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Mainstream, Vol XLVII, No 16, April 4, 2009

Impact of US Stand on World Economic Crisis

Thursday 9 April 2009, by Benjamin Todd

It is by now clear that the US authorities are not going to support or promote any solutions to the global economic crisis that diminish their role in the world financial system. International financial institutions like the World Bank and IMF are still being used by Washington to punish or encourage specific countries. The US does not want the supervision and control of the global economy to slip from its grasp.

The highly egocentric attitude of the US in the context of the current economic crisis is evoking heightened criticism in several countries. In the beginning of February this year, the Obama Administration obtained support in the US Congress to its plan for budgetary help to the American industry. Provisions of this plan oblige companies to use only domestic products thus provoking disputes. The “buy American” legislation was criticised by even the US’ close partners—for example, the European Union, Canada and later Japan accused Washington of protectionism.

It is thus becoming increasingly transparent that Obama will be a difficult President to deal with by his foreign partners. His indisputable priority is to save the American economy even at the cost of the partners.

Against this backdrop the words of former Russian President-turned-Prime Minister Vladimir Putin at the World Economic Forum in Davos assume importance. He pointed to the failure of the system of global economic growth with one centre (the US) printing banknotes without restriction and control and consuming goods, and another (China) producing goods at low costs and accumulating money. In such a system quite a number of countries are driven to the periphery of the world economic process. This means that they are out of the process of taking key economic and financial decisions. What is more, the resultant well-being is spread among an exceedingly small proportion of the world populace whereas comfortable dwelling, education and high-quality healthcare continue to elude numerous have-notes.

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