The idea that such a moment was coming has dominated U.S. foreign policy circles since the late 2000s. The declinists warn that in light of American difficulties at home and abroad, and the rapid rise of new powers such as Brazil, India and China, we should prepare for a global order no longer dominated by the United States. Some argue that the United States should retrench and do less. Others that it should share the burden of leadership with the emerging titans.
But predicting the decline of the United States has always been risky business. In the 1970s and late 1980s, expectations of waning power were followed by periods of geopolitical resurgence.
There’s every reason to believe that cycle is recurring today. Despite gridlock in Washington, America is recovering from the financial crisis and combining enduring strengths with new sources of influence, including energy. Meanwhile, emerging powers are running into troubles of their own. Taken together, these developments are ushering in a new era of American strategic advantage.
Emerging economies were the darlings of the past decade, growing at an average of roughly 7 percent annually between 2003 and 2012. By some calculations, China was poised to surpass the United States in GDP by 2016.
Today, the picture couldn’t look more different. Brazil’s growth rate has fallen from more than 7 percent in 2010 to just under 1 percent. Likewise, Indian growth tumbled to about 3 percent in 2012, down from double digits as recently as two years earlier. Perhaps most pronounced, China’s government is revising down its official growth targets. Analysts are no longer asking whether there will be a Chinese economic slowdown but rather how hard the landing will be.
Morgan Stanley has identified five particularly fragile emerging-market currencies: Brazil’s real, India’s rupee, Indonesia’s rupiah, South Africa’s rand and Turkey’s lira. Those countries are vulnerable to high inflation, large deficits, low growth and a downturn in China. And they may soon face problems in international financing.
The political systems in emerging powers are fraying, too. There have been huge protests in Brazil over wasteful government spending and inadequate social programs. Russia looks more authoritarian by the day. And the Chinese Communist Party is stepping up efforts to crack down
on journalists, academics and bloggers in what seems to be an attempt to control the discontent that accompanies slower growth and painful economic reforms.
These “rising powers” are hardly faring better collectively. The international institutions they established — BRICS, the Shanghai Cooperation Organization and IBSA — continue to disappoint.
At the same time, the United States is experiencing a turnaround of fortunes. The unemployment rate has fallen to just over 7 percent from an October 2009 peak of 10 percent. By contrast, euro-zone unemployment remains stuck at around 12 percent.
The U.S. fiscal picture is also looking up. The nonpartisan Congressional Budget Office estimates that the annual budget deficit will drop below $650 billion in 2013, the smallest shortfall since 2008 and approximately half the size it was in 2011. Meanwhile, the dollar remains the world’s top reserve currency.
Even more transformative, the United States is experiencing an energy revolution that the McKinsey Global Institute estimates could add as much as 4 percent to annual GDP and create up to 1.7 million new jobs by 2020. America is poised to overtake Russia as the world’s largest producer of oil and natural gas, and there are signs that low-cost and abundant energy is driving a revival of the U.S. manufacturing industry. Although the United States will have an enduring interest in stable global energy prices, it will no longer rely on direct and uncertain access to Middle Eastern oil, in sharp contrast to energy-starved countries in Asia.
In terms of hard power, the U.S. military is at the forefront of next-generation technologies, including unmanned systems, robotics and lasers. Even more superior than its hardware is its software: the command and control systems to conduct highly advanced joint operations and major wars.
The United States also remains the linchpin of the international community. Through hard-nosed diplomacy, economic pressure and the specter of military action, Washington has retained its ability to marshal effective multinational coalitions, bringing down Libya’s Moammar Gaddafi, getting weapons inspectors on the ground in Syria and embarking on serious negotiations to curb Iran’s nuclear weapons program. You can quibble with process and style, but it’s hard to argue that any of these would have happened without the United States.
More broadly, and most important, the United States is blessed with a superior combination of sound fundamentals in demography, geography, higher education and innovation. That ensures it has the people, ideas and security to thrive at home and on the world stage. There’s a reason elites around the world remain eager to send their fortunes, and often their families, to the United States.
Of course, the economic recovery is incomplete, and much remains to be done on the debt and growth, but as Australian Foreign Minister Bob Carr
aptly noted in July 2012, “America is just one budget deal away from ending all talk of America being in decline.” Easier said than done, but still easier to address than the mammoth challenges facing the emerging powers.
As partisan as Washington is today, the United States has overcome episodes of far greater social discord and political turmoil. The recent souring of public opinion on the obstructionists in Congress is a healthy reminder of America’s propensity for political renewal.
In this dawning era of strategic advantage, the United States will confront foreign policy challenges largely associated with weakness and instability abroad. Washington will wrestle with the consequences of a fragile China and its implications for the economics and politics of East Asia. The Middle East will continue its painful and bloody revolution. And Europe appears increasingly unable to move beyond protracted stagnation, eroding its ability to play a constructive role in world affairs.
But being lonely at the top will also engender huge opportunities to build the kind of liberal order that the United States failed to consolidate in the 1990s. Rather than simply reengineering the existing system, this will require U.S. leadership to build international norms, rules and institutions from the ground up. Washington will have new leverage to renegotiate its relationships and engagements with the Middle East; the success of U.S. sanctions on Iran is only the first manifestation of America as an energy powerhouse.
The United States can also lead in knitting together historic trade pacts across the Pacific and Atlantic oceans, reenergizing a first-rate global trade agenda long sabotaged by protectionism and low standards. And Washington can use its newfound strength to exercise restraint and develop international rules around emerging security issues such as drone warfare and offensive cyber-capabilities. All of this will contribute to a more prosperous and secure United States.
The principal risk to these efforts is that Americans could choose to wall themselves off from the world after a difficult decade. According to a survey by the Chicago Council on Global Affairs, 38 percent of Americans want to stay out of world affairs, the highest share since 1947, and the figure rises to a majority among young Americans who came of age during the Iraq and Afghanistan wars.
But retrenchment would be a huge mistake. America’s domestic revival provides all the necessary tools to facilitate American leadership abroad. Being humble about the United States’ ability to shape foreign societies, particularly through military means, is no excuse for a lack of ambition to continue advancing U.S. interests and universal values overseas.
Rather than bracing for American decline, Washington should prepare to lead the world anew.
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