eastern Siberia.

Since the rest of the world has failed to satisfy America's need for credit, the US Army has managed to succeed in this respect. The American economy stopped taking out loans that have to be repaid and started getting loans that do not have to be paid back.

There is a chance for the American economy to pick up now, but it will hardly prevent the creation of alternative forces. The world is no longer separated into two ideologically hostile blocs. European states do not feel a threat to their political regimes; they do not need the protection of their partner across the ocean. America and Europe have stopped being loyal allies and become economic and political opponents. Furthermore, China will definitely feel a need to realize its ambition. And Russia is rising from the ruins of the 1990s in the center of Eurasia.
The war in Iraq showed that America is not prepared to lose its status as absolute world leader.  The USA is ready to wage war in any part of the globe for the sake of keeping its status. The EU, China and Russia are patiently pushing the USA from its position of absolute economic supremacy, using objective, long-term changes in the world economic balance of forces.

Anton Golovin

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