English

Paying a high price for supremacy

May 21 2003

By David Roche (IHT)

HONG KONG: Even as the United States displays its military might
in Iraq, American power shows significant signs of cresting.

As a result of what is widely perceived as U.S. unilateralism,
international mistrust of America is deepening, key alliances are
weakening and terrorism will intensify.

The policy of the neoconservatives in the Bush administration is to
project the U.S. model abroad, if necessary through regime change
and preemptive military action. Syria is under pressure but North
Korea may be next in the firing line.

Such action will increase the cost of extending American influence
and undermine the strength of the U.S. economy. The Cold War peace
dividend has already gone into reverse. The costs of war and of
rebuilding affected countries will bloat U.S. defense spending and
budget deficits. Private sector investment in the United States will
be crowded out and the productivity growth rates that were achieved
in the technology revolution of the 1990s will be damaged.

Global economic reform based on an open market model was the most
successful U.S. export. But that model is now widely rejected abroad,
called into question at home and no longer practiced by the Bush
administration.

Instead, the administration has applied policies that are protectionist,
market meddling and involve the biggest public spending since the
Vietnam War.

Before President George W. Bush took office, global trade benefited
dramatically from U.S.-led liberalization. Now, with deep rifts between
the United States and Europe, Russia and China over Iraq, protectionism
is likely to be used as a political weapon.

The Doha round of negotiations to liberalize world trade is on the
rocks. For how long will China continue to have open access to its key
export market in the United States if Beijing refuses to support U.S.
efforts to disarm North Korea of weapons of mass destruction?

The dollar will be a victim of U.S. economic weakness and international
tensions. In the bull market of the 1990s, the United States was seen as
an attractive place in which to invest. But the United States no longer
offers the returns needed to sustain this investment, which is already
equal to 7 percent of the savings of the rest of the world and must rise
sharply as the U.S. budget and balance of payments deficits increase.
The dollar will fall as the troubles of the U.S. economy deepen.

Rather than making the United States invulnerable, U.S. military
superiority will cause fear, hatred and growing extremism in many
parts of the world – and will invite further terrorist attacks.
If military action were a solution to terrorism, Israel would have
been at peace years ago.

– David Roche, chief global strategist at Independent Strategy in Hong Kong and London.

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“Other News” is a personal initiative seeking to provide information that should be in the media but is not, because of commercial criteria. It welcomes contributions from everybody. Work areas include information on global issues, north-sutrh relations, gobernability of globalization. The “Other News” motto is a phrase which appeared on the wall of Barcelona’s old Customs Office, at the beginning of 2003:â€?What walls utter, media keeps silentâ€?
Roberto Savio

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