The US and the “G-0” Moment

The 2008 financial crisis was the last stage of the world order as we knew it, and it is impossible before the approaching G-8 summit begins to ignore the fact that the United States, for the first time in seven decades, is incapable of leading the international agenda or providing global leadership in all the most pressing problems of today.

As a matter of fact, the U.S. downsized its presence abroad by refusing to participate in the Eurozone rescue, intervene in Syria or use force to contain Iran’s nuclear ambitions (despite strong Israeli support). President Barack Obama put an official end to the war in Iraq; he is now withdrawing American forces from Afghanistan at a pace slowed down only by the need to save face. The U.S. gave up on its scepter, although there is no other country or group of countries willing or able to carry it.

To make a long story short, American current foreign policy is as active as ever, but is dwindling and has become more stringent in defining its priorities. As a result, numerous global challenges, such as climate change, trade, scarcity of resources, international security and wars on cyber terrorism and nuclear proliferation, to name but a few, are posing a greater danger now.

Welcome to the “G-0” world, a more volatile and less certain environment in which the coordination of global policy issues is put aside. Paradoxically, this new environment, despite its severity, is less troublesome from the U.S. perspective. It provides the U.S. with an unprecedented opportunity to take advantage of its new and unique position. If its cards are played properly, the “G-0” world is not entirely bad from the U.S. point of view.

Many remaining relatively strong spots have even greater importance in this kind of world. And the U.S. remains the only real world power, with the biggest economy in the world. Its economy is still twice as big as China’s; its defense spending represents nearly a half of what the entire world spends on defense and exceeds the defense budgets of the next 17 countries combined. The U.S. dollar continues to be world’s main reserve currency, and investors are storming at the American government’s debt, even with all its sharp growth in the crisis that started in 2008. These confirm that the U.S. is a safe haven (even in the crisis brought up by the U.S.).

Similarly, the U.S. still occupies a central position in such areas as entrepreneurship, R&D, higher education and technological innovation. Moreover, it is a country with the world’s largest natural gas production and calories export, which reduced its exposure to price shocks and food shortage.

Let’s consider Asia, for example. With the growing economic importance of China and its regional influence, its neighbors are seeking to deepen their relations with the United States; recently Japan, Australia, Indonesia and Taiwan concluded their trade and security agreements with the United States, and even Myanmar has caught up and decided to resume diplomatic relations with the United States, hoping at the same time to get out of China’s shadow.

In other words, the increasingly hostile international environment of the “G-0” world makes the United States more appealing to the countries seeking to secure their bets. As a result, the United States has an opportunity to accomplish exactly what is in line with its own interests. Introducing lesser leadership allows the United States to balance the costs of each opportunity before taking any decision, while also allowing it to choose the issues and conditions that suit it. In this environment, the military intervention in Libya does not impose the same (decision) as in the case of Syria.

It remains to be seen whether the U.S. will take advantage of these opportunities. It is evident that the short-term benefits that are enjoyed by the U.S. constitute the biggest obstacle for its long-term future. Let’s call it the “curse of a safe haven”: As long as the U.S. remains the safest harbor for every storm, it won’t face any direct pressures that would induce the healing of its weak spots.

For instance, despite all that has been written about American national debt, investors will keep on lending to the U.S. However, in the long run, U.S. policy makers will have to keep steady progress in restoring confidence to the country’s financial health by reducing the sacred political programs such as Social Security, Medicare and defense. It will be officials’ imperative to set aside short-term motivations and their parties’ doctrines to strengthen the U.S.’ crumbling infrastructure, reform education and immigration systems and seek improvement of the long-term fiscal situation.

The advantages enjoyed by the United States in a “G-0” world give it an opportunity to invest in the future by hedging against painful hazards, which are the same advantages that will allow the U.S. to take its time. U.S. politicians must be aware of a new “G-0” situation; they are gradually working on rebuilding the U.S.’ status as a regional power. If they make it, the United States will enjoy enough power and flexibility to formulate the future world order.

The American political system usually works well in a crisis, but thanks to the world-without-leadership advantages, the U.S. will not be forced to rely on a crisis to speed up its work. It only needs to take the opportunity offered to it by the “G-0” moment.