Amid a growing perception that Donald Trump will lead the US off the world stage, top officials and analysts at the IMF-World Bank annual meetings in Washington DC told GlobalMarkets that they expect a multipolar world will replace the old order as power shifts eastwards — and towards corporations. “It’s the end of Pax Americana,” Paul Sheard, chief economist of S&P Global Ratings, told GlobalMarkets. “The feeling that the US was the big, benign hegemon that underwrote global security, was the global policeman and the consumer of last resort, for decades. But it makes no sense that the US is the sole global hegemon.”
Sergey Storchak, Russia’s deputy finance minister, agreed that the global influence of the US had waned and that a single power was unlikely to replace it. “It is not a question of whether someone will substitute the US as a global leader, as leadership is divided in many dimensions, you can be a leader in one field but not another,” he said in an interview with GlobalMarkets. “I think it will be the multilateral corporations that will compete for global influence.”
Storchak pointed to Russia’s improving relations with Saudi Arabia as an example of the waning supremacy of the US. “We have grown up with the understanding that Saudi Arabia is a close friend of the US, so the fact that the diplomats from both countries managed to agree on a visit means that the influence of the US, at least towards this country, decreased.”Saudi Arabia and Russia signed deals worth $3bn last week when King Salman bin Abdulaziz Al Saud became its first ruler to visit Moscow.
Elites must be humble
The sharp comments come as the Trump administration bulldozes ahead with a strident US-first approach to foreign policy. Yesterday the US State Department announced it was pulling out of Unesco, the United Nation’s cultural body, over mounting arrears, what it described as the “need for fundamental reform”, and continuing anti-Israel bias.
At the same time, the World Bank’s president, Jim Kim, gave a frosty response to the country’s demands for a review of the Bank’s lending to China before engaging in a discussion about a capital increase for the multilateral. In a thinly-veiled criticism of the US approach Kim said it was “good news” that the US was now a part of the discussion. “A new administration takes time to get organised,” he said. “I think now the fact that the US is part of the discussion is really encouraging.”
Outgoing German finance minister Wolfgang Schäuble, yesterday won applause at the Institute of International Finance’s annual meeting, when he said that multilateralism was a precondition for peace. He warned the audience of “elites” to take their values seriously.
Sheard also warned “global elites” that they needed to pay heed to societal concerns, amid a global tendency toward protectionism. “We, the global elite, have to be a bit humble and say: ‘what are the issues here, what is driving things, and what are the solutions?’” he said.
“Just the idea we can leave everything to markets just doesn’t cut the mustard any more. We have seen what happens in the last few years in how that plays out in the political system.”